CTI_SITXMPR007_Learner Guide VI.2020 1
SITXMPR007 DEVELOP AND
IMPLEMENT MARKETING STRATEGIES
LEARNER GUIDE
CTI_SITXMPR007_Learner Guide VI.2020 2
STAFF INTRODUCTION
Review each of the employees below to see how the topic area can influence the various
departments in a TH&E business.
GENERAL MANAGER
I’ve just had my PA type up the guidelines for next year’s Marketing Plan to take down to
the Marketing team.
I’ve set down the operational goals and budget constraints and to capture the market we
work with a 16 month lead time. 4 months to prepare, roll out the completed plan in the
5th month and then start to plan again for the next one.
There is so much to consider before the guidelines are complete:
• Current economic climate and the risk factors on it like stock market hiccups,
industrial unrest and potential corporate collapse
• Owner’s return on investment
• Unforeseen natural events like floods and bushfires
It certainly is a difficult task to try and plan for this sort of stuff when you have no control
over it.
MARKETING MANAGER
We’ve just finished a brainstorming session where we were throwing ideas for marketing
strategies on to the whiteboard. Sometimes the off-the-wall ideas bring the best return.
After the brainstorming we cull anything that’s illegal or unethical. Then we chop any
ideas that don’t fit with the hotel’s direction, values and business plan. We also have
input from all the departments written up. We sent around a catchy email last week to
get some of their ideas and drew some great responses.
FRONT DESK MANAGER
It’s busier than usual here in Front Office today as the Marketing team has come down to
monitor the telemarketing sales now. They came up with a system for us to maximise our
workplace efficiency by doing phone sales at times when we traditionally have a lull in
customer enquiries.
It should work quite well as we are mostly targeting the surrounding businesses to drum up
more awareness of the office functions package we are pushing. I like being busy at work
as the day just zips by and this gives me good variety, rather than always face-to-face
contact with the guests.
Ok, here I go. First rule is to smile before I dial the number. A marketing strategy for
successful phone sales…
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EXECUTIVE CHEF
Hi it’s Ed again, the kitchen brigade is on a break. We’re in a lull before the storm, so it’s
time to attack that stack of paperwork. Marketing wants the data on food sales across all
outlets and staffing levels for functions. It’s all computerised but I have to do
an analysis on each menu item so that we can examine the trends in our food sales.
My bet is that so far duck has outsold beef on the functions packages and of course the
usual hot seller for dessert is chocolate. You could almost sell anything with chocolate.
Ok I want to do this before the boys come back in time for service…
RESTAURANT MANAGER
Hi there. I’ve just checked off my list against the Draft Marketing Plan. I supplied all the
staffing levels I require for the known events on the plan and I want to make sure they are
correctly entered so that the allocated budget is right.
The marketing guys are pretty spot on but I have been caught out before with incorrect
data entry. They also understand how important it is to have the appropriate staff
resources and skill levels to respond to the customer intake from their Marketing
activities. There is no sense spending a packet on advertising if we can’t deliver
the service level.
Ok, let us see if this all tallies…
1. INTRODUCTION
If the circus is coming to town and you paint a sign saying, “Circus is coming to town,”
that’s Advertising. If you put the sign on the back of an elephant and walk it through town,
that’s a Promotion. If the elephant walks through the Mayor’s flower bed, that’s Publicity.
If you can get the Mayor to laugh about it, that’s Public Relations. If someone videos it,
uploads it and people like it on Facebook, that’s social media interaction. And, if you
planned the whole thing, that’s Marketing!
And what’s the point of marketing? Getting customers to visit your business and spend
their money – that’s Sales!
2. THE MARKETING ENVIRONMENT
A manager involved in marketing must
have in-depth knowledge of the internal
and external business environments.
Knowing how and when to market relies
on properly researching the business
environments. A good manager will
research the internal market to
understand the available resources and
to draw on the business atmosphere.
They will also research the external
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market to understand the business’ competitors, the position in the market and market
trends.
2A. KNOWING YOUR COMPANY AND ITS PRODUCTS
The internal business environment refers
to everything that happens inside a
company which affects its performance.
This includes trends and events inside
the company which impact on staff
morale; management styles and
effectiveness; and the culture and feel
of a company or business. The internal
business environment affects how
employees feel, work and act.
This is especially important in the TH&E
industry, which relies heavily on customer service and the impression made on the
customer. A happy working environment leads to happy staff, which makes a good
impression of your business on the customer. Conversely, unhappy or grumpy service staff
can have a strong adverse effect on your business.
The internal business environment can impact on the effectiveness of marketing. If your
establishment is being marketed as having exceptional customer service and staff who go
above and beyond expectations, then it is essential that this is true. It is no good luring
potential customers to your business only to have an unhappy service staff ignoring the
new customers or making a poor impression on them.
To develop an effective marketing strategy, it is important not only to have knowledge of
the staff and their operations, but also the core business activities; the values and goals of
the business; the products and services offered by the business; previous marketing
efforts; and the customer base you will be targeting.
KNOWING YOUR BUSINESS’ CAPABILITIES
Any marketing strategies should take advantage of a business’ existing resources. There’s
no point coming up with an amazing marketing strategy if it can’t be followed through.
You must also be aware of your business’ capabilities, resources and any relevant issues in
relation to:
COMMUNICATION CAPABILITIES
Is your business able to easily communicate with potential and existing customers? What
communication channels exist?
E-BUSINESS CAPACITY
What is your business’ presence like online? Is your business already using social media
successfully? If yes, a social media campaign might reach your targeted customers.
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EQUIPMENT CAPACITY
What equipment does your business have access to? This can be of particular consideration
when running a promotion. For example, if a small ice-cream shop offers free samples to
an unlimited number of customers, they may struggle to prepare enough ice-cream.
FINANCIAL RESOURCES
What money does the business have to develop and implement marketing strategies?
HOURS OF OPERATION
What are the business’ hours of operation? These can limit promotional activities.
HUMAN RESOURCES
Is there enough man power? Do some activities need to be outsourced?
LOCATION AND POSITION
What is your business’ location? How can your location and position impact your marketing
strategy? For example, if your store is positioned on a busy street, new signage might have
a big impact.
STAFF SKILL LEVELS
What level of skill is required to pursue your marketing strategy? For example, if you need
a brochure designed, you might need someone with graphic design skills. If you and your
staff lack the required skills, you might need to outsource or rethink the strategy.
RESEARCHING PREVIOUS MARKETING EFFORTS
When developing a marketing strategy it is important that you initially conduct research to
enhance your strategy’s effectiveness. It is essential that you analyse previous marketing
efforts, both from your company and others, so that you can tailor your approach. It is not
good to repeat a previously used, ineffective marketing effort because you were unaware
of the reasons behind its failure. For this reason, it is important to use effective data
collection tools.
Information from previous marketing efforts can come from a number of sources.
• Business records
• Peers
• Official statistics and government agencies
• Industry bodies
• Marketing and business advisory services
• Websites
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RECORDS AND COLLEAGUES
As most businesses keep a record of their
promotional activities and other business
activities, the first port of call is the file
system of the organisation. Prior
activities may be stored as soft copy files
on a server or hard copy files in the filing
system in administration.
Your colleagues can be an excellent
source of information on previous
marketing efforts, both by your business
and your competitors. They should know
which previous efforts were successful
and which were unsuccessful. People who have been in the organisation for a while are
your best source of information, particularly if they are on the grassroots level. They may
be more realistic about the actual impact, whereas a consultant’s marketing report may
have been adjusted to achieve an apparent positive outcome.
STATISTICS
Official statistics such as the census
available on http://www.abs.gov.au are
excellent for exploring big picture
background information such as: the
average income in your post code area;
family status; age of residents; and all
other information gathered from census
questionnaires. So if you try to market
your business through a mobile phone
SMS campaign but your local area
population is mainly retirees, it
probably will not succeed and you will
have to rethink your strategies.
OTHER SOURCES
INDUSTRY BODIES
Industry bodies such as the Australian Federation of Travel Agents, Australian Hotels
Association or Meetings and Events Australia are also fantastic sources of information. The
information ranges from details about spending patterns, profitability, number of
businesses and industrial relations information to special marketing tools such as the Gold
Licence for Caterers.
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ADVISORY SERVICES
Specialised marketing companies and advisory services can also be used to support your
business in the development cycle, for specialised campaigns and research, or linkages
with media providers such as radio and television. Using these companies to design logos,
leaflets, websites and magazine articles makes sense. Their design and marketing
expertise can be used instead of taking up the time of your own staff, who may not have
the required expertise anyway. Good marketing companies also have data at their
fingertips about the area that you wish to reach, previous campaigns and their impact and
contacts with other businesses and networks that may prove beneficial to your business.
GOVERNMENT AGENCIES
Business advisory bodies such as the local Chamber of Business, Austrade and State
government advisory bodies are a valuable tool for reaching customers overseas, gaining
specific business information or linking with other businesses to market a region. You may
join a trade delegation going to China through the regional development office and join
other business owners. Such a trip is supported by the government; meetings and
presentations are arranged at your destination and provide considerable credibility. This
has much more impact than if each owner travels independently. If the Yarra Valley
Winegrowers Association organises a trip to Japan for some of its members through the
Victorian government or Austrade, the impact would be greater than if each wine grower
approaches potential distributors. Other advantages can also be gained such as common
delivery of goods in one container, or special packages which can be offered, from
accommodation to wine tours, special events and spa treatments for visitors.
WEBSITES
Websites are an often-underutilised marketing tool. Whilst the web has grown
substantially, meaning you can reach a greater market, the sheer size of the internet has
also made it challenging to reach that market. Always think about the outcome that you
would like to achieve. Firstly, you may want to show your products, services, contact
details and other relevant information. However, you should always try to provide a
possibility to get a return from the website. Marketing special events, email newsletters,
bookings online, special online rates are just some examples of how the web can be used
to reach a wider audience. Being clear about your target audience is crucial with the web,
as the visual images used create an immediate impression with the customer. The images
chosen to determine whether the customer sees the property as classy, traditional,
offering special services, etc. The website for a backpacker hotel would differ greatly
from a regional country spa resort.
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2B. ANALYSING THE MARKET
Understanding your company and its products is one part of analysing the marketplace.
This is done with an eye to identifying the business’ current position in the marketplace
and how it compares to competitors. Some aspects of your business and its environment
which should be analysed when developing a marketing strategy are:

When developing and implementing marketing strategies, it is necessary to know where
your business sits in comparison to competitors. SELECT THE BUTTONS AROUND THE CIRCLE
TO LEARN MORE.
• There are a number of methods for analysing a business and its market, including:

BENCHMARKING
Benchmarking involves comparing the business’ performance against available sets of
criteria that can reflect industry standards, best practice or other data to measure
against. It provides you with a way of measuring success in comparison to your
competitors. This can help businesses to identify any areas where they are doing better
than competitors, and areas for improvement.
BEST PRACTICE INFORMATION
Marketing strategies should incorporate best practice information. Best practice refers to
marketing procedures or methods that are considered within the industry to be most
effective. For example, when sending out marketing emails, it is best practice to use
dedicated email marketing software to successfully manage the process when emailing
large numbers of customers.
COMPETITOR INFORMATION
When developing marketing strategies, knowing about your competitors will help you to
better cater your marketing. For example, if you work in a restaurant and your main
competitor does not take bookings which leaves people frustrate when they miss out, a
point of difference in your marketing might be that you do take bookings.
