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The Competitive pricing in marina business: Exploring relative price position and price fluctuation

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  • University of Rijeka, Faculty of Tourism and Hospitality Management

Abstract

Competitive pricing is considered to be a very important part of revenue management, a management instrument that enables selling right products and services to the customers at the prices that will produce highest revenues. Marina business is supposed to be a business whose products or services are perishable (similar to hotels, airlines, campsites, hostels etc.) and tracking prices of competitors is very important part of managing its business. The purpose of this paper is to address the problem of relative price position and relative price fluctuation performance in marina business and seeks to complement existing research in the domain of strategic price positioning. The research results reveal that marinas who set their prices higher than their competition achieve lower level of berth occupancy and at the same time succeed higher RevPAB. Marinas with lower prices than their competitors achieve higher level of berth occupancy and lower RevPAB. Keywords: marina performance, revenue management, revenue per available berth (RevPAB), competitive pricing, price position of berth, price fluctuation of berth, berth occupancy JEL Classification: D4, G1
Journal of Tourism, Heritage & Services Marketing, Vol. 5, No. 1, pp. 3-8, 2019 3
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© 2019 Authors. Published by Alexander T.E.I. of Thessaloniki
ISSN: 2529-1947. UDC: 658.8+338.48+339.1+640(05)
http://doi.org/10.5281/zenodo.2640935
Published online: 15 April 2019
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The Competitive pricing in marina
business: Exploring relative price
position and price fluctuation
Dubravka Vlasic
University of Rijeka, Faculty of Tourism and Hospitality Management, Croatia
Katarina Poldrugovac
University of Rijeka, Faculty of Tourism and Hospitality Management, Croatia
Sandra Jankovic
University of Rijeka, Faculty of Tourism and Hospitality Management, Croatia
Abstract: Competitive pricing is considered to be a very important part of revenue
management, a management instrument that enables selling right products and services to
the customers at the prices that will produce highest revenues. Marina business is supposed
to be a business whose products or services are perishable (similar to hotels, airlines,
campsites, hostels etc.) and tracking prices of competitors is very important part of managing
its business. The purpose of this paper is to address the problem of relative price position
and relative price fluctuation performance in marina business and seeks to complement
existing research in the domain of strategic price positioning. The research results reveal
that marinas who set their prices higher than their competition achieve lower level of berth
occupancy and at the same time succeed higher RevPAB. Marinas with lower prices than
their competitors achieve higher level of berth occupancy and lower RevPAB.
Keywords: marina performance, revenue management, revenue per available berth
(RevPAB), competitive pricing, price position of berth, price fluctuation of berth, berth
occupancy
JEL Classification: D4, G1
Biographical note: Dubravka Vlasic received her PhD in Economics (2012), M.Sc. (2005)
and B.S. (2000) from the Faculty of tourism and hospitality management, University of
Rijeka. Currently she an associate professor in accounting and auditing courses. Her interest
of research is: financial accounting, environmental management accounting, environmental
auditing and internal auditing in hospitality industry. Katarina Poldrugovac received her PhD
in Economics from Ljubljana University of Economics (2015). Currently she is the assistant
professor at the department of accounting. Her interest of research is: managerial accounting,
sustainability accounting and revenue management in hospitality industry. Sandra Janković
received her PhD in Economics from the Vienna University of Economics and Business
(2001), M.Sc. (1997) and B.S (1993) from the Faculty of Tourism and Hospitality
Management, University of Rijeka. Currently she is the assistant dean for International
Studies, co-editor in chief of the journal Tourism and Hospitality Management and leader of
the project Benchmarking in the hospitality industry.
1 INTRODUCTION
Marinas are commercially the most important ports of
nautical tourism, and together with charter and cruise
industries, within the last 30 years, have continuously been
showing high growing rates. It has been estimated that in
Europe there are 4,500 marinas with 1,75 million berths
(European Boating Industry, 2016) while Marina industry of
association states that in Australia there are 347 marinas, that
have 32000 employees and create reveneues of 1.4 billion
AU$ per year (Marina industries associations, 2018).
Marinas can be classified according to (Luković 2012:405):
1. the level of equipment standard, luxury,
recreational
2. types of construction American, Atlantic or
Mediterranean type
4 Dubravka Vlasic, Katarina Poldrugovac, Sandra Jankovic
3. position of maritime zone open, semi-enclosed or
enclosed
4. marina ownership private, municipal or public
5. location sea, lake, river or canal.
Since marinas are a part of almost every national economy,
they influence the destination itself as well as general
development of a country.
Successful marina business requires quick adaptation to
changing market conditions and technological innovations.
