DL3V34 Hospitality Industry

DL3V 34
Hospitality Industry
November 2007
© SQA
Hospitality Industry DL3V 34
Acknowledgements
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pleased to make the necessary arrangements at the first opportunity.
© Scottish Qualifications Authority – Material developed by Reid Kerr College.

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No part of this publication may be reproduced without the prior written consent of COLEG and
SQA
© SQA Updated 2007 2 Developed by COLEG

Contents
Acknowledgements 2
Contents 3
Introduction to the unit 5
What this unit is about 5
Outcomes 5
Unit structure 5
How to use these learning materials 5
Symbols used in this unit 5
Other resources required 7
Assessment information 8
How you will be assessed 8
When and where you will be assessed 8
What you have to achieve 8
Opportunities for reassessment 8
Section 1: Marketing in the hospitality industry 9
Introduction to this section 11
Assessment information for this section 12
An introduction to marketing 13
Features of hospitality marketing 15
Factors which influence hospitality marketing decisions 19
Changing marketing requirements 22
Summary of this section 24
Answers to SAQs 25
Answers to activities 26
Section 2: Application of marketing 29
Market research 33
Six stages of a research study 35
Types of market research 38
Questionnaire design 41
Market analysis 43

Answers to SAQs 56
Section 3: Hospitality industry at national and local level 63
What is economics? 67
How we use our income 69
Other factors that allow people to spend more on consumables 69
Tax and the British system 70
Purpose and synergy 78
Case study of the local area – Falkirk Wheel 80
The multiplier effect 82
Loch Lomond Shores 83
Glossary 91

Introduction to the unit

What this unit is about
This unit is designed to help you understand marketing in the hospitality industry and
what is involved in the marketing process. It is also intended to highlight the importance
of the hospitality industry to the economy of the country. The unit looks at the different
sectors of the industry and requires you to analyse a current local example and make
decisions regarding the applicable marketing mix.
Outcomes
There are three outcomes:
1. Explain the importance of the marketing process within the hospitality industry
2. Evaluate the application of marketing within the hospitality industry
3. Explain the importance of the hospitality industry and its impact on the local
economy.
Unit structure
This unit contains the following study sections:
Section number and title Approx.

study time
1 Marketing in the hospitality industry 10 hours
2 Application of marketing 14 hours
3 Hospitality industry 12 hours
How to use these learning materials

You should complete all of the activities and questions detailed in the student guide.
Your tutor may request that work is completed and submitted for internal review. This
should be done within the time frame allocated.
Symbols used in this unit

These learning materials allow you to work on your own with tutor support. As you work
through the course, you’ll encounter a series of symbols which indicate that something
follows which you’re expected to do. You’ll notice that as you work through the study
sections you will be asked to undertake a series of self assessed questions (SAQs),
activities and tutor assignments (TAs). An explanation of the symbols used to identify
these follows.

Self assessed question
This symbol is used to indicate a Self Assessed Question (SAQ). Most commonly,
SAQs are used to check your understanding of the material that has already been
covered in the sections.
This type of assessment is self contained; everything is provided within the section to
enable you to check your understanding of the materials.
The process is simple:
! you are set SAQs throughout the study section
! you respond to these, either by writing in the space provided in the
assessment itself, or in your notebook
! on completion of the SAQ, you turn to the back of the section to compare the
model SAQ answers to your own
! if you’re not satisfied after checking out your responses, turn to the
appropriate part of the study section and go over the topic again
Remember – the answers to SAQs are contained within the study materials. You are
not expected to ‘guess’ at these answers.
Activity
This symbol indicates an activity which is normally a task you’ll be asked to do which
should improve or consolidate your understanding of the subject in general or a
particular feature of it.
The suggested responses to activities will follow at the end of each section.
Remember that the SAQs and activities contained within your package are intended to
allow you to check your understanding and monitor your own progress throughout the
course. It goes without saying that the answers to these should only be checked out
after the SAQ or activity has been completed. If you refer to these answers before
completing the activities, you can’t expect to get maximum benefit from your course.
Tutor assignment – formative assessment
This symbol means that a tutor assignment (TA) is to follow. These will be found at the
end of each study section. The aim of the TA is to cover and/or incorporate the main
topics of the section and prepare you for unit (summative) outcome assessment.

Other resources required

There are no specific requirements, although it is important when studying this unit that
you are aware of how we are continually being affected by the marketing process. This
should involve a certain amount of research by reading newspapers, magazines and
journals and visiting hospitality establishments to familiarise yourself with the industry.
Here are some useful subject gateways that can be accessed via the Internet.
! ALTIS: http://www.altis.ac.uk/
Hospitality, leisure and tourism gateway.
! BUBL: http://www.bubl.ac.uk
Internet resources gateway covering wide subject range.
! PINAKES: http://www.hw.ac.uk/libWWW/irn/pinakes/pinakes.html
Provides links to most of the major Internet subject gateways.
! Resource Discovery Network: http://www.rdn.ac.uk
The RDN aims to provide access to high quality Internet resources.

Assessment information
How you will be assessed
Outcome 1 is closed book and will be completed by you under supervision. You will
receive the case study information 1 week prior to the assessment date.
Outcome 2 will be completed under supervision in controlled conditions. Two weeks
prior to the assessment date, you will receive details of one of the questions. You
should familiarise yourself with it in conjunction with the case study. You may bring
notes, research and reference material to the assessment.
Outcome 3 will be completed as a closed-book assessment under supervision. The
case study used in previous outcomes will be used again, followed by structured
questions.
When and where you will be assessed

All assessments will be completed under supervision on specified assessment dates.
What you have to achieve

Assessment of Outcome 1 will involve structured short answer questions that refer to
the case study.
Assessment of Outcome 2 involves a written and/or oral response to the case study
material provided. This could be presented as a structured written report or taped or
video evidence or a mixture of these.
Assessment of Outcome 3 will take the form of a case study, which should be linked
with Outcomes 1 and 2. You need to be able to describe how the development of the
hospitality organisation in the case study will contribute to the local economy, with
reference to employment and income multipliers as well as any other relevant
economic and social factors.
Opportunities for reassessment

Normally, you will be given one attempt to pass an assessment with one reassessment
opportunity.
Your centre will also have a policy covering 'exceptional' circumstances, for example if
you have been ill for an extended period of time. Each case will be considered on an
individual basis and is at your centre's discretion (usually via written application), and
they will decide whether or not to allow a third attempt. Please contact your tutor for
details regarding how to apply.

Section 1: Marketing in the hospitality industry


Introduction to this section

What this section is about
This section explains the importance of the marketing process within the hospitality
industry.
Outcomes, aims and objectives

When this outcome is complete you should be able to:
! define marketing
! explain the features of hospitality marketing
! show understanding of both internal and external factors that influence
marketing
! define sectors in the hospitality industry
! show understanding of the factors that affect marketing decisions
! explain changing market requirements.
Approximate study time

10 hours.

Access to the internet and any research materials gathered from media, hotel visits,
etc.

Assessment information for this section

A case study with three questions.

This is a closed-book assessment to be completed under supervision. However, you
will receive the case study information 1 week prior to the assessment date.

Satisfactory completion of the three questions.

You will have one opportunity for reassessment.

An introduction to marketing
Perhaps the logical place to start the study of marketing would be with a definition. The
Institute of Marketing provides the following definition of marketing:
‘Marketing is the management process which identifies, anticipates and
satisfies customer requirements, efficiently and profitably.’
Yet another, simpler, definition:

‘The art of offering products that don’t come back to customers who do!’
Can you see from these definitions that marketing is more than just selling and
advertising?
Marketing is primarily about satisfying customer needs
Marketing concerns itself with the core business of identifying customer needs and
wants.
That is all so simple, or at least it sounds simple.
If it was as simple as this, why then is the hospitality industry one of the highest across
the sector of owner occupiers, where the owner runs the business, and why do so
many hospitality businesses fail within 1 year?
In the main this can be attributed to product and market orientation.
Product orientation
As the name suggests, in this style of business the product – what you can make –
takes precedence.
A great deal of time and money will be invested into making yours the biggest, best,
most sought-after product. Then you sell it. Or, you try to sell it.
Market orientation
Here the starting point is different – the process starts with market research, in an
attempt to find what the customers will buy.
Can you make or provide the product at a price customers will pay, and will you make a
profit? If so, you then produce and promote it in a way to encourage sales. Then you
sell.
Customers will only be attracted and retained when these needs are met.
If and when these are met they will not only return to the same hotel, restaurant or
holiday company, but they will also pass on their satisfaction and recommendation to
others.
When a customer is dissatisfied with the products or services provided, generally they
will not complain, but will never return to the establishment.

The real damage caused here is that the same customers will then discuss their
findings with an average of 10–12 other people. That is 10–12 potential customers lost.
Selling focuses on the needs of the seller, marketing on the needs of the buyer.
Customer satisfaction, leading to profit, is at the core of hospitality marketing.
1.1
Think of the definition of marketing as provided by the Institute of Marketing, i.e.:

‘Marketing is the management process which identifies, anticipates and
satisfies customer requirements, efficiently and profitably.’
Write any method that you might use to:

1. identify customer requirements within a hospitality operation
2. anticipate customer requirements within a hospitality operation
3. satisfy customer requirements within a hospitality operation.

Features of hospitality marketing

Hospitality marketing is unique in that there are so many different types of hospitality
operation that need to be marketed.
Marketing is commonly linked to profitability, but hospitality marketing needs to concern
itself with both profit-making and non-profit-making operations.
An example of a profit-making hospitality operation might be a hotel, restaurant or bed
and breakfast establishment.
An example of a non-profit-making hospitality operation might be an NHS hospital,
works canteen or HM Prison Service.
It should be stated here to avoid confusion that the hospitality element in hospitals is
non-medical.
In NHS hospitals the supply of accommodation, meals, cleaning and laundry are
hospitality services.
Many hospitals now employ a hotel services manager.
1.2
Features of the hospitality product

Before we look at the features, we need to consider the question ‘What is our product?’
In hospitality we have what are known as core products, i.e. food, beverages,
accommodation, etc. but what do we really sell?
Make a list of benefits that we provide, as well as the core product, e.g. convenience.

Features of the hospitality industry

As previously mentioned, hospitality marketing is unique because our industry is
unique.
So, how is it different from other industries?
Consider the following list of terms:
1. Perishibility: Some of our products have no ‘shelf life’, i.e. if a table in your
restaurant or a room in your hotel is unused for a night, the income from that
table or room is lost forever. You may sell the room or fill the table the next night,
but the income lost on the ‘empty’ night can never be recouped.
2. Intangibility: Most of the time, our customers do not get a ‘physical product’ for
their spend. That is, if you purchase a television, you have a physical product. If
you stay in a hotel, you do not have anything tangible once you leave.
3. Seasonality: As an industry, we have high and low periods depending on the
location of the establishment. Many establishments also have periods where they
are too busy and cannot cope or have to refuse customers.
4. Customer experience: In hospitality, every contact with a customer must be
treated as a ‘moment of truth’ and for this reason, customer care is extremely
important.
5. Demography: This is the study of population trends and our industry relies on
the demographic movement in our catchment area.
6. Competition: There are two types of competition we face; direct competition, i.e.
similar establishments, and indirect, which is any other way the customer spends
his/her disposable income.
7. Variety: The hospitality industry is an ‘umbrella’ title for thousands of different
establishments ranging from 5-star hotels to snack bars and also includes profit
and not-for-profit establishments. Also, within each of these thousands of
different establishments there will be different types of customers with a variety of
needs, i.e. lunchtime clients will be different from those who come in the evening.
1.3
Prepare a list of as many profit and not-for-profit establishments as you can in the
hospitality industry.

Within each hospitality operation, marketing may be required for a number of different
services.
A hotel, for example, may need to market its bars, bedrooms, restaurants, nightclubs,
leisure facilities and/or conference facilities.
At state school (i.e. a school funded by the government), the catering provider may
need to market and promote various healthy eating options. The school may be
required to do this in response to government health targets. Alternatively, the school
may be required to market a Chinese New Year meal in order to promote cultural
awareness and tolerance.
The principal aim of marketing is to achieve customer satisfaction, and the people who
undertake the task attend to the customers’ needs by developing the products they, the
customers, want and presenting them in a way that has some hope of success in
satisfying that need.
The selling or product concept is unfortunately endemic in the hospitality industry. We
have all seen it: a hotel starts to suffer a drop in sales and the temptation is to push
products harder through increased advertising or coupon offers. Both these solutions
cost money. Why promote a system that will involve additional costs and have no
guaranteed additional income?
It can be assumed that the operators have not stopped to ask why trade has declined,
and what the customers, the ones they hope to attract, want.
Perhaps their drop in sales is because they no longer provide what customers want,
and the customers are going to another hotel that does.
Eventually, business will fail because the product supplied does not match the
customers’ needs and wants.
In activity 1.1 you were asked how you would identify customers’ needs, and were
offered some ideas about how this can be done.
Look now at activities1.4 and 1.5 these are concerned with what you could do to
ensure that you are matching customers’ wants and what is being offered.
1.4
You are asked by a hotel owner to devise a questionnaire that can be completed by
guests.
Plan a rough draft of this, and indicate which areas you would comment on.
There is no specific answer to this question discuss your answer with your tutor and
other students.

