Markets In Hospitality

Ac 1.3. Evaluate the relevance of consumer markets in the hospitality industry

Burnett (2003) defines market as a constant dynamic of economic forces. These forces include supply, demand, competition and government intervention and a series of economic agents which can generally be represented and classified as buyers and sellers. They interacts dynamically, exchanging among them information, products and services. Consumer markets relate to markets where the predominant economic agents are individuals and households who buy and consume goods and services for their own personal use and need. Within these markets, individuals are heterogeneous in term of their demographics, gender, age, culture and income. Such heterogeneity

Hospitality service providers study consumer behavior with the objective to understand and predict what customers will buy (what), the motivations behind such purchase (why), its associated patterns (how) and frequency. If an hospitality organization can model consumers expectations and predict their purchase patterns (what, where, when and why) then it will be able to influence to its own benefit the consumer demand and consumption. Beech and Chadwick (2006) describe how a market consumer organization prioritizes its activities on satisfying the consumers needs. With such objective, the organization spends considerable resources on how to meet the needs and expectations of the customers, centering their entire product development cycle and marketing strategies around their targeted customer base. The continuous application of market research provides organizations of this type a competitive advantage in modeling the consumer behavior and needs. Furthermore, by leveraging their marketing model and analytics, hospitality marketers can build a positive, continuous and long term relationship with the customers, get recurrent feedback concerning customers’ expectations and satisfactions with the offered services and strengthen customers’

Cooper and Hall (2008) highlight the fact that while these services might be considered intangible, especially when compared to the marketing of goods and products. However, the hospitality services rely on a very sophisticated set of infrastructure, manpower and physical resources with a significant impact on the places in which the services are provided. “What is being purchased by the tourist is the experiences provided by this infrastructure and set of resources, and not the infrastructure itself”. Because hospitality and “tourism is an experience-based product it means that in order to be able to understand tourism phenomenon we need to be able to understand both its consumption and