,
,Part I – Understanding the Hospitality and Tourism Marketing Process
Chapter 1 – Creating Customer Value and Engagement Through Marketing for Hospitality and Tourism
1.1 Understanding marketing and the marketing process
Marketing is the process of creating, communicating, delivering and exchanging value for customers and
other stakeholders. In hospitality and tourism, it is fundamentally customer-oriented: organisations identify
needs, design experiences that satisfy them, communicate their value and build relationships that support
organisational objectives.
The marketing process can be summarised in five stages:
1. Understand the market and customer needs
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing programme
4. Build profitable customer relationships and engagement
5. Capture value through loyalty, satisfaction and revenue
Marketing therefore begins before a product is offered and continues after consumption.
Key distinctions:
Needs: basic states of deprivation or desired conditions.
Wants: needs shaped by culture, experience and individual preferences.
Demand: wants supported by purchasing power.
Value: the customer's overall assessment of benefits relative to costs.
Satisfaction: the perceived performance of an offering relative to expectations.
In hospitality and tourism, marketing is particularly complex because customers frequently purchase an
experience rather than a tangible product.
1.2 Creating customer value
Customer value represents the perceived difference between the benefits obtained from an offering and the
total costs associated with obtaining and using it.
A simplified relationship is:
Customer value = perceived benefits − perceived costs
Benefits may include functional performance, convenience, emotional rewards, social status and experiential
quality. Costs extend beyond price and can include time, effort, uncertainty and psychological costs.
For a hotel, for example, value may depend simultaneously on room quality, location, service, reputation,
convenience and perceived price.
, Effective value creation requires organisations to:
1. Identify important customer needs.
2. Determine which benefits customers value most.
3. Design an offering around those benefits.
4. Communicate the resulting value clearly.
5. Deliver the promised experience consistently.
Value is customer-perceived, not simply determined by the organisation. A costly service is not necessarily
valuable if customers perceive insufficient benefits.
1.3 Customer engagement and relationships
Customer engagement refers to the customer's cognitive, emotional and behavioural involvement with an
organisation or brand. It extends beyond a single transaction.
Relationship marketing seeks to establish durable relationships by consistently delivering value and satisfaction.
Loyalty can subsequently generate repeat purchases, positive recommendations and greater customer lifetime
value.
Important relationship mechanisms include:
personalised communication;
reliable service delivery;
recognition of returning customers;
effective complaint handling;
relevant loyalty programmes.
Digital technologies increasingly enable organisations to analyse customer interactions and personalise
communications. However, personalisation is effective only when it improves relevance and customer value;
excessive or inappropriate data use can reduce trust.
Customer engagement can occur before, during and after consumption. Reviews, social media, online
communities and user-generated content therefore become part of the broader customer relationship.
1.4 The hospitality and tourism marketing concept
The hospitality and tourism marketing concept places customer needs at the centre of organisational
decision-making. Organisations should not merely produce what they are capable of delivering; they should
align their offerings with identified market needs while achieving organisational objectives.
This requires coordination between marketing and other organisational functions because customer
experience is produced collectively.
For example:
Marketing promise → operational delivery → customer experience → satisfaction → relationship
A strong marketing concept therefore requires consistency between what an organisation promises and what it
actually delivers.
1.5 Marketing in the hospitality and tourism industry
,Part I – Understanding the Hospitality and Tourism Marketing Process
Chapter 1 – Creating Customer Value and Engagement Through Marketing for Hospitality and Tourism
1.1 Understanding marketing and the marketing process
Marketing is the process of creating, communicating, delivering and exchanging value for customers and
other stakeholders. In hospitality and tourism, it is fundamentally customer-oriented: organisations identify
needs, design experiences that satisfy them, communicate their value and build relationships that support
organisational objectives.
The marketing process can be summarised in five stages:
1. Understand the market and customer needs
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing programme
4. Build profitable customer relationships and engagement
5. Capture value through loyalty, satisfaction and revenue
Marketing therefore begins before a product is offered and continues after consumption.
Key distinctions:
Needs: basic states of deprivation or desired conditions.
Wants: needs shaped by culture, experience and individual preferences.
Demand: wants supported by purchasing power.
Value: the customer's overall assessment of benefits relative to costs.
Satisfaction: the perceived performance of an offering relative to expectations.
In hospitality and tourism, marketing is particularly complex because customers frequently purchase an
experience rather than a tangible product.
1.2 Creating customer value
Customer value represents the perceived difference between the benefits obtained from an offering and the
total costs associated with obtaining and using it.
A simplified relationship is:
Customer value = perceived benefits − perceived costs
Benefits may include functional performance, convenience, emotional rewards, social status and experiential
quality. Costs extend beyond price and can include time, effort, uncertainty and psychological costs.
For a hotel, for example, value may depend simultaneously on room quality, location, service, reputation,
convenience and perceived price.
, Effective value creation requires organisations to:
1. Identify important customer needs.
2. Determine which benefits customers value most.
3. Design an offering around those benefits.
4. Communicate the resulting value clearly.
5. Deliver the promised experience consistently.
Value is customer-perceived, not simply determined by the organisation. A costly service is not necessarily
valuable if customers perceive insufficient benefits.
1.3 Customer engagement and relationships
Customer engagement refers to the customer's cognitive, emotional and behavioural involvement with an
organisation or brand. It extends beyond a single transaction.
Relationship marketing seeks to establish durable relationships by consistently delivering value and satisfaction.
Loyalty can subsequently generate repeat purchases, positive recommendations and greater customer lifetime
value.
Important relationship mechanisms include:
personalised communication;
reliable service delivery;
recognition of returning customers;
effective complaint handling;
relevant loyalty programmes.
Digital technologies increasingly enable organisations to analyse customer interactions and personalise
communications. However, personalisation is effective only when it improves relevance and customer value;
excessive or inappropriate data use can reduce trust.
Customer engagement can occur before, during and after consumption. Reviews, social media, online
communities and user-generated content therefore become part of the broader customer relationship.
1.4 The hospitality and tourism marketing concept
The hospitality and tourism marketing concept places customer needs at the centre of organisational
decision-making. Organisations should not merely produce what they are capable of delivering; they should
align their offerings with identified market needs while achieving organisational objectives.
This requires coordination between marketing and other organisational functions because customer
experience is produced collectively.
For example:
Marketing promise → operational delivery → customer experience → satisfaction → relationship
A strong marketing concept therefore requires consistency between what an organisation promises and what it
actually delivers.
1.5 Marketing in the hospitality and tourism industry
