Chapters 12-13docx

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Grand Rapids Community College *

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Feb 20, 2024

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Chapter 12: Q1) Explain how the four I’s of services would apply to a Marriott hotel. Intangibility: Customers cannot purchase a hotel room and bring it home or own that room. They are paying for an experience rather than a possession. The tangible benefits that are associated with a Marriot hotel are items such as amenities, food, and free perks. Inconsistency: A Marriott hotel and its rooms have different prices, perks, and amenities depending on where and even when a customer stays and the staffing that the specific hotel has. Inseparability: The value of a Marriott hotels amenities is dependent on the individual customer and their needs. Families might value hotel attractions such as arcades and pools, while single adults might enjoy soundproof walls and spa access. Inventory: The value of the Marriott hotels room inventory is dependent on if customers are booking rooms. For example, the demand will be higher for hotel rooms the week of the fourth of July, but the demand will be low the 3 rd week of May. Q2) Idle production capacity may be related to inventory or capacity management. How would the pricing component of the marketing mix reduce idle production capacity for (a) car wash, (b) a stage theater group, (c) a university. (a) A car wash can be operated with little to no cost because the idle production capacity can be reduced with little to no staffing for self-serve car washes. (b) A stage theater groups idle salary is a high inventory cost if no one purchases tickets to their performances. (c) The idle production capacity for a university can carry a high inventory cost if few students chose to attend classes at their University. Q3) How does the off-peak pricing influence the demand for services? Off-peak pricing is offered as a way to balance the supply and demand for services depending on the time of the service. For example, many movie theaters offer low prices to see movies in the morning or mid-day because there is little demand when comparted to afternoon and night showings. Offering these discounted prices will increase the demand for mid-day movies and help manage the higher demand for afternoon showings. Chapter 13: Q1) How would the price equation apply to the purchase price of (a) gasoline, (b) an airline ticket, and (c) a checking account? (a) As an effort to save money on gas prices, many consumers will purchase memberships to stores like Sam’s Club so they can access their gas stations with a lower price per gallon. Sam’s Club is then charging anywhere from $45 dollars to $100 dollars for an annual membership which balances the price equation. (b) Many people will use sights like Priceline and Expedia as an easier way to view and compare airline tickets. These 3 rd party sights do all the work of looking for connecting flights and comparing all options for their customers. Once a customer chooses a lower priced ticket, these companies then charge a service fee for their site usage and even ticket insurance. (c) A consumer might chose a checking account that offers a lower membership fee in order to have a higher return interest rate. Q2) How is a downward-sloping demand curve related to total revenue? The higher the price, the lower quantity there will be sold. In addition, the lower the price, the higher number sold. By companies selling higher quantities at slightly lower costs, they will increase their total revenue.

Q3) Suppose that the marketing executives for Touché Toiletries reduced the price to $6.50 for a three-ounce bottle of Ode d’Toade and the fixed costs were $1,100,000. Suppose further that the unit variables remained at 45 cents for a three ounce bottle. (a) How many bottles must be sold to break even? (b) What dollar profit level would Ode d’Toade achieve if 200,000 bottles were sold? (a) 181,818 (b) $110,000 Video Case 12: Q1) What is the LA Galaxy “product”? The LA Galaxy is a professional soccer club. They compete in Major League Soccer (MLS). Q2) Which of the seven elements of the service marketing mix are most important in the LA Galaxy marketing program? The physical environment is the most important marketing mix element in the LA Galaxy’s marketing program. The majority of their revenue comes from ticket sales. To create larger profits from ticket sales, the LA Galaxy has adjusted their games by creating soccer specific stadiums and increasing their relations with their support groups like the Riot Squad who add exciting elements to the games such as face painting, drumming, and chanting. All these things combined make for a more exciting physical environment which will increase the likelihood of people wanting to return to see another game. If they did not adjust their physical environment, people would not be compelled to come back because they would feel as if they have already experienced it. Similar to going to see the same movie over and over again. Q3) How is promotion (advertising, personal selling, public relations, sales promotion, direct marketing) used by the LA Galaxy? Do these activates depend on the specific target markets? The LA Galaxy team is very involved with their supporter clubs. The supporter clubs make the experience of the soccer games more exciting for other members of the audience, so it is important that the LA Galaxy team provides them with support and listens to their comments and concerns. The actives do depend on the specific audience. For example, they plan many student nights that are based around the student calendar that offer unique experiences such as discounted tickets, face paint and tattoos. Q4) How are social media integrated into the LA Galaxy’s marketing strategy? The LA Galaxy does still rely heavily on traditional media such as print and radio. They use their social media to target and evaluate specific audiences. They can tailor their promotions to attract different demographics easier on social media then on a generic commercial or billboard. In addition, even their mascot has its own social media platforms such as Facebook and twitter that the LA Galaxy’s team uses to target specific audiences. Q5) How does the LA Galaxy assess the impact of its marketing activates? Has its program been successful? Each year they do an in-depth analysis of their ticket sales and compare them to similar markets. They then compare these prices to previous years to see if there is any growth, or what other promotions or packages that they can offer to create more unique experiences and grow their ticket sales.

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