Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`Hospitality and
`Travel Marketing
`
`
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`Hospitality and
`Travel Marketing
`
`Second Edition
`
`Alastair M. Morrison, Ph.D.
`
`rbDe11I1ar Publishers
`1®P
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`Albany - Bonn - Boston - Cincinnati - Detroit - London - Madrid - Melbourne
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`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`NOTICE TO THE READER
`
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`
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`123456T8910}CXX0l0O99,989T9695
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`Library of Congress Cataloging-in-Publication Data
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`Morrison, Alastair M.
`Hospitality and travel marketing / Alastair M. Motrison.—2n<:l ed.
`p.
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`includes index.
`ISBN 0-8273-6620-5_
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`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`C H A P T E R %
`
`y OBJECTIVES
`Having read this chapter, you should be able to:
`mg
`1. Explain the meaning of services market-
`
`2. Identify four reasons that marketing in
`the service industries has lagged behind
`marketing in other industries.
`. List and describe six generic differences
`between the marketing of services and
`the marketing of products.
`
`. List and describe six contextual differ-
`
`ences between the marketing of services
`and the marketing of products.
`
`. List and explain eight specific differ-
`. Explain five unique approaches required
`
`ences affecting the marketing of hospi-
`tality and travel services.
`
`'
`
`'
`
`'
`
`Markeng
`
`'
`
`’
`
`-'
`
`'
`
`Hosplll
`an d aI
`
`Se,‘-C l
`
`in hospitality and travel marketing.
`Identify three unique
`relationships
`
`. among hospitality and travel organiza-
`
`tions.
`
`OVERVIEW
`
`This chapter describes the emerging field of
`services marketing. It emphasizes that, although
`product and service marketing are similar in
`many ways, there are important differences be-
`tween them. These differences are identified and
`described. For the hospitality and travel industry,
`generic, contextual, and specific differences are
`discussed. The unique marketing approaches re-
`quired in the service industries are also de-
`scribed. One of the distinct features of the hospi-
`tality and travel ‘industry is the dependency that
`exists among companies and organizations. The
`chapter ends by reviewing these relationships.
`
`Starbucks V. Amaranth, CBM201 5-00091
`
`Starbucks, Ex. 1071
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`MARKETING HOSPITALITY AND TRAVEL SERVICES
`
`KEY CONCEPTS AND TERMS
`Carriers
`Contextual differences
`Destination mix
`Evidence
`.
`Generic differences
`Inseparability
`Intangibility
`Packaging and programming
`
`Partnership
`Perishability
`Service industries
`Services marketing
`Suppliers
`The travel trade
`Variability
`Word—of-mouth “adver.tising"
`
`ow that you knowwhat marketing is, you are probably anxious to learn the steps involved.
`So what
`is the point of having to read another introductory chapter on services
`marketing? Well, not including this ‘material would be like selling you a car without
`giving you a maintenance manual. You would probably know how to drive the vehicle, but
`not much about why it operates the way it does and why things sometimes go wrong. -
`To be an effective marketing manager, you need to understand the “big picture.” You
`have to visualize the broad scope of the industry and be aware of the many different
`organizations within it. Think of our business as a car engine, with many parts working
`together to ensure high performance. As you knovst it takes a problem with only one small
`auto part to give you that sinking feeling when you turn the ignition key and nothing
`happens. The same is true in our industry. If one of the providers in the “chain” provides
`bad service, all suffer.
`-
`Take a trip to your local supermarket and then think about the differences between
`its merchandise and what we provide. You will realize there is no shelf space in the
`hospitality and travel industry, nor can you put what we produce in a brown bag. Because
`of these and other differences,_our organizations have to use marketing approaches not
`required by supermarkets and other product suppliers. You need to understand these
`differences and unique approaches before moving on.
`
`wHAr IS SERVICES MARKETING?
`The United States is recognized as having the worlds first service economy. More
`people are employed in providing services than they are in manufacturing. Almost 50
`.percent of an average United States farnily’s budget is devoted to buying services.1 in
`mericans, or 84.4 million people, were employed in service-
`d States Bureau of Labor Statistics estimates that 94
`en 1990 and 2005 will be in the service"
`industries. Other developed countries are moving in the same direction as the United
`States. For example, in 1991 services represented the following percentages of Gross
`lish-speaking developed co_untries'.3
`
`Starbucks V. Ameranth, CBM201 5-00091,‘
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`Starbucks, EX. 10
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`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
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`

`
`INTRODUCTION TO MARKETEN G
`
`
`
`
`
`
`Australia
`Canada
`
`‘
`
`60%
`60%
`
`_ New Zealand
`61%
`United Kingdom
`62%
`United States
`69%
`Increasing affluence and more leisure time are two of the reasons for the growing
`economic importance of services.
