Inkijkexemplaar_Marketing & Sales for the Hospitality_1

Chapter 7 | Market research and sales forecastSTRENGTHS/WEAKNESSES ANALYSIS (some aspects)Assessment criteria negative -- - 0 + ++ positivecomposition of menuquality of dishes serveddoes the drinks selection suit the menu?does the menu encourage more spending?consistency of the menuimage of the kitchenquality experience as a guestrecognisable service brandINKIJKEXEMPLAAR ©SVHstand-out value / location profileaccessibilityparking situationexpansion optionsgeneral site valuepresence of crowd pullersdoes exterior view suit the business formula?interior design and decorationmenu presentationpresentation / consistency of business formulastaff clothingquality and presentation of table settingambiance and atmosphere in restaurantexpertise of employeesservice orientation of staffsupport of business formulateam spiritemployee flexibilitymarketing competitionimage competition 201

Marketing & Sales for the Hospitality Industry 7.3  |  Compiling market data A hospitality entrepreneur can compile market data in different ways. The entrepreneur will first have to establish what information he wants. This information must meet a number of requirements: 1. the information must be complete; 2. the information obtained should relate to what you want to measure; 3. the information must be reliable; 4. the information must be accurate; 5. the information must be current; 6. the costs should not be too high (user value must outweigh acquisition costs). A hospitality entrepreneur can obtain market data in different ways.INKIJKEXEMPLAAR ©SVH Desk research Desk research The entrepreneur can collect a lot of information at his desk without too much effort. With desk research, the entrepreneur uses data that have been collected for another purpose. An entrepreneur likes to use desk research because it is a relatively cheap way to find information and to have it quickly available. The hospitality entrepreneur must be careful when using desk research. This information is not always accurate and complete. It is collected for other purposes and is therefore less useful Information from desk research is often too old and therefore no longer comparable to the current situation. Sources of desk research may include: a. Internal company sources Market research starts in-house. The data that the hospitality business can gather on-site must be collected, processed and analysed. These data come from the establishment’s own financial administration and customer records. Think of all the information stored by an automated checkout. Due to the increased automation in accounting and in the POS system, it’s becoming easier to use internal company sources. b. Sources outside the company Information collected by others can also be a starting point for desk research. We list research firm Foodstep and Statistics Netherlands (CBS) as the most important sources. A lot of information can be requested directly via the Internet. Amongst other things, CBS maintains a monthly written survey of guest accommodation providers on the number of foreign guests, their country of origin and length of stay. CBS also knows exactly where the tourists who visit the Netherlands come from and how long they stay. This information is particularly interesting for the202

Chapter 7 | Market research and sales forecast hospitality entrepreneur. This information is not only useful to an accommodation supplier, but also to a restaurant in a tourist area. Research firm Foodstep has a comprehensive database. The website www.foodstep.nl provides a hospitality entrepreneur with a lot of information (e.g., food service monitor) to use for business comparison and market analysis. Data from the Chamber of Commerce, trade associations, municipal authorities, banks, trade journals, Internet etc. can also be used for desk research. Desk research can provide a much clearer understanding of the actual problem. Good desk research helps the entrepreneur determine what data are still missing and what data are still necessary to draw the right conclusions.INKIJKEXEMPLAAR ©SVH Field researchField research New data is collected with field research. Field research is the direct compiling of data from the Guest survey market. This can be internal (guest survey) and external (a sampling of the local population). With a sampling, a small group of people is researched, who are representative of the whole population that the entrepreneur wants to investigate. A good sampling succeeds or fails with the way the people to be researched are selected. After determining what information the entrepreneur still must have, he can decide what research technique he will use to perform the field research. 203

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 7.4  |  Research techniques There are several research techniques available for field research. The hospitality entrepreneur can use: 1. a survey and interview, this can be done verbally, in writing, by telephone or via the Internet; 2. systematic observation and recording. Oral survey The structured interview is the most widely used research technique. The pollster conducts the interview based on a questionnaire. He must ask the questions in the order given and in the indicated wording. A survey is an enquiry that involves determining facts and motives. The following types of questions can appear on the questionnaire: a. Open questions vs. closed questions. With open questions, the surveyed people can come up with their own answers. The possible answers are provided with closed questions (e.g.: yes, no, no opinion). Open questions are avoided as much as possible in connection with processing the research results. b. Direct vs. indirect questions. An example of an indirect question would be: Why do you think that other people ...? Indirect questions are mainly used with professional motivation research. Professional market research companies use half structured and half open interview techniques. People would like to know exactly why a particular alternative is chosen. Written survey A written survey’s success depends strongly on the surveyed person’s interest in the subject and the way he is approached. The surveyed person should be prepared to fill in the survey form himself and send it. People not returning the forms can seriously harm the reliability of the research. The response is often low. People try to increase the number of returned forms by offering discount vouchers or gifts. The question is whether this puts the research’s reliability at risk. Telephone survey This type of survey can be very effective if it is carried out by well-trained pollsters. The problem is that some consumer groups are difficult to reach by phone. One can only carry out short and not too personal interviews over the telephone.204