Developing and accepting new and creative ways of decision
making is necessary in order to achieve greater business
results and stay ahead of the competition (Korol and Fotiadis,
2016). Reacting to the changes in competitors’ pricing is no
longer acceptable solution and it should be replaced with
leading and acting in order to challenge the elasticity of
pricing. Managers should implement consistent pricing
strategies in their businesses in order to improve the quality
of their decisions and this will lead to higher RevPAB
(Revenue Per Available Berth) relative to their competitive
set.
Setting optimal price for ones’ product or service is not an
easy task, and in order to maximize their business results,
managers need to introduce in their business revenue
management. Revenue management is a management tool
whose main objective is to increase sales revenues by
manipulating prices of products or services (HOSPA, 2013).
Revenue management is particularly useful in industries
whose fixed costs are high in comparison to variable costs as
hotels, airlines, car rentals, cinemas, stadiums, conventions,
cruise liners etc. The hospitality industry recognised the
benefits of adopting RM in order to maximize their business
results and several research was conducted in order to explore
the degree to which strategic price positioning and price
fluctuations affect relative revenue per available room (Enz
and Canina, 2005, Enz, Canina and Lomanno, 2009, Noone,
Canina and Enz, 2013, Enz, Canina and van der Rest, 2015).
Marina business characteristics have similarities with hotel
business regarding perishability of their product (selling
berth vs. room) and high fixed costs of a business. The
methodology for research conducted on hotels was adjusted
for marinas in order to explore the effects of price positioning
in marina business. In this research we seek to extend the
literature by examining how relative price position and
relative price fluctuation has an impact on performance in
marina business.
2 THEORETICAL FRAMEFORK
Despite a well-developed practical and scientific approach in
the field of pricing, managers in many industries still rely on
the rules of thumb, including cost-based pricing. Recent
research shows that they also react to competitor’s pricing
performance (Enz, Canina, van der Rest, 2015). Setting
prices should not be merely a tactical matter, even though
there’s no doubt that competitors are an important factor to
consider in pricing. Absolutely, price setting should be a part
of companies’ overall strategy, and pricing should expose the
position in providing customer value at a given cost, as well
as enable actions and reactions of market players. Pricing is
considered to be a strategic capability that is integral to a
company’s overall strategy, indicated by revenue
management analysis and economic conditions (Enz, Canina,
van der Rest, p.6). Revenue managers need to know how to
contribute to firm performance via pricing to drive higher
revenue and optimise GOP. The pricing strategy could be one
of price stability or one of changing price category relative to
competitors (Noone, 2012). More importantly, it’s crucial for
strategic pricing in marina business to define whether raising
or lowering prices relative to their competition contributes
additionally to RevPAB growth.
Authors Enz and Canina with several colleagues, in their
research about hotel pricing concluded that consistent pricing
strategy is essential and that pricing strategy should not rely
on neoclassical theories of perfect competition (Enz, Canina,
van der Rest, p.7). Their research investigates whether a clear
strategic path to avoid tactical price fluctuations to steal
market share in the short run by price positioning below
competitors actually pays off (Enz, Canina, van der Rest,
p.7). They found that hotels that consistently maintained an
ADR somewhat higher than that of their competitive set also
enjoyed a relatively higher RevPAR.
Studies also indicate that revenues are more strongly
influenced by ADR than by occupancy.
Research results also suggest that hotels should not follow an
overall strategy of price reduction, since it results in RevPAR
losses. Offering average prices higher than those of
competitor is the best way to get desired returns (Enz, Canina,
and Noone, 2012).
Singh at al. explore the influence of changes in ADR on
financial result measured by GOPAR and NOIPAR. They
prove that changes in ADR have a significantly stronger
correlation with changes in GOPPAR and NOIPAR
compared with changes in occupancy. These results indicate
that ADR appears to be the key driver of RevPAR and
bottom-line profitability since 1 percent change in ADR
yields a 1.9 percent change in NOI, and an estimated 1.6
percent change in GOP (Singh, Dev and Mandelbaum, 2014).
Although it is commonly known that tactical pricing decision
must bring into line with strategic price positioning and
contribute to the fulfilment of strategic goals, the literature
provides little guidance in the domain of strategic price
positioning. Noon, Canina and Enz have been identified two
key dimensions of strategic pricing: relative price position
and relative price fluctuation (Noone, Canina, & Enz,
2013:4). While relative price position represents a measure
of the mean ADR attained by a given hotel relative to the
competitive set and can be higher or lower, or on par with the
competition, relative price fluctuation is a measure of relative
variability in ADR over time and represents the degree of
variation in price relative to the competition over time.
(Noone, Canina, & Enz, 2013).