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SWOT ANALYSIS
SWOT analysis is a commonly used tool for identifying the strengths and weaknesses of a
business or product as well as opportunities and threats. This involves analysing the
internal and external business environments.
SWOT stands for: Strengths, Weaknesses, Opportunities and Threats
IDENTIFY STRENGTHS AND WEAKNESSES – INTERNAL ENVIRONMENT
Identification of strengths and weaknesses requires analysis of all the factors under the
control of the business that can influence its success or failure. These are internal issues
that can have an impact on planning and implementing a marketing strategy. Some factors
that must be considered are human and financial resources; staff skill levels; equipment
availability and reliability; location and hours of operation; and capacity for
communication.
For example, consider conducting an analysis of a chain hotel with a bar, restaurant and
conferencing facilities. A table may be constructed which lists all the identified strengths
and weaknesses:

IMPLICATIONS OF EACH STRENGTH AND WEAKNESS
Once the strengths and weaknesses have
been identified, the manager must
determine the implications of each
strength and weakness and incorporate
that knowledge into the marketing plan.
For example, the fact that the hotel is
part of a well-respected, recognised
chain means that there is little benefit
from using marketing techniques to raise
public awareness. More stress should be
put on the fact that the hotel is situated
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downtown with easy access to shopping, restaurants and nightlife; and that the hotel can
host large conferences in modern environs.
As there is little walk-in custom for the restaurant and not much space for advertising
signage, the fact that the head chef is well-known and respected should be used as a
selling point in your marketing activities.
It is also advisable to develop a website for the hotel, either as part of the national chain
or as a standalone entity. Hotels which do not have an easily accessible website with
information and booking facilities will miss out on significant business.
STRENGTHS AND WEAKNESSES ANALYSIS
More in-depth analysis on each product and service can be conducted to identify which
products are performing well and which products are performing poorly. Once these have
been identified, ideas for what steps should be taken should then be developed. Strengths
should be built upon and exploited; weaknesses should be dealt with to reduce the
problem. A form such as the one on the right can be constructed:

IDENTIFY OPPORTUNITIES AND THREATS – EXTERNAL ENVIRONMENT
Opportunities and threats are those
factors outside the control of the
business that can have an effect on its
success or failure. Opportunities and
threats are determined by analysing
trends and developments in the external
business environment and the
marketplace in which the products and
services compete. These trends and
developments can involve changes in
demographics, economic and political
climates and other social influences which impact upon consumer behaviour and
competitor activity.
Some regular issues relating to the external business environment of a TH&E business are:
• Domestic and international economic climates.
• Fluctuations in currency exchange rates.
• Increase or decrease in competition.
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• Shifting supply and demand levels.
• Changes to the numbers and profile of international tourists.
• Changes in legislation, e.g. Industrial Relations, Taxation, Development grants.
ANALYSING OPPORTUNITIES AND THREATS
Long-term opportunities and threats can be identified and periodically analysed. An
example of an opportunity and threat analysis for a resort drawing on international
clientele is as follows:

OTHER OPPORTUNITIES AND THREATS
Other opportunities and threats present
themselves at various times. For
example, the establishment of a new
regional tourism bureau would be
designated as an opportunity. The
bureau is an opportunity for the business
to market itself in a previously
unavailable forum. Flyers can be
installed in the bureau office and links to
the business website can be included in
the bureau’s website. It is necessary for a
business to be aware of developments
such as this in order to take advantage of the opportunity before its competitors do.
An example of a threat could be the sudden, unexpected increase in fuel prices. This
influences domestic tourism particularly, as more money must be spent on travel costs.
Also, suppliers will need to increase the cost of their products, particularly in regional
areas. This cost will be passed on to the business, meaning higher expenditure and fewer
customers. It is essential that a business remains vigilant so they can plan for such events.
Once all the strengths, weaknesses, opportunities and threats have been compiled, it is
necessary to determine which of these are the most likely to occur and which have the
biggest potential impact on the business. Brainstorming sessions should be conducted to
identify possible solutions or approaches. It is essential that Marketing Managers involve
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personnel from all areas of a business such as F&B, Conferencing and Rooms so that
feasibility of approaches can be determined, and all sections of the business are kept
informed.
DEVELOPING MARKETING STRATEGIES
One of the key elements of developing marketing strategies is to have a clear picture of
the existing business environment. Strengths and weaknesses should be assessed and by
using relevant data, decisions can be made rationally, rather than on an emotional basis.
External factors always play an important role in planning and in this video data from the
Chamber of Business provides valuable information. Careful analysis will then lead to
better outcomes in the new strategy.
MARKETING MIX
The term “marketing mix” was coined by Neil H. Borden in 1965 to describe the various
components involved in a marketing strategy. The marketing mix is also referred to as
the 4Ps, the 5Ps or the 7Ps of marketing. Scroll down to view the components of the
marketing mix:
7Ps
• Price2
• Place
• Product
• Promotion
• Physical evidence
• People
• Process
PRICE
There are numerous pricing strategies available and the correct strategy must be
determined for each product or service.
PREMIUM PRICING
Use of a high price for a premium or unique product or service where a large competitive
advantage exists.
PENETRATION PRICING
Initial low price to increase market share followed by an increase in price. This is typically
used in a competitive market such as airline travel.
ECONOMY PRICING
Low-cost products and services with no or low-cost advertising and manufacture.
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PRICE SKIMMING
Charging a high price while a short-term competitive advantage exists. Large profit
margins encourage competitors into the market resulting in a necessary reduction of
prices. The ‘make hay while the sun shines’ approach.
PSYCHOLOGICAL PRICING
Tricking the consumer into thinking a product is cheaper than it is, e.g. charging $2.95 for
a cup of coffee rather than $3.
PRODUCT LINE PRICING
Offering discounted prices if more than one related product or service is purchased, e.g. a
massage is $100, a pedicure is $50 and a combination massage/pedicure is $130.
OPTIONAL EXTRA PRICING
A low cost to entice the customer followed by up-selling of additional products or services,
e.g. guaranteed window seat.
CAPTIVE PRODUCT PRICING
Offering a low cost for the initial purchase followed by increased prices for necessary
companion products or replacements such as printer cartridges.
PRODUCT BUNDLING
Discounted prices for two or more products purchased simultaneously. A commonly used
approach in fast food restaurants where several items are packaged together.
PROMOTIONAL PRICING
Using reduced prices during a promotion such as “beer of the day”, “destination of the
month” or buy-one-get-one-free promotions.
GEOGRAPHICAL PRICING
Modifying prices depending on the physical location of a business. This is particularly
common for large hotel chains, particularly those with properties in different countries,
regions, or parts of a city. Fast food restaurants offer different discount rates in different
socioeconomic areas.
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PLACE
Place refers to the channels of
distribution used to deliver a product. It
must be determined which channels are
the most appropriate to a business or
one of its products. Issues involved in
determining channels include the use of
direct or indirect channels; multiple or
single channels; and avoiding conflict
between channels.
For a hotel an indirect channel may be
through a travel agent or wholesaler and a direct channel may be through the business
website. It is useful to use multiple channels rather than just a single channel or
dedicated distributor as this creates too much reliance on one factor and if this channel
suffers, the whole business may be jeopardised. It is important that conflict between
competing distributors is avoided, such as neighbouring travel agents in a shopping centre.
DIRECT SALES DISTRIBUTION
The advantage of using a direct channel
is that the business has control over
supply lines, distribution and the quality
of service. Direct selling also reduces
administration costs and reduces prices,
by avoiding distributor mark-ups. The
disadvantage is that distributors will
have access to different markets that
you as a business would not have. For
example, your hotel may create a
cookbook with favourite recipes by the
chef and sell it directly to their clients,
keeping the revenue made from sales that exceed production costs. Jamie Oliver sells his
books internationally through distributors and whilst each party in the distribution channel
gets a percentage, the number of books sold is much greater.
INDIRECT SALES DISTRIBUTION
There are five commonly used types of indirect selling.
1. SHOTGUN DISTRIBUTIONCLOSE
The shotgun distribution approach involves selling your products and services through as
many different channels as possible. This approach is not concerned with a business’
image, as the promotional material and sales information will appear in many and varied
forums. It is simply concerned with exposure. Channels such as travel agents, websites,
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the Yellow Pages, magazines, television, billboard advertising and tradeshow advertising
are just some of the channels that can be used. Shotgun distribution is often used by large
hotel chains.
2. EXCLUSIVE DISTRIBUTIONCLOSE
Exclusive, or rifle distribution, involves selling your products and services through a very
limited number or type of channel. This approach is extensively used by businesses wishing
to portray a specific image. Luxury hotels will only advertise in high culture style channels
such as fashion magazines, in order to portray an image of exclusivity. Adventure tour
operators advertise in publications that appeal to young travellers.
3. SELECTIVE DISTRIBUTIONCLOSE
Selective distribution covers anything in between extensive and exclusive distribution
approaches. This is done to strike a balance between maintaining an image and reaching
as large an audience as possible. Selective distribution ensures that more than one aspect
of a target market can be reached. Products and services can be matched to individual
channels in order to target the correct audience for each product. For example, the Accor
Group owns thousands of hotels which cater to different markets. Accor would not market
their Formule 1 hotels through the same channels as their Sofitel or Mercure hotels.
Selective distribution is based on the concept of the Pareto principle that 80% of your
sales come from 20% of your customers. In other words, customers who are suited to your
products and services will continue to purchase them. By focussing your efforts on this
group of customers you can achieve maximum impact.
4. AGENTS AND WHOLESALERSLOSE
Wholesalers act as middlemen to distribute your product, usually via chains of agents.
Wholesalers buy your product and then add a fee or charge a commission when they onsell it to third parties. If you deal directly with travel agents they will often charge a
commission on any products they sell on your behalf. The benefit of this approach is that
agents and wholesalers have specifically targeted markets that you can access.
5. VALUE ADDED RESELLERS (VARS)OSE
VARs are businesses which incorporate other products and services in their own products
and services, such as computer companies who build new computers using independent
parts. In the hospitality industry, companies like Flight Centre combine various products
into one bundle for sale to the general public. VARs can be useful in increasing exposure
and customer loyalty, without the business having to do as much leg work. A benefit of a
VAR is the sharing of customer and sales information.
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CHANNEL SELECTION
There are several options which need to be considered when deciding which channels are
appropriate. You need to think about where, how and when your target market is likely to
buy.
PRICE
Different channels require different prices. A smaller operator may decide that using a
small retailer and charging a high price is better than using a major wholesaler and
charging less, however a larger operator might think differently.
IMAGE
Where you advertise and sell has an effect on your business’ image. An exclusive resort
would probably choose to advertise in fashion magazines and other places associated with
high culture, rather than in local newspapers.
COMPETITORS
Analysing which channels your competitors use can help you decide which ones to use
yourself. If some of them are highly successful then it might be useful to use the same
approaches. Alternatively, you could seek out unused channels and thereby gain an
advantage.
ADMINISTRATION
If you are choosing multiple distribution channels you will need to be able to administer
them effectively, e.g. being able to deliver to each channel in a timely fashion.
PRODUCT
When selling your product you must
understand not only what you are
selling, but why you are selling it. Is
your pub selling beer because it
quenches thirst and relieves stress or are
you selling beer because of the social
opportunities that drinking in a pub
allows?