INKIJKEXEMPLAAR ©SVHChapter 7 | Market research and sales forecast Survey via Internet Many surveys are now also done over the Internet. Here you can see two variants. When a user is browsing on the Internet, a pop-up survey can appear when visiting a particular site. These surveys are often very short and mainly provide information regarding the product’s name recognition and how the visitor came to the site. Surveys are also sent via e-mail. These surveys may be more extensive. The advantage of an e-mail survey is that the respondent does not have to go to the post office to send the completed survey. The questionnaire The questionnaire should meet the following requirements to get as much information as possible: 1. T here has to be a conversation. The questions should encourage the respondent to give full information. There should be a line in the follow-up of the questions, so that all the questions together form a conversation. The questions should show a link with the subject. 2. The respondent should not be influenced by the questions. 3. W hen answering the question, the respondent should have the same intention as the questioner. 4. T he questions should be clear, i.e. they should not cause confusion. Keep the language simple by using short sentences and not too difficult words. Leading and ambiguous questions should be avoided. 5. The questions should be formulated in a positive way in order to avoid confusion. Some things stand out when we compare the different types of surveys. The response in an oral survey is often bigger than with a written survey. The questionnaire can be much longer with the oral survey, while the questionnaire for the written and telephone survey must be short and the questions not too difficult. By doing a test survey, the researcher can test whether the questionnaire fulfils the survey’s purpose. 205

Marketing & Sales for the Hospitality Industry The choice for a particular type of survey is determined by: 1. the representativeness; 2. the degree of response; 3. the desired geographical distribution; 4. the amount of information requested and the difficulty factor of the questions; 5. the speed of the information need; 6. the costs.INKIJKEXEMPLAAR ©SVH Systematic observation and registration. Instead of asking consumers about their motives, the pollster can also try to figure it out through observation. The problem with asking questions is that you’re never sure if you’re getting the real answer or a socially desirable one. Through observation, the pollster looks only at behaviour and the consumer cannot steer it in a certain direction. Examples of observe and record research in the hospitality industry include counting passers-by for place of establishment research and recording the number of cars at a direct competitor. Data from systematic observation and recording are also available to the hospitality entrepreneur through desk research. The traffic counts that Rijkswaterstaat does from time to time are available to everyone. Foot traffic Larger municipalities in the Netherlands can use vehicle registrations to give a very good picture of how busy the traffic is on the main traffic routes in their municipality. There are also municipalities that have extensive information on foot-traffic flow in shopping and entertainment areas. Few hospitality establishments observe customer behaviour. This makes sense because most (traditional) hospitality enterprises directly affect the behaviour of their guests through their staff. In more system-based formulas, it can be particularly instructive to observe the behaviour of customers carefully. This is a common (but expensive) research method in the retail sector.206

Chapter 7 | Market research and sales forecast Sampling The basis of sampling is that one can get a good idea of the judgement, preferences or behaviour of relatively many people by researching relatively few people (or investigating relatively few products). Sampling makes market research affordable. A sampling should meet a few conditions in order to come to a conclusion about relatively many people based on relatively few observations. The sample must be sufficiently large (to eliminate coincidence) and representative. This means that all relevant characteristics of the population occur in the same proportion within the sample. A sample is representative when all elements of the population have an equal chance to be included in the sample (random selection).INKIJKEXEMPLAAR ©SVHSampling makes marketresearch affordable. 207