There is no doubt that competitor prices should be considered
in managing revenue and maximizing profitability. For this
purpose, competitive set reports can be used. They allow
revenue manager to track their own performance against that
of their comp set(s). It usually consists of main revenue
management KPIs and compares the subject’s indicators to
the compset’s aggregates. It is employed to assess the
effectiveness of short-term decisions as well as effectiveness
of long-term decisions and polices. These comparative
reports are also used extensively by regional and corporate
units to assess property-level performance, and by owners
and investment companies to evaluate the performance of a
contracted management company, the usefulness of a brand
THE COMPETITIVE PRICING IN MARINA BUSINESS 5
affiliation and the performance of the industry (Webb,
Schwartz, 2016).
In order to keep up-to-date with ever changing environment
in which marinas operate, the following KPIs are
recommended in compset reports for marinas, to assess their
own performance and keep track to their competitors:
(Jankovic & Vlasic, 2018)
total occupancy rate (total number of occupied
berths divided by total number of available berths),
occupancy rate for wet berths (number of occupied
wet berths by contract and in transit divided by total
number of available wet berths)
occupancy rate for dry berths (number of occupied
dry berths by contract and in transit divided by total
number of available dry berths).
occupancy rate by contract (number of occupied wet
and dry berths by contract divided by total number of
available berths),
occupancy rate by contract for wet berths (number
of occupied wet berths by contract divided by total
number of available wet berths)
occupancy rate by contract for dry berths (number
of occupied dry berths divided by total number of
available dry berths),
marina revenue per occupied berth - Ave rage Berth
Rate ABR (revenue from renting dry and wet berths
divided by total number of occupied berths),
total marina revenue per occupied berth (revenues
from renting berths, revenues from marina services,
revenues from renting spaces, sub-concessions, permits
and licenses and other marina revenues divided by total
number of occupied berths)
marina revenue per available berth RevPAB
(marina revenue from renting dry and wet berths by
contracts and in transit divided by total number of
available berths),
total marina revenue per available berth TRevPAB
(revenues from renting berths, revenues from marina
services, revenues from renting spaces, sub-concessions,
permits and licenses and other marina revenues divided
by total number of available berths),
In order to measure the mentioned KPIs, a uniform
methodology of measuring marina revenues and costs should
be clearly defined. Although Uniform System of Accounts
for Marinas and Boatyards (USAMB) was published by
International Marina Institute in 1996 to improve financial
reporting for marina business, nowadays, this standard does
not enable the framework for performance measurement in
marinas. More comprehensive measurement of revenues,
costs and capacity, traced by profit and cost centres is
required. To enable marina benchmarking, minimum
business data for its measurement on monthly basis is
provided below (Jankovic & Vlasic, 2018):
revenues from renting dry and wet berths by
contracts and in transit,
revenues from marina services,
revenues from renting spaces, sub-concessions,
permits and licenses, and
other marina revenues,
the number of available wet berths and dry berths
(on monthly basis)
the number of occupied wet berths and dry berths by
contracts and in transit (boat per day)
Marina business can be considered as lodging business (berth
is the lodging for the guests’ boat/yacht) and the competitors
are most commonly defined by size, location, proximity and
published price, with location and price used as dimensions
of similarity since it is strongly believed that location and
price have significant impact on a business success (Kim &
Canina, 2011). The marina business can create its
competitive sets using several parameters: size, region, type
of marina, marina categorization, marina occupancy rate and
marina revenues.
Renting berths or berth revenues is considered to be the main
profit centre of marina business, which is similar to a hotel
business, where renting rooms (or lodging) is the main profit
centre. Marina berth rates can be calculated for transit (daily,
weekly) or by contract (seasonal or annual basis). They are
normally calculated by length of the boat (per ft) and
basically a boat slip is like a hotel room with the exception
that marinas accommodate guest’s boat and hotels
accommodate guests in a time period. Marina business
requires high investment in property plant and equipment and
therefore have high fixed costs so high berth occupancy is
necessary for financial success.
3 METHODOLOGY AND SAMPLE
Based on the idea that good revenue management exists when
rates and occupancies show positive correlation this research
examines the relationship between pricing strategy and
marinas position in RevPAB and berth occupancy in relation
to their competitive sets. The methodology for this research
was taken over from the research conducted by Enz, Canina
and Van der Rest (2015) for hotels. Variables that were used
are average berth rate (ABR), berth occupancy and revenue
per available berth (RevPAB) percentage differences. The
percentage differences were calculated for each indicator by
dividing each individual marina indicator to the average
indicator of its competitive set. Relative price position for
each marina in the sample was computed as the average of
monthly ABR percentage difference from the competitive set
over 36 months and relative price fluctuation for each marina
in the sample was computed as the standard deviation of the
monthly ABR percentage difference from the competitive set
over the 36 months period. The methodology applied in this
research excluded marinas who were unable to achieve a
percentage difference in RevPAB with one standard
deviation of zero from their competitors considering them
non-competitive.