1.5
Now revisit the questionnaire and classify the 10 items shown in the solutions,
according to their order of importance to you.
Score each of the items from 1 to 6 (1 being poor and 6 exceptional).
Rated
Quality of food
Drink and bar service
Service: Reception
Restaurant
Room
Cleanliness
Décor
Size and space in rooms
Price
Value for money
Can you now see that this gives a clearer picture of what you, and the customers who
will complete the questionnaire, want from a hotel visit?
Using this information gathered from customers, a hotel can make marketing decisions,
knowing that they are giving customers what they want.
It is worth noting here that the needs and wants of customers change. Hospitality
marketing must be aware of that and change with the customers.

Factors which influence hospitality marketing decisions

Whatever product we are trying to sell, there are a number of external factors which are
likely to have an effect on demand.
When making marketing decisions, it is important to recognise that these factors will
have an impact on the market.
When planning a marketing approach this is referred to as a SWOT and PEST
analysis.
A SWOT analysis is the beginning of any attempt to plan a marketing strategy in any
business, and will directly influence the decisions made. It consists of:
! S – Strengths of a business – what it is good at, where it draws trade, what
makes it good, for example robust systems in place to support and report on
operational and organisational policies or a good customer care system.
! W – Weaknesses – where the business could be better, what its failings are,
where it loses out, for example little if any feedback system for staff or
customers.
! O – Opportunities – where the openings are for new trade, what the business
can capitalise on, new business planned, expansion.
! T – Threats to the business – new competitors, failing trade, less staff
available.
These are some examples of the issues that must be addressed in a planned
marketing approach.
This can then be linked to a further analysis, often referred to as a PEST analysis.
The factors which are considered here are:
! P – Political – decisions made by central government, for example to increase
fuel tax, will discourage some sectors from travelling and increase the cost of
ferry and air travel. Threats of hijacking have in the past devastated the airline
industry and, in turn, certain sectors of the hospitality industry.
! E – Economic – unemployment rates in Scotland are traditionally higher than
most other parts of the UK. Earnings for workers in Scotland are also
generally lower than the earnings for workers in England, particularly the south
of England.
Higher unemployment rates and lower earnings might indicate that Scots have
less disposable income to spend than people in the rest of the UK. This might
mean that Scots are more likely to seek budget accommodation and cheaper
restaurants than their English counterparts.
Rates and rateable values are lower in England than Scotland. This has an
adverse affect on business since Scotland, having higher costs, must charge
customers more than their English counterparts.
Rate of exchange, particularly during times with strong sterling, may
discourage tourists. Disposable incomes are reduced through increases in
central taxation.

! S – Social awareness is greatly improved, and the public – our customers –

are becoming increasing concerned with issues relating to healthy eating,
child-friendly facilities, anti-smoking policies and curbs on binge drinking. Both
men and women now see the need for pampering and so spa resorts are on
the increase.
Environmental issues are now very much in the public eye. Global warming is
reducing the skiing season in Scotland, as well as increasing the rainfall –
especially in the springtime. Flooding, in areas that previously carried no
threat of it, may affect the business generated from camping and caravaners.
Scotland has never in the past relied upon its weather as a tourist attraction,
but we should now carefully consider what, if anything, we can do to make up
the expected shortfall in visitors.
On-sales in all sectors of the trade have faced a decline in recent years, partly
due to the bad press regarding excess alcohol consumption. Establishments
that have in the past depended on wet (bar) sales must now reconsider their
trade. Duty payable on liquor is a matter of public knowledge, and customers
are now settling for purchasing off-sale. Each increase in duty is widely
reported and the fall in on-sales is very predictable.
Customers are also more aware of social issues. Many hotels now adopt a
‘save the environment’ policy, where guests are invited to reuse towels rather
than have them replaced every day. This saves on energy, water and effluent.
The policy has also been used in establishments to cut electricity usage –
room keys which operate lights and conserve water – fitting devices to restrict
the amount of water used when flushing loos. This reflects public awareness
and at the same time makes valuable savings for the establishment.
! T – Technology – improved information and communications technology might
mean that people don’t have to travel so frequently to attend meetings or
conferences. Instead of travelling to a central venue, people can perhaps
contribute to a meeting by video conferencing. Alternatively, information may
be transmitted by email, mobile phone or via the web (i.e. an interactive
information website on the Internet). This might mean that those hotels that
have depended on business travellers will have to shift their advertising
attention away from travelling business customers towards other potential
customers.
There are, of course, other factors that might affect hospitality marketing decisions, e.g.
cultural, psychological, etc. however, for the purposes of this unit; we will limit
ourselves to considering the factors listed above.
Most of the factors mentioned in the PEST analysis are external to the business. The
organisation has no real control over the outcome or impact. They can, however, react,
as with the example given about water and electricity usage as a reaction to public
concern.
In the SWOT analysis, however, the organisation does control most of the factors,
while some will remain outwith their control.
Take a few minutes to consider what you as an owner would control in a SWOT
analysis. Now try the SAQ on the next page.

Remember that you would control most of the elements in a SWOT analysis. Take note
of those and any that you consider to be out with your control (PEST factors).
1.1
You’re the owner of a hotel in a busy city in central Scotland.

! Part of your trade depends on wet (bar) sales.
! Customers have in the past commented on how some of the staff are really
friendly, but you have had general complaints about the prices.
! Although food is generally well received, sales are dropping.
! A period of high winds has affected the picture quality of your large-screen live
football matches.
! Resident figures have dropped due to the protest marches planned around the
city centre.
1. Prepare a SWOT analysis on where you see the business.

To get you started the first is in place in each section.
SWOT analysis
Strengths: Good local trade
Weaknesses: Pricing structure
Opportunities: Generally good staff
Threats: Competition
2. Prepare a PEST analysis
Using the information on the previous two pages on PEST analysis, describe at
least three external factors which could cause a downturn in business, e.g. the
recent smoking ban in all public places.

Changing marketing requirements

When you think of the external factors – those over which we have very little if any
control – that affect all hospitality operations, it seems safe to say that nothing in
marketing remains static.
Perhaps the most influential of all the external forces, which puts pressure on
hospitality operations to constantly reassess, alter and change, is competition.
No one has the market to themselves.
The competitive environment will affect hospitality marketing on a continuing basis. The
intensity of the competition will determine the reaction that may be required to counter
it.
Competition can come from unexpected sources. For instance, in an economic
recession, a large hotel’s competition may come from local guest-houses and bed and
breakfast accommodation.
Competition must be closely monitored at all times. When the marketing mix is
discussed later in this unit, you will better appreciate the strategies involved when
dealing with competitors’ pricing.
The natural course of action when faced with falling sales due to the competition is to
drop your prices.
This is not advisable, since the message sent out to customers and potential
customers is never positive.
Consider the last time you saw a restaurant or hotel offering cut-price deals. What was
your instant reaction?

1.1
Choose a hospitality establishment with which you are familiar and complete the
following based on your research.
Submit your response to your tutor who will correct and offer guidance to you. This will
act as revision for the closed book assessment for this outcome.
1. Describe in detail at least three external factors which could affect the level of
business (PEST).
2. Describe in detail at least three internal factors which could affect the level of
business (SWOT).
3. Explain in detail any one method to identify customer requirements within your
chosen establishment.
4. Explain in detail any one method to anticipate customer requirements.
5. Describe at least five features of the hospitality product, i.e. what makes it
different from other consumer products.

Summary of this section

In Outcome 1, you have studied the following:
! introduction to marketing in the hospitality industry
! sectors of the industry
! features of the industry and the hospitality product
! methods to identify and anticipate customer requirements
! internal and external factors which influence industry and marketing decisions.
Please ensure that you have completed the activities and SAQ and have submitted the
tutorial to your tutor.

Answers to SAQs
SAQ 1.1
1. Strengths:
o good local trade
o possible room trade
o easy transport
o evening parking
o customer loyalty.
Weaknesses:
o pricing structure
o electronic difficulties.
Opportunities:
o generally good staff
o established food trade.
Threats:
o competition
o falling sales.
2. PEST factors
Your response could include:
o changes in legislation (give examples)
o social aspects, i.e. green issues and local issues
o financial factors, i.e. rise in inflation, taxes and rise in interest rates. Also, the
exchange rate will either encourage or discourage foreign tourists
o the weather
o unemployment rates locally
o opening or closure of new business in the area.

Answers to activities
Activity 1.1
1. I would identify customer requirements by talking with them, listening to their
comments, observation, recording all feedback, use of questionnaires, checking
sales patterns.
2. I might anticipate customer requirements by observing customers, keeping in
touch with customer trends, being sensitive to the needs of customers, checking
on previous sales and requests.
3. I might satisfy customer requirements by periodically changing the products and
services I offer; responding to identified customer requirements courteously and
efficiently.
Develop a system for recording customers’ likes and dislikes. VIP guest register.
This is not in any way prescriptive; you will no doubt have many more examples of how
we can make customers comfortable.
Activity 1.2
Your list should include some or all of the following:
! convenience
! luxury
! necessity
! pampering
! comfort
! entertainment
! social aspects
! quality
! value for money
! experience
! ego satisfaction
! safety
! service.

Activity 1.3
Examples of profit-making Examples of not-for-profit hospitality
hospitality operations operations
hotels NHS hospitals
restaurants state schools
airlines prisons
ferry services and cruise liners state nursing homes and hospices
motorway service stations
rail operators
industrial caterers
food takeaway operators
public houses
bed and breakfasts
guest houses
Activity 1.5
Score each of the services mentioned between 1 and 6 (1 – poor and 6 – exceptional).
! quality of food
! drink and bar service
! service:
i. reception
ii. restaurants
iii. room
! cleanliness
! décor
! size and space of rooms
! price
! value for money
Comments
Note that the scoring scale is graduated 1 to 6, with 3 being the mid-line, tends to give
little useful information. This scoring at least makes the respondent thinks about each
area.


Section 2: Application of marketing



This section looks at evaluating the marketing decisions of an organisation within the
hospitality industry.

On completion of this section, you will be able to explain:
! market research and describe suitable examples
! market analysis and customer mix/segmentation
! the marketing mix and evaluate these in relation to a specific example.

14 hours.

Research material from media, journals, hotel visits, etc.


You will use the case study issued for Outcome1. Two weeks prior to the assessment
date, you will receive details of one of the three questions. You should familiarise
yourself with it in conjunction with the case study. You may bring notes, research and
reference material to the assessment.

This assessment will be completed under supervision in controlled conditions.

Satisfactory completion of all three questions.

You will be given one opportunity for reassessment.

Market research
Marketing and market research has one purpose: to take as much of the guesswork
and assumption out of business decisions as possible. A small operator in the
hospitality industry may shrug and say that they are too small to afford research.
All market research falls into two main categories: quantitative and qualitative.
Quantitative – Quantitative data requires that the answers are in the main numerical. It
is commonly used to present information such as numbers of people falling into
specified age groups, or the frequency of use of certain facilities.
Quantitative data generates and records facts. Any information that can be presented
in terms of numbers is quantitative. It is objective.
In addition to the information that organisations already hold on customers, valuable
information can also be gleaned from:
! tourist board statistics
! trade association and journals
! government data
! educational establishments
! professional agencies.
Qualitative – Qualitative data is gathered and relates to opinions, attitudes,

perceptions and behaviour. This comes from in-depth unstructured discussions, usually
with small selected groups (focus groups, referred to later in this section) or during
one-to-one interviews. The data collected here will often point the way to quantitative
research that may be required at some later date.
Qualitative data are commonly used to find out why people buy, what factors influence
that decision, what gives and generates satisfaction and, just as importantly,
dissatisfaction, how individuals perceive current products, or their feeling concerning
promotions. This research and the data that is collected are subjective, that is they are
only opinions relating to the group in question. That is why in any study the selection of
the group is very important.
Information derived from market research should be updated at least annually to
establish whether there have been any changes. It is on the basis of research that
marketing strategies are evolved.
Some marketing experts say that there are two basic reasons for research as detailed
on the following page:

Customer research – This will enable a hospitality organisation to find out which
groups of people make up the market and what percentage of each group most often
use the facilities of the organisation. This research is designed to answer questions
like:
1. Where do most of your clients come from? Which towns, cities, regions or
countries?
2. For what reasons do your clients visit?
3. When do your clients mostly visit?
4. What types of people are your clients? What age, sex, race, marital status are
your clients? What are the social, economic, cultural and national characteristics
of your clients?
5. How much does each client type spend, and on which products?
These are examples of quantitative research questions.
Attitude research – This will enable a hospitality organisation to find out the attitudes
of each group of client types towards the various products that the hospitality
organisation offers. Your clients’ attitudes towards your organisation should be
compared with their attitudes towards your competition. This research is designed to
answer questions like:
1. What attitudes do potential and existing clients have towards the various products
and services offered by your hospitality organisation?
2. How well are the service systems working?
3. How good is the staff at providing various services?
4. Why do various groups of clients choose or not choose to engage with your
organisation?
5. Which promotions and advertising appeal to your clients and which do not?
These are examples of qualitative research questions.
In any organisation there are two categories of customers.