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Chapter 7 | Market research and sales forecast 7.5  |  Market and sales forecast It is very important for an entrepreneur to estimate what sales he can expect. By calculating the potential sales, he can judge whether the business to be started is profitable or not. If this is not the case, the entrepreneur may consider choosing a different target group, another business formula or a different location. Depending on that decision, the entrepreneur will have to recalculate the expected sales.INKIJKEXEMPLAAR ©SVH Business plan A starting entrepreneur needs money. The entrepreneur will probably try to borrow money at a bank. A bank lends money only to businesses that have a high probability of success. An entrepreneur will have to convince the bank that his establishment will be successful. The entrepreneur convinces the bank based on a good business plan. A business plan provides insight into the business formula of the start-up enterprise. A business plan provides insight into: • the qualities of the entrepreneur; • the conditions required for establishment; • sales forecast (the market possibilities); • the business formula; • the investment required; • the financial possibilities; • the feasibility of the targets. The purpose of this and the next section is to learn how a sales forecast (estimate of following year’s sales) can be calculated and which factors the entrepreneur must take into account. It is important to calculate the size of the market within a service area. The market can be measured in sales figures by counting the number of people/families and the average spending per person or per household. Preparing marketing plans and calculating the necessary budgets only make sense if one understands the sales in the entire market area. On this basis, a good picture can be formed of the expected sales of the business. To create a good estimate (determination) of the market size, we encounter the following concepts: market potential and market forecast compared to sales potential and sales forecast.Effective demand Market potential and market forecast To create a good estimation of the market size for next year and subsequent years, we first consider the actual sales from this year and last year. The actual (realised) sales in the current market are therefore also called the effective demand instead of the real demand. 209

Marketing & Sales for the Hospitality Industry In Chapter 5 (consumer behaviour), we learned that consumer needs can be differentiated into manifest needs and latent (dormant) needs. The latent needs are actually the not yet manifested demand of those that have an interest in a certain product or service and who, in principle, can and want to buy. These so-called sales opportunities (only realisable under ideal conditions with optimal marketing efforts of all providers) are the potential demand in the market. The potential demand lies above the current market.INKIJKEXEMPLAAR ©SVHPotential demandMarket potential The market potential is the sum of effective demand and potential demand. When making plans, it’s important for the hospitality entrepreneur to be able to estimate the opportunities in the market properly. The market potential gives an idea of the upper limit of total sales opportunities in the market. The market forecast, the actual sales forecast for the coming year, will depend on a number of factors that lie between the effective demand (from the last period) and the market potential.Market forecast The market forecast is a realistic estimation of the sales in a service area by all providers in a given period of time. Sales potential and sales forecast The question now becomes: How big is the sales potential of your business? An estimate of the possible sales should be made based on the sales opportunities in the whole service area under ideal conditions and with optimal use of the marketing tools of the business. Sales potential The sales potential is an estimate of the sales of a business under ideal conditions within a certain period of time. When the hospitality entrepreneur uses the sales potential and compares this with the current sales and expected sales increase due to marketing activities, he comes to expected sales based on realistic conditions. A sales forecast is the expected sales of a business in a given period of time. Sales forecast This sales forecast is based on a well defined business formula and a detailed marketing plan.210

Chapter 7 | Market research and sales forecastMeasurement of the market and the sales 200INKIJKEXEMPLAAR ©SVH Potential demand Market potential 190 Room for expansion Market forecast 180 in the sector 170 Sales potential 160 Room for expansion Effective demand Sales forecast 150 for the businessSales(x 1,000) 5 4 3 2 1 0 Actual Current level Forecast Marketing activitiesMarket-sales forecastA sales forecast is based ona well defined business formulaand a detailed marketing plan. 211

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 7.6  |  Calculating the sales forecast In order to generate as realistic an estimation as possible of the sales of a hospitality business, the hospitality entrepreneur has to take into account a lot of factors. He wants it to be realistic in order to limit the risk of a wrong assessment. The bank wants this sales estimate to be as well- substantiated as possible. Otherwise it is not credible. Before a sales forecast can be made, the entrepreneur must first do some desk research. This research should provide insight into: • the size of the market area; • the composition and size of the target group; • the average spending per customer in the target group; • an estimate of the sales of the other providers; • the possibilities his own hospitality business. We will discuss all this information one by one. The size of the market area The business type chosen by the hospitality entrepreneur should have a particular service area. This may be a village, a city district, a city or an entire region. The business type determines the size of that area. The service area for a cafeteria is usually a neighbourhood or a village, whilst a luxury restaurant has a larger service area in which guests could also be residents of surrounding villages and towns. Consumers are prepared to travel a greater distance for some products and services. Consumers do not want to travel far for goods relating to primary needs and those with a high purchasing frequency. Consumers are more willing to travel greater distances for goods mainly relating to secondary needs, such as a restaurant visit. That’s why the service area often covers an entire region. It's a good idea to see if the chosen area is easily accessible to communication. For example, the hospitality entrepreneur can find out if212