The sample consisted of 32 Croatian marinas whose data
were collected through the project Croatian Benchmarking
for the period of 36 months for years 2015, 2016 and 2017.
The number of observations made was 848. As the sample
contained four seasonal marinas, it has to be kept in mind that
they have operated only during the summer months (April till
October) and therefore have no data during off-seasonal
months. Also, there are marinas whose prices were not
considered because their value of ABR, RevPAB and berth
occupancy were too low or too high in comparison to other
marinas due to errors made in providing data. The reason for
that stands in their information system limitations that do not
provide separation of revenues from cash received for the
time period that the transaction occurred in. For example:
6 Dubravka Vlasic, Katarina Poldrugovac, Sandra Jankovic
Annual contracts for berths are usually signed and the invoice
for the entire year delivered in April. The invoice is then paid
in the same or next month (April or May), and the system
records this transaction in that month disregarding the fact
that according to the accounting principle the (annual)
revenue should be divided and recorded for each month
separately. The above mentioned values were excluded from
the final calculations in order to avoid misinterpretation in the
conclusions for this research.
In choosing competitive sets, it is essential to emphasize the
fact that Croatia is substantially a small market for nautical
tourism and that the differences in prices are connected to the
heterogeneity of locations and brand reputation and quality
of services which is not connected to the classification of
marinas. There is a problem of the classification of marinas
not only in Croatia but also at the international level because
there is no uniform classification of marinas prescribed
internationally. Marinas in Croatia carry different
classifications containing letters (A, B, C), roman numbers
(I., II., III. Etc.) or anchors (1 5) and therefore it was not
used for the separation of the results as it was used in the
research for hotels. Because of the small sample of marinas,
there was no separation of the individual and chain ones or
the size of marinas regarding number of berths.
In order to uniform the existing criteria for evaluation of
marinas, for calculating the berth occupancy, only the
occupancy of sea (wet) berths was considered for this
research. It is because not all marinas in the sample contain
sea and dry (land) berths, and there is a great difference when
calculating berth occupancy for total berths or just sea berths
the dry berth occupancy is lower than the occupancy of sea
berth and the total berth occupancy is lower in those marinas
with dry berths. In some marinas the berth occupancy
exceeds 100%, due to the fact that marinas some berths sell
twice, once through the annual contract and second time,
when during the high season the yacht/boat leaves the marina
for cruising, sell the same berth as the transient one. The
marinas have chosen their competitive sets on the basis of the
closest ABR in the sample, regardless its location or size.
4 RESULTS AND DISCUSSION
Figure 1. Occupancy and RevPAB differences
Regarding the information on marina business for descriptive
statistics, the sample showed relatively wide disparities for
average in occupancy ranging from 8,10 to 149,27 with mean
78,09 of value. The range for ABR is 22,06 to 461,22 with
mean value of 106,78. The sample also showed great
disparities for average in RevPAB that range from 15,28 to
326,47 with mean value of 79,06.
Ten different pricing categories ranging from 0 to 30% were
used for Marinas. Five of the pricing categories were set for
the marinas with higher price position in comparison to their
competitors and five categories for the marinas that achieved
price position lower than their competitors (Figure 1).
Table 1: Percentage difference in average berth rated (ABR)
The research results conducted on marinas show that when
marinas positioned their prices below the prices of their
competitors, they have achieved better berth occupancy of
marina and their RevPAB was slightly lower. With the
marinas that positioned their prices substantially lower (15-
30%) the occupancy was much higher (13,5) with RevPAB
being only slightly lower (-2,55).
For those marinas that positioned their prices above then their
competition, the research results show that their berth
occupancy experienced lower values, with their RevPAB
being slightly higher, so for much higher prices (15-30%), the
occupancy was much lower (-15,40) and RevPAB only
slightly higher (1,43).
In order to reveal the effect of price position, price fluctuation
and occupancy performance of marina on its RevPAB,
regression analysis is performed (Table 2):
Table 2: Regression analysis results
Note: *** significance at 0,001 level respectively. Standard error is given in parenthesis.
Dependent variable: Revenue performance
Variables selection method: Enter
Table 2 shows the results of regression analysis used to test
the effects of relative price position and fluctuation on
RevPAB performance in marinas. RevPAB was entered as
dependent variable, while relative price position and relative
price fluctuation were entered as the independent variables.
