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Keys to Success - A Fresh Look at the 4 Ps of Marketing

publication date: Mar 12, 2012
author/source: Dr. John Hogan CHA CHE CMHS
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Keys to Success - A Fresh Look at the 4 Ps of Marketing

or An Unlikely Salute to Collin Raye


by Dr. John Hogan, 

Readers of my writing over the years have likely noted my consistent message about the need to keep the balance between “high tech” and “high touch” in the hospitality industry. If we make too many guest interactions function on automated systems, we will run the danger of changing from an industry known for its service and unique hospitality to one that has little distinction other than price

For years now, businesses globally have recognized and used a fundamental approach in marketing, called The Marketing Mix model. Informally labeled “the 4 P’s”, they were included in business and hotel school classes beginning a generation or more ago and remain in use today, although in an evolved fashion as technology has progressed.

These tools continue to be used by hoteliers as part of the overall marketing strategy in attempts to generate the most favorable response in targeted markets by blending as many of the 4P’s variables in ways that understand and meet those markets’ preferences and needs.

Simply stated, the 4 Ps of the marketing mix are:

1. Product 

Product is usually defined as either a physical object or an intangible service that is mass-produced on a large scale with a specific volume of units. Intangible products are service based and include hospitality, tourism and the hotel industry .  In contemporary lodging, the Product has become segmented by location and segment – luxury, upscale, mid-range, economy, budget, etc.  In addition, the massive introduction of branding and sub-branding to many properties has brought the industry to a point where the danger of becoming an indiscernible entity is very real.  Does a potential guest make a decision on the physical product being offered, or on which brand is pushing better loyalty rewards this week?  (And the cost of those perks are paid for by the hotel ownership and then passed on presumably to future guests)

The thinking from an earlier time was that a good product should sell itself, but there are not really many “ bad “ products in today's extremely competitive markets. In addition, all the brands have extensive customer “something” service programs and departments created to try to reduce complaints and build repeat visits. 

The question on Product every hotel and/or brand must address is if they have created what its’ targeted markets and guests wanted.   Providing a unique flavor in your hotel product/service must meet the needs of your customers or they will not return, regardless of airline miles or extra points.

2. Price

As in the Product category, segmentation has defined some of the price points. The global recession of the last two years has clouded some of the traditional differences, as some resort and upscale brands have discounted heavily to the point where the lower priced properties cannot effectively compete.   Price (the amount a customer pays) is determined by market share, competition, operational costs, brand or product identity and the customer's perceived value of the product. Pricing may increase or decrease with frequency and pricing strategies must be planned and worked daily. Hotels should have learned the lessons of the airlines and not just compete based on being the lowest cost.  The anger of flyers today for being charged extra for almost everything has opened the way for certain carriers to expand and others to enter what were previously lucrative and exclusive markets.  The associates of each kind of those airlines have major differences as well in how and what communicate to their travelers. I encourage you to observe the associates of Southwest Airlines, Virgin Airlines, Singapore Air and a few others and contrast them with numerous other carriers.

Cash flow is an obvious business critical factor and reasonable discounts on a logical basis are often good business practices. Southwest Airlines in the US has been consistently one of the most profitable carriers in the past 20 years and, at times, is the lowest fare provider. A non-technical look at their pricing strategies from only a consumers’ view will show how they track demand and adjust prices accordingly, even in the economic downturn. They are not always the lowest fare in a given market on a given day, but their overall satisfaction ratings demonstrate their ongoing and continued success.  Consumers will always remain sensitive for fair prices, discount options and special offers, but competing on Price as the major component for success is not a viable or logical long-term approach for most hotels.

3. Place

This is the P that may have changed the most in the past 10- 15 years, as Place represents the locations where a Product or in the case of lodging, accommodations can be purchased.  Technology has changed the distribution channels via the internet and third party resellers and the changing role of travel agents and instant communication has clearly changed the location of reservations and guest access.   

4. Promotion

Marketing includes many faces to reach out to the targeted guests or groups, including advertising, direct sales, sales promotions, public relations, publicity, branding, media, etc.  Promotion has evolved through technology to become what is perhaps the most visible P, requiring a significant focus to bring the Product (lodging experience) to the Place (distribution channels) at a reasonable and competitive Price.   While all four P’s still link to each other, Promotion has become the one many hoteliers have concentrated as their point of difference as the other three P's have become somewhat eroded in their significance in today's markets. 