INKIJKEXEMPLAAR ©SVHChapter 7 | Market research and sales forecast there is a newspaper that covers the entire region. The entrepreneur can find this out by using the Cebuco area. Almost every market region has an inflow of purchasing power, but also has to deal with outflow of purchasing power. In some municipalities, the number of hospitality businesses per 10,000 residents is far above the national average, but sometimes also far below. In these municipalities, there is a greater influx of hospitality spending in relation to outflow. The hospitality entrepreneur should estimate as well as possible the influence of entertainment and village centres along with city centres. The municipality can help the entrepreneur with this. Many municipalities have researched the foot-traffic flow in their municipality and the traffic volume of certain roads. The size of the target group The entrepreneur should indicate which market segments fall within his target group. He must have a clear idea of the main characteristics, wishes, needs and requirements. He will also have to indicate in the business plan how he wants to meet these wishes with his business formula. The market segments within his target group should be measurable, accessible to communication and sufficiently large. The Koninklijke Horeca Nederland can help the hospitality entrepreneur determine the number of people in his target group in the private market. For the business market, the hospitality entrepreneur is better off using data from the Chamber of Commerce and the municipality. Sales estimates for the tourist market can be calculated using data from VVV organisations, the municipality, the province, the Chamber of Commerce and CBS. Data regarding this can also often be found on the Internet. 213

Marketing & Sales for the Hospitality Industry Nights spent by Dutch people on staycations per season by tourist area, 2005 Winter Summer Total period period periodINKIJKEXEMPLAAR ©SVH x 1,000 Wadden Islands 1,700 4,960 6,660 North Sea seaside resorts 3,270 8,650 11,920 Ijsselmeer coast 2,850 Delta area 770 3,300 3,620 Lakes in Groningen, Friesland and Northwest-Overijssel 1,040 3,010 4,340 Hollands-Utrechtse lakes 3,740 Utrechtse Heuvelrug and ‘t Gooi 730 980 1,040 Veluwe and Veluwerand 60 1,720 2,660 Gelders river region 7,310 10,810 Achterhoek 940 Twente, Salland and Vechtstreek 3,500 780 960 Sandy heathland of Groningen, Friesland and Drenthe 2,700 3,650 West and Central Brabant 180 5,560 7,810 East Brabant, North and Central Limburg and Rijk van 950 7,150 10,030 Nijmegen 2,250 6,200 8,690 South-Limburg 2,880 Amsterdam, Rotterdam, The Hague and Utrecht 2,490 5,890 8,560 Other in the Netherlands Total 2,670 2,510 4,160 630 1,050 Source: ContinuVakantieOnderzoek 1,650 5,950 420 4,520 95,650 68,720 1,430 26,930214

Chapter 7 | Market research and sales forecastOvernight stays by foreign guests in Dutch accommodations per 2003 2004 2005tourist area 2002 x 1,000INKIJKEXEMPLAAR ©SVHWadden Islands 1,610 1,340 1,420 1,220North Sea seaside resorts 5,310 5,920 5,450 4,970Ijsselmeer coast 1,040 1,140 1,010Delta area 1,150 1,000 950Lakes in Groningen, Friesland and Northwest Overijssel 990 980Hollands-Utrechtse lakes 290 290 260 290Utrechtse Heuvelrug and ‘t Gooi 220 90 110 110Veluwe and Veluwerand 280 220 300Gelders river region 600 220 610 690Achterhoek 710Twente, Salland and Vechtstreek 50 50 50Sandy heathland of Groningen, Friesland and Drenthe 170 70 150 190West and Central Brabant 450 130 590 460East-Brabant, North and Central Limburg and 600 500 590 420Rijk van Nijmegen 1,400 490 1,340 1,420South-Limburg 1,250Amsterdam, Rotterdam, The Hague and UtrechtOther in the Netherlands 1,690 1,500 1,450 1,590Total 610 620 580 580Bron:ContinuVakantieOnderzoek 8,650 7,850 8,300 8,690 2,410 2,070 2,250 2,320 26,370 25,340 25,380 25,210The average spending per customer in the target groupCBS statistics provide information about spending by individuals on hospitality services. These areaverage data for all of the Netherlands. The hospitality entrepreneur will have to use other sourcesif he wants more detailed information about his target group. The hospitality entrepreneur mustensure that his information is as current as possible. 215

