2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Chapter Ten Understanding Competition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Macrocompetition Any organization that competes for a customers business The maturity stage Missed opportunities become threats Marketing threats: Michael Porters Five Forces Model 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Choosing the Right Competition Critical to a competitive analysis Focus on the concept at the expense of the customer: conceptitis How do we compete? Choose competition you can and want Ask customers where else they would like to patronize and why 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intensity How intensely companies battle each other Factors contributing to competitive intensity Example: the amenities war Services can be easily duplicated When the market needs are similar, intensity is greater 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence Know your competition Measurable differences: REVPAR Yield index REVPOR REVPAC Internet REVPAR Measurable differences (cont.): Purchased data RSQFT REVPAS Customer satisfaction index (CSI) Perceptual mapping 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Hotel Actual Rooms Sold Occupancy % Fair Share % Actual Share % Upper-Tier Hotels A B C Yours Total Middle-Tier Hotels E F G Total Example of Market Share 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Hotel Actual Rooms Sold Occupancy % Average Daily Rate (ADR) Revenue REVPAR Yield Index Upper-Tier Hotels A $120$26,400$ B , C , Yours , Total , Middle-Tier Hotels E $110$24,200$ F , G , Total , Example of REVPAR 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition ImportanceBrand ABrand B RatingScoreRatingScore ColumnABCDE FeatureScale: 1-10 A x BScale: 1-10A x D It is a place friends like to go Atmosphere is very pleasant One place seems to have better odds Slot machines filled in a timely manner Types of promotions offered TOTAL INDEX (281.54/384 x 100)67.53 Calculation of Competitive Index 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence Types: Defensive Passive Offensive Objectives: Understand positional advantage or disadvantage Understand strategy or tactics of competitors Create strategies that will lead to a competitive advantage 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Intelligence (cont.) Step-by-step procedure 1. Setting up the process 2. Collecting the raw data 3. Evaluate and analyze the data 4. Draw conclusions and use the data 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Analysis Barriers: Size of a targeted market Cost differentials (i.e., advertising) Sustainable competitive advantage: Customers perceive a consistent difference Differences are a result of better capability Differences and capability endure over time 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Competitive Marketing Positioning Develop strengths that align with competitors weaknesses Take the offense to disrupt the balance Anticipate shifts in the industry to exploit change Obtain a position that is less vulnerable to attack 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Finding Marketing Opportunities Identify and quantify customer problems Simple and easily understood by customer Know your market, customers, and their problems Ask: Will it create/keep a customer? 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition Feasibility Studies Quantitative research strength of an opportunity Evaluate marketing opportunities Focus on proposed financial performance Depends on the behavior of customers 2007 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4 th edition