 With that as an introduction, I am now ready to share the second half of this column with the curious title of 

An Unlikely Salute to Collin Raye

Collin Raye is an American country music singer, who made his debut on the country music scene in 1991 with the release of his debut album, which included his first Number One hit in "Love, Me".  This was the first of four consecutive albums released by Raye to achieve platinum certification the United States for sales of one million copies each.  He maintained several Top 10 hits throughout the rest of the decade and into 2000.  Between 1991 and 2007, Raye charted thirty singles on the U.S. country charts and he also had success on the Adult Contemporary format as a duet partner. Four of Raye's singles reached Number One on the Billboard country music charts and he has recorded eleven studio albums, a Christmas album, a compilation of lullabies, a Greatest Hits compilation, a live album, and a live CD/DVD package.

I lived in Nashville for more than 15 years and while I was aware of some of his work, I had not seen him perform.  Raye was touring the US in the 2009 holiday season and was scheduled to perform at a unique venue in Phoenix, AZ, the Celebrity Theatre.  Two weeks before the show, we were contacted by a ticket service announcing this show offering special pricing for mid-section seating. My bride and I have been to a number of excellent shows at this 2,000 seat, theatre in the round and we booked two seats.

When we arrived, we were pleasantly upgraded to prime seating in the first six rows, as the theatre overall was significantly less than fully booked. The performers and theatre management made the decision to upgrade almost everyone to maximize their enjoyment.
What struck me about this was the fact that we had tickets to other shows, where performers in similar situations had either cancelled their performance or verbally complained during much of the show about the poor attendance.  Rather than thanking the people who did support them, they chose to deliver a less than stellar performance and left a very poor impression on those attending.

On this same tour, Collin Raye and his band performed at several concert halls and arenas that had significantly larger numbers in attendance.  What we noticed that night was a different 4 Ps that can have meaning to our industry.

1. Professionalism 
Many contracts give performers an option to cancel or reschedule a show if a certain number of tickets are not sold.   Raye and the Celebrity Theatre management and ownership made the decision to show their professionalism and appreciation for those who had booked by performing, even with low numbers.

2. Passion 
This performer has been singing some of the same songs for almost 20 years, yet he and his band shared their passion for the work as if this were their first tour.  

3. Pride
When an entertainer takes the time to speak with and interact with the audience, their sense of connection and pride shows.

4. Performance
This was likely the smallest crowd on the four-week tour, but no one in the audience would ever have known.  For more than two hours complete with two encore numbers, this band and entertainer gave the audience 100% of their efforts and their showmanship as if they were performing for a crowd of 15,000.

The 4 Ps of Marketing remain an important part of strategies in successful hospitality businesses today. The 4Ps of Personal Attention, as illustrated by Collin Raye also can provide us in hospitality a lesson in “high touch.”

“Our business life is not to get ahead of others, but to get ahead of ourselves...
to break our own records, to outstrip our yesterdays by our today,

to do our work with more force than ever before.”

Stewart B Johnson (UK artist known for his figurative work)

Keys to Success Hospitality Tip of the Week:
Review the current AAA/CAA (or other national) rating system and determine your hotel’s diamond or star rating. Evaluate if you need to take steps to maintain or improve your standing.

KEYS TO SUCCESS is the umbrella title for our new programs, hospitality services and columns. This year’s writings will focus on a wide variety of topics for hotel owners, managers and professionals including both my "HOW TO" articles and HOSPITALITY CONVERSATIONS. My segments Lessons from the Field, Hotel Common Sense and Principles for Success will be featured at appropriate times in the year as well.

Feel free to share an idea for a column at john@hoganhospitality.com anytime or contact me regarding consulting, customized workshops, speaking engagements …………. 

And remember – we all need a regular dose of common sense.

Autographed copies of LESSONS FROM THE FIELD – a COMMON SENSE APPROACH TO EFFECTIVE HOTEL SALES are available from THE ROOMS CHRONICLE www.roomschronicle.com, www.smartbizzonline.com  and other industry sources.      

All rights reserved by John Hogan and this column may be included in an upcoming book on hotel management.   The opinions expressed in this article are those of the author and do not necessarily reflect the views of this publication 

John Hogan is a successful hospitality executive, educator, author and consultant and is a frequent keynote speaker and seminar leader at many hospitality industry events. http://www.linkedin.com/in/drjohnhoganchache 

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