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INKIJKEXEMPLAAR ©SVHChapter 7 | Market research and sales forecast The sales estimate of the other providers The hospitality entrepreneur should know the amount of sales demanded by the direct and indirect competitors in the market area. The observation of competitors mainly involves the number of visitors at certain times (around lunch and in the evenings) and the average spending of the guests. A supplementary estimate should also be made of the sales that the indirect competition attracts. This is difficult to estimate and a careful estimate is only possible with a good understanding of the market. The possibilities of your own hospitality business In addition to all these external factors, a sales forecast also has to take into account the entrepreneur’s own business. The hospitality entrepreneur will have to estimate the appeal of his business formula. The hospitality entrepreneur will have to take into account: • the size of the hospitality establishment (business size); • the location (foot traffic); • the competitiveness (quality of the business formula); • property appearance; • image of the company; • hours of operation. Sales forecast for existing or start-up hospitality business When the entrepreneur makes the sales forecast for next year, he uses the last year’s sales and the expected sales of this year as the starting point. Depending on the development of the sales to date, the development of demand and supply in the market and the additional marketing activities that he wants to use to achieve a certain sales growth, the entrepreneur can make a pretty accurate sales forecast. This is much more difficult when a starting entrepreneur wants to take over an existing hospitality business. He must then create a sales forecast for a hospitality business that is unknown to him. Sales data from previous years are usually unavailable or unreliable. Making enough visits to this business and the businesses of direct competitors can provide a good picture of the number and type of guests. Estimating the average spending per guest is highly dependent on the time of day that the guest visits the business. Properly studying the food and drink menus and regularly visiting these businesses can give a good idea of the average spending per guest. 217

INKIJKEXEMPLAAR ©SVHMarketing & Sales for the Hospitality Industry 7.7  |  Questions about the chapter 1 Using market research, the entrepreneur can: a. Properly set his administration in order digitally. b. Train the staff properly before the summer season starts. c. Change the menu according to the season. d. Quickly identify changes in the demand and supply conditions. 2 The entrepreneur can use a guest survey to get more insight into: a. The guest’s wishes, needs and satisfaction. b. How often the guest visits and how much is spent each time. c. Precisely how many dishes are sold in a certain period. d. What guests like to see in the business. 3 What is market research? 4 Name and substantiate three marketing problems. 5 Market potential is the sum of the effective demand and the potential demand. What is the difference between the effective demand and the potential demand?218

Chapter 7 | Market research and sales forecast6 When calculating a sales forecast, the entrepreneur should first do desk research on the following points in order to gain insight into this information:Insight into Description Source (where can the entrepreneur find this information?)INKIJKEXEMPLAAR ©SVHThe size of the market areaThe composition and size ofthe target groupThe average spending percustomer in the target groupAn estimate of the sales of theother providersThe possibilities of the ownhospitality business 219

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TermsINKIJKEXEMPLAAR ©SVHTerms Description Chapter Page Term How often consumers buy a particular product. 6 179 Purchase frequency Abstract market The entire supply and demand for a particular 4 106 product and all the factors that can affect the Customer analysis price of a product. Customer behaviour The customer analysis is part of a situation 6 189 analysis and is used to map the external Attitude environment of a business. Business concept Consumer behaviour regarding the acquisition 5 141 Business formula of goods and services. There are basically three Supply chain stages: communication behaviour, purchasing behaviour, and consumption or usage behaviour. Industry Need The attitude of the consumer which is formed by 5 157 knowledge, feeling and action orientation. The entrepreneur’s idea of how he sees his 1 25 business formula and how he manages to put it into practice. A deliberately chosen combination of marketing 1 30 tools. The path that the product travels from primary 2 44 production to the consumer, shown in a column diagram. All the companies that belong to the same link 2 44 of the supply chain, also called the sector. A feeling that you need something or a feeling 5 141 that you really want something. 221

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Benefit segmentation Black box Emphasising in the business formula the benefits 6 182 Sector that the target group is looking for when CLA (CAO) choosing.INKIJKEXEMPLAAR ©SVH Catering The thinking of the consumer where stimuli are 5 146 Cebuco area converted into response. Cognitive dissonance See Industry. 2 44 Commercial stimuli Complementary goods A Collective Labour Agreement is a set 2 65 Concrete market of agreements between representatives Consumer behaviour of employers and representatives of the employees. Food and/or drink provision is outsourced to 3 95 third parties (the caterer). A Cebuco area is an area consisting of a number 6 173 of municipalities, which is concentrated around no more than three economic delivery centres. The Cebuco area classification is managed by Marketing online. The feeling that the customer experiences when 5 146 the expectation built up in the buying process does not match the experiences after the sale. Incentives that companies and institutions 5 156 purposefully direct towards consumers in order to persuade them to buy a particular product. Goods that complement each other, such as 5 163 food and drinks. A market where demanders and suppliers (and 4 106 usually also the product) are present at the same location. The human behaviour of consumers (guests) 5 133 associated with the acquisition, use and consumption of goods and services.222

