Department Of Hotels And Hospitality Management and Marketing - 3025 Words

Department Of Hotels And Hospitality Management: Introduction To Marketing (Essay Sample) Content: MOI UNIVERSITYSCHOOL OF TOURISM,HOSPITALITY AND EVENTS MANAGEMENTDEPARTMENT OF HOTELS AND HOSPITALITY MANAGEMENTCOURSE TITLE:INTRODUCTION TO MARKETINGCOURSE CODE:BHM 113SUBMITTED TO:Ms.SCHULZ R.DATE:6/7/2018GROUP SIX MEMBERS:BHM/0007/18 CHELAGAT MERCYBHM/0018/18 KHAEMBA N.SUSANBHM/0031/18 MBUGUA ANN NGINABHM/0042/18 NDIBA SIMON MUNGAIBHM/0053/18 PURITY MUKAI MACKENZIBHM/1003/18 GETRUDE JEPKEMOIBHM/1019/18 CHRISTINE MUNYUABHM/0059/18 WAMBUGU CHRISTINE WANGARIBHM/1008/18 OCHIENGI MOSES LLOYDQUESTIONS.1.Explain the term pricing.2.Discuss the factors that affect pricing of hospitality products.3.Pricing a new products usually challenging in a company. Explain the strategies of pricing a new product.4.Explain the major objectives/importance of pricing.1.Explain the term pricing.Price is the value that is put to a product or a service and is a result of a complex set of calculations ,research and understanding and also taking risks ability.Pricing is a process whereby a bus iness sets the prices at which it will sell its products and services:in setting prices,the business will take into account the price at which it could acquire the goods,the manufacturing cost,the market place,competition,market conditions,brand and quality of products.Pricing also refers to giving monetary value to products and services.Pricing method is used to set the price of producers offerings relevant to both the producer and the consumer.Some of the pricing objectives are;1.Survival-firm set the price that is optimum and help the product or service to survivein the market.2.Maximizing the current profits-pricing is done in line with the products demand in the customers and the substitutes available to fulfill that demand.3.Capturing huge market share-charging low prices so as to have an increased sales resulting to economies of scale.4.Market skimming-charging a high price to products and services offered by firms which are innovative and uses modern technology.5.Product-man y firms keep their goods and services in accordance with the quality perceived by customers.2.Discuss the factors that affect the pricing of hospitality products.1.Competition.Hospitality establishments often consider the price on offer by other competitors to help them make decisions on pricing that will keep them competitive.2.Government policies.Laws and regulations do have an impact on pricing as government may sometimes interfere in pricing of hospitality establishments directly or indirectly.For instance an increase in taxation will result in an increase in prices and while an increase in value added tax of products used by establishments will result in an increase of prices as well.3.CostsThe hospitality establishment must be a financial informed.Thus before setting the prices,costs involved with the business must be worked out.These include fixed costs (espenses that will come in every month regardless of sales)and direct costs(the expenses incurred by producing and deliveri ng the products and services)4.Consumers.What the consumer want from product or a serviceis critical i.e are they driven by cheapest price or by the value they receive?By also looking at what your current customers are buying whether high end or low end products ans services.This information helps in setting up the right price for products and services.5.ProfitAfter calculating the costs involved in preparing the product or service the establishments then adds value to ensure they earn a profit to keep them competitive thus increasing the price.6.Market demand.If demand exceeds supply there is a mad rush for the few available products thus intiating the price of a product and vice versa.7.Demographics.This include determining characteristics of your target consumer for example the age bracket of market among others.8.Class of targeted customers.The society has three generally recongnised classes of people the rich,the middle class and the poor.Thus a product targeting the rich will command a higher price than those targeted for the middle and lower classes.9.Economic factors.Factors such as taxation rate,labour cost,inflation rate,currency exchange rate,government fiscal and monetary policy will definitely influence the product pricing strategy.10.Brand strategy.Pricing is art of establishments brand image.For instance ,some establishments are known for their low pricing whereas others are known for their high end pricing.11.Channel intermediaries.The marketer must consider a number of channel intermediaries and their expectations.The longer the chain the chain of intermediaries ,the higher would be the prices of the goods.12.Image of the firm.The price may also be determined on the basis of the image of the firm