Understanding the Product Life Cycle
(PLC) is important for a business. For
example, in nightclubs it was once
popular to drink tequila shots using the “lick, sip, suck” method. However, this is no longer
as popular as it was and businesses need to be aware of these trends. It is not a good idea
to buy a case of tequila only to find out that patrons are now asking for “Jager bombs”.
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PROMOTION
Good knowledge of the market and your
products will lead to good promotions.
The correct type of promotion must be
chosen to maximise the effectiveness of
your marketing strategy. Knowledge of
previous promotional activities and
their effectiveness, both from your
business and from your competitors,
will help to formulate an appropriate
mix of promotional activities.
PHYSICAL EVIDENCE
Physical evidence is especially important when delivering a service. As a service has no
obvious tangible aspect to it, it is important to create one to remind the customer who is
delivering the service. This can be done through using the company logo on tickets,
thankyou notes, etc. The physical aspects of your service such as the environment, the
furnishings, uniforms and website can also provide a tangible aspect to your intangible
service.
PEOPLE
The people involved in delivering your service are extremely important to the impression
given to your customers. Staff need to be trained to carry out their job roles well; have
extensive knowledge of the product and service; have excellent customer service focus;
and be able to up-sell and on-sell. For example, a concierge, tourist information officer or
a travel agent must have in-depth knowledge of local attractions, shows and restaurants;
contact details for limousines and airlines; and travel times to airports and other
destinations.
It is the people, the staff who represent the company to the customer, who are the face
of the company. To get return customers, your staff need to be able to create memorable
links and generate trust. Think about your own habits: why do you go to a specific pub or
club? Besides the offerings and ambience, it is often the relationship that you may have
formed with the owner, manager or staff. They recognise you, welcome you and your
friends; and that makes you return regularly.
PROCESS
The marketing process is a means of achieving a goal for ensuring efficiency of the
marketing strategy implementation. The process involves all aspects of delivering the
products and services to the customer. While a customer may only see the end result of
the business’ service, the process of delivering that service involves all aspects of
management. The process must be made clear to all staff involved to make it effective. It
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is pointless to design professional-looking leaflets if they are left in a pile and not given
out to customers!
THE MARKETING ENVIRONMENT
The marketing environment analysis tool explores the factors that impact on your target
market and customers in their purchasing decisions. At the centre of the model is your
target market. This is surrounded by the marketing influences on them and all other
variables which affect marketing. The surrounding influences can include products;
competitors; suppliers and distributors; economic and political factors. To aid in analysis
the influences can be divided into the 4 PEST classifications:
• Political and legal
• Economic and demographic
• Social and cultural
• Technological
More recently, marketing has also had to consider the environment as an influence on
marketing strategy.
POLITICAL AND LEGAL
The political and legal
environment consists of the legislation
and government agencies which impact
upon marketing and can differ between
societies. Much legislation is created in
order to protect companies. For
example, trademarking and copyrighting
prevents rival companies from using
your logos and business name in order to
exploit your public profile.
Legislation is also in place to protect the
consumer. The Australian Competition
and Consumer Commission (ACCC) and Department of Fair Trading were set up to ensure
that businesses trade in a fair and legal manner. These bodies act as watchdogs to ensure
that businesses do not sell inferior quality products or lie about available services. Local
and regional laws and rules also affect the ability of a business to market itself, for
example a town may ban all advertising signage from the main street.
AUSTRALIAN CONSUMER LAW
The Australian Consumer Law (ACL) commenced on 01 January 2011. It was established as
part of the Competition and Consumer Act 2010 which replaced the previous Trade
Practices Act 1974. ACL covers laws for consumers and business in relation to consumer
protection. This includes unfair contract terms, consumer guarantees, sales practices,
consumer rights and product safety.
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PURPOSE
Consumer law is designed to promote competition in the marketplace and prevent unfair
or anti-competitive work practices. By controlling competitive activities, this Act not only
stops a business from competing unfairly, it also protects the business from other
businesses that might attempt to compete unfairly. Conduct such as predatory pricing and
unconscionable conduct is outlawed under the Act.
WHAT DOES CONSUMER LAW COVER?
Consumer law also covers other aspects of a business’ conduct, such as:
• Pricing
• Advertising
• Complaints handling
• Product safety
• Warranties
IN THE TH&E INDUSTRY
In TH&E, where advertising, discount pricing and promotions are commonplace, it is
important to ensure that consumer laws are not breached. Any promotional materials must
have “small print” outlining the terms and conditions of the promotions and any add-ons
must be specified.
LABELLING
Products must not be sold under the wrong label, e.g. beer keg lines must not be
deliberately swapped and liquor must not be rebottled and sold as more expensive brands.
If menu items specify the types and origins of ingredients in the dishes, then they must not
be substituted, e.g. you should not serve “lobster” filled with seafood extender if it is not
specified on the menu.
COPYRIGHT AND PRIVACY LAWS
COPYRIGHT
Copyright protects writing, music, still images, moving images, computer programs and
recorded sounds. According to the Australian Copyright Council, something is protected by
copyright if it is:
• A form of expression covered by the Copyright Act,
• Recorded or “fixed” (for example, written down or saved in a digital file), and
• The result of some skill and effort, and not merely copied from somewhere else.
Go to www.copyright.org.au for more information.
Any business that uses recorded music or music videos as part of their business must pay a
fee for use of the copyright material, under the Copyright Act. Businesses may need 2
licenses, depending on what is played and how it is played, from Australasian Performing
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Right Association Ltd (APRA) and also from Phonographic Performance Company of
Australia (PPCA), which will provide a blanket license covering the vast majority of
copyright material. www.ppca.com.au/music-users-/licensing-home/ and www.apraamcos.com.au for more information.
PRIVACY
Businesses often compile data on their guests in a bid to tailor their product and service
offering to their clientele. Whenever this information is taken, it is subject to privacy
laws.
In Australia, there is a federal Privacy Act as well as state Privacy Acts. These Acts govern
what is required of businesses, as well as the rights of the people whose personal
information is collected.
Essentially, organisations must control how they collect, use, disclose, store, destroy and
update personal records that they hold. Under current legislation a person can:
Know why their personal information is being collected
• Know how it will be used and which organisations will be given access to it.
• Request not to receive direct marketing material.
• Correct inaccurate information that is held about them.
• Ask for access to their stored personal information.
In the Hospitality industry it is inappropriate to provide information about guests to other
parties, especially for the purposes of marketing.
Go to www.privacy.gov.au for further information
TECHNOLOGY
Today, many new technologies used in marketing activities deal with personal
information. Therefore, privacy laws need to be considered. For example, if your business
keeps a database of customer contact information for targeted advertising, there are laws
that need to be followed. With so much information being collected online, it is important
that customers’ details are kept secure.
Cyber security is also increasingly an issue. In mid-2015, cyber-crime incidents had
impacted 30% of small businesses. Cyber-crime refers to any criminal activities carried out
over the Internet or with a computer. CERT Australia is the national computer emergency
response team and is the point of contact for any cyber security issues that impact major
businesses. The Australian Cyber Security Centre provides a Stay Smart Online Small
Business Guide which has advice for small businesses in regards to cyber security.
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INFLUENCING FACTORS
Below are some factors that influence the development of marketing strategies.
ECONOMIC AND DEMOGRAPHIC
The economic environment incorporates all economic factors which influence how much
people can spend, as well as what, where, when and how they will spend. The economic
environment is influenced by fluctuations in income levels, interest rates and inflation.
Changes in patterns of earning such as the increase in numbers of dual-income families
and single parents affect consumer buying power. Affluent families have more money to
spend on good quality products and services, but are also affected by interest rates. Many
have mortgages, which may be higher due to the location of the property.
Changes in income distribution affect consumer buying power. Traditionally, consumers
can be divided into upper, middle and lower socioeconomic classes, each with their own
spending patterns. As changes in the number of people in the different classes occur,
marketing efforts must be modified to accommodate this. Over the last few decades, the
traditional “blue-collar” workers have seen a rapid increase in average wages, resulting in
a new market for many products.
Annual analysis by Hays Recruitment provides an indicator of the average wages for
different industry sectors and different geographic locations. In 2016, for example, the
average salary for a Bank Branch Manager in Sydney was $110,000, while a welder working
in the mining sector in Western Australia had an average salary of $132,500. A university
graduate geologist working in the same mine could be earning $70,000-$90,000. Changes
of this type can occur quickly and it is important for marketers to keep track of these
trends and to tailor their approaches appropriately.
The demographic environment describes where people live and spend their money as well
as how different groups of people behave. In Australia, there was a large movement of
people towards Queensland and Western Australia throughout the 1980s and 1990s.
Movements of this type open up new markets and close other markets.
Ethnic makeup can affect buying patterns within regions, for example recent immigrants
tend to stick together in close communities and as a result are not easily reached via
traditional marketing techniques. Adult immigrants often tend to shop locally, particularly
for fresh produce, while teenagers and young adults will tend towards the large shopping
centres and prefer pre-packaged food.
Population profiles shift over time, which has implications for marketing. Groups such as
the baby boomers, born after World War II, have changed their spending patterns many
times as they have aged.
Understanding how demographics and economic influences affect your target market’s
behaviour is vital.
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SOCIAL AND CULTURAL
People who grow up in different societal and cultural groups will behave differently as
consumers. Different groups often share similar core beliefs, such as respecting family and
obeying the law, while they can have different secondary beliefs, such as appropriate ages
for leaving home, or social acceptance of alcohol consumption.
When marketing towards particular groups, or subcultures, it is important to understand
what appeals to them. Working mothers, Christians and teenagers, as groups, will disagree
on many topics while agreeing on some. Marketers need to tailor their approach to the
particular social group.
Popular culture has a large influence on people’s spending patterns. People emulate their
heroes, such as sport stars, musicians and actors. Marketers often use these people to
either sell their product or affect people’s attitudes towards products, e.g. using faux fur
in fashion.
Recent social pressures have led to an increase in environmental awareness, a focus on
healthy eating and a reduction in cigarette smoking. Marketers need to keep track of
these social and cultural trends in order to keep up with the market.
The concept of triple bottom line is recognised as being important to businesses. This
concept describes the business operations in terms of sustainability in:
1. Economic terms, e.g. business profitability.
2. Environmental terms, e.g. conservation of resources and waste minimisation.
3. Social terms, e.g. diversity of staff and ethical HR procedures.
The success of a business is largely dependent on the management of income and
expenditure levels. Budgets are used to facilitate this management and should be applied
in all types of Tourism, Hospitality and Events businesses, whether that be a local café, an
event facility, a tour booking office or an international hotel.
At a supervisor level you will need to manage your expenditure and make sure that you
are meeting the budget targets. Beyond that you can also try and identify how things can
be improved.
In addition to saving money you might also identify ways of improving revenue. Ensuring
staff are using appropriate sales techniques and understand how they can up-sell or crosssell is a great way of maximising revenue. For example, selling an additional airport
transfer in addition to a tour booking will create more revenue for not much extra effort.
Social sustainability refers to the ethical practices of a business in considering all the
people involved – owners and shareholders, staff, customers and suppliers. One example
of a social sustainability program is the purchase of Fairtrade items such as coffee, which
is often produced in areas known for exploitation of workers.
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A business has a responsibility towards its employees to ensure that they are provided with
a safe, secure and healthy workplace. Staff development programs and social programs
are often implemented as a way of forging a team spirit within the company.
TECHNOLOGICAL
The technological environment has a huge influence on consumer behaviour. Currently,
the vast majority of people use mobile phones. Smart phones have flooded the market,
with features including cameras, internet access, GPS, MP3 players, etc.