`The hospitality andtravel industry (a group of interrelated organizations provid-
`ing personal services to customers who are away from home) is just one part of the service
`industries (organizations primarily involved in the provision of personal services). Other
`service industries include banking;
`legal, accounting, and management consulting
`services; insurance; health care; laundry and dry cleaning; education; and entertainment.
`National, state, provincial, and local government agencies are also major providers of
`services. Services marketing is a concept based on a recognition of the uniqueness of all
`services. It is a branch of marketing that specifically applies to the service industries.
`Chapter 1 discussed the evolution of marketing in the manufacturing and packaged-
`goods industries. Services marketing has not developed at the same pace, but has lagged
`behind by as much as 20 years. Why did this happen? Onereason is that marketing terms
`and principles were defined with the manufacturing industry in mind. Most marketing
`textbooks are written for manufacturing and hardly scratch the surface of services
`marketing. Few marketing textbooks devote special chapters to services.
`We cannot blame only authors and marketing managers in manufacturing for the
`slow evolution of services marketing. A second reason for the delay involves certain *
`characteristics of the industry and management. Parts of the hospitality and travel
`industry have been highly regulated. United States domestic airlines are a prime example.
`For one-half century, the Civil Aeronautics Board (CAB) dictated what fares could be
`charged and what routes flown. This stifled the development of airline marketing.
`Between 1978 and 1984, the CAB was phased out. The Airline Deregulation Act of 19 7'8
`opened the floodgates to marketing creativity in the domestic airline industry, about 30
`yearsafter manufacturers first discovered the marketing concept.
`industry. It is
`A third reason is the composition of the hospitality and travel
`dominated by small businesses. Small family~run restaurants, motels, resorts, camp-
`grounds, travel agencies, attractions, and tour wholesalers significantly outnumber larger
`chain and franchised businesses. Most small businesses cannot afford full-time marketing
`managers and have limited marketing budgets. Many of them regard marketing as a
`luxury that only “big business” can afford.
`There really were no “big businesses” in our industry in 1950, when large manufac-
`turers began using the marketing concept. McDonald’s, Burger King, Wendy’s, Holiday
`Inns lnc., Marriott, Ramada, Howard ]ohnson’s, Travel_odge, and Best Western—all
`household names now—did not get going until after 1950. Most of the major airlines,
`travel agencies, rental car firms, tour wholesalers, and theme parks have been in operation
`- for less than 35 to 40 years. Big-time marketing by government tourism-promotion
`agencies, convention and visitors bureaus, and other nonprofit groups is in its infancy For
`example, the United States did not have a national tourism marketing agency until 1961,
`when the United States Travel Service (now the United States Travel and Tourism
`Administration) was established. Compared to Pillsbury, Procter &r Gamble, General
`
`Starbucks V. Ameranth, CBM201 5-00091
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`Starbucks, EX. 1071
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`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
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`

`
`MARKETING HOSPITALITY AND TRAVEL SERVICES
`
`3 l
`
`Motors, and the Ford Motor Company, our indust-ry’s leaders have had much less time to
`practice marketing.
`'
`As Chapter I mentioned, a fourth reason for the lag in services marketing is the
`historical tendency for technically and operations-oriented people to create and manage
`hospitality and travel organizations. Few of these people had any formal training in
`marketing. They learned it on the job. Manufacturers were creating full-blown marketing
`departments in the 19505, when our industry was in its infancy.
`Why is an understanding of services marketing so important? The answer is simple.
`Some of the approaches to marketing manufactured goods need to be modified to fit the
`service industries. For example, packaging in the hospitality and travel industry is quite
`different from the packaging-of cereals and other packaged goods. A package of cereal
`serves as a container and visual merchandisler of the product, whereas a hospitality and
`travel package is a combination of our industry’s services. The distribution system for
`hospitality and travel services is also much different from the physical transportation of
`products from manufacturers to retailers and then to customers. A travel agent, for
`example, does not physically pass a hotel or air trip to the customer. The customer must go
`to the hotel or airport to use the service.
`
`SERVICES MARKETING DIFFERENT?
`
`The marketing of hospitality and travel services has several unique characteristics.