in the market.13.Promotional activity.Undertaken by the firm also the prices.If the firm incurs heavy adversting and sales promotion costs,then the pricing of the product shall be kept high in order to recover the cost.3.Pricing a new product is usual ly challenging in a company .Explain the strategies of pricing a new product..Challenges facing organisatons face in pricing.1.Lack of internal alignment on the objectives within a company and between the different functions concerned.Not sharing the same definition of expectations and goals across the different functions involved in pricing generates missed opportunities to enhance business performance.When different departments have objectives that are in dire guide conflict,it results to missed opportunities to enhance profits.2.An ineffective pricing governace or lack of policies that guide pricing in the field.This is generally due to limited visibility as to what is the true price realized by the direct force or indirect sales channels.There is also a risk of having excessive or unnecessary discounting,jeopardizing,the intergrity of prices charged to similar customers buying the same volumes.3.Market misperception of the pricing related to the value delivered.If your customer s don`t understand the value of your products and services ,there is a strong likelihood that will push back on your prices.4.Misaligned offer and related prices across the different customersor segment served.Many companies fail to adapt their offered as they served different customers who have varying value requirements.Some might want high value and will be willing to pay for this while others want less value and seek for a different price.5.A new product or service iinovation that is not oppropriately priced .Launching a new product or service presents many risks and companies have in general low chances of success.However,when companies don`t properly understand the value of your innovation and prepare the pricing well,the failure rate of new product rises sharply.6.Gaps in capablilities and enables in managing pricing.Companies have different levels of maturity when it comes to pricing.Organisations that are building their own pricing capabilities and that have a senior mana gement focused on pricing achieve better business performance..Strategies of pricing a new product.1.Premium pricing.Business sets costs higher than their competitors.It often most effective in the early days of small business that sell unique goods.Because customers need to perceive products as beibg worth the higher price tag,a business must work hard to create a value perception.They used also ensure their marketing efforts,the products packaging and the store`s dcor all combine to support premium pricing.2.Penetration pricing.This aims to attract buyers by offering lower prices on goods and services while new business use this technique to draw attention away from their customers.Penetration price close tends to result in an intial loss of income for the business in the long run after sufficiently penetrating a market,business often wind up raising their prices to better reflect the state of position within the market.3.Economy pricing.This stratergy minimizes to cost associate d with marketing and production in orders to keep product prices down.As result ,customers can purchase the products they need without frills.Economy pricing aim to attract the most conscious of consumers.4.Price skimming.This involves setting rates high during introductory phase,the company then lowers prices gradually as competition goods appear on the market.One of the benefits of price skimming is that it allows a business to maximize profits on easy adopters,it helps a small business recoup its development cost and then also it helps in creating an illusion of quality and exclusivity when item is first introduced into the market.5.Psychology pricing.It involves technique which marketers use to encourage customers to respond to their emotional levels rather than logic ones .It assumes that customers tend to put more attention on the first numbers on price tag than the last.The goal of psychology pricing is to increase demand by creating on illusion of enhanced value for the cust omers.6.Bundle pricing.With this stratergy ,business sell multiple products for lower rates than consumers would face if they purchased each item individually .Not only is bundles goods an effective way of moving unsold items that are upspace in your facility but it can also increase the value of perception in the eyes of your customers since you are essentially giving them something for free.Bundle pricing is more effective for companies that sell complementary products.4. Explain the major objectives /importance of pricing?IMPORTANT OBJECTIVES OF PRICING.Pricing strategy begins with determination of objectives. Pricing objectives reflect The...