For many people, their phones are the primary tool of engagement with the broader
world. They will use the web browser, access social media and engage with various apps in
order to consume, use and interact with information. The mobile phone platform has
become a hugely important marketing battleground, so marketers need to understand and
be aware of how to use the platform for their gain.
Some statistics:
• 80% of consumers use their phone to shop – some shops offer mobile-only coupons
that can be accessed when in the store
• 15% of all web traffic is mobile-based – your website needs to be mobile-friendly!
• 91% of mobile internet access is for social activities – you must engage with your
customer base
• Mobile advertising forms 30% of Facebook’s advertising revenue – try new ways to
reach your customers
In the wider sense, the technological environment has led to better health, increased
transportation and worldwide access through the internet. Many businesses have websites
displaying their establishment and its services in order to attract their internet-savvy
target market. In addition to websites, social media accounts provide a new platform for
establishments to promote their business.
ENVIRONMENTAL
In the current social climate, the influence of the natural environment on consumer
behaviour is enormous. The trend towards environmental responsibility has been growing
since the 1960s and the hippie movement. Social pressures have led to governmental and
business responses such as the banning of CFCs, signing of the Kyoto Protocol and the
recent attempts to begin a carbon trading scheme.
It is important for businesses to be seen as behaving in an environmentally responsible
manner. Australia underwent an extensive drought period throughout the late 1990s and
much of the following decade. Water shortages reached such a point that pubs in the
Goulburn region started purchasing plastic drinking cups in order to save water by not
washing up glasses. While this had a local positive effect, it must be remembered that
plastic is not biodegradable and consumes a lot of water during production.
Resorts and tourism destinations with outdoor gardens are increasingly using recycled or
tank water, rather than relying on town drinking water. The Voyages Brampton Island
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resort in Queensland produces its own water via a desalination plant and advertises that
all gardens are watered with recycled water.
Carbon footprint has become another common term in our vocabulary. It refers to the
impact that an individual or business has on the environment. By analysing the level of
emissions associated with all aspects of the business, you can then look at minimising or
neutralising it through offsets and changes in behaviour. This can then be publicised and
used as a competitive advantage whilst also making a positive impact on the environment.
Carbon footprints calculations incorporate:
• Energy consumption
• Travel costs
• Shipping costs
• Logistics costs
• Maintenance equipment
There are also many indirect impacts on the environment. Using renewable energy,
reducing energy consumption and avoiding unnecessary travel are ways of reducing your
carbon footprint. Think about ways of reducing your footprint in the TH&E industry:
• A restaurant sells only locally produced wines – reducing freight emissions
• A resort uses “grey” water on its gardens – reducing wastage
• Buying in bulk – reducing emissions and pollution from excess packaging
• Offer tap water first – bottled water is shipped long distances and plastic
production involves large emissions
• A conference uses online registrations – reducing the amount of paper needed for
sending and receiving registrations
You can also consider sustainability to be a marketing tool. Many outdoor events now offer
recycling incentives to attendees, e.g. paying a dollar for bringing a plastic cup back to
the bar. Given the potential impacts an event can have on the environment, promoting
your initiatives can be a positive PR generator.
COMPETITOR ANALYSIS
For a business to be successful, it must constantly be comparing itself to its competitors in
order to find some kind of advantage. Information about your competitors that you will
need includes:
• Who are the competitors?
• What are they trying to achieve?
• How are they trying to achieve it?
• What are their strengths and weaknesses?
• How will they respond to your presence?
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WHO ARE THE COMPETITORS?
In any marketplace there will be existing or new competitors who offer the same service,
a similar service, or a different service that competes for your market. For example, 2
beachside caravan parks compete directly by offering the same products and services. The
caravan parks also compete with the low-budget motel down the street, which offers a
similar service. In a broader sense the caravan parks are competing with car companies,
sport stadiums and restaurants for the same consumer money. A family may choose to
have fewer holidays and go to the football more often instead.
It is important to address competition on each of these levels. Defining what industry or
area your products and services are relevant to affects how you analyse your competitors.
The beachside caravan park can classify itself as being in the beachside holiday market;
the family holiday market; the short-term accommodation market; the general holiday
market; and many others. Depending on how it classifies itself affects how it sees
competition and therefore how it will market itself.
It is important to maintain a wide scope of competition in order to deal with new products
or competitors. In many industries, new technologies completely replace old technologies
and if businesses are caught unawares then they will suffer. For example, in the recording
industry, records were replaced by magnetic tapes, tapes were replaced by CDs and CDs
have declined dramatically due to the availability of downloadable files and streaming
services. It is necessary for companies in this industry to see new technologies as
competition, not just other companies selling the same product.
In the fast food industry, burger chains competed directly with each other for many years,
with similar products and strategies. More recently they have had to compete with
“healthier” options such as Subway and indirect competitors such as coffee shop chains.
The new competition reflected a shift in society’s opinions and the burger chains have had
to significantly remodel themselves to stay competitive.
Click here for an example of Direct and Indirect Competition
WHAT ARE THEY TRYING TO ACHIEVE?
Once the competitors have been identified it is necessary to determine their objectives.
Different competitors will emphasise different goals in order to achieve success. Some will
emphasise short-term profit, others will try to become industry leaders in terms of service
or technology, while others will try to offer low-cost alternatives.
Understanding how each competitor thinks will help to predict how they will react to
certain situations. A 5 star hotel will act considerably differently from a budget motel
when a new, internationally recognised luxury resort opens nearby.
HOW ARE THEY TRYING TO ACHIEVE IT?
It is useful to know the strategies and techniques used by your competitors. Two local
pubs may offer vastly different service levels and product range and therefore compete
for different sections of the pub-going market. One may emphasise their extensive
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imported beer range and knowledgeable staff, while the other might emphasise its
cheaper prices for local draught beer.
If a third, new pub opens, it will have to determine what strategies to use for generating a
market. It may choose to directly compete with either of the existing pubs or it may
choose to cater for a different market segment, such as wine drinkers. If direct
competition is chosen, then careful analysis of the existing competitors’ successful and
unsuccessful approaches needs to be done.
WHAT ARE THEIR STRENGTHS AND WEAKNESSES?
Assessing your competitors’ strengths and weaknesses allows you to determine their
capabilities. While financial and performance figures can be hard to obtain, estimations
can be made from research and personal experience. Visits can be made to rival
businesses to experience the products and services first hand.
Competitor information can be sourced from official documentation (recorded data),
research and analysis (observable data) and anecdotal information (opportunistic data).
Potential sources of these data are outlined in the table shown below:

Information that should be sought or is desirable includes:

HOW WILL THEY RESPOND TO YOUR PRESENCE?
Your competitors will respond to your presence and decisions in a variety of ways. By
understanding how your competitors think, you have an advantage of predicting how they
will react. Some competitors will be quick to react, others will be slow and some will only
react to certain situations. A reduction in prices often results in a quick reaction from
competitors, as can often be seen in the airline industry.
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Some competitors simply won’t have the capacity to react. A harbour tour company may
advertise its new boat but its competitors don’t have the time or money to create a
competing product. Some may choose to advertise their own point of difference with you,
but many will be unable to respond in a timely fashion.
Knowing how different competitors will react may help you in deciding who to directly
compete with aggressively. Competing with weaker competitors can be easily successful
but does not bring large gains. Competing with stronger competitors can be hard and
sometimes end badly, but there are usually much larger gains to be made.
Damage Control: The New Player
SCENARIO
A 15 year old hotel had been operating
successfully, drawing guests from the
local area as well as interstate and
international. Occupancy rates were
steadily high, until a sudden drop. It
became apparent that the drop in
occupancy rates was due to the opening
a brand new hotel in the area at same
accommodation level. Occupancy rates
remained low until new advertising
materials could be produced and distributed. Even then the rates never returned to the
previous level.
Why was the hotel unprepared? What should have happened to prevent the sudden,
unexpected drop in occupancy rates? How can the hotel entice more guests and
customers?
TRENDS AND DEVELOPMENTS
Managers in the TH&E industry need to be particularly aware of trends and developments.
The industry applies to everyone in the world and so is particularly susceptible to social
changes and influences. Ensuring that quality services are delivered to customers requires
businesses to look at themselves from the customer’s perspective.
CUSTOMER DEMAND
Customers are increasingly demanding higher quality with lower cost and businesses will
have to adapt to these requirements. Many people have travelled internationally and have
seen many standards of living and service provision. These people understand the value of
a dollar and when they pay for a service they expect value for money.
THE INTERNET
The internet has revolutionised the market place and potential customers can research
and compare a vast variety of locations, destinations, products and services from
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anywhere in the world. Businesses must be able to cater to discerning customers and
provide a high level of customer service and satisfaction.
QUALITY AND COST
An increased demand for high quality and low cost puts pressure on the industry. Prices
are dependent on costs of the commodities required to provide a service. In order to
create a point of difference the level of service you provide must be high. This relies on
good management and staff training in order to maximise your business’ potential. This is
particularly prevalent in the travel sector, where online wholesalers now offer their
products directly to the consumer, so the travel agent has to work extra harder to prove
their worth.
Adding to the difficulty of providing low cost, high quality services is the perception that
low cost equals low quality. Steps must be taken to counteract this public perception.
MEETING CUSTOMER EXPECTATION
When Virgin Blue entered the market as a cut-price airline, it informed customers exactly
what to expect and why it was so cheap. Virgin Blue specified that all food, beverages and
in-flight entertainment must be purchased and that no fancy lounge areas would be
provided. Customers would have to walk across the tarmac as they did not wish to pay
higher costs for direct terminal access. However, they emphasised that they had new
planes, comfortable seats and young, attractive, highly trained staff.
This “no bull” approach told the public exactly what to expect and allowed Virgin Blue to
create a positive public image. They were able to provide good service at a low cost and
compete for market share. By avoiding the perceptions associated with lower costs, Virgin
Blue was able to make a profit in its first year of operation and has become a significant
player in the Australian market. Virgin Blue also identified a new niche market and
introduced a class of travel between economy and business classes called premium
economy.
A similar approach has been taken by some restaurants who wish to provide good quality
products but save on costs. On Brisbane’s Southbank one of the bistro style restaurants has
been very successful. The restaurant provides large servings of above-average quality
food, yet they have little décor, the furnishings and menus look cheap and customers
order at the counter. But by saving on some costs, the restaurant has been able to provide
good quality products at a low cost.
WEBSITES
Websites such as www.htrends.com and www.traveldailynews.com offer up-to-date
industry analysis, articles and information on current trends. Karen Weiner Escalera of the
KWE Group predicts a continuation of the swing back towards the “slow food” movement
of quality local produce and handed down recipes. She predicts a growth in Epicurean
travel, similar to a winery tour but on a grander scale. Tourists will visit markets,
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agricultural villages, participate in harvests and learn traditional methods of food
production, for a price.
MOST COMPETITIVE COUNTRIES IN TOURISM AND TRAVEL
The 2015 World Economic Forum has declared that the most competitive countries in the
tourism and travel sector are:
1. Spain
2. France
3. Germany
4. United States
5. United Kingdom
6. Switzerland
7. Australia
8. Italy
9. Japan
10. Canada
This ranking is determined using 60 different variables including politics, infrastructure
and security issues. This indicates that Australia is in a strong position for the future.
Deloitte reports that tourism experts expect Australia to grow as an international
destination, despite the costs of international travel.