External and internal customers
External customers are easy to categorise. These are those people who buy our
accommodation, eat our food or drink in our bars.
Internal customers, however, are different. Internal customers are those people we all
interact with in our day-to-day jobs.
The newsagent who brings the newspapers to be delivered to guests’ rooms is also a
customer. All of the suppliers are customers, in the same way as they would consider
us to be theirs.
All customers deserve the same standard of service and satisfaction.

2.1
Imagine that you are a marketing expert who has to ask a variety of questions as part
of your college canteen’s customer research and attitude research.
1. List the questions that you would put to clients as part of your customer research.
Remember, this should be numerical.
2. List the questions that you would put to clients as part of your attitude research.
Six stages of a research study

If you are ever in the situation where you are asked to carry out a marketing research
study, it is important to know where to begin and how to see the study through to the
end. These six stages are a useful guide to allow you to proceed.
1. Decide what information is needed. Sales in the cafeteria are falling. You might
need to find out why sales are falling and what you can do to make customers
return.
2. Establish the research objectives. You might put questions to a broad range of
existing and former customers over a 1-week period in order to establish:
(a) where customers are going to eat instead of here
(b) why customers are going to eat elsewhere
(c) what customers would like in order for them to return
(d) what existing customers think of the current service.
3. Develop the research plan:
(a) Compile a questionnaire aimed at existing customers, within 5 days
beginning 01 November 2007, consisting of 20 questions. The questionnaire
must aim to find out what customers think of the current service.
(b) Compile a questionnaire aimed at former customers, within 5 days
beginning 01 November 2007, consisting of 20 questions. The questionnaire
must aim to find out where customers are choosing to eat, why customers
are choosing to eat elsewhere and what customers would like to see
changed in order for them to return.
(c) Ask 20 existing customers to complete a questionnaire within a period of 1
week beginning 08 November 2007.
(d) Ask 20 former customers to complete a questionnaire within a period of 1
week beginning 08 November 2007.
(e) No more than four questionnaires should be completed per day.
(f) The age group of those questioned should be varied so that persons aged
18–25 years, 26–35 years, 36–45 years and over 45 years are equally
represented.

(g) The gender of those questioned should have the same number of males as
females.
(h) The research will take the form of a field survey.
4. Implement the research
At this stage the research begins by sending out the researchers, mailing the
questionnaires or making the phone calls.
5. Collect and analyse the data
Once all of the questionnaires have been completed, the next stage is to analyse
the results. These results should show the facts, e.g. 55% of those surveyed
believe that the cafeteria is dirty.
6. Interpret the information and recommend a course of action
For example, if the evidence suggested that the majority of customers no longer
wish to eat at the cafeteria because they believe it to be dirty, we would
recommend that the following course of action is implemented immediately:
(a) all staff are given training in food hygiene
(b) all staff are given training in personal presentation
(c) all staff are given training in cleaning methods and the appropriate use of
cleaning equipment
(d) the catering manager puts systems in place to ensure that general hygiene
meets professional standards.
2.2
Read the following case study and note one example for each of the six stages of a
research study.
‘Very little meals’
In order to stay in profit, Burger World must take in £12,000 per week. This Burger
World unit is open between 0800 and 2200 hours. There is no ‘drive-thru’ facility.
Burger World offers its popular ‘Little Meals’ consisting of a burger, chips, drink and a
toy for £1.99. Burger World also offers schoolchildren a special ‘burger and chips’ for
£1.50. Most Burger World meals are ‘extra value meals’ consisting of a large burger,
large fries and a cola at £3.29. Burger World has had long-standing competition from:
! Chip shop – provides takeaway meals as well as sit-down meals during the
same opening hours as Burger World. The average price for pie and chips and
a drink is £3.20.
! Centre Coffee Shop – provides light meals and snacks between the hours of
0900 and 1700 hours. The average price for tea, sandwiches and a cake is
£3.00.

! Baker’s shop – provides hot beverages, snacks and sandwiches on a

takeaway basis. Offers a drink, sandwiches and a cake for £2.20.
! Public house – offers bar meals and snacks from 1100 to 2100 hours. The
average price of a main course is £4.00.
In January 2007, two new businesses opened in direct competition to Burger World,
resulting in Burger World takings sinking below the £12,000 breakeven figure. These
businesses were:
! A national chain public house which offers bar meals and snacks from 1100 to
2100 hours. The average price of a main course is £3.50.
! A takeaway sandwich bar that offers a lunchtime special of a drink,
sandwiches and crisps or chocolate bar for £1.90.
Sales patterns suggest that Burger World has no difficulty attracting customers
between 1200 and 1400 and between 1700 and 1900. Burger World is generally quiet
outwith these times. Being based in a busy shopping centre, many shoppers would like
to stop occasionally for a cup of tea or coffee and a cake; however, research shows
that most shoppers dislike drinking hot beverages from a paper cup. The Burger World
menu currently has very little to offer in terms of cakes that might be served with tea or
coffee. Customers who dislike paper cups are more likely to go to the nearby Centre
Coffee Shop.
1. Decide what information is needed.
2. Establish the research objectives.
3. Develop the research plan.
4. Implement the research.
5. Collect and analyse the data.
6. Interpret the information and recommend a course of action.

Types of market research

Here we will look at primary and secondary research methods and internal and external
sources of information.
Primary research data is any new information acquired by an operator or researcher.
It is gathered usually to investigate a specific problem, and it is a time-consuming and
expensive research method.
Primary research methods include the following types of activities:
! interview face-to-face or telephone
! observation of clients
! nominal group research
! mail shots
! questionnaires that may be used independently or in conjunction with any of
the other methods mentioned.
Secondary research data is already in existence. This is often collected from internal
customers historically, and the information is then used to formulate trends and
patterns – hopefully to be used successfully in the future.
Sources of information may include:
! sales records – the more detailed the better
! guest profiles
! purchasing documentation
! reservation statistics – again the more detail the better – breakdowns of
weeks, days and monthly figures
! function and conference reservation records
! enquiries that did not result in sales.
The information may be used to assist at different levels. What is important is that the
data used has been checked and verified.
Field surveys
A field survey consists of interviewing and asking questions of a number of people who
are representative of the market. This is one of the most common methods of
marketing research. Field surveys seek information from potential customers,
customers of other establishments and the general public. Field surveys using a
carefully planned questionnaire can be conducted by mail, email, telephone or even
face-to-face.
The mailed survey is the least effective form of field survey because, even with a reply
paid envelope, most people do not have the time, or the inclination, to answer. Those

who do answer are usually a particular type of person, unrepresentative of the whole
sample. Expect a return rate of 3%.
A telephone survey is relatively inexpensive, and more people can be interviewed in a
given period of time. Telephone surveys work best when the questionnaire is short and
the questions require a minimum of explanation. Careful training needs to be in place
for the operators, since this type of call can be taken for a sales call and achieve very
little.
Best of all is the personal interview, mainly because the interviewer can see reactions
such as shrugs or facial expressions. These kinds of reaction might let the interviewer
know that more questions are needed in order to get a clearer view of a person’s
opinions.
Focus group research

Focus group research involves gathering together groups of people with similar
characteristics. These groups, usually eight to 12 in number, come together to discuss
a topic which is of interest to the researchers. Researchers observe and listen to the
discussions and take note of the interactions which take place.
After four or five group sessions, researchers should develop a clearer understanding
of certain emotions, opinions and attitudes. These can help a hospitality organisation
offer the right products and provide insight into the best advertising and promotion
themes.
Observation research
Observation research is said to be the simplest form of market research. It involves
watching and recording what people do, either in one’s own organisation or in someone
else’s establishment. Numbers of customers, staff attitudes and customer reactions
can be recorded by observation.
Experimental research
This type of research involves trying out something new for a period of time and then
measuring the reactions of customers. If you are considering redecorating your hotel or
restaurant, you might ‘experiment’ by redecorating only a couple of rooms and then
inviting the opinions of the hotel guests.
Research by sampling
Research draws conclusions about large groups by questioning or observing small
groups. For the results to be meaningful, the sample of people researched must be
representative of the total market population.
Before sampling begins, the total market population must be defined. How many of the
total market population are male, female, old, young, married, left-handed, etc.?
Some of the main sampling techniques used by marketing research agencies are as
follows:

Probability sampling
! Simple random sample – Simple random sampling is where every member of
the population has a known and equal chance of being selected for the
sample. An example of a simple random sample is to choose the 10th name of
the second column of every name in the telephone directory. This technique
will yield a representative sample of the population without undue bias.
! Stratified random sample – This occurs when researchers divide the
population into exclusive groups based on, for example, age, sex or income. A
random sample is then drawn from this group.
! Cluster (area) sample – This occurs when researchers divide the population
into exclusive groups based on, for example, age, sex or income, by area. A
random sample is then drawn from this group.
Non-probability sampling
! Convenient sample – This means that the easiest to access population
members are selected, i.e. on a ‘first come, first served’ basis. Any one who is
willing to answer the questions may take part in the survey.
! Judgement sample – This means that researchers select those people who
they think will provide useful information. If women are to be targeted in the
survey the researcher will only approach women. If the views of the retired
community are to be found, the researcher must judge whom to ask, simply by
judging the age of the possible target.
! Quota sample – This occurs when researchers find and interview a specific
number of people in each of several categories. This is more difficult to
establish and the sample is usually pulled together by contacting possible
respondents and arranging a meeting.
2.1
Consider the five types of research outlined previously. Explain the meaning of each of
these types of research and show a hospitality-related situation where each of these
types might be applied.
! Field surveys
! Focus group research
! Observation research
! Experimental research
! Research by sampling.

Questionnaire design
A questionnaire is a series of questions designed to get answers that reveal people’s
opinions, preferences or thoughts.
To be effective, every question in a survey must be relevant, concise and easy for the
respondent to understand.
Furthermore, a questionnaire should always be able to identify the respondents by
some form of demographic classification, i.e. young, old, wealthy, poor, office workers,
manual labourers, etc. This can be achieved by asking the respondent to identify
themselves in groupings, for example age 18 - 25, 26 - 35; earning levels £18,000 -
24,000, £25,000 - 32,000; occupation - clerical, manual, professional.
A common mistake is asking an ambiguous question, for example ‘Do you dine out
regularly?’ The meaning of this question is not clear. How often is ‘regularly’? ‘Dining
out’ might mean having tea at the house of a friend.
A clearer indication is given when you ask - How often you dine out?:
! never
! once or twice per month
! about once a month
! once a week on average
! more than once a week.
A specific answer might be achieved by posing a question that can be answered yes or
no. The question ‘Do you dine out regularly?’ could be answered as a yes or no.
A few additional tips for constructing a questionnaire

! When developing a questionnaire always pre-test questions by getting
yourself and others to try them out. Some questions may be answered in a
different way from what you would expect
! Do not test people’s memories. It is unlikely that anyone will remember what
they did last year
! Begin with easy questions. Leave more difficult questions till later on in the
questionnaire
! Do not ask very personal questions
! Where a scoring system is to be used, make sure that there is no middle
ground. This will occur if the range is restricted to five options or any other odd
number of choices.

Analysing the data

When a survey is completed, the answers can be collated and the results expressed in
raw figures or percentages and perhaps put into bar or pie-chart graphs. For an
extensive survey, the data should be entered into a computer which has a programme
designed to analyse the results.
Survey results are always interesting. Sometimes they are predictable, but there are
often enough surprises to make marketing research one of the most fascinating
marketing tools.
Many market research (MR) companies will undertake market research on your
behalf. It is important, if this is to be the chosen route, that as many pointers as
possible be clarified before a contract is entered into. Important issues to be
considered when using MR companies to purchase data:
! Ensure that the data is current
! Make sure that it is ‘cleansed’ regularly – cleansing means that the data held
is checked and verified
! Checked for duplicate entries – de-duping ensures that all extraneous entries
that relate to the same person have been eliminated. You will be charged per
entry. D Smith, Donald Smith and D Smith MP are examples of three entries
that may all be the same person
! Establish how often and how recently the data has been used.
2.2
Choose a hospitality establishment with which you are familiar and devise a
questionnaire to give to existing customers. The purpose of the questionnaire is to
identify reasons for falling sales in food and beverages. Use the guidelines provided in
the previous pages.