`Some are shared with all service organizations (generic differences). Others exist
`because of the ways in which service organizations are managedand regulated (contex-
`tual differences). Generic differences affect all organizations in the service industries
`and will never be eliminated. Contextual differences are also unique to service organiza-
`tions, but they may eventually disappear through changes in management, legislation,
`and regulation. Generic differences are common to all service organizations. Contextual
`differences vary by type of service organization. There are six generic and six contextual
`differences:4
`
`THE SIX GENERIC DIFFERENCES
`
`Unchangeable differences that affect marketing of services
`. Intangible nature of the services
`. Production methods
`
`. Perishability
`. Distribution channels
`. Cost determination
`
`. Relationship of services to providers
`THE SIX CONTEXTUAL DIFFERENCES
`
`_
`
`Correctable differences common among service organizations
`that affect marketing
`. Narrow definition of marketing
`. Lack of appreciation for marketing skills
`. Different organizational structures
`. Lack of data on competitive performance
`. Impact of -government regulation and deregulation
`Constraints and opportunities for nonprofitmarketers
`
`Starbucks, EX. 10 .1-
`Starbucks V. Ameranth, CBM2015-0009 "I
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`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`Generic Differences
`Let us take a closer look at the six generic differences that affect the marketing of
`services.
`
`INTRODUCTION TO MARKETING
`
`1. Intangible Nature of the Services. Before you buy products, you can evaluate them in
`various Ways. If you go into a grocery store, you can pick up, feel, shake, smell, and
`sometimes taste many products. The packaging and contents can be examined closely.
`In a clothing store, for instance, you can try on merchandise for fit and size. Products
`such as automobiles and personal computers can be tested before you buy them. You
`can do so much evaluation because products are tangible. On the other hand, services
`cannot be tested and evaluated in the same way They are intangible and you have to
`experience them to “know how they Work." Since customers cannot physically evaluate
`or sample most services, they tend to rely on other people’s experiences with these
`services. This is usually referred to as “word-of-mouth” information and is of great
`importance in the hospitality and travel industry. Customers also place great value on
`the advice of hospitality and travel experts, such as travel agents, who tend to have
`more previous experience vvith travel destinations and companies.
`. Production Methods. Products are manufactured, assembled, and physically trans
`ported to the point of sale. Most services are produced and consumed in the same
`location. Passengers have to board airplanes, guests need to stay in hotels, and people
`must visit restaurants to experience the services they purchase. The fast~food outlet is
`the closest thing our industry has to a manufactured product, but even then the
`service is consumed on-site or is picked up by the customer. The fast-food outlet that
`provides "a home-delivery service is one step closer. Most services are not mass-
`produced.
`I
`The manufacturing process can be precisely and comprehensively controlled.
`Checkers,
`inspectors, and even robots ensure that rigid production and quality
`standards are met. Factory workers have the equipment and training to produce
`exactly the same quality and quantity of goods each time. No customers are around to
`worry about. Quality control of services is neither as precise nor as easy to achieve
`because of the human factors that are involved in supplying them. All staff members’
`cannot consistently provide the same levels of service as their colleagues. Variability
`of service levels is a fact of life. Although standardized service is an admirable target
`that all organizations should try to achieve, it is unrealistic. A robot cannot yet provide
`effective personal service, and the ever~present stare of an inspector would surely take
`something away from a service experience.
`Customers are more involved in the “production process” of services. Manufac-
`turers keep customers out of their factories for safety and proprietary reasons. Service
`organizations cannot bar people from their “factories?” if they did, most companies
`would be bankrupt before long. Hotels, restaurants, airplanes, theme parks, and travel
`agencies are some of the “factories” in our business. The behavior of one customer can
`ruin the service experience of others. A boisterous drunk on an airline flight, a noisy,
`all—night party in an adjoining hotel room, a smoker in a nonsmoking area, or a loud
`quarrel at the next table in a restaurant can result in dissatisfied customers. In other
`Words, our own customers can stop us from achieving marketing objectives. For
`example, drunks do enter retail stores, and such storesget their share of quarrels, but
`
` &%%%flW§%@it;it
`
`
`
`
`
`
`
`Starbucks V. Ameranth, CBM201 5-00091
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`Starbucks, EX. 1071
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`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`MARKETING HOSPITALETY AND TRAVEL SERVICES
`
`33
`
`shoppers in retail stores do not get as upset by such disruptive behavior as they would
`if they were celebrating a special occasion in a local restaurant. They can leave their
`shopping carts, having spent some time but no money in the store. Customers make a
`significant emotional, financial, and time investment in most hospitality and travel
`services. Once a service experience begins,
`the customer is more committed to
`completing it. If the experience is spoiled by other customers or service staff, the
`customer cannot totaliy recoup the investment, especially its emotional and time
`components.