15-
30%
lower
10-
14%
lower
6-9%
lower
3-5%
lower
0-2%
lower
0-2%
higher
3-5%
higher
6-9%
higher
10-
14%
higher
15-
30%
higher
13,50
7,98
6,42
1,71
0,50
-3,64
-4,31
-8,31
-11,60
-15,40
-2,55
-1,83
-0,43
-1,42
0,02
-0,77
0,17
0,78
0,35
1,43
Dependent variable
RevPAB performance
Constant
-1.039 (0.234)
Price position
0.773***(0.019)
Occupancy performance
0.815***(0.019)
Price fluctuation
0.165***(0.008)
Observations
848
R2
0.334
R2 (adj)
0.332
F
141.005***
THE COMPETITIVE PRICING IN MARINA BUSINESS 7
The model is statistically significant (F = 141.005; p < 0.001)
with 33,7% of variation in RevPAB accounted for the model
(R squared = 0.332). The effect of price position, price
fluctuation and berth occupancy performance shows that
there is a significant relationship between dependent and
independent variable. Berth occupancy performance has
higher influence (β=0.815) on RevPAB performance than
price position (β=0.773), but still price position was highly
significant in explaining RevPAB performance. The price
fluctuation has also been significant in explaining RevPAB
performance (β=0.165) but less than the price position and
occupancy performance.
Our research results show that marinas who set their prices
below their competitors achieve higher berth occupancy but
still achieve lower RevPAB, and marinas that set their prices
above their competitors manage to achieve lower level of
occupancy but at the same time those marinas achieve higher
RevPAB. These results emphasize the importance of setting
strategic price positions based on presenting different marina
products and marina services. Marina managers should
consider more strategic and consistent price positioning,
particularly if their marinas offer unique, recognized, high
quality services and valued products (Fotiadis and
Vassiliadis, 2017). Although price fluctuation shows lower
significance on influencing RevPAB, it should be noted that
price variability is connected to customer risk and
perceptions of brand and that lowering prices can be seen as
lowering quality of services in marinas and should be
avoided. Because of the small sample, the individual marinas
were not separated from the chain affiliated ones.
Therefore, we suggest to upgrade this project on surrounding
countries (eg. Mediterranean) or at international level. In this
case different approach should be introduced starting from
prices that should be collected in equal (not different)
currencies, different types of marinas regarding areas,
locations, sea/river, inland/coastal, wet/dry etc). We suggest
that the criteria for defining marina categorisation should be
set at national as well as international level and we suggest
that gold anchor categorisation could be used. We also
suggest to repeat the research for longer period of time (5 or
10 years), because three years is considered to be small
amount of time. We also suggest that in order to get better
basis for the comparison nationally and internationally length
and width of the boat or yacht should be taken into
consideration. For length of the boat meter/day value should
be introduced, and for the boat width equivalent numbers
should be used. Until now, only the managerial accounting
information were collected and financial indicators
calculated. In order to further develop and improve project
benchmarking marinas there is a need for additional
information on costs /expenses and sustainability to be
introduced and costs and sustainability indicators calculated.
To position itself in the long term, marina needs to gain clear
understanding of its current market position and the direction
it wants to take in the future. As competitors pricing creates
a part of short-term and long-term strategies marina managers
should consider those prices in order to facilitate responsive
positioning and to avoid conflicts. Regarding price
positioning in short and long term marina managers are
suggested to be very careful when setting the prices above
their competitors in marinas in order to prevent lowering their
marinas occupancy by having unsatisfied customers. If they
plan to set higher prices than their competitors, than in order
to keep the customers satisfaction, the prices should be risen
gradually and they should offer higher quality of their
services or include additional bonus services. When setting
higher prices than their competitors for annual contract
berths, the additional services should be included in the price
and higher quality of services should be offered in order to
keep the customers satisfied. Managers should have in mind
that this berth will be sold and revenues gained for the entire
year which will increase their occupancy, but will also enable
selling the same berth in the summer months when the
boat/yacht owner decides to take the boat out of marina for a
few days. Although setting prices for transient berths seem
slightly easier, it is definitely not so. For the seasonal months
it is not difficult to sell the berth because regardless the price
their marina will reach maximum in occupancy. However, in
that period managers should maximize their business results
but they should be careful with pricing policy because if they
set the prices too high, they risk losing their revenues in long
term.
In Europe there are 4500 marinas with 1,75 million berths
(www.europeanboatingindistry.eu). They are very attractive
for boat owners/ yachtsmen, and considering this fact they
should not have problems with raising the prices of their
berths, but they still need to do it very carefully thinking
about long-term effects of this increase. Therefore, future
research on shifting prices should be conducted in order to
follow the actual effects of this change on occupancy and
revenue per available berth. It is also suggested that total
revenue per available berth (TrevPAB) needs to be
considered because it will bring clearer picture on managers’
ability to be successful. TrevPAB apart from the price of
berth includes other marina revenues e.g. from parking,
maintenance of the boat, transfers, lodging if available,
revenues from renting, sub-concessions, permits and
approvals and other marina revenues excluding financial and
extraordinary revenues and shows actual results of managing
marina business. As this is the first research regarding the
price positioning and price fluctuation of marina business it
should be noted that the research in this area should be further
developed. We also suggest for further research that marinas
should be divided by chain affiliated or by size or even by
region, and that for long-term price positioning the period of
observation should be extended to at least 5 to 10 years.