Market analysis
Before hospitality managers can make a decision, they must have information. Market
analysis is one of the main sources of this information. The purpose of market analysis
is to understand what is happening in the market by dividing it into convenient
segments. Market segmentation makes it easier to identify opportunities.
Market segmentation
The hospitality industry is all about people. Groups of these people can be divided into
segments according to various characteristics, as follows:
1. Business – the main segments in this category are:
o sales representatives
o executives, professional persons or civil servants attending a meeting or
conference
o persons attending a convention or training seminar
o professional or trade persons on an assignment for a limited period.
2. Pleasure – the most common segments in this category are:
o people visiting friends or relatives
o honeymooners, couples and singles
o couples on holiday with a planned itinerary
o couples or single people with children of varying ages
o package holidaymakers
o tour, coach, sporting or social groups.
3. Demographic – the most common segments in this category are based on:
o Age – every age group has its own needs. Young people aged between 18
and 24 years may have quite different hospitality requirements from those of
older people aged between 55 and 65 years. Both groups need to eat and
sleep, but may prefer to do things in very different environments
o Gender – males and females can have different hospitality preferences.
What a male thinks is OK as a place to stay may not be a female’s idea of
suitable accommodation
o Family size – a couple with three children may want a different style and size
of accommodation from a young single man
o Income – what people want is heavily influenced by what they can afford
o Occupation – the business person with an expense account will generally
aim for a higher standard of facilities than a self-employed electrician
o Nationality – people from different countries and cultures often have a liking
for a particular range of food and beverages.

4. Social class – the most common segments are:

o A – senior management, professional
o B – intermediate management, professional
o C1 – white collar worker (office worker), small trader with premises and staff
o C2 – blue collar worker (skilled manual worker)
o D – labourers
o E – retired, unemployed, unemployable.
There are many other ways to divide customers into segments. For the time being, we
will settle for those as defined above.
The total population of the UK is reasonably static at around 55 million. In Scotland we
have in the region of 5 million people.
Segmentation is the art of defining the possible market size of each segment.
Consider this pie chart – it represents the total population of UK.
49% 51%
What do you think each portion of the pie represents?

It shows the breakdown of the population of the UK by gender.
Pie or bar charts are a useful method of displaying the results of any data collected.
You can see that there are slightly more females (shaded green), than males, at the
moment, currently the population is 51% female and 49% male.
This type of statistic is available from government publications and is an example of
quantitative research from external sources.
The marketing mix is a concept that is commonly used by marketing specialists. In
modern marketing the four Ps are recorded. These are:
! Place
! Price
! Product
! Promotion.

However, in hospitality it is worthwhile adding a further two:

! People
! Profit.
The hospitality marketing mix is a checklist of six strategic elements, all of which need
attention and developing in order to create a successful hospitality operation. Effective
marketing also depends upon the concept of synergy.
Synergy is a management term which states that it is possible to get out more than
you put into a situation when each of the elements work effectively.
In arithmetical terms, synergy can be exemplified with the statement that 3 + 3 = 8, or 9
or 11.
We look at each element now, not in any order of importance:
Product – products are the foods, beverages, goods or services which consumers
receive or buy. Product strategies can be classified under two broad headings:
Product growth strategies – This strategy is aimed at producing a better product or
even a different product in order to attract additional customers. An example of this
might be the McDonald’s that now offers salads as well as fries as a choice to
accompany the world famous burgers. The aim is to attract health conscious
consumers.
Competitive product strategies – This strategy is aimed at retaining customers by
offering an improved or different product. The idea underlying this is to prevent
customers from becoming bored with the goods and services on offer. This in turn
might prevent them from going elsewhere just for a change. This is a major reason why
restaurants should vary their menus from time to time.
The products that are on offer in hospitality organisations must constantly be under
review to ensure that the targeted sales uptake is being met. If this is not the case then
different products must be offered.
In our trade we also have product layers, which are capable of meeting most of the
needs. For example. what products do most people want from a hotel?
A clean bed for the night – any outlet in our industry should offer that as a minimum.
This is a core product.
En suite bath/shower – may not be possible in bed and breakfast or backpacker
hostel accommodation. May be available as standard in most hotels. This is known as
a facilitating product.
Television/DVD/radio/video – most 3-star plus establishments will offer some, if not
all, of these facilities. This is a supporting product adding value.
In-house restaurant/bars – again, except for bed and breakfasts and hostels, this
should be available in most outlets. This is a facilitating product and should be in place
in order that the core product is accessible.
Business facilities/supported secretarial services – now we are into the 4 and 5
star league. This and the last example are both augmented products.

Leisure facilities/spa/gym – some 4 star but all 5-star – augmented products combine
all the other products and make for total customer satisfaction.
Whether a product is facilitating, supporting or augmenting, the core product is the bed
for the night. Each group of customers will bring their needs and wants to the
organisation and the marketing magic is to make sure that there is a fit so that we have
on offer what the customers need and want, at the right price.
In our industry, however, we have difficulties and problems with some products.
In high street stores, if a shop fails to sell its products on any one day, they remain in
stock and will go on sale again the following day and the day after that.
In hospitality outlets, when what we are selling is beds for that night, if the bed is not
sold then the chance of that sale is lost – forever.
Yes, it is offered for sale again the next night, but that then represents another product
and if that remains unsold then yet another opportunity is lost.
This is known as perishability.
Although the hospitality industry suffers from product perishability, the same problem is
faced by theatre seats, as well as seats in trains and planes.
A second major difficulty we have is one of tangibility – being able to touch and feel a
product.
If you were buying a pair of new trainers from a high street store, you would try, test
and get a feel for them before you purchased your particular favourite. We in the
hospitality industry do not have that opportunity, since so much of what we sell and
base our products around is the service which is applied.
To some extent this has been overcome by the clever use of promotion materials,
which allow the prospective customers at least to see what is on offer in the
establishment.
Brochures are not the best medium to display this, but the increasing use of 360
degree viewing online and in videos can, in part, show the product to its best
advantage and allow the customer to get a feel for the place.
Another issue we have in the hospitality industry is that of seasonality.
The seasonal variances of customer needs must be taken into account when products
are being planned. High and low season affects the prices customers expect to pay for
basically the same products. Marketing will again try to show added value and value for
money.
Product life cycle

Every product has a lifetime and as in any lifetime there are different stages:
1. Birth: This involves the introduction to the market of a product and involves
research, promotion, trials and advertising. There may also be an introductory
pricing policy.
2. Growth: During this period, product awareness and sales should be increasing.
Supply should be meeting demand and the price should be yielding a profit.
Consumers should be aware of the product, and promotion should still be a
priority.

3. Maturity: At this stage, the product is established and sales have levelled. They
are not increasing or decreasing. However, this is a dangerous time for the
product and it is not a time to sit back and relax. A new product may be
introduced by a competitor and consumers could stop buying yours. Now is the
time to take stock and consider product development. Research on new and
existing customers will decide if your product is still satisfying their needs and if
not, what can be done?
4. Decline: Sales are falling and a decision must be made – develop the product or
let it die.
2.3
1. Choose a hospitality establishment (or product) which has stood the test of time
(i.e. has been successful for a long period of time) and apply the product life
cycle to it.
2. Apply the product life cycle to another establishment or product and suggest
reasons why it has not been successful or did not last long.
Branding
This is the process of making your customers identify with your name. Branding exists
in every walk of life from baby milk to funeral operators.
In hospitality, many brand names exist. Make a list of all the hospitality brands you can
think of, e.g. McDonalds.
The advantages of branding are that:
1. Customers recognise the name
2. There is a perception of quality and value for money attached to many brands
3. The customer knows exactly what to expect and can be reassured by this
4. The prices are normally the same in every establishment using the same brand
5. Establishments can differentiate their product from competitors
6. A brand image can be created
7. Successful establishments can achieve high customer loyalty.

The disadvantages of branding, although outweighed by the advantages, can

include:
1. Customers become bored by the safety of a brand
2. Brands can be copied and can result in brand wars (McDonalds v Burger King)
3. Staff can also get bored with standardised menus, etc.
2.4
Look at the list of hospitality brand names below and any others you have in your own
list.
Consider and make notes on the consumers’ perception of each brand:

1. McDonalds
2. Kentucky Fried Chicken
3. Starbucks Coffee House
4. The Hilton group
5. The Ritz Hotel, London
6. Gleneagles Hotel, Scotland
7. The Burj Al Arab, Dubai (7 star hotel).

Price – A pricing strategy is usually determined by the expectations of the people you
choose to target. Refer back to the placement of 5 star and 3 star hotels, and the
products they offer.
Other influences might be the cost of products and services, economic climate or the
activities of the competition. For example, your business customers might generally be
satisfied with your price for a single room. However, to maintain a 7 and not a 5 day
business, you will review the prices you charge to attract different customers at the
weekends. Multi-pricing strategies are commonplace in hotels.
There may also be a psychological element in pricing.
There is mistrust in goods and services that the customer believes to be cheap: ‘At that
price I don’t expect much.’
However, expensive price tags can give instant appeal: ‘At that price it has to be good.’
More than the other elements of the marketing mix, price is the major one on which the
product will be judged.
Value for money and perceived value for money plays an important part in pricing
strategies.
In the hospitality industry pricing is often operated on a target profit system.
Organisations are aware of the overall gross profit (GP) which they must generate. By
careful product selection the overall GP can be achieved.
This in turn relies upon the menu mix, where a careful balance of those items which will
generate more than the target GP are offered at the same time as those choices which
will not make the target. The way the menu mix is prepared will determine its success
or otherwise of the pricing strategy.
A second more simplistic method, which works particularly well with accommodation-
only units, is one the ‘bottom up’ pricing method.
With this method the amount of profit expected is established, sales levels are
calculated and costs are charged. It is then a simple calculation to arrive at the price
per night. That amount multiplied by the total number of bed nights will give the price of
each room per night.
Prices may be set artificially low in an effort to attract first time customers, this type of
strategy is short term, and operates along with other promotions.
Costs are an arithmetical exercise; price is a matter of policy.
People – People and teams are the backbone of the hospitality industry. Without
effective people, staff working together to a common goal, there would be no business.
It is very important that we select the best staff to be our ambassadors for the
business.
People who work for us in the industry deserve the best possible terms and conditions,
rewards and recognition. Without dedicated, well-trained staff the best establishments
are liable to fail.

Customers often comment on how well particular staff looked after them. This is all
excellent marketing.
It is often said that people are a business’s most precious asset. In our industry, people
are a business’s only asset.
People in this context are also our customers, and the way we decide which of the
available customers we wish to attract to our establishments is very important.
You should be aware that different groups of people have different needs. Marketing
will target specific groups, define their needs and develop products that will meet that
group’s needs. People change, so the development needs to change along with them.
The SAQ 2.3 should clarify this.
2.3
Family life cycle

This term is used to illustrate the change in needs as a family develops.
For each of these segments, think about which products the hospitality sector could
offer:
! single females
! single males
! young married couples
! married couples with two children
! retired couples
! single widows
! single widowers.
Having worked through that example, it should be clearer how needs change as we
grow older.
I’m sure that you can repeat the same exercise when thinking about the style of car
each of the groups mentioned might want.
At this stage you may find it easier to relate to that.
What is important is that you begin to realise that people, although we categorise them,
have changing needs. Hospitality operations must realise this and market to their
chosen group.

Take a few minutes to try to capture the market each of the following operations is
aiming for:
! Travel Lodge
! TGIF
! Brewers Fayre
! Ashoka Shack
You may want to discuss this in class.
Place – Place is the site or sites from where the products or services are sold. This is
not as simple as it might seem. You may, as part of your place strategy, have to market
your products from various places or outlets, such as travel agents, central
reservations offices, or through national tourist boards such as Visit Scotland.
Another important part of your place strategy might be referrals from other hotels in the
same chain or consortium. Hilton, for example, uses its wide spread of hotels around
the world to sell its ‘sister hotels’ in other cities. Place also refers to where you are, and
where you want to be, in the bigger picture.
A 5-star hotel will place itself in that particular bracket, by ensuring that it has all the
facilities that its customers need. A commercial 3-star hotel has a different place, and
should set out to provide, clean, accessible, comfortable accommodation, which allows
the business people it is targeting to check in, stay and depart easily.
Promotion – Promotion strategies determine how you communicate the food,
beverages, goods and services offered by your hospitality operation to the
marketplace. A promotion strategy is usually based on a combination of some or all of
the following channels of communication:
1. personal contact
2. advertising (posters, newspapers, television, radio, etc.)
3. sales promotion (special deals, package holidays, etc.)
4. publicity (stories in newspapers, news broadcasts, etc.)
5. point-of-sale displays and signs (perhaps at reception)
6. direct mailing
7. public relations – creating news interest which is then released to the local or
national press
8. appearance of the hospitality establishment and its staff.
Promotion is not a one-off operation. To maintain the share of customers, they, the
customers must constantly be aware of your establishment. All of the activities
mentioned above are tools to achieve this.