`Our industry offers various self—service options, including salad bars, cafeterias,
`ticket—dispensing machines, and so on. How well customers serve themselves can
`affect how well they are satisfied with the service. Many bars, resorts, restaurants, and
`amusement and entertainment facilities depend on the behavior of some guests to
`influence others positively. 1f guests have a good time, it rubs off on others. People
`attract people, especially the ones who are visibly enjoying themselves. An empty
`restaurant parking lot, an empty dance floor, or an attraction ride with no riders is iess
`likely to attract people than ones thronged with customers. Such is human nature.
`When customers buy toothpaste in supermarkets, they are almost 100 percent
`sure that the toothpaste will clean their teeth. When they purchase a service, they have
`far less assurance. The same standardization cannot be provided. The actions of
`service staff, other customers, and the customers themselves make the experience
`more variable.
`'
`'
`
`zgceffence Case
`
`Standardizing Services:
`Red Lobster
`
`One of the great differences be-
`en manufacturing products and
`ovlding services is the control over
`U.a|"'y standards. It is much more diffi—
`to standardize services. The sea-
`ood dinner chain, Red Lobster, is one
`"industry's finest examples of a
`ny- that makes an extra-special
`. give its customers c0nsis-
`V=!n menu items and personal ser-
`-
`-
`Lobster was founded by a res—
`.311 Bill Darden,as a single unit in
`"cl, Florida. in 1993, its 25th year,
`
`the company served 70+ million
`pounds of seafood to 140 million
`guests in 600 restaurants located in 49
`states. Red .Lobster also had 57 Cana-
`dian restaurants. So successful was
`Darden's concept that it was acquired
`by General Mills in ‘E970,then as a five-
`unit, Florida—based group.
`Part of the secret of Red Lobster’s
`success has been its moderate prices,
`giving it a strong family appeal. Cou-
`pled_with the reasonable prices, the
`company has built a reputation for of-
`fering both consistent quality and a '
`
`Starbucks, EX. 10*
`Starbucks V. Amaranth, CBM2015-000.91
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
`34
`
`_lNTFiODUCT|0N T0 MARI‘-(ETING
`
`
`
`
`
`ourtesy of Red Lobster)
`
`'
`
`wide variety of seafood and fresh fish.
`The consistent quality is no accident. it
`comes from a combination of strict
`quality specifications for purchasing
`seafood and fish, a test kitchen facility,
`and a unique way of communicating
`preparation details to individual _res—
`taurants.
`Red Lobster is now one ofthe larg-
`est restaurant buyers of seafood in the
`world, drawing its supplies from nearly
`'50 different countries. It uses extremely
`strict purchasing guidelines andtriesto
`establish long-term relationships with
`suppliers. Red L0bster's own buyers
`are notonlyfamiliar with the restaurant
`business, but are required to be knowl-
`edgeable about oceanography, marine
`biology, aquaculture, finance, and food
`processing. They work with suppliers
`and processors to ensure thattheir ha r~
`vesting and processing meet Red Lob-
`ster’s high quality standards.
`Now that Red Lobster has ensured
`a high-quality supply, how is it possible
`to have 650-plus restaurants prepare
`dishes consistently? An important part
`of the answer is through the operation
`
`of a test kitchen. Here, different prepa-
`ration methods are tried out, and rec-
`ommended recipes and preparation
`guidelines are developed. Even the fin-
`est details including portioning and the
`arrangement of items on plates are fig-
`ured out. How does Red Lobster com-
`municate all these fine details to its far-
`flung units? One of the ways is through
`the
`"Lobster Television”
`network,
`where Red Lobster produces video-
`tapes giving pointers on preparation
`and service techniques. By poppingthe
`tapes into in-store VCFls, all unit man-
`agers and their staffs can be imme-
`diately brought up-to-date on new
`items, combination meals, sales pro-
`motions, and service ideas.
`Red Lobster's worldwide search for
`quality seafood and fish has also re-
`sulted in the discovery of items not of-
`fered before in North American restau-
`rants,
`including its popcorn shrimp,
`snow crab legs, and langostinos. De-
`spite the company's size and sophis—
`tication,mostofits dealswith suppliers
`are based on a handshake rather than
`written contracts.