PRICE TRENDS
Downward pressures on price have
become particularly acute since the
terrorist attacks of the early 21st
century. Hotels and resorts were
adversely affected, with occupancy rates
in some cases being as low as 20%-25%.
Many hotels turned to third party
retailers such as discount websites,
including www.lastminute.com and www.wotif.com, to sell their ‘distressed stock’ i.e.
rooms that hotels had no chance of selling. In the US, overseas arrivals took a while to
recover to their pre-2001 levels. In 2000 there were 26 million visitors, in 2003 there were
18 million and in 2007 there were 23.9 million.
Discounting can be a useful short-term solution to a problem but can be very risky. It will
have a small impact on occupancy rates, but if the discounted prices are continued for an
extended period of time, then customers will expect the discounted price. Once the
reduced price has become the benchmark it is very difficult to increase the price to the
original level. If customers become used to staying in 5 star hotels at a much reduced rate
then they will expect to continue to do so in the future. Price increases in these situations
must be handled carefully.
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When there is a downturn in arrivals, this will be reflected with a lack of hotel room
creation. For example, following the Sydney Olympics in 2000 no additional hotels were
built for a period of time, as occupancy rates have not justified the major investment
needed. Development costs for a new hotel include:
• Land prices at approximately 10-15% of the total project costs
• Hotel equipment and furniture which forms 10-20% of the cost
• Kitchens and décor which are major component costs
• Pre-opening expenses and operating capital which are unique hotel industry costs.
Developers also want a return on their investment and this is usually in the vicinity of 10%.
These costs must then be considered in the profitability of the overall operation, based on
expected occupancy rates, rack rates and profit achieved form other cost centres.
Discounting can also have the effect of damaging public perception of the brand. High-end
hotels do not want to be associated with discount prices as they may be seen as being at
the lower end of the market. Customers with a lot of money like to pay higher prices for
the very highest service. Hotels like The Observatory and Palazzo Versace need to
maintain higher rack rates in order to maintain the public perception of their exclusive
status and to cover the higher expenses incurred due to the cost of fittings and staff costs.
Sustained competition using discount prices can have serious effects on a business.
Operating costs generally do not reduce in line with the reduction in accommodation
price. If the discounted rates are maintained for an extended period then the amount of
money available for maintenance and improvements will be reduced. If upkeep is affected
then this will in turn affect the public perception of the hotel as being of lower quality. It
is then even more difficult to increase prices when the level of service does not increase
along with it.
RESTAURANT TRENDS
A long-term trend in the food industry is
the trend away from silver service
restaurants towards fast food and
convenience. This has mirrored the shift
away from the one income, forty hours
per week family, towards the dual
income family with a long commute and
a large mortgage. Financial pressures and
time constraints have led to an increase
in quick, low cost and less labourintensive products. People still like to go
out but instead of going to an exclusive
restaurant people prefer to spend less
and go out more often. Casual bistro-style meals with informal surroundings and relaxed
service are often preferred.
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However, the increasing public health crisis may influence the way people eat.
Convenience products are getting healthier in response to the crisis and the damage to the
business’ reputations. More people are choosing the café and deli style convenience foods
as a result of their health awareness. Vegetarian options are also much more common and
have become a standard feature on many menus. Some restaurants have realised that
convenience is probably here to stay and have embraced it in their service. Seaside dining
restaurants have also included a takeaway section, to cater to different markets at
different times. The same kitchens are turning out à la carte fine dining alongside
battered and deep-fried fish and chips.
The desire for people to eat healthy but in a convenient fashion has led to the
development of fast health food chains. Chains such as Boost, who sell juices, smoothies
and crêpes, are popping up in shopping centres around the world as an alternative to
burger joints.
TOURISM TRENDS
One of the trends in recent times is the
shift in popularity away from traditional
travel routes and organised tours,
towards independent and self-organised
tourism. This is primarily a result of
increased availability of travel
information and booking on the internet.
This independence has also led to
segmentation of traditional tourism and
the creation of niche markets.
The last few years has seen a massive
boom in social media, with tourism companies quick to follow in the general population’s
footsteps. Social media gives companies direct and immediate access to their customers
and, if used cleverly, can be a valuable marketing channel.
Many businesses have Facebook profiles, where customers can view the latest news,
pictures, videos and sales. Airlines such as Jetstar and Virgin Blue have used Twitter to
offer special prices which are only accessible to individuals who sign up to receive their
tweets. In recent times, Instagram has also been used to market destinations.
Tourism companies have followed in the footsteps of the accommodation sector and are
using the internet to advertise and sell their products. Last minute websites allow
customers to view special tour deals and book their activities online.
In recent years cruising has become much more popular in Australia and many more cruise
ships now call Australia home. In addition to the permanent cruise ships based in
Australia, many other cruise lines send ships to Australia for the summer. The benefits of a
cruising holiday are:
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• Visit several locations and only unpack once.
• All meals included.
• All entertainment included.
• The journey is part of the holiday.
• Excellent kids club programs.
EVENT TRENDS
Every year decor trends change, often in
line with the fashion industry. In one
year there may be a focus on floral
prints; the next year understated and
cool colours; the next year a return to
bold colours or a natural look. The same
goes for other components such as
interaction spaces – trends shift from
large shared spaces to laidback and
intimate areas, which also depend on
the style and purpose of the event.
Social media and new modes of
interaction and communication have greatly impacted on how conference delegates gain
access to and utilise information.
Use of audience feedback technology allows participants to take an active role in a
seminar or discussion as part of a conference. New technologies such as smartphone apps
like bizzabo are used to organise and personalise events for participants.
Social media integration and live streaming allow access to a much broader audience.
Conferences can now reach many more people than can fit into the event space.
Technology is ever changing and new software and systems are constantly being
introduced. Technology is used in all aspects of Event Management, from those used to
organise events such as software, identification and accreditation systems and security
systems, to those used to enhance events, such as audiovisual technology used in
conferences and special events.
Examples of technology trends impacting on events include:
• New project management systems and tools.
• Delegate registrations and tracking systems.
• Computer-aided layout and theme design.
• Use of mobile phones.
• Wireless technology.
• New types of ticketing.
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DISTRIBUTION CHANNELS TRENDS
The ongoing introduction of technology
is changing the way TH&E businesses can
connect with their markets. In
particular, a business website is now an
absolute necessity. Many businesses also
have internet presences on social
networking sites such as Twitter and
Facebook. Businesses can run weblogs to
keep their customers up to date. Most
people now have easy access to highspeed internet connections which can
handle large, complex websites.
One of the effects of the success of the internet as a medium will be a reduction in
reliance on traditional methods of distribution. People prefer to log on to a hotel website
and make their booking without having to talk to a staff member. This process has also
become popular with some restaurants. In order for this to be effective, there must be a
simple and easy-to-follow process to minimise complaints and problems. Customers can
now easily choose a destination, compare prices and then decide on and book every aspect
of a holiday including accommodation, travel, transfers, tickets, tours and restaurants.
Businesses need to recognise that competition is global and to choose distribution methods
which allow for this. Local businesses can have international reputations, both good and
bad. Particularly in Europe, customers can choose which restaurant they wish to visit not
just from their own neighbourhood or city, but from the entire country and even
neighbouring countries.
Fewer people are using travel agents and many businesses purchase their air travel from
wholesalers. While customers are looking for personalised service, at the same time they
usually wish to avoid dealing with people.
PROMOTION TRENDS
Select each of the navigational circles below to travel through some information regarding
promotion trends.
STEP 1
The type and style of promotional activities tends to rely on available technology, the
amount of competition and public perceptions. For example, in the fast food industry
much money is spent on emphasising healthier and unprocessed aspects of their menus.
Where there are few actual points of difference, businesses attempt to create perceived
points of difference.
CTI_SITXMPR007_Learner Guide VI.2020 34
Some examples of this include:
• Finger licking’ good
• Better Ingredients. Better Pizza.
• The burgers are better at Hungry Jack’s
• Subway. Eat Fresh.
• Can’t beat that taste
• Always Fresh
STEP 2
These taglines also reflect a trend in marketing away from 30 second ads and musical
jingles towards short, punchy slogans designed to capture the audience and portray the
business’ image. With the increasing number and type of distractions to potential
customers it is essential to capture their attention whenever possible. Many tourism
advertising campaigns use this principle:
• Incredible India
• Malaysia, Truly Asia
• 100% Pure New Zealand
• Uniquely Singapore
• Estonia. Positively Transforming
• What happens here, stays here
• Croatia. The Mediterranean as it once was
• There’s Nothing Like Australia
STEP 3
Each of these slogans stresses a particular aspect of the tourist destination which the
destination wants to be emphasised. Malaysia and Croatia are emphasising their
originality, while Estonia is trying to portray itself as developing towards the rest of
Europe, but maintaining cheap prices and old world charm. The slogan not only describes
the country’s situation, but also implies that if you visit, you will come back a better
person. The New Zealand slogan emphasises the natural beauty of the country. Perhaps
the most successful slogan to date is Las Vegas’ “What happens here, stays here” slogan,
which was responsible for turning around a 5% annual decrease in tourism into an annual
increase.
STEP 4
Hotels in different segments of the market use various methods to distribute their
marketing. Mid-range hotels often rely on third parties for recommendations and bookings,
while top-of-the-line hotels can use travel shows and magazines to convey their message.
Large hotel chains and expensive hotels that cater to an international market often use
slogans as well:
• Euler. It’s not a hotel, it’s a way of life.
• Relax, it’s Holiday Inn
• Who’s taking care of you? – Sheraton Hotels
• The best value under the sun – Days Inn Hotels
CTI_SITXMPR007_Learner Guide VI.2020 35
• Gleneagles. Come back Richer.
STEP 5
Each of these slogans is short and snappy and easily communicates a clear message. It is
important when devising a slogan that the message is easy to understand and memorable.
Examples of slogans that are too long and messy or overly complicated include:
• An economic epicentre where high tech meets baroque – City of Dresden
• Highly strung grand pianos, relaxed people. Not the other way around. – Hotel Ana
Singapore
• Fifty Hotels. Twenty-Two Countries. One Philosophy. – Four Seasons Hotels and
Resorts
In the case of Dresden’s slogan, the sentence itself is hard to say and the target market is
also unclear. For Hotel Ana the slogan is simply too long. Better options may have been
removing the second sentence or “Only the pianos are highly strung”. People are good at
inferring the rest of the meaning, so it is not necessary to spell it out. This was important
for the Las Vegas slogan “What happens here, stays here”, as it allows each individual to
fill in their own slightly different interpretation. For Four Seasons, part of the message
gets across i.e. that they are an experienced, international hotel chain; however their
philosophy is unclear. Is it value for money, exemplary service or something else?
HUMAN RESOURCES TRENDS
There are several human resources
issues of concern to TH&E businesses,
including:
• Shortage of skilled workers.
• Low entry numbers into the industry.
• Perception of the industry as not
being a career industry (especially
hospitality).
• Increasing numbers of businesses
competing for available staff.
• Expectation of higher levels of
customer service.
• Changes in lifestyles of staff
In Australia, very few front-of-house staff have received formal training in their jobs.
Waiting tables and bar work is seen by many as a short-term employment opportunity
while at university, rather than as a respected career path. This places a heavy load on
the establishment to provide in-house training to ensure standards of service are met.
