This paper examines the utility of mobile marketing within the hospitality industry through an evidence-based, qualitative case study approach. Drawing on semi-structured interviews with marketing personnel from six hotels, the paper explores how properties apply mobile marketing, what benefits they derive from it, and what challenges arise during implementation. The paper first establishes a theoretical foundation by defining marketing, categorizing demand types, and characterizing hospitality-specific market dynamics. It then situates mobile marketing within a broader communications framework encompassing mobile advertising, sales promotion, direct marketing, and customer relationship management (CRM). Findings reveal broad agreement on mobile marketing's future relevance, while current utility varies widely across properties, with key applications in information distribution, guest acquisition, and room bookings.
Mark Twain once quipped that "many a small thing has been made large by the right kind of advertising." The truth of this maxim is as applicable in today's marketing reality as it ever was. Marketing can be understood primarily as a business philosophy that puts the customer first. From this perspective, the primary goal of hospitality businesses should be to create and retain satisfied customers. This concept proposes that satisfying customers' needs and wants should be at the center of an organization's decision-making process. Professional marketers believe that this customer focus is the responsibility of everybody in the organization. Adopting this philosophy requires a total management commitment to the customer, and companies that pursue this approach can be described as having a customer orientation.
One new area to better serve the customer through the distribution of information and discounts is mobile marketing. With the proliferation of mobile devices, the hospitality industry is going through a gradual transformation as it adapts to this new technology. Literature on the benefits of this technique can be extremely beneficial to industry efforts. Furthermore, an awareness of the issues that must be addressed can help ease the adoption of this novel technique. This paper presents extensive interviews and data analysis performed within the hospitality industry's use of the technology, in order to elucidate key themes regarding mobile marketing.
Originally, a market was a meeting place where people could buy and sell produce, and of course this type of market still exists today. In modern societies a "market" is much more complex, but retains the core principle of bringing together buyers and sellers with common interests. This modern concept of the market is based on groups of people who have similar needs and wants — actual and potential buyers or consumers — and companies that aim to satisfy those needs and wants better than their competitors. Needs can range from the basic requirements for survival — food, shelter, safety — to much more complex social needs, such as belonging and recognition (Singh, 2011). Wants are how different people choose to satisfy their needs, and are shaped by culture and personality. Hence people with similar needs — for example, the need to travel for a family event and stay overnight — can have different wants: some may stay with relatives while others book their own hotel accommodation. Obviously, a major limitation on how people can satisfy their wants is what they can afford (Gleanster, 2011).
Consumers have to make buying choices based on their own resources or buying power. Consumers will often buy the best bundle of benefits provided by a product for the price they can afford. The combined purchase decisions of all the individuals buying a product or service is described as market demand. Market demand is normally measured using two criteria: (1) the number of units sold, which reflects the number of people buying the product or service — called the volume — and (2) how much people have paid for the product — called the value. Individuals can choose different ways to satisfy similar needs (Nester and Alt, 2003). Not everyone wants the same bundle of benefits, and this creates sub-markets, or market segments, within the overall market. In hospitality markets, luxury, mid-market, and budget market segments represent different bundles of benefits sought by different groups of customers.
Over time, the volume and value of market segments can increase or fall depending on a wide range of factors. Market supply can also be measured; this is called industry capacity. In the hotel market, the number of hotels and bedrooms in an area is called the market capacity. If new hotels or bedroom extensions are built, market capacity increases. In the hospitality industry, market supply is often categorized under the same headings as market demand segments, so the luxury, mid-market, and budget classifications are used to describe the different types of operations serving those market segments. Other ways of categorizing hospitality market supply include tourist board or motoring organization ratings (e.g., star rating classification), purpose of travel (leisure or business), and niche markets (youth adventure holidays, conferences, or gourmet food). The level of market demand and the amount of industry capacity are crucial factors underpinning hospitality profitability: when market demand is consistently high and industry capacity low, the hospitality business should be operating at high capacity and be profitable; when demand fluctuates and industry capacity is high, the hospitality business will be operating in a highly competitive environment and profitability will rise and fall (Rask and Dholakia, 2000).
One way to think about marketing is to view it as the art and science of managing customer demand. Negative demand exists where consumers positively dislike a product — for example, an unpopular food or drink product. The marketing response is to encourage demand by educating consumers about the positive features of, or benefits from, the product. Free tastings of food and drink products in supermarkets and wine shops are a common example, enabling potential customers to see, taste, and buy the product.