Profit – In all business, and hospitality is not an exception, the whole point of the
operation is to create profits.
Each of the other Ps, when working and interacting in harmony should generate profit.
As we have already seen hospitality is not always about profit and profit making, but
even those not-for-profit outlets must generate more than they spend, or they would
collapse.
2.4
Case study – Jack’s Bistro

‘I’m not interested in marketing,’ explained Jack. ‘What do I need with such a
thing? I’ve been running restaurants all my life. My customers are happy.
They like the food. I make the money.’
Jack runs a top Edinburgh bistro seating around 150 people. The bistro is
located in the heart of Edinburgh’s business district. He used to be very
successful. In recent months however, he has begun to sense that things are
not going too well. Takings and profits are down.
Jack is like many operators in the hospitality industry. He operates by instinct.
When his business faces a change in circumstances, Jack may not have the
benefit of past experience to help him out. Without the discipline of marketing
planning, Jack could easily make some wrong decisions.
Jack always believed that it was his food that was the reason for the success
of his bistro. He may be partially right but, as we know, there are other factors
to consider. Jack is not aware of the concept that we call the marketing mix.
He is therefore unaware of the need to have marketing strategies that relate
to the six Ps.
If we were to analyse Jack’s business in its current situation, we might
describe his current strategies as follows:
! Jack’s people strategy is to target everyone who passes his door
! Jack’s product strategy is good quality, nicely presented French food.
The team of waiting staff wear white blouses or shirts and black skirts or
trousers. None of the waiting staff wears ties. There is no dress code for
shoes and socks, therefore many waiting staff wear different coloured
shoes, usually brown, grey or black. Waiting staff also wear various
colours of socks, the most common being white, black or grey
! Jack’s place strategy is solely the location of the bistro itself
! Jack’s price strategy is to price all food menu items based on a 60%
gross profit. There is no consideration given to competition

! Jack’s promotions strategy is based purely on point-of-sale display of

menus at reception and in an outside wall-mounted menu display cabinet
adjacent to the entrance.
! Jack’s provision of customer service strategy is just an informal
instruction given to all staff to smile at everyone
! Jack’s strategy is basically himself as manager. Jack is not a good
delegator. He wanders around the bistro checking for problems and
instructing waiting staff to react to his instructions. There are no formal
systems in place.
You have known Jack for years. Jack has heard that you are a hospitality management
graduate. He asks for your advice. In relation to each of the following, write in detail
(between 200 and 250 words per section) what you would advise him to do:
1. market research
2. compilation of a questionnaire (include a recommended questionnaire)
3. market segmentation
4. marketing mix.
Within each of the sections above, be careful to explain why you are giving this advice
as opposed to some other alternative.

2.1
Complete and submit this tutorial for marking.
Choose a hospitality establishment with which you are familiar.

Imagine you have been asked to work there as marketing manager. Your first task is to
carry out some research.
1. What are the six stages of a research programme? Give a brief explanation of
each stage with reference to your establishment
2. Discuss primary and secondary research and suggest examples appropriate to
the establishment
3. Discuss the type of information you would want to know about your customers
4. Which market segments use the establishment at present? Are there other
segments which could be targeted now, or in the future?
At this stage, you will be issued with Question 3 of the assessment for Outcome 2.
Your tutor will advise you if it is to be completed and submitted on the assessment date
OR if it is to be completed under supervision (in this case you should bring notes and
research/reference materials with you to class).
Below are some suggestions to note and help you:
1. Discuss product life cycle and branding in your product development
2. Discuss pricing policies, i.e. special rates for groups, off season, etc.; value for
money; price suits the product and place; profit margins, etc.
3. Discuss all points in the assessment details
4. Discuss direct sales, the Internet, tour operators, centralised reservation
agencies, etc.
5. Discuss possible use of questionnaires, comment cards, conversation with
customers, observation, staff meetings to discuss complaints/comments, etc.
6. Discuss company policies such as customer care, complaints handling, staff
training, staff incentives, pricing policies, etc.


In Outcome 2, you have studied:
! marketing research and types of data required
! the six stages of a research study and different types of research
! questionnaire design
! the marketing mix and its elements.
Please ensure that you have completed the activities and SAQs and have submitted
the tutorial to your tutor.

Answers to SAQs
SAQ 2.1
1. Customer
How often do you visit in a day?
How much do you spend each time?
2. Attitude
What do you think of the quality of the:
o food
o staff
o cleanliness
o choice of food available.
How do you rate our prices?
Do we represent value for money?
SAQ 2.2
1. Decide what information is needed
Reasons for falling sales in Burger World:
o Is this a general decline in the area?
o Is the competition also recording a drop in revenue?
o How will Burger World get the custom back?
2. Establish the research objectives
Existing customer
o Are they eating out less than normal?
o If not, where are they going?
o Why are they going to the competition?
o How do they feel about current products?
Former/lost customers
o Why did they stop using Burger World?
o What would it take to bring them back?
3. Develop the research plan
Questionnaires to existing customers:
o product range
o prices
o value for money

o frequency of visits
o average spend per day.
All customers on historically busy and quiet days will be asked to complete and
return the questionnaire before leaving the shop. A station will be set up with
complimentary coffee and pens to encourage completion. Free prize draw for all
entrants.
Field research:
o One-to-one survey with competition customers.
o A general survey to establish the public awareness and satisfaction with:
i. product range
ii. prices
iii. value for money
iv. frequency of visits
v. average spend per day.
o Research criteria – target only your agreed segment of the market.
o Equal gender mix
4. Implement the research
o Research to be undertaken within 1 week initially.
o The in-house questionnaires to be managed so that the busiest and quietest
days are covered in the same week. Field research to be completed within
the same week with a particular emphasis on Burger World’s quietest day –
targeting the competition customers should then give interesting data.
o The research will need to be repeated regularly.
5. Collect and analyse the data:
o Data collected should show customer reaction to the issues being raised.
o Particular attention must be paid to in-house data.
o If any customer respondent has comments, they should be invited to discuss
matters, in order to lead to improvement.
o Careful analysis of the competition data will be required to establish the pros
and cons of the competition products, prices and frequency of visits.
6. Interpret the information and recommend a course of action:
All of the information gathered requires action. Burger World, being a franchise
operation, is restricted in the changes they can make to the product lines.
Similarly, pricing may be controlled regionally, but individual franchisees may be
allowed to offer packaged deals. Head Office will be aware of the fall in sales and
a strategy to combat this must be undertaken jointly. The market research will
support this.

SAQ 2.3
Single females
! Hotel rooms with full length mirrors
! Multi-guest tables – single women prefer not to eat on their own
! Hotel room doors with fitted door viewers
! Business rooms
! Leisure activities in-house.
Single males
! Activity breaks
! Sports packages
! Business rooms
! Leisure activities.
Young couples
! Romance – romantic destinations
! Romantic packages, champagne, flowers
! Isolation – country house hotels
! Cosmopolitan night life
! No children around
! Theatre, concert and interests packages.
Couple with children

! In-house kindergarten
! Safety factors
! Children’s meals
! Children’s activities supervised
! Family budget.
Retired couple
! Cruises
! Exotic destinations
! Pampering resort hotels
! No children
! Travel packages linked to multiple destinations.

Widow/widower
! Activity holidays
! Pampering hotels and resorts
! Children/grandchildren friendly.
SAQ 2.4
The content of your reply should show that you have made an attempt to cover the
following:
1. Market research – various methods, probably starting with customer comment
cards. Formation of a customer database and establish a system where every
existing customer will hear from the bistro at least annually. A procedure put in
place to analyse the likes and dislikes of customers. Attempt the forming of a
Customer Relationship Management (CRM) system.
2. Your questionnaire should include:
Part 1
o pattern and frequency of eating out
o acceptable spend
o types of food preferred by order of preference (classical French must be
included, with regional variations, and five or six others)
o their age range.
Part 2
o Relating to Jack’s Bistro:
o quality of the food
o quality of the wine
o quality of the service
o friendliness of the staff and Jack.
Part 3
o How often the customer eats in Jack’s – don’t confuse with the first question
o How the customer heard about Jack’s – they won’t all be existing customers
o Why did they choose Jack’s?
o Value for money?
o Additional comments.
With this style the best format for the first part would be a ‘tick a range’ response.
The second part needs to be more structured. A bistro setting may lead itself to a
‘smileys’ grading. Circles are printed and the customer simply either gives a real
smile, a straight line to show neither one thing or the others or a frown indicating
unhappiness.

Part 3, again predetermined ranges.

o The object is to extract the valuable information required to determine the
real reasons why the custom is falling away. It must be easy to answer the
questions.
o Remember too the possibility of a prize for completion, and to do that the
customers must give names and addresses.
o Indicate in your answer what you would do with the data.
3. Market segmentation
o Describe the principals of segmentation to Jack.
o Show the segment of the market he is attracting.
o The research on this can be done in part by observation.
o Analysis of the questionnaires.
o Importance of data.
4. Marketing mix
A full description of the marketing mix.
In Jack’s case:
People – Staff, motivation, empowerment, dress code.
Place – Explore the possibilities of website, Internet promotion.
Product – It's not just the food; atmosphere and comfort are also important. Also
discuss product life cycle, product development, and branding.
Promotion – Explore ways in which Jack could promote the bistro, perhaps
linking to a theatre or concert venue. Packaging to increase spend but at the
same time offering value for money. 150 seat means he could take large parties.
Is there scope for small private parties? Try to get a unique selling proposition
(USP). Home-made petits fours or canapés could be offered as complimentary
enticements.
Price – Jack’s method of pricing needs review – target pricing is only one
method. Packaging can also be used when pricing. Set menus with limited choice
and averaged prices would generate the same if not better margins.
Complimentary items will be costed into the price.
Profit – This will always depend on customers. If all the other issues are
addressed the customers will follow.
This is offered as a possible solution and is not in any way prescriptive.

Activity 2.1
! Field surveys - Researcher employed to interview a cross section of tourists in
the street, by phone or by mailing. Relating questions to standards of welcome
from hotels, quality of accommodation and food.
! Focus group research - Inviting a selected group of your establishment’s
customers to a free and frank discussion of why they use particular hotels,
what they expect, and their attitudes to various new, planned product
initiatives.
! Observation research - The simple watch and learn strategy. Can be used
effectively with both customers and staff in the industry. Watching, seeing and
recording the way customers act and interact.
! Experimental research - Used when gathering information about a new or
renewed product. Often used in hotels when guests are asked to comment on
proposed décor and colour schemes. They are shown the proposals on site,
before a larger scale revamp is undertaken or completed.
! Research by sampling - Choosing possible respondents, by selection those
who appear to fit the requirements but remain representative of the total
market.
Activity 2.2
There will be a variety of responses to this activity. Check with your tutor.
Activity 2.3
Product life cycle
1. The chosen establishment or product should have been popular and successful,
satisfying its customers’ needs at all times during the growth period possibly due
to effective research and promotion, high standards of service, efficient pricing
policy, correct location, high satisfaction ratings, etc.
During its maturity stage, the establishment or product continued to satisfy
consumers who remained loyal for a variety of reasons (see growth period).
Or, continuing research prompted some product change/development to the
establishment or product to keep up with market changes and continued to
satisfy the customers. Examples of this can be found in establishments such as
The Ritz in London or Gleneagles in Scotland. Both places have been famous
throughout the world for a long period of time; they have adapted to changes
while still satisfying their customers.
2. Your chosen product or place may have been successful at the onset due to
effective promotion or attractive pricing but did not survive the maturity stage of
the product life cycle. This could be due to promotion being reduced or prices
increasing to cover costs. Examples of this can be found in themed
establishments or where research was ineffectively done.

Activity 2.4
Branding suggestions
1. McDonalds – convenient, fast food, inexpensive, fun for children
2. KFC – as above but chicken only. Limited menu?
3. Starbucks – known throughout the world, good coffee, place to meet and be seen
4. Hilton – expensive, high quality
5. Ritz – well established, VIP visitors, exclusive
6. Gleneagles – expensive but comfortable, golf, country activities, G8 Summit
7. Burj Al Arab – very exclusive, opulent, luxurious, only 7-star hotel in the world.