In other areas of TH&E such as travel agencies and event management, entrants can see
the possibility of a career path and sometimes formal qualifications are required. However
the problem is that not enough new staff are entering the industry to cope with the
increasing number of businesses. This can mean that businesses will have to offer better
CTI_SITXMPR007_Learner Guide VI.2020 36
terms and conditions than they otherwise would in order to attract the best staff. This can
lead to pressures as a result of the increased operational costs.
In turn, other industries recognise the skills of junior and middle managers in the TH&E
industry and may attempt to entice them away with better offers of pay, career path and
lifestyle.
As a manager, it will become increasingly important to provide high quality and effective
in-house training for staff. Vocational training is increasingly conducted as a joint venture
between educational institutions and businesses. This is regularly done in many other
industries, where a company will pay for their employee to spend a certain amount of
time in education. This effectively reduces the cost of training in terms of both time and
money.
We may increasingly see in the TH&E industry, formal qualifications being offered as a
part-time aspect of employment. This can provide an enticement for new staff and lock
them in for a defined period of time. This will allow for the business to enjoy the benefits
of training the staff and reduces staff turnover rate.
EMERGING MARKETS
Two emerging markets for international tourism are China and India. This is a result of the
increased industrialisation and affluence of these countries. As these two countries alone
account for a third of the world’s population, it is especially important that Australian
tourism taps into and caters for these markets. In order to do so, management will have to
ensure that staff members are trained in the social nuances of these cultures and how to
deal with the people appropriately and respectfully.
In the 1980s Japan was the emerging market for international tourism, particularly in
Queensland. Initially, large tour groups of between 30 and 50 people travelled en masse to
specific destinations. As the destination became better known and more international
business relationships were developed, smaller and specialised groups began to travel to
more widespread destinations. Eventually families, couples and single travellers became
the majority of travellers, opening up the market to the entire country. Whether this
pattern will be repeated for China and India is uncertain as there are already large
immigrant or descendant communities throughout Australia. Indians in particular are
travelling to Australia for educational purposes, including diplomas and degrees in TH&E.
Tourism 2020 represents Australia’s long-term strategy for the tourism industry. It
identifies 6 key areas in order to grow the industry and realise its potential. Select each of
these below to find out more.
Go to Tourism Australia’s website for more information
CTI_SITXMPR007_Learner Guide VI.2020 37
GROW DEMAND FROM ASIA
Asia is expected to be the biggest growth market, especially from China. The China Ready
program and China Approved Destination Scheme are a recognition of this potential.
BUILD COMPETITIVE DIGITAL CAPABILITY
Tourism operators need to embrace online booking and marketing systems in order to get
their product to a larger audience.
ENCOURAGE INVESTMENT AND IMPLEMENT THE REGULATORY REFORM AGENDA
Streamline the regulation of the industry to make it easier to invest and build.
ENSURE TOURISM TRANSPORT ENVIRONMENT SUPPORTS GROWTH
Airports, roads, train travel and other infrastructure has to be capable of handling the
volume of traffic required.
INCREASE SUPPLY OF LABOUR, SKILLS AND INDIGENOUS PARTICIPATION
Industry recruitment, training and education must all be improved in order to meet the
increase in demand for staff.
BUILD INDUSTRY RESILIENCE, PRODUCTIVITY AND QUALITY
Allow tourism operators to deliver higher quality products and services using improved
business planning, systems and standards.
HOTEL TRENDS
There are numerous trends currently
occurring in the hotel industry. One is
the trend towards suite-style
accommodation, particularly in the
downtown areas of a city. These hotels
only offer suite-style accommodation,
with separate sleeping, lounge and
kitchen areas. The usual services of a
hotel are offered such as concierge and
guest facilities, however the suites are
offered at a lower price than a
comparative top-of-the-range suite in a
hotel. This is due to lower staff numbers and the lack of food provisions. If these are
provided they are often leased out and therefore do not contribute to costs.
The luxury end of the market is changing. The traditionally popular large 5 star hotels are
increasingly being viewed as too impersonal and poor value for money. Smaller, boutiquestyle luxury accommodation is impinging on this market, as they can offer more
personalised service. Due to the oversupply of luxury accommodation particularly in
downtown areas, many hotels are experiencing reduced occupancy and facing price
CTI_SITXMPR007_Learner Guide VI.2020 38
reductions. To counteract this, some hotels are converting more rooms into suites, as well
as reducing the number of rooms to provide more spacious accommodation.
The luxury market is always affected by the global economic climate. When the exchange
rate with the US dollar is favourable, many American tourists choose Australia as their
holiday destination. This market is significantly reduced whenever the exchange rate is
not favourable. Luxury businesses will instead have to shift their focus to the stronger
economies of Europe as well as the expanding market of Asia.
Hotels are feeling the need to appear eco-friendly, as more and more people are factoring
this into their accommodation choices. The changeover to eco-friendly practices and
materials can also have real financial benefits. The Best Western Burlington Inn in
Burlington, Ontario was built from Insulated Concrete Forms, which increases the energy
efficiency of the property. The operators have estimated a 20% annual cost saving on
utilities and the extra building expense has been recouped after 5 years of operation.
The “sharing economy” has also impacted the hotel industry, with many customers opting
to use platforms such as Airbnb. Today, hotels are not simply competing with other hotels,
but also face competition from innovative, online platforms.
2C. BUSINESS ETHICS
In any business operation it is necessary
to consider the ethics involved.
Generally speaking, ethics covers the
social acceptability of our actions.
Different cultures have different moral
and ethical norms, which are
determined by societal pressures. While
ethics can be a challenging and
complicated area of discussion, there
are some basic themes which, if
considered, will usually result in ethical
behaviour:
• Is the action legal? – Laws are based on socially acceptable behaviours. In the
Western world, many laws have connections to the Ten Commandments, e.g.
murder, theft and adultery are all frowned upon and indeed have been made
illegal at some point in time. Other cultures have similar sets of moral codes that
form the basis of their laws.
• Does it hurt anyone? – If your actions result in damage to an innocent party, then
they may be unethical.
• Is it fair? – If you are gaining an unfair advantage by deceiving someone, then it is
unethical.
• Would I want it to happen to me? – The principle of treating others as you wish to
be treated.
• Would I tell anyone what I’ve done? – If you don’t want to publicise your actions
because you are ashamed, then it is probably unethical. This can also be termed
the “what would my mother think?” principle.
CTI_SITXMPR007_Learner Guide VI.2020 39
• What is my gut reaction? – If it feels wrong, then it probably is.
• The mirror test – What kind of person do I want to see when I look in the mirror?
In the current business climate, there are strong social pressures on businesses to behave
in an ethical manner, particularly in relation to the environment. Australians have been
concerned about the environment, particularly since the development of the hole in the
ozone layer and the decade-long drought at the turn of the century. In light of these social
pressures, businesses now feel it is necessary to portray themselves as being beneficial to
the environment or at the very least, lessening their impact.
In the TH&E industry this is particularly important, as many establishments only exist in
the locations they do due to the surrounding environment. Businesses around the Great
Barrier Reef will be hit hard by the detrimental effects of warming oceans on coral life
and retreats nestled among rainforests will be affected if the forests deteriorate.
It is important to consider the ethical implications of any marketing activities you
conduct. Any type of advertising must adhere to all the legal requirements and standards
dictated by the relevant bodies. In Australia, all advertising is governed by the Advertising
Standards Bureau (https://adstandards.com.au/) and consumers can complain to the
Bureau about any advertisements they feel are inappropriate. In 2016 the most
complained about ads featured
• Two women dancing in tight outfits.
• An ad promoting eating lamb through ‘Operation Boomerang’, a recovery mission to
rescue Australians from overseas so they can eat lamb on Australia Day.
However, both of these ads were adjudged to have not breached the AANA Code of Ethics.
2 ads which were found to have breached the code featured
1. A horror movie ad
2. A window poster of a woman in revealing underwear
In general complaints are made because viewers of the advertisements feel that the ads’
content is in conflict with their own sense of morality and socially acceptable behaviours.
BEHAVING IN AN ETHICAL MANNER
Whenever you as a manager are representing your business, it is important that you
behave in an ethical manner at all times.
Imagine if you are appointed as Food and Beverage Manager for a hotel. As part of your
duties you are responsible for selecting which of the many thousands of wines available
will appear on your wine list. You have a large budget and are responsible for negotiating
and signing contracts with the chosen suppliers. During the course of deciding which wines
to select, one of the suppliers delivers a complimentary case of champagne to your home.
While this may be interpreted as simply a nice gesture on behalf of the wine distributor, it
is easily interpretable as something more sinister, such as collusion or a bribe. What would
you do in this case? To determine the ethical course of action you must consider the
following questions.
CTI_SITXMPR007_Learner Guide VI.2020 40
IS IT LEGAL?
It may not be considered illegal, however the hotel most likely has guidelines for how to
handle such an occurrence. Many businesses have established guidelines on the
appropriate protocols for handling gifts. Violation of the guidelines is legal, however it will
result in disciplinary action by the hotel.
DOES IT HURT ANYONE?
It may not appear that anyone is hurt as a result of a gift, however you must consider your
objectivity in the future. Next time that you have to develop the wine list, will you be
more inclined to choose the wines from the supplier who gave you the gift last time?
IS IT FAIR?
What would your colleagues or employees think about your gift? Considering that you are
working for a salary, why should you receive bonuses when they don’t? This is the principle
behind the ethical sharing of tips. Likewise, any gifts received as a result of decisions
made while on duty should also be shared with the staff.
DETERMINING THE ETHICAL COURSE OF ACTION
Follow these steps when determining the ethical course of action.
STEP 1
WOULD I WANT IT TO HAPPEN TO ME?
Put yourself in the position of a rival supplier. If you are trying to convince a hotel to
purchase your wines then you would consider the situation as a level playing field. Imagine
what your reaction would be if you found out a rival supplier was sending gifts to the F&B
Manager. What about your employers? Would they want one of their employees receiving
gifts for decisions they made on the job? You would certainly question the integrity of that
employee and their ability to conduct their job ethically.
STEP 2
WOULD I TELL ANYONE WHAT I’VE DONE?
Would you take the case inside and crack open a bottle if you were worried what other
people thought about it? Imagine if the local newspaper got hold of the story and you saw
yourself on the front page of the paper the next day. Would you be embarrassed or
ashamed? The reaction from your employer, colleagues, business partners and suppliers
would probably not be a favourable one.
CTI_SITXMPR007_Learner Guide VI.2020 41
STEP 3
WHAT IS MY GUT REACTION?
What would your feelings be the moment you thought about keeping the case? If you have
a vague feeling that it probably wouldn’t be a good idea, then it probably wouldn’t be.
Humans’ initial reactions to situations are based on ingrained social expectations and
personal beliefs. As such they are usually correct.
STEP 4
THE MIRROR TEST
When you look at yourself shaving or putting on your lipstick what do you think about your
actions? Do you have a nagging sense of something not being quite right or are you
continually convincing yourself that what you did was acceptable?
Instead of taking the gift inside, there are a number of possible options which are more
ethically acceptable:
• Return the gift with an explanation of company policy.
• Add the free wine to your stock.
• Offer the bottles to regular or loyal customers as a thank you.
• Donate the bottles to the employee barbecue.
• Use the bottles as sponsorship for a local event such as a charity fundraising
auction.
• Register the gift on the company register. Most companies have a gift register
where the donation is noted and how it was distributed or used. This provides a
clear audit trail and reference point in case of an enquiry.