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SUBMITTED: JUNE 2018
REVISION SUBMITTED: NOVEMBER 2018
ACCEPTED: FEBRUARY 2019
REFEREED ANONYMOUSLY
PUBLISHED ONLINE: 15 APRIL 2019
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... The nautical tourism sector is studied from three different perspectives according to its industry: the boarding of sailboats and motorboats owned, the rental of boats (charter) -and the cruise industry (Luković, 2012). All of them have experienced high growth over the last thirty years (Çakıroğlu, 2019;Vlasic et al., 2019), with the service activity of marinas closely associated with boat rentals and yacht owners (Luković, 2012). ), in such a way that the traditional yacht clubs (Chen et al., 2016) focus their activity towards yacht owners while the business of the new marinas is more oriented towards yacht charter tourism (Nowacki, 2015 ). ...
... Europe has a coastline of 68,000 km (European Environment Agency, 2020 1 ); with a total of 4.500 marinas, 1.75 million berths and 6.3 million yachts (Vlasic et al., 2019) with around 222.000 berths in France, 130.000 in Spain, as well as a similar number in Italy, 14.000 in Croatia and 9.000 in Greece (Chen et al., 2016) as the most prominent countries within the European Union. ...
... • Appropriate depth of water for the draft of sailboats, • sufficient land for dry boat storage, • repair services, • parking access, • complementary services There is no uniform definition of the characteristics and functions that a marina should have, despite the existence of international institutions and associations that regulate this activity, presenting the sector with a lack of unified criteria and procedures. In the same way, the works developed on this subject are scarce and present diverse approaches, most of them observed as case studies aimed at various topics such as user experience (Benevolo & Spinelli, 2021;Paker & Vural, 2016;Silveira & Santos, 2014), the sustainability of facilities and their integration into the environment (Andres et al., 2017;Yang, L et al., 2014), the application of new technologies (Maglić et al., 2021;Rafał et al., 2022), tourism capacity (Benevolo & Spinelli, 2021;Payeras et al., 2011;Vlasic et al., 2019) or the situation within the legal framework where they fit Škorić et al., 2012). ...
Chapter
In recent years, the development of nautical tourism has been experiencing growth in the area of the Mediterranean countries and the European Atlantic coast, being a tourism sector with a high potential for both spending and developing innovative products involving technological development. Nautical tourism focuses its operations on the network of leisure ports and marinas scattered along the coastline and inland in rivers and lakes, with a heterogeneous variety depending on the type, size, public or private management, the services provided to users, and their involvement with the tourism development of the area where it is located. Likewise, there is no uniform definition of the characteristics and functions that a marina should have, despite the existence of international institutions and associations that regulate this activity, presenting the sector with a lack of unified criteria and procedures. This work presents a Systematic Literature Review (SLR) with a selection of 60 studies and references from 2005 to August 2022 using the bases of World of Science and Scopus. Exploring the types of questionnaires and methodologies used in the sector of marinas with the aim of finding homogeneous directions of study facilitates analysis based on the use of advanced statistical methodologies and helps to understand this sector for future studies in this area.KeywordsSailing tourismMarina user satisfactionNautical tourism marketingTourism sustainabilitySystematic literature review (SLR)JEL ClassificationL83: SportsGamblingRestaurantsRecreationTourism
... Although consumers may benefit from reduced prices in the short term, prolonged price wars can diminish company profits and impair their ability to invest in innovation and enhance product quality. Firms must therefore thoroughly assess the risks and potential outcomes of engaging in a price war, weighing both the immediate and enduring effects of their pricing decisions (Heil & Helsen, 2001;Vlasic et al., 2019;Wu et al., 2020). ...
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... While consumers may initially enjoy the benefits of lower prices, prolonged price wars can negatively impact a company's profitability, hampering its ability to invest in innovation and product quality. Consequently, it is crucial for companies to thoroughly assess the implications and carefully consider both short-term and long-term consequences before engaging in a price war (Heil & Helsen, 2001;Hsieh & Vermeulen, 2014;Vlasic, Poldrugovac, & Jankovic, 2019;Wu et al., 2020). ...