`
`
`
`
`
`Starbucks V. Amaranth, CBM201 5-00091
`
`Starbucks, EX. 1071
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`'MAFIKETlNG HOSPITALITY AND TFIAVEL SERVlCES
`
`EXCELLENCE CASE —contfnued
`There is little doubt that Red Lobster
`has been one of North America's most
`
`successful chain restaurant concepts.
`As evidence,
`its weekly customer
`counts are among the highest in the
`dinner house category. The company’s
`past and continuing growth has in large
`part been due to its excellent procedures
`for ensuring consistent, standardized
`service at a reasonable price.
`
`Discussion Questions
`_ a. What has Red Lobster done to stan-
`dardize its production methods and
`standards of personal service? How
`successful has it been with these ef-
`forts?
`
`b. Do you know of any other organiza-
`tions in the hospitality and travel in-
`dustry that try to introduce greater
`standardization of their production
`methods and service standards?
`Who are they and what approaches
`have they used?
`
`. What are some of the key advan-
`tages of standardizing hospitality
`and travel services? For example, do
`services
`that
`are
`highly stan-
`dardized lose some of their appeal
`for the customer? is service becom-
`ing too mechanical? How would you
`blend the benefits of standardiza-
`tion with the appeal of the unex-
`pected?
`
`3. Perishability. Products can be stored for future sale—~services cannot. Aproduct such
`as a videocassette recorder can be purchased any day the store is open/now, next
`week, next month, or even next year. Services are highly perishable. They are “like a
`running tap in a sink with no plug."5 An unsold “inventory” of service is just like water
`down the drain. Time cannot be saved. The sale of an empty hotel room, airline seat, or
`convention center room is lost forever Services and, more importantly, the time
`available to experience them, cannot be stored. There is only one chance to enjoy a
`summer vacation in 1990. An anniversary or birthday dinner only has value at a
`specific time. Their shelf lives are only one day or less. There are no warehouses for
`service experiences.
`'
`
`. Distribution Channels. Trucks, railroad cars, ships, and airplanes physically trans-
`port manufactured goods to warehouses, retailers, and directly to customers. Market-
`ing managers in manufacturing have to devise distribution strategies for the most
`effective movement of products. There is no physical distribution system in our
`industry Customers, in fact, have to come to the service “factory" to buy, rather than
`vice versa. There are a few exceptions to this rule, including home delivery of pizza
`and other prepared foods.
`There are many intermediaries in the hospitality andfltravel industry Travel
`agents, tour Wholesalers and operators, corporate travel managers, incentive travel
`planners, and convention/meeting planners are examples. The items being purchased,
`however, are not physically shipped from producers through the intermediaries to
`customers. They cannot be because they are intangible.
`L
`The chain of distribution for most products consists of three distinct locations: A
`factory, a retail store, and a place of consumption (home or business). There is often
`only one location involved when hospitality and travel services are bought. For
`example, customers come to a restaurant (the factory) where food and beverages are
`
`Starbucks V. Amaranth, CBM201 5-00091
`
`Starbucks, EX. 1071
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`INTRODUCTION TO MARKETING
`
`merchandised (the retail store), and leave after consuming the food and drinks of their
`choice (the place of consumption).
`_ Most manufacturers do not own the retail out-lets that merchandise their prod-
`ucts. The opposite is true in our industry. Chain stores, franchises, and other similar
`groups have direct control over the individual outlets that provide the services.
`
`. Cost Determination. Fixed and variable costs can be precisely estimated for most
`manufactured goods. Such goods are physical, known commodities. Services are both
`variable and intangible. Some customers may require more attention than others, and
`the nature of the service needed may not always be known exactly. Factory output can
`be carefully programmed and predicted. Business volumes in our industry cannot.
`
`. Relationship of Services to Providers. Some services are inseparable from the
`individuals who provide them. One example is the many restaurants whose chefs or
`owners have developed unique reputations for their food, personalities, or both, like
`K-Paul’s in New Orleans. Dolly Parton’s Dollywood theme park in Tennessee is another
`example. Other examples include tennis camps at resorts hosted by professional stars,
`shows by famous performers, and tours guided by noted experts in their fields. These
`individuals are the major attraction. Without them, the services would not have the
`same appeal.
`
`Contextual Differences
`Generic differences between products and services exist because of their inherent
`natures, ‘‘production’‘ processes, distribution, and consumption. Contextual differences
`are caused by variations in organizations’ management philosophies and practices, and in
`external environments. Now let us take a closer look at six common contextual differences
`that affect the marketing of services.