ETHICAL ADVERTISING
It is very important for businesses to
maintain their ethical standards when
advertising. Complying with the
requirements of Australian Consumer
Law is a good starting point, as many
ethical considerations such as not using
false or misleading advertising are
actually legislated.
Essentially you should be truthful in all
that you say and portray. This means
that images and text used in advertising
must not create a false perception of the
product, service, price, inclusions or other features. For example when hotels show
pictures of their rooms, they state which type of room it is, e.g. “suite shown”. Pictures
of beachfront and other areas are demarcated with “location shot” so the consumer does
CTI_SITXMPR007_Learner Guide VI.2020 42
not think it is the view from the balcony.
This link http://www.icharter.org/standards/eas405/ provides a useful framework for
ethical advertising of any product or service.
Other areas of concern are the protection of children, targeting of particular vulnerable
groups within the community, promoting potentially damaging practices, e.g. alcohol
consumption, smoking and gambling.
The Advertising Standards Bureau administers a range of codes and initiatives related to
advertising of products and services. Some of the codes and initiatives they administer
include:
• AANA Code for Advertising and Marketing Communications to Children
• AFGC Responsible Children’s Marketing Initiative of the Australian Food and
Beverage Industry
• Australian Quick Service Restaurant Industry Initiative for Responsible Advertising
and Marketing to Children
For more information relating to these, and other codes please
visit www.adstandards.com.au
The Alcohol Beverages Advertising Code (ABAC) sets out the requirements for alcohol
related advertising. Advertisements for alcohol beverages must:
• Present a mature, balanced and responsible approach to the consumption of
alcohol beverages.
• Not have a strong or evident appeal to children or adolescents.
• Not suggest that the consumption or presence of alcohol beverages may create or
contribute to a significant change in mood or environment.
• Not depict any direct association between the consumption of alcohol beverages,
other than low alcohol beverages, and the operation of a motor vehicle, boat or
aircraft or the engagement in any sport (including swimming and water sports) or
potentially hazardous activity.
Go to www.abac.org.au for more information.
3A. DEVELOPING A MARKETING STRATEGY
Whenever a new product or service is introduced into the market place it is essential to
have a clear and concise plan to effectively market it. A marketing strategy needs to be
developed which is consistent with the values, goals and business plan of the business.
This is important because the way a product or service is marketed not only affects the
success of the product itself, but also the appearance, reputation and success of the
business offering it.
CTI_SITXMPR007_Learner Guide VI.2020 43
The marketing strategy should be developed as a basis for forming the marketing plan.
The marketing strategy is the overriding reasons for performing the marketing, whereas
the marketing plan includes all the steps taken to achieve the marketing objectives.
An example of a marketing strategy for a new bar could involve:
• Initial awareness-raising through promotions.
• Cheap feature drinks to attract customers.
• Building on the customer relationship to sell additional products with higher profit
margins.
There are many types of marketing strategies, each with their own benefits and
drawbacks. Marketing strategies can be based on the market share, as shown below.
MARKET LEADER
McDonald’s has the largest market share and usually leads in innovation and pricing.
MARKET FOLLOWER
Eagle Boys has a smaller market share and relies on the popularity of fast food in general,
as it cannot compete with the larger establishments.
MARKET CHALLENGER
Hungry Jack’s is aggressively campaigning to increase its share of the fast food market.
MARKET NICHER
Subway provides an alternative type of product to the same target market.
BASING A MARKETING STRATEGY ON PRODUCT OR SERVICE
Marketing strategies can be based on product or service innovation:
• Pioneers
• Close followers
• Late followers
An example of this in the TH&E industry is the current rise in ecotourism and adventurebased tourism. Often it is linked to the availability and rights to use geographic locations.
In Queenstown, New Zealand, the Shotover Jet owns the rights to operating jetboats in
the Shotover Canyon. Since their inception, other companies have started offering jetboat
trips, but in different, nearby locations, including the Shotover River.
In the Indian Ocean, more and more islands are being developed into tourist destinations.
On Mauritius the first resort was opened in 1952 by the Beachcomber Hotels group, who
now operate 8 properties on the island. They account for 18% of the hotel rooms on the
island and have a high occupancy rate. In this example, Beachcomber was able to capture
and exploit a new market and weather the storm of close followers into the market and
more recent late followers. Their strategy of continual investment into their properties
CTI_SITXMPR007_Learner Guide VI.2020 44
(over 20 million euro per year) has allowed them to stay modern and to compete with the
newer hotels intruding into their market.
Marketing strategies can also be based on growth of the business.
HORIZONTAL INTEGRATION
Acquiring direct competitors within the same market, e.g. Domino’s Pizza acquiring the
Pinky’s Pizza chain in Victoria.
VERTICAL INTEGRATION
Expanding into different aspects of the delivery pipeline, e.g. a brewery opening pubs to
cover the production, distribution and retail aspects of the pipeline.
DIVERSIFICATION
Introduction of new products and services outside the existing portfolio, e.g. Walt Disney
moving from animation into theme parks and accommodation.
INTENSIFICATION
Increasing the amount of marketing focussed towards a particular market or subset of
customers, e.g. tour companies having offices at the airport, inside major hotels and on
the main street.
3B. MARKETING PLANS
A marketing plan is the description of
all the steps necessary to achieve a
business’ marketing objectives.
Marketing plans should form part of an
overall business plan and rely upon
sound marketing strategies in order to
be successful.
The reason for a marketing plan is to
allow the objectives set out in the
marketing strategy to be achieved. By
converting objectives into smaller,
realistically attainable goals, people involved in the process have timelines and
benchmarks for their work. Simply stating what a business wants to do without having a
plan of action could end in disaster.
CTI_SITXMPR007_Learner Guide VI.2020 45
MARKETING PLANNING
The process of constructing a marketing
plan involves understanding the business
objectives and the marketplace.
The business objectives can be
described as the corporate mission. The
mission statement describes what it is
that a business hopes to achieve. It is
important not to be too broad, e.g. “We
want to make money” or too narrow,
e.g. “We want to serve coffee at $3”.
For a café, a mission statement may be
along the lines of “We wish to deliver affordable food with a high standard of service to
local residents”. A statement like this guides staff as to why they are doing their jobs and
helps to focus marketing efforts. It indicates what the central ideals of the business are,
how they wish to achieve those goals and who the general target market is.
There may be many stakeholders that must be involved in planning your marketing
strategy. For example, a strategy may affect Sales, frontline staff, Finance, etc. consider
that if you are offering a discount product or service then Sales staff need to pass on the
discount, frontline staff must inform customers of the discount, a new item or discount
code may need to be generated in your sales system, and the Finance department may
need to know why items are being invoiced at a different rate.
Involving staff in your marketing strategy will give you a wider perspective on potential
marketing activities, and also help in making your marketing plan more successful. For
example, frontline staff deal with customers on a daily basis. They may hear many
requests for a particular type of service which you have not heavily marketed in the past.
They may also lead you to better ways of implementing marketing solutions. For example,
a staff member might identify that a coupon discount promotion will dramatically slow
service if the coupon numbers need to be checked, or that the coupon system might be
easier if they are simply viewed on a customer’s mobile phone.
Marketing planning must also incorporate the business vision. The mission describes what
the business wishes to deliver and the image it wishes to portray to the general public.
The business vision describes how the business wishes to progress and grow in the future.
This could be a statement such as “Perfect Coffee, perfect time” highlighting the key focus
and then explaining where the company wants to go, for example this motto will be taken
across Australia and New Zealand via a franchise model.
All the market research undertaken needs to be incorporated into a marketing plan.
Information on your customers should be reviewed:
CTI_SITXMPR007_Learner Guide VI.2020 46
• Who they are
• What they do
• Needs and wants
• Opinions of your products and services
• Buying profiles and intentions
You should also collect and review statistical and monetary data such as:
• Financial data
• Product data
• Sales data
• Advertising and promotional data
• Other market data
ANALYSING DATA
Once all the data has been collected you will need to perform some type of analysis on
them. Analysis can include SWOT, market research, the Marketing Mix, positioning,
product portfolio analysis and the 80:20 rule.
SWOT analysis, market research and the marketing mix, as discussed earlier, often form a
central part of any market plan.
MARKET POSITIONING ANALYSIS
Market positioning analysis involves deciding where your products and services should sit in
comparison to your competitors’ products and services. This involves analysing potential
points of difference and determining competitive advantages. Once a market position has
been determined, the marketing must focus on achieving the perception in the
marketplace of that product existing in the desired position
PRODUCT PORTFOLIO ANALYSIS
Product portfolio analysis involves looking at all of your products and services as a whole.
A restaurant’s wine list, menu, location, staff, service, ambience and décor all contribute
to the overall impression of the business. Determining how to best market the combination
of your products and services holistically can be important in the overall marketing plan.
THE 80:20 PARETO PRINCIPLE
The 80:20 Pareto principle describes how marketing should be targeted. The marketing
plan should be focussed on the 20% of products and services used by the 20% of customers
which account for 80% of sales and profit. While this doesn’t mean you should neglect any
of your customers or target market, it helps to focus on where the majority of your
business will come from. When branching out into other market segments, you should
consider how it will affect your core business and whether the returns justify the time,
effort and expense incurred.
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KEY ASPECTS OF A MARKETING PLAN
The key aspects of a marketing plan.
PRICE STRATEGY
Current market position, pricing or discounting techniques, costs for material, labour,
overheads, etc.
LOCATION
The location used for selling the product or service and the benefits of this location
STAKEHOLDERS
Key personnel within the business who are critical to the marketing strategy and what
their roles and responsibilities are
THE TARGET MARKET
Such as income, age, sex, profession, etc.
COMPETITORS
Demand, market share, strengths and weaknesses, comparisons between your product and
theirs
THE PRODUCT OR SERVICE
Features, benefits and selling points
MARKETING BUDGET
Allocated costs for advertising and promotions, lists of types of media for advertising and
costs associated with each option
GLOBAL MARKETING STRATEGIES
When making global marketing strategies it is very important to not lose focus on specific
targets. Ed highlights a shortcoming in the proposed strategy where it fails to address
clients that are genuinely interested in the product. Unless the marketing strategies
incorporate detailed approaches it may miss the actual target and end up as a nice-looking
but useless document without any clear goals. Measuring the outcomes of marketing
strategies will also provide valuable input into future campaigns and increase
effectiveness. Always remember that expenditure must fall into the overall budget
projections and needs to result in a measurable return on investment.
CTI_SITXMPR007_Learner Guide VI.2020 48
FROM STRATEGY TO ACTION
Once you have analysed all the available
data, the marketing strategy and
objectives need to be established. Your
marketing strategy dictates the goals
you wish to achieve and it is imperative
that any of the operations undertaken in
pursuit of these goals do actually help
your business to achieve them. A
marketing plan must also be flexible and
adaptable to any changes in the
external or internal environment.
Individual plans for each product, market segment or geographical location can be
constructed. Each plan should be tailored to the different needs of the customers as they
vary between market segments and locations.
Plans should be SMART:
• Specific
• Measurable
• Achievable
• Realistic
• Timed
Plans also need to be agreed upon by all those concerned including management, owners
and staff involved in implementing the plans. This is necessary to ensure commitment and
awareness of all relevant parties.
SMART PRINCIPLE
SPECIFIC
Any plan or activity should have a clear, unambiguous statement of what must to be done,
how it is to be done and why it is to be done.
MEASURABLE
Each activity needs to have a set of measurable outcomes in order to allow success to be
determined.