Section 3: Hospitality industry at national and

local level



This section will explain the importance of the hospitality industry and its impact on the
local economy.

This outcome should use a current/recent local development. You will be encouraged
to research what is happening locally to help you contribute to discussion and
understand the concepts of employment and income multipliers and also the benefits of
the social implications. The examples used in this outcome are Scottish ventures and
attractions.

12 hours.

Research material and information on local developments.


The case study issued for Outcome 1, followed by structured questions.

Outcome 3 will be completed as a closed-book assessment under supervision.

Satisfactory completion of all questions.

You will have one opportunity for reassessment.

What is economics?
It is making the best use of what we have, in other words taking the people’s skills and
energies, the land, the buildings, machinery and any other economic resources in order
to obtain the highest possible standard of living.
We will look at each of these in turn.
Labour
What is available to the local economy will depend on the population of the area:
! age
! education
! skills
! whether available for work.
Age
The age of the population in the local area will determine the type and size of the
workforce. Some areas often attract specific groups of the population. For example, a
coastal area may have a large proportion of retirement homes, meaning that the bulk of
the residents will not be available to the labour market.
Other areas of high population may have a large percentage of young families where
the main earner is unskilled, and the area may have a high unemployment rate.
Education
Areas with few colleges or colleges that specialise in limited courses can mean that the
labour force is trained in skills no longer required in the local area. It is therefore
important that local government see the need to invest in training to make sure that the
workforce is able to satisfy the needs of the local area.
Skills
In many areas traditional skills such as fishing, shipbuilding and skills associated with
heavy industry are predominant but in the economy at present are no longer required.
Skill shortages are in the medical area such as doctors and nurses but the training
required takes many years and requires people with a high educational achievement.
Whether available for work

We have looked at the age of the population but you have also to consider whether
they are available for work. They may be young mums looking after the family, single
mums, registered disabled or in full-time education.

Land
When you look at the land you have then to note what it is being used for. Areas where
land are traditionally used for agriculture is difficult to change without the local authority
granting permission and this can take several years.
Areas that are covered by forest and rivers, and areas deemed to be of special natural
beauty all help to contribute to the local economy, as we will discuss at a later stage.
What is found under the land must also be taken into consideration. Central Scotland
traditionally had large seams of coal which over the years have had the areas that were
economic to mine exhausted, leaving areas where the remains of the mining past can
still be seen and, as we shall see later, have been turned to their advantage by local
communities.
The sea and lochs are in this text classed as land and each can be seen to affect the
economy. Areas of the coast developed into fishing ports but as the varieties of fish
have diminished, we find almost ghost towns and villages. Many of the lochs are used
for recreational activities and have allowed areas that were desolate to become
developed.
Capital
This will depend on the type of business being discussed. Many see capital as the
buildings they own, e.g. factories or office blocks, or in the case of agriculture the
sheds and tractors. In some areas it can be the grants given by either central or local
government to help in the regeneration of land, an activity or training.
3.1
Think about somewhere local that has changed its use in the last few years. Note why
it had to change. Has the change done anything to help the local area?

How we use our income

Outgoings
Our main outgoings are in consumer spending where the things we consume can be
divided into durable and non-durable.
Durable goods have a long life. We eventually discard them when they become worn
out. Most of the time the goods we buy are there to give us satisfaction and when we
speak of consuming the goods, it quite frequently refers to the pleasure we get from the
goods not the actual product itself, for example a television.
We can then note the amount of that spending, and relate it directly to the income the
person or household receives.
Non-durable consumer goods are items such as food, fuel and other services.
It is fair to say that what we spend is related to what we earn. The concept of easy
credit may have altered this – but the general rule still applies.
Spending is limited by the income a person or household receives, so how do we
determine the income?
Personal income
This can come from several different sources: wages, salaries, rent from ownership of
property, pensions, dividends from shares, and state benefits.
Regardless of where the income comes from it will then be divided into gross income
and disposable income.
Disposable income is the main indicator, as this is what is left after income tax and
national insurance contributions have been deducted.
When people have a high disposable income they will have more money to either
spend or save. Consumer spending can increase when there is more money available,
creating a higher demand for durable goods such as cars or televisions and services
such as holidays, eating out and short breaks.
People are also likely to save a percentage of their disposable income, but when this
income decreases most of it will be spent on essential items with little left for saving.
Other factors that allow people to spend more on consumables

Wealth
Some people will have money to spend that does not rely solely on the income they
receive from employment: it could come from savings, selling shares or from the sale
or inheritance of property.
Borrowing
When interest rates are low the cost of borrowing money will also be low and this
encourages people to buy durable goods or have expensive holidays and frequently
spend more money than they have as disposable income.

Tax and the British system

As already mentioned the amount of disposable income relies on the amount of tax
deducted. Let us look at this in a little more detail.
Direct taxes
! Income tax – the main source of revenue for the government.
! Corporation tax – this is taken from a proportion of the profits of a company.
! Petrol tax – this is taken from the income of oil companies working in the North
Sea and other offshore oil fields.
! Capital gains tax – this is a tax on assets which are sold at a higher price than
when they were bought.
! Inheritance tax – this is a tax which is levied on the amount of wealth a person
inherits.
! Stamp duty – all documents that transfer the ownership of property have to
bear a stamp which is a percentage of the value of the property.
Indirect taxes
! Value added tax – this tax is levied on goods and services, although certain
items are exempt such as food, children’s clothes, public transport, books and
newspapers.
! Excise duty – this is charged on some goods such as petrol, tobacco and
alcohol.
! Custom duty – this is levied on goods brought in from countries that are not
part of the EU.
Having now looked at all the areas that can affect the income of individuals we can look
in more detail at how they spend that income.
Figure 3.1 Typical pattern of expenditure by household composition

From the chart you will note that adults with no dependants spent a greater proportion
of income on travel and other expenses.
When checking out the statistics you would also find that with higher disposable
income the growth area is in hospitality with more being spent on holidays, air travel
and catering services.
3.2
Imagine you are setting up a restaurant in the area where the above statistics were
compiled. Who do you think your target group would be? Give reasons for your answer.
How businesses develop

You will have noted in the news that there is continual information on firms being taken
over or the attempted take over of other businesses. Why is this?
There are three main reasons for this:
1. To reduce average costs, that is to reduce the costs of production, as the more
you produce the less it will normally cost.
2. To obtain a larger share of the market. A company which controls a large
percentage of the market has more marketing power can negotiate better
purchasing prices for the raw products than a small company, which can end
being squeezed out of the market.
3. To have better security. Companies with greater resources are also better
equipped to withstand market fluctuations and can cope with temporary down
trends in their trade.
Companies can grow in several different ways.
Vertical integration
This can be either termed as forward integration when one company, such as a
brewery, takes over a chain of pubs or restaurants, or backward integration. This is
when the company, such as a hotel chain, takes over one of the companies it obtains
its supplies from such as laundry or wine importer.
Horizontal integration
This is when one company takes over another company trading in the same product or
area.

3.3
Look in your area and see where you can find examples of each of the above types of
integration.
! vertical forward integration
! vertical backward integration
! horizontal integration.
Discuss this as a class exercise.
Conglomerate merger
Sometimes, companies that produce or operate in entirely different areas merge
together. This is called a conglomerate merger.
One of the main reasons for this type of merger is for greater security. When one arm
of the company is not doing so well the other areas can help cushion the problem and
hopefully allow it to pull through.
Sometimes the companies that merge may use the same raw materials but the end
product may be entirely different.
3.4
From the above description, see if you can find examples in the hospitality industry of
both types of merger named above:
! a company producing entirely different products
! a company that uses the same raw materials but produces different end
products.

The final type of large company to look at is the multinational. This, as the name
implies, is a company that operates in more than one country, and if we look at most of
the larger hotel companies we will find they are examples of multinationals, for example
the Hilton group or the Radisson Hotels, which are found in several areas of the world.
Although large companies are inclined to dominate when looking at any sector of the
market, there is still an important place for the small company or individual trader
who owns one business or just two or three.
When small businesses succeed it can be because they provide:
! a specialist service, such as operating a restaurant concentrating on local
produce and dishes
! a hotel mainly serving an isolated local community
! an exclusive service that will only attract a small proportion of those with a
high income, such as a gourmet style restaurant.
Sometimes, these small businesses help each other by joining together in some way to
share some of the benefits of being a larger company.
An example of this could be the Best Western Group, where hotels pay a membership
to gain the benefits such as marketing and the hotel booking system of a larger group.
Other local companies may form an alliance to help with training or have the advantage
of bulk buying.
Before we leave the discussion on companies and the benefits, we should also note as
previously mentioned that the government also offers incentives to companies or
individuals to set up trading in certain areas. These incentives can come in several
different forms:
! they may be exempt from local rates for a specific period
! they may have a grant to help with construction costs
! they may offer to set up training schemes for the new business to help in the
recruitment of labour.
Although in the short term this may cost the government money, in the longer term it
will help cut unemployment and help in the development of areas suffering from
neglect.
The next area of the economy we must look at is exchange rates.
The rate of exchange

Different countries have different currencies, which means that when people or goods
move from one country to another they have also to change currencies.
The rate of exchange is controlled by the exchange market located in areas of the
world where major banking takes place.

As we know, most of Europe now uses the euro, although Britain still has sterling. This
then means that sterling is priced against the euro and other major currencies, such as
the dollar.
On a daily basis these prices fluctuate and therefore have the knock-on effect that the
cost of goods or the amount of money you have to spend may change.
What could cause the price to change?
The following table should help to show the effect of rises and falls in the dollar and the
pound:
How the pound might fall How the pound might rise
The British demand for goods and Americans demand more goods and
services increases services
British residents offer more pounds in American residents offer more dollars in
exchange for dollars exchange for pounds
The value of the pound in terms of The value of the pound in term of dollars
dollars falls rises
The pound buys fewer dollars and the The pound buys more dollars and the
dollar buys more pounds dollar buys fewer pounds
In the foreign exchange market the In the foreign exchange market the
supply of pounds increases and the supply of dollars increases and the
demand for dollars increases demand for pounds increases
3.5
Find the countries of the EU that have the euro as currency.

At present, what is the price you would get if buying £100 of euros and £100 of dollars?
Please note that this example uses Scotland but the principle remains the same in any
country.

How does the rate of exchange affect what happens to trade in Scotland?
When we as a country buy anything abroad we have to pay in the currency that they
use.
When we sell abroad the goods are sold in sterling.
When the exchange rate is high, i.e. the pound is strong, it becomes more expensive to
trade in and travel to Scotland. Foreign currency buys fewer pounds.
At times of a weak pound, and low exchange rates, Scotland is less expensive for
tourists and traders since their currency buys more pounds.
This can be broken down into visible trade and invisible trade.
Visible trade
This refers to physical goods that are anything that can be loaded or unloaded at docks
or airports. In hospitality this could be items of raw produce we require that cannot be
grown in Britain. If as a company we decide to buy vineyards in France, the wine we
bring back into the country would be part of the visible trade. But unless we also
exported goods we would then cause an imbalance of trade.
Invisible trade
This type of trade consists of three different types of transactions:
! buying and selling of services
! interest, profit
! transfer payments.
It involves the buying and selling of services such as transport, insurance, banking, and
hotels and catering.
Interest, profit and dividends
This is earned by companies that own property overseas or foreign companies that
own property in Scotland plus residents of either country that invest in shares or
banking in either country. Customers who borrow in either country will also be making
payments.
Transfer payments
This will be payment in the form of grants such as that given by the EU or the grants
given by Britain to aid overseas development. It could also be immigrants sending
money home to relatives either in Britain or any other country.
To understand more clearly invisible exports and imports, study the following table.

Exports Imports
Britain earns foreign currency when Britain spends foreign currency when
British airlines and British ships carry British firms and British citizens make
foreign passengers use of foreign-owned airlines and ships
People from other countries come to British citizens take holidays abroad
Britain as tourists
British entertainers make overseas Foreign entertainers perform in Britain
tours
British-owned companies located Foreign-owned companies located in
abroad bring profits back to Britain Britain take profits back to their home
countries
Overseas residents pay interest on British citizens pay interest on loans
loans made to them by British banks made to them by foreign banks
One final area of economics we have to look at is inflation.

What is this?
It is a situation where the value of money is falling.
When prices are rising, the buying power of the pound is falling, so each pound will buy
fewer goods and services.
In Britain inflation reached an all time high in the late 1970s but by the mid -1980s it
had fallen to 4% and it has stayed around that level ever since.
How does inflation affect the economy?
! It has a tendency to accelerate the economy
! It affects the distribution of income. You have gainers and losers
! It leads to a deficit in the balance of payments
! Borrowers tend to benefit at the expense of lenders.
Policies that help to deal with inflation are:

! Monetary and fiscal measures to reduce demand
! Helping industry to become more efficient so as to increase supply
! Using income policies to keep the growth of money income in line with the
growth of real income. That is, people’s income should not increase faster
than the supply of goods and services on which those incomes are spent.