TermsTerm Description Chapter PageConsumption circumstances The situation in which the guest finds himself 1 20 before, during and after a hospitality visit, suchINKIJKEXEMPLAAR ©SVH as the reason of the visit and the company.Culture All of the knowledge, beliefs, art, laws, values, 5 153 norms and habits belonging to the members of a community.Demographic characteristics Characteristics that say something about the size 6 174 and composition of the population (age, gender, race, size of the household, etc.).Desk research The entrepreneur uses data that has been 7 202 collected for another purpose.Differentiation A business pushes off tasks to another company 2 46 within the supply chain. The supply chain becomes longer.Direct competition Businesses with a similar business formula that 4 118 focus on the same target group.Target group The guest group on which the hospitality 1 19 entrepreneur bases his business formula and on which he focuses his marketing activities.Target group The guest group to which the hospitality 6 171 industry entrepreneur aligns his business formula. A target group can be composed of multiple market segments. Comparable to a focus strategy.Threshold goods Before buying these goods, a consumer must 5 162 first have a certain income.Economic motives The consumer is lead by financial (rational) 5 152 arguments.Effective demand The demand that really takes place in number of 7 209 sales in a given market area. 223

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Efficiency Elastic demand Efficiency, for example by standardising the 3 88 Emotional motives service provision process.INKIJKEXEMPLAAR ©SVHEvoked set External analysis The consumer reacts strongly to changes in 5 159 price. External developments Behaviour is determined based on feelings (such 5 151 Face-to-face groups as fear, love, guilt and status). Facility hospitality services Field research The favourite choices from which consumers 5 145 Focus strategy choose when making a purchasing decision. Food contractor Analysis of research data to provide the 1 33 entrepreneur with insight into the opportunities and threats for his business in the market. Influences from outside the business; these are 1 21 normally outside the control of the hospitality industry entrepreneur. Groups with which daily contact is maintained. 5 154 Businesses that also provide hospitality services 3 89 outside their core task. Data collected specifically for a particular 7 203 purpose. A competitive strategy whereby the hospitality 4 109 entrepreneur focuses on a small part of the market with specific needs. The market is so small that it is not interesting to other suppliers. Specialised hospitality company that manages 3 95 a company restaurant. This hospitality entrepreneur provides the raw materials/ ingredients and meals and is compensated in return.224

Terms Term Description Chapter Page Franchising A form of collaboration between self-employed 2 59 Guest survey persons, whereby the franchisor makes a proven Hospitality mix business formula available to the franchisee against payment of a fee (franchise fee).INKIJKEXEMPLAAR ©SVHConcentrated marketing strategy Research by asking guests about 7 203 Differentiated marketing their wishes, needs and satisfaction. strategy Behavioural scientist The composition of the marketing tools of 2 43 Heterogeneous oligopoly Homogeneous oligopoly product, personality and presentation. These Horizontal collaboration Inelastic demand three marketing tools determine how the guest Indirect competition experiences the hospitality product. The entrepreneur aligns his business formula 6 184 with a particular market segment. Comparable to a focus strategy. The entrepreneur focuses on multiple market 6 186 segments, and he develops a separate business formula for each market segment. Someone who has studied the examination of 5 133 human activities and behaviour. Market type with a limited number of suppliers 4 107 with a distinctive product. Market type with a limited number of suppliers 4 107 with a completely equivalent product. A type of collaboration between businesses that 2 58 fulfil the same function in the supply chain. The amount demanded does not change or 5 160 barely changes due to a price change. Competition from businesses that supply 4 119 similar products but with a different business formula. Most competition is to be expected from companies with a business formula directly above or below the market of the hospitality establishment. 225