Where there is no demand, the marketing task is to create demand. Raising awareness through advertising and public relations activity to demonstrate a product's positive attributes helps educate consumers and encourages them to sample it (Brown and Chalmers, 2003). Latent demand means that demand would exist if there were a product or service available to meet consumer needs. The development of domestic short breaks as a hotel product was originally based on consumers' increasing affluence and available leisure time.
Where demand is falling, the task is to revitalize it. This situation can occur when a product or service begins to lose its appeal. Marketers need to research the reasons why the product no longer meets consumers' needs, reformulate the offer, and re-launch the product to stimulate consumer interest. Irregular demand can be described in hospitality markets as the seasonality of demand. In these situations, companies strive to develop marketing strategies to synchronize demand over the high and low seasons, often using price-led promotions.
Full demand occurs when actual demand matches the desired demand, and the marketing task is to maintain current demand. In hospitality markets, full demand rarely occurs since competitors are likely to enter attractive markets and disturb the equilibrium. If there is too much — or overfull — demand, the service operation will not be able to cope and considerable customer dissatisfaction is likely. The hospitality marketer will aim to reduce demand either by increasing prices or by managing the booking and queuing process. A long-term solution to overfull demand is to increase capacity by building more bedrooms or extending restaurant seating, but managers need to be confident that overfull demand will be sustained.
Unwholesome demand can occur when illegal activities such as drug use, gambling, or prostitution take place on hospitality premises. Management clearly has a legal and ethical duty to try to inhibit or destroy unwholesome demand; however, this can be a difficult situation when customers are willingly involved (Krum, 2010). In short, a proper appreciation of the nature of demand is critical in establishing effective marketing.
"Four travel demand types and hotel service focus"
In short, hotel marketing exists to meet the reasonable demands of customers in order to generate profits through a series of sales and operational activities. What separates hospitality marketing from most other industries is that hotels sell service, comfort, and convenience rather than a tangible product (Singh, 2011).
The mobile market has revolutionized the way we go about our daily business. From checking email and doing banking, to engaging with social media and even operating our automobiles, mobile devices are essentially becoming the world's remote control. Companies from all over the world are developing mobile tools that increase business utility and overall business value (Gleanster, 2011). The hospitality industry is taking full advantage of the many mobile utilities available, and there is no clear endpoint to this evolution. Eventually, virtually every business experience will have some form of mobile application that allows customers to engage at a new level. These applications give users a sense of participation in the forefront of technology and, as a result, a sense of affiliation with the businesses they interact with (Gleanster, 2011b).
Propelled by new technological innovations, the prevalence of personal mobile devices, and the continuing business need to do more with less, mobile marketing in the United States is going mainstream. According to Gleanster, Acuity Mobile found that 89% of major brands were planning to market via mobile in 2008, and nearly one-third of those brands were planning to spend greater than 10% of their marketing budgets on mobile (Gleanster, 2011a). Research by Nielsen Mobile illustrates the extent of mobile device penetration in American society: in the fourth quarter of 2008 there were 109 million subscribers to the mobile Internet, and 44 million of them had used the mobile Internet within the previous 30 days. U.S. mobile advertising revenues (search and display) were forecast to grow to $3.1 billion in 2013 from $160 million in 2008, representing a compound annual growth rate of 81.2%. During the same period, mobile local search advertising revenues were forecast to increase from $20 million to $1.3 billion, an annual growth rate of 130.5% (Heinonen and Standvik, 2003).
Unlike the Internet revolution, when home computers helped drive the development of online marketing, mobile devices were already in the hands of millions of people in the United States — meaning a ready market already existed. Attracted by high response rates and the relatively low cost of campaign deployment, early adopters saw encouraging results from well-designed mobile marketing promotions. These mobile trailblazers represented well-known major brands and a wide cross-section of industries, including restaurants, online and offline retailers, auto manufacturers, consumer electronics, travel and entertainment, casinos, and political campaigns. As companies realize the full potential of mobile marketing and expand their budgets accordingly, the need for specialized talent in this young and burgeoning industry continues to grow (Krum, 2010).
"Interview design, case selection, and validity measures"
"Advertising, CRM, direct marketing, and implementation options"
Mobile devices are everywhere in the modern world. One new area to better serve the customer through the distribution of information and discounts is the use of mobile marketing. With the proliferation of mobile devices, the hospitality industry is going through a gradual transformation as it adapts to this new technology. Literature on the benefits of this technique can be extremely beneficial to industry efforts, and awareness of the issues that must be addressed can help ease its adoption. Through careful analysis of interviews with those involved in implementing mobile marketing in the hospitality industry, critical insights were observed regarding the utility of the technology and the issues involved in its utilization. By understanding these important issues, students of marketing can gain valuable insight not only into mobile marketing but also into marketing theory and technological implementation more broadly.
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