ACHIEVABLE
Plans should not overextend your capabilities.
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REALISTIC
Stated goals need to be achievable. You need to be aware of limitations of personnel,
production capacity and the 80:20 rule.
TIMED
Timeframes for the completion of activities and the attainment of goals need to be set.
MARKETING PLAN CONTENT
Marketing plans can be broken down into a number of components.
MARKETING OBJECTIVES
What it is that the business hopes to achieve by conducting the marketing.
EXTERNAL MARKET ANALYSIS
Research into the state and make-up of the current market.
INTERNAL ANALYSIS
Who in the business can be allocated to specific tasks and what financial resources are
available.
OVERALL MARKETING STRATEGY
Defines which markets will be targeted for the product and the strategic reasons for the
decisions.
SALES AND PRICING STRATEGY
Defines how the marketing will be carried out in terms of pricing structure.
DISTRIBUTION CHANNELS
Determines how the products will be distributed to customers.
PROMOTION STRATEGY
What types of promotion and advertising will be used and why.
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DEPTH AND FORMALITY
Depending on the size of the business,
the depth and formality of the
marketing plan will vary. A larger
business will have more formal
requirements for a marketing plan,
whereas a small business will have a
simpler marketing plan which may
consist of the following:
• Customer demographics
• Competitor analysis
• Product and service outlines
• Marketing budget
• SWOT analysis
• Pricing strategy
• Market segmentation
• Financial forecasts
MARKETING PLAN BRIEF
For a small restaurant such as Futura
Restaurant and Bar, the marketing
plan brief could be:
• Customer demographics obtained
from census data show that the
median income in a 5km radius is
$75,000. Most people are
professionals with relatively high
education standard and an average of
0.6 kids per couple. The target group
is people that go out for dinner 2-3
times per week with a range of food
options including healthy and
vegetarian alternatives.
• Competitor analysis shows that there are another 10 restaurants in the area with
the majority being ethnic speciality restaurants. There is 1 fast food outlet and 2
wine bars offering snacks. Futura Restaurant and Bar will focus on a niche of
cosmopolitan feel and furniture with informal atmosphere overlooking the park and
fountain with an outside wintergarden.
• Product and service outlines. The menu offerings created portray a cosmopolitan
setting with fresh food prepared to order, comprising a small selection that is
changed every season with a few signature dishes and daily specials.
• Marketing budget is defined at 6% of gross profit.
• SWOT analysis is undertaken, including all competitors.
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• Pricing strategy is based on promotional strategies for the specials and specific
targeted food costs with higher retail prices in comparison to most of the
competition but a high level of service provision offsetting the higher charge.
• Market segmentation occurs through special bento box offerings for take away for
busy professional couples in the vicinity, cocktail special Friday night and Sunday
brunch across the Park.
• Financial forecasts are completed by forecasting a net profit of 11.5%, food cost of
28% and a staff cost of 27.5%.
Once your marketing plan is complete it must be approved by management before being
implemented. This approval process acts as both a quality control procedure and a review
against budget requirements. For example creating a marketing campaign where nude
people paint your company’s logo on each other might attract a lot of attention, however
management might not be pleased with the image it creates for their businesses. Or,
employing a TV celebrity to endorse your product or service as he jumps out of a
helicopter might result in a huge increase in brand awareness, however if you spend your
company’s yearly wage budget, you may find your company goes broke. You should check
your company’s policy in regards to the approval process.
4A. CONTROL AND EVALUATE MARKETING ACTIVITIES
All marketing activities need to be reviewed for their performance and effectiveness. As
marketing can be a large investment for any business in terms of both time and money, it
is important to be able to measure the impacts and success of the marketing activities.
This is also referred to as Return on Investment (ROI). Also, marketing can involve
unexpected opportunities and hindrances, so it is important to continually control and
evaluate marketing activities to adjust to or take advantage of unexpected or changing
situations.
An unexpected market niche might open up during a marketing campaign. This means the
marketing strategy needs to be adjusted. For example, there may be a new Wedding Fair
in your region offering you a new opportunity to promote your event services. If continual
reviews are not done, then this opportunity might be missed and filled instead by a
competitor.
Alternatively, a competitor may release a superior product in the middle of your
campaign. If you are unaware of the superior product and don’t adjust your marketing
strategy accordingly, then you may be throwing away your money.
Control is also necessary to ensure that the marketing activities are on track, i.e. that the
marketing objectives are being met.
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Marketing control involves 4 steps. SELECT THE NUMBERED CIRCLES BELOW TO TRAVEL
THROUGH THE STEPS INVOLVED IN MARKETING CONTROL.
STEP 1
Set marketing goals
STEP 2
Measure performance
STEP 3
Evaluate performance according to criteria
STEP 4
Correct any flaws
CONTROL AND EVALUATE MARKETING ACTIVITIES CONT.
In order to determine the success or
failure of any marketing activity, it is
necessary to be very clear on why the
marketing is being conducted. Goals
must be measurable while the marketing
is being conducted. The performance of
the marketing can be measured against
the criteria outlined so that it can be
evaluated for its adherence to the goals.
If there is a difference between the
expected performance and the actual
performance then reasons for the difference must be determined. Once the reasons for
any underperformance have been determined then corrective action needs to be taken to
rectify the situation.
In order for goals to be achievable and measurable they must include quantities and
timescales. If an increase in market share is desired then the goal may be to capture an
extra 10% of the market by January. By setting a clearly defined target, it is possible to
measure whether or not the marketing has been successful.
Continuous monitoring of performance not only allows you to determine if the goals are
being met, but also to investigate the reasons behind goals not being met. This is
important because the market is continually changing. A goal that is not reached must be
investigated so that it can be determined if the reasons are in-house, there is a new
competitor in the market, or if it is the result of some environmental variable outside the
control of the business.
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4B. CRITERIA FOR EVALUATION
When evaluating marketing strategies,
it is necessary to check them against
the following criteria. This should not
only be done at the conclusion of the
marketing strategy, but throughout its
development:
• Consistency with marketing direction
– Was the marketing strategy consistent
with the overall direction of the
organisation?
• Exposure achieved – Was the desired
level of exposure achieved? Did your
marketing strategy reach the intended target market?
• Penetration of target market – Did the marketing strategy successfully increase
sales within the target market?
• Cost-effectiveness of resources – How cost-effective was your spending? What was
the ROI?
• Timeframe – Was the strategy completed within the established timeframe?
Why/why not?
Based on this criteria, recommendations should be made that indicate a strategy
addressing the criteria. These recommendations should be constructive and specify a clear
path for the future. For example, if your organisation is designing a new website and the
timeline was not met, it may be because the project’s timeframe was unrealistic, or the
project was not adequately resourced. A recommendation may be to allocate more
resources to the project (if possible) or adjust the timeline.
PERFORMANCE ANALYSIS
There are various aspects of a marketing campaign that can be analysed. The most
common types of analyses are:
SALES FIGURES ANALYSIS
Tracking sales figures over time can give a good indication of the success or failure of a
marketing campaign. In simple terms, an increase in sales means that marketing has been
successful. Actual sales can be compared to projected or expected sales in order to get a
better measure of the success.
Sales figures can be further broken down in order to achieve a higher resolution analysis.
Individual products, locations, distribution channels and market segments can all be
analysed to give a more detailed picture of the success of marketing. It may show that the
marketing had varying effectiveness in different regions, for example. This information
can then be used in future marketing and poorly performing products or regions can be
given extra attention. This also determines the ROI for the campaign.
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MARKET SHARE ANALYSIS
Analysing the market share can give a different perspective on the success of the
marketing plan. For example, if sales increased by 20% over a 2 year period, but the total
sales in the entire market increased by 30%, then the business is losing its market share.
When the market stops expanding, the sales figures will actually reduce, as a result of the
reduction in market share.
Different aspects of market share can be analysed:
• Overall market share – the percentage of the market purchasing the product or
service.
• Segment market share – the market share in specific segments of the overall
market, e.g. single mothers, suburban areas.
• Relative market share – useful for comparing against other competitors. A
competitor may be chosen as a benchmark and a goal set to improve market share
to more than the competitor.
• Change in market share – how the market share is increasing or decreasing over
time. Goals may be set to improve market share by 10% over 3 years.
EXPENSE ANALYSIS
Expense analysis involves comparing the amount of money spent on marketing with the
amount of sales generated as a result of marketing. This may be hard to quantify for some
types of marketing, such as brand awareness raising. Expenses can be broken down into
administration costs, advertising costs, salary and travel, among others.
4C. REVIEWING MARKETING OPERATIONS
The operational aspects of a marketing
activity also need to be reviewed. You
need to determine if the marketing
activity was an efficient use of the
participants’ time. If an activity is offsite then it will take considerable time
when you consider the preparation,
travel and unpacking time that is
involved. Developing marketing
materials can be time-consuming as
well, particularly if you want to do it
well.
It is common practise to hold a debrief session after every promotional activity or
important occasion, such as New Year’s Eve parties. The debrief should include the
marketing team and any operational staff who were involved or affected. This is an
opportunity to analyse any issues that arose, such as poor communication between
departments or if one section of the conference room had lower service quality than other
sections.
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The debrief is an opportunity to ascertain people’s opinions on all aspects of a function,
such as:
• Quality of food.
• Quality of hired entertainment.
• Problems with venue and facilities.
• Operational difficulties and inconveniences.
• Positive and negative feedback.
• Areas for improvement.
4D. REPORTING ON MARKETING ACTIVITIES
You will often be required to report on
the promotional activities you conduct,
particularly if they are off-site.
Reporting can be either informal or
formal. A nightclub that hands out flyers
at a university or on a street corner will
probably only require an informal
report. This can be along the lines of the
participants telling their manager what
they did and how well the material was
received. Larger-scale marketing
activities such as a trade show or
product launch will require a more formal report.
Imagine that you are representing Hotel Futura at a trade show. This is an excellent
opportunity to display the Hotel’s marketing material, to cement business relationships
with business allies and to gather market intelligence on competitors. How would you
convey the important events that occurred during the trade show? One method is to
construct a promotional activity report such as the example shown here.
The contacts that were made at the trade show can be recorded for follow-up. Many
Hospitality businesses have some form of contact register, which holds the details of each
existing and potential client. The entries for each client can be updated each time contact
is made. At trade shows, delegates are given name tags, which often have barcodes
attached. Businesses can scan the barcode using a barcode tracker and the information
can be added to the contact register. This provides an electronic recording mechanism for
contacts made.
Periodically, the Marketing Department will produce a Sales and Marketing Report to be
distributed among Management. The report can then be discussed at a meeting. The
template for the Hotel Futura monthly Marketing Report is shown here.
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4E. CONCLUSION
Marketing should not be a haphazard
string of unrelated promotional
activities. Every business should
construct a Marketing Plan that
encompasses the strategy it will use in
order to increase its profit. The strategy
will be based on research into the
marketing environment and the
strengths and weaknesses of the
business. A clever Manager will keep
abreast of trends and changes in the
marketplace, using a variety of
techniques to stay informed and ahead of the game. If you do this then you will be able to
decide which promotional activities suit your needs.
All promotional activities should be reviewed for their success or failure and the results
used to update the marketing strategy. Any updates to the marketing strategy must then
be communicated to key stakeholders which may include management, sales, frontline
staff or other employees. Whenever there is an opportunity to gain insight into the buying
patterns and trends of your target market, you should take it. Only by keeping up-to-date
will a business become successful in this cut-throat industry.