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Inferior goods Income elasticity The more a person earns, the fewer inferior 5 162 goods a person buys.INKIJKEXEMPLAAR ©SVHPurchase combination Integration The income elasticity indicates the effect of 5 161 a change in income on certain expenditures. Internal research There are three kinds of goods differentiated: luxury, necessary and inferior goods. Internal developments Purchasing behaviour A type of collaboration in which businesses 2 58 characteristics make purchases jointly. Cost leadership A business takes over tasks from the preceding 2 45 Cross elasticity link in the supply chain or from the succeeding link in the supply chain. The supply chain Latent need becomes shorter. Internal research is done in order to gain insight 1 33 into your own business. A study is done to determine the strengths and weaknesses of the business. Influences from within the business; these are 1 21 typically under the control of the hospitality industry entrepreneur. Arguments to which the consumer is particularly 6 179 sensitive when purchasing. A competitive strategy in which the hospitality 4 109 entrepreneur is trying to be the cheapest supplier in the market. He will have to standardise the production process for this. Shows the relationship between a price change 5 163 of one product and the amount of demand for another product. We distinguish between complementary goods and substitute goods. A need of which you are not consciously aware. 5 142 You require a stimulus to become aware of this need.226

Terms Term Description Chapter Page Lifestyle Luxury goods The consumer’s lifestyle How the consumer 6 178 Macro level spends his time and money.INKIJKEXEMPLAAR ©SVHMacro environment These are goods that the consumer will buy 5 162 Management more of, the more his income increases. Management Information See macro environment 1 23 System (MIS) Management contract The environment of the business at national 1 24 level. The hospitality entrepreneur cannot Manifest need change the influences from the macro Marketing activities environment but these do influence his Marketing policy operating result. The leadership of a business. Continuous 1 32 process of analysis, planning, implementation and evaluation of activities, with which an objective is pursued. A well organised set of activities aimed at the 7 198 collection, processing, storage, and preparation of information. An investment company owns a hotel building 3 92 and hands over the running of it to a hotel chain. The hotel chain provides the management, the name, the business formula and the reservation system. The risk is for the investment company; the hotel chain gets a fee. This is a consciously experienced need. 5 142 Adjusting the marketing tools to improve the 1 27 business formula. The systematic planning, design and 1 33 implementation of marketing activities to achieve marketing goals. 227

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Marketing concept Marketing objective The mindset of the entrepreneur in which he 1 25 Marketing tools takes into account the wishes of the guest in Marketing mix every decision he takes.INKIJKEXEMPLAAR ©SVHMarketing plan An objective that the entrepreneur wants to 1 33 Marketing strategy achieve in the coming period using marketing Market activities. Market research Market research Tools for the entrepreneur to align his business 1 27 Market potential formula with his target group: Product, Place, Presentation, Personality, Price and Promotion. The composition of the marketing tools 1 29 An annual plan worked out with established 1 32 marketing objectives, the activities that are needed to achieve these objectives and a justification of the costs incurred in the implementation of this plan. The way in which an organisation tries to achieve 6 184 its objective over the long-term using marketing. The complete range of demanders and suppliers 1/4 33 of a given product in a given area. 106 The systematic and objective searching for and 7 197 analysing of data important for determining and solving marketing problems. Research into the opportunities and threats 1 33 in the market (external) and the strengths and weaknesses of the business (internal). The maximum achievable sales in the market 7 210 under ideal conditions. Market potential is the sum of the effective demand and potential demand.228

Terms Term Description Chapter Page Market forecast Market segment Real estimate of the expected sales in a 7 210 particular market area.INKIJKEXEMPLAAR ©SVHMarket segmentation Maslow A homogeneous part of the market, consisting 4/6 109 Meso level of people with similar desires and expectations. 171 It must be assumed that this group will react to Meso environment the marketing tools in much the same way. Micro level The market divided into homogeneous sub- 6 171 Micro environment markets. Monopoly Monopolistic competition Psychologist who ranked the needs of humans in 5 142 Motives order of importance. Non-price competition Factors in the immediate vicinity of the business, 1 21 such as competition, customers, suppliers, bank, city development and the decisions of the town council. The immediate environment of a hospitality 1 23 establishment with supply and demand and all other developments at industry level. Factors within the business. 1 21 Regards all decisions that a hospitality 1 29 entrepreneur should take. A market situation where there is only one 4 107 supplier with a unique product. A market situation in which there are many 4 108 suppliers with comparable competing products. A motive creates a need for concrete buying 5 151 behaviour. Type of competition in which the businesses 4 107 compete using all the marketing tools except with the pricing policy. 229