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This study investigates how consumers make decisions when using online food delivery services in Thailand, with a particular focus on the price-related factors that influence their choices. The research adopts a mixed-method approach, combining quantitative and qualitative data collection and analysis. Quantitatively, data was gathered from 392 respondents through closed-ended questionnaires, and statistical analysis software was used, employing binary regression to explore the relationship between various independent variables (including gender, age, education, marital status, income, residence, experience, reasons, information sources, frequency, and expenses) and the price war strategy, which serves as the dependent variable. Qualitatively, in-depth interviews were conducted with ten purposively selected participants. The qualitative data were analyzed using content analysis and the NVivo software program. The study's results highlight the significant influence of income and information on the price-related decisions in Thailand's online food delivery market. Moreover, consumers in Thailand prioritize factors like price sensitivity, value perception, convenience, promotions, and cultural food preferences when selecting online food delivery services. This understanding is essential for businesses operating in this market to effectively meet consumer preferences and succeed in the competitive online food delivery industry.
... For example, when marine tourism ports (marinas) charge higher prices than competitors for renting docks, the number of applicants for renting them decreases. Of course, due to the high price compared to competitors, the revenue per docks increases [33]. The fact that some customers perceive higher prices as an indicator for superior products or services, by using pricing higher than the average price of competitors, companies can attract such customers. ...
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This article applies competition-based pricing method to a location-inventory-pricing problem, something which had not yet been investigated as of this study. It reveals that examining the three problems of location, inventory and pricing in an integrated and simultaneous manner can be the best approach to optimize the supply chain (SC) and increase the profitability of its companies. The investigated three-level SC distribution network model includes one supplier, several distribution centers (DCs), and several customers. The model is structured in form of a mixed integer nonlinear programming to maximize the long-term average profit of the distribution network. It considers constraints of inventory capacity along with continuous review inventory policy in each open DC. For its DCs’ retail price determination, two competing pricing approaches of higher than and lower than the average price of competitors have been used. The approach has been investigated on several potential DCs and customers and its numerical results show that retail price from the DCs to the customers is dependent on the average price of the market and its fluctuations. The major finding of this research is the fact that the type of demand function can have a substantial effect on the obtained results in the location-inventory-pricing model and greatly influence the amount of the profit of each company. Its applied strategy along with innovative competition-based pricing approach and projection of customers’ demand via linear and exponential functions show how companies can increase their profit through price adjustment and demand projection.
... The long coastline offers great opportunities for the development of sailing tourism. Europe has 4500 marinas with 1.75 million berths and a total boat park of 6.3 million vessels [12]. The nautical tourism sector in Europe creates 234,000 jobs and generates €28 billion in revenue each year. ...
... While spinoffs and mergers are mirror images of one another, both are mooted to create new shareholder value. In the case of mergers, benefits are said to accrue from scale or scope economies, or other forms of synergies between entities (Daley, Mehrotra & Sivakumar, 2007;Vassiliadis et al, 2013;Vlasic et al., 2019). By extension, for spinoffs, it would be assumed that these benefits are absent from the initial entity, or that any benefits that do exist do not compensate for the coordination costs involved in managing the diverse portfolio of businesses (Cusatis, Miles & Woolridge, 1993;Hubbard, Rice & Galvin, 2015;Priporas et al, 2018;Chatzigeorgiou et al., 2019;Nella, A., & Christou, 2021). ...
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Purpose: This case study examines Marriott Corporation’s large and successful spinoff between 1993 and 1995 and the concomitant adoption of a corporate ALFO strategy enabled by the transfer of assets and debt between the two entities. As an example of corporate restructuring, it involves changing ownership, operational structure, or business activities within a corporation in order to improve shareholder performance. Methods: Key directional changes in Marriott’s history that have changed the structure of the business is used to examine the spinoff and ALFO strategy adaptation. Results: Marriot have been characterised by a small number of significant and foresightful innovations. There was a great deal of importance attached to the company’s move away from food service and towards accommodation in the future. During the early stages of the company’s existence, the company was located near Marriott’s Bethesda headquarters and was headed by the founder’s oldest son. There is no doubt that these investments have been probing in nature in the recent past, but they are significant in terms of scale and commitment in the future. Implications: Marriott’s success can be attributed to the fact that the company has a flexible corporate strategy that focuses on high growth and high yield business opportunities, as well as the willingness to dispose of assets that don’t provide this outcome. As a result of this focus, the company was able to grow globally from the 1990s onwards. Ultimately, it can be said that the company’s success can be attributed to the fact that it has adapted appropriately and successfully to changing operational and industry realities over the course of many decades, especially as exigencies in the asset and debt markets rendered the portfolio structure it had developed over so many decades unsustainable.
... Most consumers make product purchases due to price [17], [18]. Setting product selling price competitively is such a product pricing strategy [19] [20]. This can be conducted by benchmarking against similar competitors. ...