`
`1. Narrow Definition of Marketing. Chapter 1 explained that marketing-organization
`and societal—marketing orientations are the most sophisticated and advanced. Few
`hospitality and travel organizations have progressed this far. Many still have to fully
`adopt a marketing-department orientation. Their so-called marketing departments
`are really only responsible for promotion (advertising, sales promotion, merchandis-
`ing, personal selling, and public relations). Pricing, new site selection, development of
`new service concepts, and research are still done by other departments or by “general"
`managers. This is changing, and many marketing specialists are reaching top
`management positions in our organizations.
`There is less emphasis on marketing research in the hospitality and travel
`industry than there should be.
`Its value to marketing decisions is not yet fully
`appreciated.
`
`. Lack of Appreciation for Marketing Skills. Marketing skills are not yet as highly
`valued in our industry as they are in manufacturing. Technical skills such as food
`preparation, innkeeping, destination/supplier knowledge, and ticketing still tend to
`be held in higher regard. There seems to be a feeling that everybody has the skills to be
`a marketer, if they really want to be. Marketing skills and talent are not seen as unique,
`and they are not fully appreciated.
`I
`
`Starbucks V. Ameranth, CBM201 5-00091
`
`Starbucks, Ex. 1071
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`
`
` Development
`pi
`and
`s Partnership
`
`resources in the hospitality and .
`Recent supply trends are reviewed
`The term pro ductfservice mix’
`and explained, and each of its €01.11
`described. The cl1apter_Sh0WS howf
`made to modify an organizati
`service mix.
`
`
`
`CHAPTER10-
`
`
`
`Product
`
`OBJECTIVES
`
`Having read this chapter, you shoulclb
`1. Identify the four major groups
`zations in the hospitality and
`- dustry.
`'
`2. Describe the roles played by eac
`four groups of hospitality and:
`
`U ('93"321W %W
`'10 CLS('3PI‘“-.U1(01"!<1rd1'3(9
`"Ci
`we
`. Identify and describe the"s'
`nents of an organization’s
`
`_
`development.
`Define the term partnership
`5;’ O
`2.5 E('0
`28‘.3.at R‘%
`*0
`'33-‘
`
`00>1 5?"FL
`
`organizations.
`
`OVERVIEW
`
`start with, you already know the
`replace the word “products” with ",9
`
`Starbucks, Ex. 1071
`Starbucks v. Ameranth, CBM2015-00091
`
`

`
`2..:.:;.>::.rx;:;\:.;:s.>::.::.i.:s:msxs.\m:.:.i:-Aiz.c:u.
`
`
`
`PRODUCT DEVELOPMENT AND PARTNERSHIP
`
`239
`
`KEY CONCEPTS AND TERMS
`Cannibalize
`Carriers
`
`Destination marketing organizations (DMOs}
`Horizontal integration
`Partnership
`Product/service mix
`
`Product/service-rnix length
`Product/service-mix Width
`
`Relationship marketing
`Suppliers
`Travel trade intermediaries
`
`Vertical integration
`
`
`
`ave you ever tried to put your finger on a blob of mercury? What happens is quite
`predictable, right? Whenever you think you have got the mercury pinned down,
`it
`squeezes away from you. -Des cribing the hospitality and travel industry is very similar. It is
`a fasbchanging business. If you take a snapshot of it today, the picture is sure to become
`outdated in a few months. When putting this book together, We gathered the latest
`statistics, but there probably Will be many changes after the book is published.
`Some of you are probably most interested in hotel and restaurant career__s— others in
`the airlines and the travel trade. Some may be pursuing other fields such as cruise—Iine
`operations, theme parks and attractions, convention and meeting planning, country club
`management, government or association travel promotion, or ski area management.
`Whatever your favorite area, you Will find this chapter both interesting and informative.
`You may even see new career opportunities opening up.
`Before discussing product development decisions, we will take a look at the overall
`industry structure. Taking this broader perspective first will help you better understand
`the role played by various types of organizations.
`
`“firm
`
`,
`
`
`
`STRUCTURE OF THE HOSPITAUTY AND TRAVEL INDUSTRY
`
`This book looks at various parts or sectors of the industry based on the functions they
`perform. For example, supp1iers—inc1uding cruise lines, car rental firms, and lodging,
`restaurant, casino, and attraction facilities—provide the services that travel trade inter-
`mediaries Wholesale (or package) and retail, and customers also buy directly. Carriers,
`including airlines and train, bus, and ferry companies, provide transportation from the
`customer’s origin to their destination. Travel trade intermediaries package and retail
`supplier and carrier servic