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Necessary goods Goods for which an increase in income does not 5 162 lead to much increase in purchasing.INKIJKEXEMPLAAR ©SVH Oligopoly A market situation in which there are several 4 107 providers with the same or similar products. Sales potential An estimate of the sales of a business under 7 210 ideal conditions in a certain period of time. Sales forecast The sales forecast is the expected sales of the 7 210 hospitality establishment for a specific period of time based on the business formula and the marketing plan. Undersupply There are fewer businesses in the researched 4 117 area than the national average. Business plan This contains the objectives and the business 1 32 formula of the start-up entrepreneur. The plan consists of a financial plan, a human resources plan and a marketing plan. Undifferentiated marketing The market is approached as a whole, with the 6 186 strategy same marketing mix. Oversupply There are more businesses in the researched 4 117 area than the national average. Para commercial institutions Institutions that provide hospitality services 3 82 outside their objective. These institutions are not-for-profit and often work with volunteers and receive subsidies. As a result, fair competition is not possible. Parallelisation A business is active in multiple supply chains. It 2 46 will sell or produce more products. Foot traffic The number of people walking past a hospitality 7 206 establishment. Perception How the consumer perceives and evaluates 5 150 things.230

TermsTerm Description Chapter PagePersonal stimuli Stimulus that the consumer experience from 5 150 within.INKIJKEXEMPLAAR ©SVHPilot store A shop where a new business formula is tested. 3 89Positioning The business formula is aimed at appealing to a 6 187 specific guest group.Potential demand The potential demand is the demand that 7 210 could be achieved above the effective demand under ideal conditions and optimal marketing. Consumers respond by buying more or less.Price elasticity of demand The extent to which the amount demanded 5 158 changes due to a price change. Consumers respond by buying more or less.Price cartel Mutual agreements on the price policy by 4 107 providers in an oligopolistic market.Primary needs Basic needs to stay alive such as food, housing, 5 142 clothing and safety.Private industry organisation Organisation(s) at which a hospitality 2 62 entrepreneur/business may be registered (not required), such as Koninklijke Horeca Nederland.Product concept Making a good quality product is of great 1 25 importance to the business. A good product sells itself.Product differentiation A competition strategy in which the hospitality 4 109 entrepreneur can clearly distinguish himself from his competitors.Production concept Producing as cheaply as possible is the basis of 1 25 the business.Profiling Using a business formula that primarily focuses 6 187 on being different from the competition. 231

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Reference groups Groups to which people (often unconsciously) 5 154 Upscaling want to belong and that influence their purchasing decisions.INKIJKEXEMPLAAR ©SVHDownscaling Secondary needs This is the development where the number of 2 55 companies in a particular sector decrease, but Segmentation analysis the existing companies acquire increasingly greater capacity. Selective perception Service-oriented business This is a development whereby the number of 2 55 formula small businesses in a specific sector increases. Social class Social stimuli Luxury products that are not part of the primary 5 142 Social marketing concept needs such as recreation, nightlife, nice clothes, etc. Should provide the hospitality entrepreneur 6 181 with insight into the market segments that are important for his hospitality business. The analysis consists of three steps. 1. The search for differences within the current guest group. 2. How big are the homogeneous segments within the current guest group? 3. What are the special needs of a target group? People only see what they want to see. 5 151 The personal service of the host is key in a 1 30 service-oriented business formula. A group of people with about the same status; 5 153 another term is socio-economic class. Stimuli that the consumer experiences from his 5 153 social environment. The business wants to operate with social 1 25 responsibility and takes into account issues such as scarcity of raw materials and environmental aspects in its production process.232

Terms Term Description Chapter Page Sociology Specialisation The science that studies the behaviour of groups 5 154 of people.INKIJKEXEMPLAAR ©SVHStimuli The entrepreneur focuses on a particular part 2 46 Subculture of his production or sale and is active in fewer supply chains. Substitution goods System-oriented business The consumer receives a lot of incentives to 5 142 formula buy certain products or not. Such incentives Theme restaurant are called stimuli. We distinguish three types Veblen of stimuli: social stimuli, individual stimuli and commercial stimuli. Sales concept Vertical collaboration Separate cultural groups that are part of a 5 153 Service area culture in which their own values and standards apply but that do not apply to the culture as a whole. Goods that can replace each other such as meat 5 163 and fish. In a system-oriented business formula, speed 1 30 and a consistent quality are key (e.g. counter service and self-service). A mid-level restaurant that tries to create a 3 86 specific guest experience using a theme. A sociologist who created a model that 5 155 describes the influence of groups on human behaviour. An important basis of the business is to sell as 1 25 much as possible in order to reduce inventory. A type of collaboration between businesses that 2 59 follow one another within the supply chain. Geographical area where the potential guests 4 114 come from. 233

Marketing & Sales for the Hospitality Industry Term Description Chapter Page Full competition 4 108 A market situation in which there are many suppliers with the same product.INKIJKEXEMPLAAR ©SVH234

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