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Background: Kunir Jalak business unit is part of UPJ Surya Boga belonging to the Catering Department at SMK Muhammadiyah 1 Moyudan, Sleman. This unit produces a powder drink made from turmeric, ginger, and temulawak. This drink is intended to maintain immunity, considering the covid 19 pandemic. The Kunir Jalak business unit is relatively new, so it still needs assistance to develop its business. This community service activity aims to assist in determining business development strategies so that the Kunir Jalak business unit can be more developed. Contribution: The impact of community service activities is shown by increasing partners’ empowerment in identifying strengths, weaknesses, opportunities, and threats (SWOT) for the Kunir Jalak business unit and determining the alternative business development strategy, which has never been done before. Method: The method used is Focus Group Discussion (FGD) to determine strengths, weaknesses, opportunities, and threats (SWOT) and determine business development strategies. Furthermore, the Analytical Hierarchy Process (AHP) approach determines strategic priorities. Results: AHP analysis shows three business development strategies with the highest priority, namely: Weakness-Treats-1 (WT-1), Strength-Treats-1 (ST-1), and Weakness-Opportunity-2 (WO-2). Conclusion: Following the objectives of the community service program, it means that the priority of business development strategies can be determined, which can be used as guidelines for developing the business unit of Kunir Jalak.
... Marketers, acknowledging the positive contribution of price in positioning a brand, argued that due to the competitive nature of some markets in the service industries, price is a favorable choice for positioning a brand for competitive advantage. The finding supports Vlasic, Poldrugovac, and Jankovic (2019) who argue that price positioning has favorable outcomes. Positioning based on pricing became useful for product differentiation, the data suggested. ...
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The study sought to determine the areas of congruence between firm and organizational buyers, and consequently develops a B2B service positioning strategy framework. With an interpretative phenomenology and purposive sampling, the study sampled and interviewed 35 participants from the banking, insurance and media industries. The data was analyzed using thematic analysis, and identified quality, price, network and relationships, competitiveness, service employees, and CSR as positioning strategies required in the B2B market for sustainable competitive advantage. The study makes a substantial contribution to the study of B2B positioning with the proposed B2B service positioning framework. The outcome of the study also informs the practice of marketing in general and B2B positioning strategy in particular.
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This study explores the effects of competitor pricing levels on relative revenue on a sample of over 4,000 hotels in Europe over a ten-year period (2004–2013). Hotels in this European sample, which included both independent and chain-affiliated properties, achieved higher revenue per available room (RevPAR) than direct competitors when they positioned their hotels with comparatively higher prices. These data revealed that regardless of the economic situation of the time period, hotels that positioned with average daily rates (ADRs) above those of their direct competitors benefited from higher relative RevPAR even though they experienced lower comparative occupancies. This finding was stronger for chain-affiliated hotels than for independent hotels. Maintaining a consistent relative price over time (as compared to having a fluctuating price) did not significantly affect revenue performance, controlling for hotel type and location. A further analysis of hotels in the Netherlands likewise found the same connection between relatively higher rates and revenue. As is the case with previous, similar studies, the findings argue for a firm, strategic approach to pricing, rather than a reactive or strictly tactical approach.
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Purpose – The objective of this exploratory study is to investigate the “flow-through” or relationship between top-line measures of hotel operating performance (occupancy, average daily rate and revenue per available room) and bottom-line measures of profitability (gross operating profit and net operating income), before and during the recent great recession. Design/methodology/approach – This study uses data provided by PKF Hospitality Research for the period from 2007-2009. A total of 714 hotels were analyzed and various top-line and bottom-line profitability changes were computed using both absolute levels and percentages. Multiple regression analysis was used to examine the relationship between top and bottom line measures, and to derive flow-through ratios. Findings – The results show that average daily rate (ADR) and occupancy are significantly and positively related to gross operating profit per available room (GOPPAR) and net operating income per available room (NOIPAR). The evidence indicates that ADR, rather than occupancy, appears to be the stronger predictor and better measure of RevPAR growth and bottom-line profitability. The correlations and explained variances are also higher than those reported in prior research. Flow-through ratios range between 1.83 and 1.91 for NOIPAR, and between 1.55 and 1.65 for GOPPAR, across all chain-scales. Research limitations/implications – Limitations of this study include the limited number of years in the study period, limited number of hotels in a competitive set, and self-selection of hotels by the researchers. Practical implications – While ADR and occupancy work in combination to drive profitability, the authors' study shows that ADR is the stronger predictor of profitability. Hotel managers can use flow-through ratios to make financial forecasts, or use them as inputs in valuation models, to forecast future profitability. Originality/value – This paper extends prior research on the relationship between top-line measures and bottom-line profitability and serves to inform lodging owners, operators and asset managers about flow-through ratios, and how these ratios impact hotel profitability.