Text 6. Key terms and concepts

The company does not exist in vacuum, it is surrounded by other firms and institutions which influence its operations. These external forces constitute its marketing environment. It is made up of two parts: (a) the microenvironment which consists of forces in the immediate surrounding of the company – suppliers (firms and individuals that provide the resources necessary to produce goods and services), intermediaries (firms that help to promote, sell and distribute the product to customers), competitors (the firms working in the same market segment) and public (any group that has an actual or potential interest in the firm's business activity), and (b) the microenvironments which consists of more general influences of society: cultural, economic, political and technological. The analysis of how these factors will affect a hospitality company's success is called environmental analysis. Social and cultural factors include forces that affect people's values, preferences, and patterns of behavior, which vary in different social, ethnic (people of the same nationalities living as distinct communities) and age groups (for example, teenagers, seniors), etc. The economic factors include the state of the national economy, the demographic situation (the population in terms of size, density, age, and other statistics), development of consumerism and public-interest groups (an organized movement of citizens to defend the rights and power of buyers in relation to sellers). Political environment is made up of laws and regulations, produced by government agencies, pressure political groups that influence the organization's business. Technological environment is made up of forces that create new technologies, in their turn creating new product and market opportunities.

 

 

LESSON 1: THE COMPANY'S MICROENVIRONMENT

Reading:

The success of the company's operations depends greatly on the trends and developments affecting its suppliers. Suppose that a restaurant manager wants to run a live lobster special for the weekend promotion. The seafood supplier promised to send 200 lobsters but on Friday morning something happened: lobsters are shortened on the shipment from Boston, and they cannot be delivered until Saturday night. In hospitality industry, even greater is the companies' dependence on the intermediaries who help to deliver the resources and sell the product. Suppose the transport workers responsible for the shipment of that seafood are on strike! In this case there would be no lobsters in the market for a week. The manager, who already has sent invitations to his frequenters, may try to find an alternative source only to find out that the prices for lobsters are doubled.

In hospitality industry, the companies usually have little control both over the suppliers and the intermediaries, since there is usually no contractual arrangement between them and the firm. For example, most guests make their own reservations when traveling for business or pleasure. As airline fares increased, both companies and individuals cut back on travel. As a result, the hotel business suffered losses. Some companies that are heavily dependent on their guests being delivered by air must work with local and state tourist bureaus to ensure that there are enough flights serving their region. Or they may start their own airlines. Typical intermediaries of a hotel firm are travel agents, wholesale tour operators, and hotel representatives. For example, a wholesaler creates leisure packages that include air ticket, ground transportation, and hotel accommodations. These packages are promoted through newspaper advertisements and travel agents. Through volume purchasing, the wholesaler receives reduced prices, which enables him to pay the travel agent a commission for selling the product, give the customer a good price, and produce a profit for himself.

 

Exercises:

1. Find in the text the following topical words and phrases, make sure that you are able to explain in English what they mean, and add them to your working vocabulary:

"a live lobster special", a shipment, a wholesaler, an airline fare, a hotel representative, a leisure package.

 

2. Write out from the text the sentences or their parts which contain the words and phrases given below and translate them into Russian:

a trend, to be shortened, an alternative source, to deliver by air, volume purchasing, a commission.

 

3. Answer the following questions using the topical words and phrases:

1. What problems connected with supply of perishable goods can unexpectedly emerge?

2. What is the function of intermediaries in marketing hospitality services?

3. Why is it difficult for hospitality companies to control their transportation intermediaries?

4. How does airline fare increase affect hospitality business?

5. What services are usually included in a leisure package?

6. How does a wholesaler earn his living?