3.6
Find the countries that at present have high inflation and try to find out how it affects
the inhabitants of those countries.
When inflation is high, you will also have a high rate of unemployment.
Unemployment reached an all-time high in the late 1970s until the early 1980s,
particularly among the unskilled and semi-skilled.
Other points of unemployment are:
! The total output of goods and services are less than they should be
! People who are unemployed suffer a fall in their standard of living and a loss
of morale
! The benefits paid to the unemployed must be met out of taxation.
What policies can be put in place to help?
! Make sure all job vacancies are well advertised in all areas – not just the local
area
! Have better retraining facilities
! Persuade businesses to move into areas where industries are declining
! Increase demand – but care needs to be taken as this could also mean higher
wages and lead to balance of payment problems.
We have now looked at all the elements of the economy that can have an influence on
the hospitality industry.
When discussing the hospitality industry we must also be clear about the areas it
covers:
! hotels
! restaurants
! pubs, bars and nightclubs
! contract food service providers
! events
! gambling establishments, i.e. casinos
! visitor attractions.

! holiday parks
! self-catering accommodation
! hospitality services.
Purpose and synergy

The purpose of the sector is the provision of food, drink, accommodation and leisure
activities. The sector is closely bound to ensure a high standard of customer service
and a quality visitor experience. The visitor is at the heart of the sector and further
synergy is found in common vertical and horizontal ownership, which means that many
operators can be found in more than one industry.
The sector itself is one of the largest in the UK.
It consists of a considerable variety of sub-sectors within individual industries, each
bringing a unique product to a demanding market. For example, many hotel chains
have a stable brand, each offering a different product and service and targeting a
different customer profile.
Nightclubs, dance halls and discos, conferences and exhibitions, gambling, visitor
attractions and holiday parks seek to offer a unique leisure experience.
The sector works in strategic partnership with museums and historical monuments,
theatres and music events, active leisure, food manufacturing and retailing, to name
but a few.
It is important to highlight at this stage that there are inherent problems in defining the
tourism sector. Within the UK, a number of different definitions are used and, as a
recent report has highlighted, given that tourism can be defined as anything a tourist
comes into contact with, the sector can be very focused or all-encompassing,
depending on the definition used. Further work is undoubtedly required to ensure that
as far as possible a consistent definition is adopted.
Economic generator
The hospitality industry generated £55 – £60 billion in 2005.
It is therefore a major wealth generator. It supports a number of other sectors, such as
cultural heritage, construction and retailing.
However, the sector has to compete hard in an uncertain business climate.
The industry employs approximately 1.7 million people in the UK with an employee
turnover of about 42%.
Group activity: Research and discuss the income and employment generated by the
hospitality industry in China in 2005.

Sector characteristics
The sector is characterised by low barriers to entry, with many new businesses starting
up without the necessary skills required.
Salary levels are below the average across the economy. It has a diverse workforce:
58.2% are female, 10.4% are from ethnic minorities, and are mainly employed in Asian
and Oriental restaurants. There has been a recent influx from Poland and Eastern
Europe.
The sector is also predominantly young, with 35.8% under 25.
There are wide industry variations in terms of age, with the hospitality industries
employing a predominantly younger workforce.
Sector drivers
A number of key drivers are affecting the skill requirements of the sector. September
11, severe acute respiratory syndrome (SARS) and the foot and mouth disease crisis
are only three events that have reduced the number of travellers, both internationally
and domestically.
The World Travel and Tourism Council estimate that the war in Iraq alone has reduced
visitor numbers to the UK by 2.1%.
The consumer is becoming more demanding and rising expectations require higher
levels of customer service.
The pub and gambling industries have been affected by the new Gambling Act 2005
and this has resulted in the opening up of markets and the potential expansion of these
industries.
The sector is heavily reliant on technology, but not all of the sector has been quick to
embrace developments or is aware of new competition in the form of direct bookings
and online betting.

Case study of the local area – Falkirk Wheel

The hospitality industry and the economy have been looked at in general terms. We will
now focus on the local area.
A case study of local areas lets us see how developments have changed these
communities.
Below are extracts from The Scotsman concerning the tourist attraction The Falkirk
Wheel.
Falkirk Wheel turns into top 10 tourist attraction - Sunday 1 September 2002
The newly opened Falkirk Wheel has already become Scotland’s third most
popular tourist attraction, knocking the Royal Museum and Museum of
Scotland into fourth place.
(Source: http://news.scotsman.com/topics.cfm?tid=541&id=973052002)
Falkirk Wheel locked in canal ‘wonders’ fight - Friday 31 May 2002

Canal enthusiasts were today launching a quest to identify the ‘Seven
Wonders’ of the inland waterway network.
Falkirk Wheel voted a waterway wonder - Thursday 24 October 2002

The Falkirk Wheel has been voted one of the top seven waterway structures
in the UK, only 4 months after it was opened by Her Majesty the Queen.
Visitor target smashed as 200,000 roll up for Wheel - Wednesday 28 August

2002
THE multi-million pound Falkirk Wheel canal boat lift has shattered its target
for visitors.
Couple get married on the Falkirk Wheel - Saturday 26 April 2003

A lovestruck couple yesterday became the first to tie the knot on the Falkirk
Wheel, the world's only rotating boat lift.

ERDC rolls out park-and-ride at Falkirk Wheel - Friday 5 September 2003

ERDC, the Edinburgh-based civil engineering and construction firm, has
formally opened the £2.8 million park-and-ride facility at the Falkirk Wheel,
the world's first rotating boat lift.
Falkirk Wheel does a turn at Christmas - Monday 2 December 2002

The Falkirk Wheel has announced plans to open on Christmas Eve and New
Year's Eve.
3.7
From the above, how do you think the development of this tourist attraction has helped
employment in the Falkirk area?
Obviously with the volume of tourists coming to the wheel the potential for other
industries to develop and expand should be seen. Identify some of these industries.
What other social implications do you think there are for the area?

The multiplier effect

A new visitor attraction, factory or real estate development can provide a huge boost to
the prosperity of an area or city. The benefits can be economic and social, and can
involve new employment opportunities and new private investment. The extra
employment should bring about an increased sale of food, cars and consumer goods,
etc. as the new wage earners spend their earnings. This is called the multiplier effect.
It is normally split into employment, income and social benefits.
Employment
There are benefits of direct employment where more people are employed to build
and work in the new development.
These employed people may then employ other people to work for them. Examples of
this could be a childminder or cleaner. This is known as indirect employment.
Induced employment is where other businesses or suppliers to the new development
take on more employees to cope with the new demand.
Income
Direct income is that earned by the employees of the new development.
They in turn pay the people mentioned in indirect employment (above) and this is
called indirect income.
Indirect income goes to local suppliers and businesses from the employees.
Social benefits
A new development brings higher employment to an area, more spending, more
demand for leisure and pleasure outlets and possible housing developments in the
area. There will be a general prosperity and higher profile of the area.
An increase in tourism has the same multiplier effect, which is why so many
governments wish to increase the number of visitors to their country.

Loch Lomond Shores

Loch Lomond Shores is a new tourist attraction on the shores of Loch Lomond.
Below are extracts from publicity leaflets detailing the various facilities that are part of
the complex.
Eat:
“Drumkinnon tower – The Great Hall Café
With its sheer scale and presence, the Drumkinnon Tower is the dominating
architectural feature of Loch Lomond Shores. On the water’s edge, it looks
north to where the Highlands begin.
A self-service restaurant, the Great Hall Café, welcomes visitors to stay for
refreshment and take in the unique atmosphere. The family restaurant serves
a selection of high-quality soups, home-made hot dishes, filled baguettes,
sandwiches or wraps, and fabulous cakes and pastries. There is also a
children’s menu to ensure everyone is happy.”
“Drumkinnon tower – Viewing Gallery Café

As the view will inevitably draw visitors higher into the building, the Viewing
Gallery Café can be found on Level 6.
From this height, attention is divided between the quality of the food and the
quality of the view. The tables are close to the viewing window with its ever-
changing panorama of the loch. Linger over a luscious latte or a refreshing
pot of tea. Treat yourself to a freshly baked pastry or mouthwatering salads.
The homemade sandwiches and paninis are a must.”
“Jenners – Conservatory Restaurant

You can also enjoy the stunning Loch Lomond environment in the
Conservatory Restaurant within Jenners. Serving a fine selection of light
meals, pastries and speciality coffee.”
“Meson del Lago

With stunning views over Loch Lomond, Méson del Lago is the only place to
enjoy fabulous full Mediterranean-styled restaurant and tapas.
Relax and enjoy the unique atmosphere while enjoying a drink in the bar or
on the terrace with loch views.”
“Loch Lomond Books and Internet Café

Sit back and enjoy real Italian coffee and freshly baked bread sandwiches,
cakes and pastries in the cafe or browse the web with state-of-the-art satellite
broadband Internet access.”

Play:
“Drumkinnon Tower
Welcome to Drumkinnon Tower, the heart of Scotland's most spectacular
destination, Loch Lomond Shores. With its sheer scale and presence,
Drumkinnon Tower is the dominating architectural feature of the site. Situated
at the waters edge, its 18 metre wall of glass looks north to where the
Highlands begin. The building is reminiscent of an ancient castle and
contains a unique mixture of exciting attractions, to help you discover more
about the natural and cultural heritage of the Loch Lomond area.
Drumkinnon Tower contains two shows: Beneath the Loch, and The Legend
of Loch Lomond, as well two cafes, a gift shop specialising in local
merchandise, and a roof top Lookout.”
“The Loch Lomond Experience

If Loch Lomond is one of the best known places in Scotland, then that is at
least partly a result of the song originally called ‘The Banks of Loch Lomond’,
and said to have been written by a condemned prisoner in Carlisle Jail.
This is the starting point for The Legend of Loch Lomond, the first full-length
drama 58 minutes to be shot in large format. It is shown in Drumkinnon
Tower’s 350 seat, giant screen theatre. With the impressive screen – the size
of a tennis court – and state-of-the-art projection and sound, the experience
is visually overwhelming. On one level, the film sweeps over the rugged
grandeur of Loch Lomond’s surroundings. Yet this visual spectacle is just the
backdrop to an intriguing encounter between past and present, on one
special evening of the year. The audience travels back in time to Loch
Lomondside to the days of the Jacobites. Yet the timeless theme of romance,
separation and war are also firmly rooted in the goings-on around a
contemporary ceilidh in a lochside hotel. An atmosphere of mystery
permeates this haunting, yet heartwarming, tale, while the soundtrack is
enthralling and ‘The Banks of Loch Lomond’ is given a new musical
treatment. In short it’s a must-see!
Shorter in duration Beneath The Loch is the children’s animated show. It tells
the story of a young otter that dives beneath the waters of Loch Lomond and
travels back through time to discover some of the area’s history, myths and
legends.
At the top of the Tower the Look Out is a viewing area at the highest point of
Drumkinnon Tower, where the waters of the loch stretch out to the peaks of
the horizon.”
“Scotland's First National Park

Scotland's first National Park, Loch Lomond and The Trossachs, is worlds
apart from the hustle and bustle of the city. The past is inescapable here as
two worlds collide – the gentle lowlands end abruptly at the Highland
Boundary Fault Line and gives way to rugged terrain.”

“National Park Gateway Centre

Loch Lomond Shores hosts the principal Gateway Centre to the park offering
you the opportunity to explore the astonishing diversity of this stunning
landscape and its abundant wildlife. Visit the National Park’s site for more
information about the National Park. (www.lochlomond-trossachs.org)
Staffed jointly by park rangers and VisitScotland staff, the centre contains all
the information and tools you need to discover Scotland's first National Park –
Loch Lomond and The Trossachs.
Ever since the Stone Age hunters entered the woodlands 6000 years ago,
people have influenced the National Park landscape. Learn how everyone,
whether you are living, working or visiting can protect and help to shape the
future landscape.
Go to the VisitScotland website for visitor information about the area including
accommodation. (www.visitscotland.com)”
“Park Rangers
There is always someone on hand to help you explore Scotland's first
National Park. Whether it is offering information on the local wildlife and flora,
organised talks, or simply locating the best place for you to explore, the
rangers are there to ensure you make the most of the park.”
“Woodland Trails
Behind the centre, situated in woodlands, is a short trail suitable for everyone.
For the more adventurous the rangers can also point you to trails throughout
the park, for walking, hiking and cycling. You'll be amazed by the beauty of
the area!
Throughout the park you will find a collection of modern art and sculptures. In
recognition of this world famous location, international artists have come
together to give their interpretation of Loch Lomond and The Trossachs.”
“Interactive exhibition
The centre contains a state-of-the-art exhibition. The five interactive zones
charter the history, wildlife and flora of the area and explores the international
need to protect our environment.”
“Can You Experience

Canoe and bike hire provided by Can You Experience (hire is weather
dependent and available from Easter – October)
! Canoe hire: Canoe hire is available by the hour. Paddle around a
sheltered lagoon on the loch with stunning views towards Ben Lomond.

! Bike hire: Adult and children’s bikes, even a trailer for toddlers, can be
hired on a half-day or full-day basis. Staff are more than happy to advise
on suggested routes.
! Pedalo hire (Can You to provide): Pedalo around the sheltered lagoon in
one of Can You’s newest additions.
Can You Experience also offers guided canoe, mountain bike and hiking
trips. Get off the beaten track, leave your cares behind with unforgettable
journeys on and around Loch Lomond. Glide through the sheltered waters of
the loch in a canoe from the safety and comfort of the large stable and
professionally guided canoes. Hire a guide to take you by bike to some
favourite areas around the loch, share their knowledge and passion for Loch
Lomond. Take to the hills with a qualified guide, walk in the footsteps of the
clans that have lived by the loch. Take up the challenge of Ben Lomond or
perhaps join one of our more leisurely guided walks to local sites of natural
and historical interest.”
“Loch Cruises (Easter – September)

Sail from Loch Lomond Shores with Sweeney’s Cruises. Take the chance to
sail on the famous loch. Whether it is a 45-minute cruise north up the loch or
a 2½ hour trip to Luss, what better way to make the most of the beauty,
history and culture that surrounds Loch Lomond than to capitalise on the fun
and excitement on the water?”
(Sourced from www.lochlomondshores.com)
3.8
Having read the above extracts, you should have an idea of what Loch Lomond Shores
has to offer as a tourist attraction.
How do you think this development has helped the area around Loch Lomond? In
particular, how will it help other businesses in the area?

3.1
Using the details provided on The Falkirk Wheel or Lomond Shores or on a new
development of your choice, discuss the following in detail in relation to the
development:
1. employment benefits: direct employment, indirect employment, induced
employment
2. income benefits: direct income, indirect income, induced income
3. social benefits to the local area.


In this outcome you have studied the following aspects:
! The importance of the hospitality industry to the local area
! Economics including consumer expenditure, inflation and the exchange rate
! Business development and the benefits to the local area.
Please ensure that you have completed the activities and have submitted your tutorial
to your tutor.

Activity 3.1
The answer to this activity will depend on the area you have looked at. Please check
with your tutor.
Activity 3.2
From statistics shown.
Adult with no dependants, i.e. couple without children with higher than average
disposable income.
Activity 3.3
No formal answers.
Activity 3.4
No formal answers – it will depend on the geographic area.
Activity 3.5
Countries that have the euro include France, Spain, Portugal, Italy, Greece, Belgium,
Ireland, and Holland. Check the current exchange rate with your tutor.
Activity 3.6
No formal answers.
You will find that these countries have a high unemployment rate with the cost of basic
items expensive.
Activity 3.7
Employment in the Falkirk area.
Falkirk and the surrounding area of Grangemouth had relied on the petroleum and
engineering industries for the source of employment, but since the decline of both
these areas unemployment was high.
The clean-up process of the canal and the towpath plus the construction of the Wheel
and the visitor centre has given employment to many in the area. With the success of
the attraction not only is it employing staff on the site but you will also have businesses
such as local shops, hotels and restaurants benefiting.
The catering facilities have increased and improved at the wheel and the novelty of it
attracts other visitors such as Christmas parties and even as a venue for weddings.
The canal itself could also attract businesses that focus on outdoor lifestyle such as
cycle hire.
Social implications are an area that is seen as attractive allows local communities to be
proud in the area they live. Gives a feeling of well being. Means they have a better
standard of living and have money to spend in other sectors in the local area.

Activity 3.8
Loch Lomond has always been an attraction for tourists but with only the natural beauty
to admire there was little to detain them as they passed through the area.
The Lomond Shores gives the tourist somewhere to spend several hours, regardless of
the weather. Most of the activities available are indoors, therefore on a cold wet day
they can still stop and enjoy the area, and in good weather the loch will always attract
tourists.
The area around should see an increase in the demand for accommodation as tourists
stay for a longer time.
More people will be employed; therefore the area in general will be more prosperous.
With opportunity for local producers to sell their wares, the farming community will also
feel the benefit.
As already mentioned hotels, shops and farmers should see an increase in trade.
Water-based sports should also have the chance to grow with more visitors staying in
the area.

Glossary
Advertising Any paid form of non-personal presentation or promotion of
products or services
Age and life-cycle The division of a market into different age and life cycle groups
segmentation
Attitude A person’s feelings on a product or service
Available market The set of consumers who have interest, income and access to a
particular product or service
Behavioural Dividing a market into groups based on attitude or reaction to a
segmentation product or service
Brand A name or sign used to identify and differentiate a product,
service or company from others
Brand equity The value of the brand based on its brand loyalty, perceived
quality and name awareness
Brand image The opinions held by consumers about a particular brand
Business market All the organisations who use products and services for the
purpose of business
Buyer The person who makes an actual purchase
Catchment area The geographical area where existing and potential customers
live and/or work
Closed-end Questions that include all the possible answers
questions
Competitor The process of identifying key competitors, assessing their
analysis strengths and weaknesses and deciding on a strategy
Consumer buying The way in which consumers react to the purchasing of products
behaviour and services
Consumer- A principle of enlightened marketing which holds that a company
oriented should view and organise its marketing activities from the
marketing consumer’s point of view
Convenience A consumer product that the customer usually buys frequently,
product immediately and with a minimum of comparison and buying effort
(i.e. fast food)
Core product The actual product the consumer is buying
Customer An organised collection of comprehensive data about individual
database customers
Customer The extent to which a product’s perceived performance matches
satisfaction a buyer’s expectations
Cycle The medium-term wavelike movement of sales resulting from
changes in general economic and competitive activity

Decline stage The product life-cycle stage at which a producer’s sales decline
Demarketing Marketing to reduce demand temporarily or permanently – the
aim is not to destroy demand but to reduce or shift it
Demographic Dividing the market into groups based on age, family size,
segmentation income, occupation, etc.
Demography A study of population in terms of size, age, sex, occupation and
other statistics
Direct-mail Mail outs, which include letters, ads, samples and special offers
marketing sent to potential customers
Discount A straight reduction in price on purchases during a stated period
of time
Distribution The use of other organisations to sell your product or service (i.e.
channels tour operators)
Environmentalism The movement of concerned citizens and government agencies
to protect and improve people’s living environment
Events Occurrences staged to communicate messages to target
audiences, e.g. grand openings and news conferences
Experimental The gathering of primary research data by selecting matched
research groups of people giving them different products and checking for
differences in their response
Fads and New products or services normally with a short product life cycle
fashions
Feedback Results from questionnaires and experimental research
Focus group A small sample of typical consumers who give their reaction to a
new advertising campaign or product launch
Forecasting The art of estimating future demand by anticipating what
customers want
Gender Dividing a market into different groups based on sex
segmentation
Growth stage The product life-cycle stage at which a product’s sales start to
climb quickly
Habitual buying Consumers who use the same products and services through
behaviour habit and brand loyalty
Income Dividing a market into different income groups
segmentation
Information It is vital to have information in order to anticipate and satisfy
customer needs
Internal audit An evaluation of the company’s strengths and weaknesses,
opportunities and threats (SWOT analysis)

Internal records Information gathered from sources within the company which can
be used for marketing purposes
Internet A vast global computer network which enables communication
throughout the world
Introduction The product life cycle stage when the new product is first
stage distributed and made available
Life-cycle A system which recognises that consumers needs change at
segmentation different stages of their life
Lifestyle A person’s pattern of living as expressed in his/her activities,
interests and opinions
Market The set of all actual and potential buyers of a product or service
Market follower A runner-up firm in an industry who wants to hold its share of the
market without rocking the boat
Market leader The company with the largest market share; it usually leads in
price changes, new products and promotions
Market segment A group of consumers who respond in a similar way
Market Dividing a market into distinct groups of buyers with different
segmentation needs, characteristics or behaviour
Market targeting The process of evaluating each market segment and selecting
one or more
Marketing mix This contains the four elements: Product, Price, Place, Promotion
Marketing The function that links the consumer to the company through
research information. This information is used to identify and define
marketing opportunities
Marketing These include research and advertising agencies, media firms
services agencies and other service providers that help a company to target and
promote its products to the right markets
Maturity stage The stage in the product life-cycle where sales slow down or
level off
New product The development of original products, product improvement and
development new brands
Observational The gathering of primary research information by observing
research consumers’ reactions to situations
Online marketing A form of direct marketing conducted through interactive online
computer services which provide two-way systems that link
consumers and sellers
Open-end Questions that allow people to answer in their own words
questions
Packaging How the product or service is presented to the consumer
Personal selling Oral presentation in conversation with consumers for the purpose
of making sales

Potential market The set of consumers who profess some level of interest in a
particular product or service
Product mix The set of all products or services that a particular company
offers for sale
Public relations Building good relations with the public through charitable work,
etc.
Publicity Activities to promote a company by using the media to plant
news
Qualitative This explores consumers’ motivations, attitudes and behaviour
research
Quality A consumer perception on goods or products which satisfies
needs
Quantitative This research is based on statistics rather than attitudes
research
Sales promotions Short-term incentives to encourage sales of a product or service
Target market A set of buyers sharing common needs
Target marketing Directing a company’s effort towards a group of customers
sharing common needs
Total quality Programmes designed to constantly improve the quality of
management products, services and marketing processes
(TQM)
Unique selling A company with a USP (e.g. an extensive range of expensive
point whisky) will promote this to its target market
Value for money The customer’s perception of the product and how much is it
worth
Word of mouth Personal communication about a product between target buyers
and neighbours, friends and family members.

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DL3V 34

© Scottish Qualifications Authority – Material developed by Reid Kerr College.

© SQA Updated 2007 2 Developed by COLEG

© SQA Updated 2007 3 Developed by COLEG

© SQA Updated 2007 4 Developed by COLEG

Introduction to the unit

Section number and title Approx.

How to use these learning materials

Symbols used in this unit

© SQA Updated 2007 5 Developed by COLEG

Self assessed question

Tutor assignment – formative assessment

© SQA Updated 2007 6 Developed by COLEG

Other resources required

© SQA Updated 2007 7 Developed by COLEG

When and where you will be assessed

What you have to achieve

Opportunities for reassessment

© SQA Updated 2007 8 Developed by COLEG

Section 1: Marketing in the hospitality industry

© SQA Updated 2007 9 Developed by COLEG

© SQA Updated 2007 10 Developed by COLEG

Introduction to this section

Outcomes, aims and objectives

Approximate study time

Other resources required

© SQA Updated 2007 11 Developed by COLEG

Assessment information for this section

When and where you will be assessed

What you have to achieve

Opportunities for reassessment

© SQA Updated 2007 12 Developed by COLEG

Yet another, simpler, definition:

© SQA Updated 2007 13 Developed by COLEG

Think of the definition of marketing as provided by the Institute of Marketing, i.e.:

Write any method that you might use to:

© SQA Updated 2007 14 Developed by COLEG

Features of hospitality marketing

Features of the hospitality product

© SQA Updated 2007 15 Developed by COLEG

Features of the hospitality industry

© SQA Updated 2007 16 Developed by COLEG

© SQA Updated 2007 17 Developed by COLEG

© SQA Updated 2007 18 Developed by COLEG

Factors which influence hospitality marketing decisions

© SQA Updated 2007 19 Developed by COLEG

! S – Social awareness is greatly improved, and the public – our customers –

© SQA Updated 2007 20 Developed by COLEG

You’re the owner of a hotel in a busy city in central Scotland.

1. Prepare a SWOT analysis on where you see the business.

© SQA Updated 2007 21 Developed by COLEG

Changing marketing requirements

© SQA Updated 2007 22 Developed by COLEG

© SQA Updated 2007 23 Developed by COLEG

Summary of this section

© SQA Updated 2007 24 Developed by COLEG

© SQA Updated 2007 25 Developed by COLEG

© SQA Updated 2007 26 Developed by COLEG

© SQA Updated 2007 27 Developed by COLEG

© SQA Updated 2007 28 Developed by COLEG

Section 2: Application of marketing

© SQA Updated 2007 29 Developed by COLEG

© SQA Updated 2007 30 Developed by COLEG