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- 2. • Marketing consists of all those activities necessary to bring a product or service from the manufacturer to the end user. • The product or service itself; • The methods of distribution; • The methods of pricing; • The methods of promotion; • The form of selling; and • The form of advertising. In relation to tourism, marketing is the systematic process by which an organization tries to maximize the satisfaction of tourist demand through research, forecasting, and the selection of tourism products and services to meet that demand.
- 3. Uniqueness of Tourism Marketing • Tourism is a service.* Because it is a service, production and consumption take place at the same time. • Tourism supply cannot be stored. Airline seats, hotel rooms, or restaurant seats not sold today lose that particular sale forever. • The service provided is usually composed of several components such as transportation, lodging, food & beverage, attractions, activities, and the like. • Tourism product is that travel intermediaries are a necessity. • Tourism is that the demand is highly elastic, seasonal in character, and subject to changes in taste & fashion.
- 4. Marketing Orientation • A product orientation emphasizes the products or services that are available. • It may be successful if there is a surplus of demand over supply. Thus, the destination which offers the best product will get the tourist. • The old adage that reflects this is “build a better mousetrap, and the world will beat a path to your door.” • When there is more supply than demand, the consumer orientation is used. • Consumer orientation places the needs and wants of the tourist foremost in the mind of the marketer who seeks to provide a product or service that will satisfy those needs and wants. • The social-marketing approach or social orientation which focuses on the satisfaction of tourist needs & wants while respecting the long-term interests of the community.
- 5. Marketing Segmentation • Market segmentation is a universally accepted way of analyzing demand. It is the grouping together of people with similar needs and wants for the purpose of serving the market better. • 4 criteria that have been developed by which a market segment can be constructed: 1. Socioeconomic segmentation – are the most commonly used at present due to the ease of collecting data, the comparability of such information through census, as well as media data, and the fact that such data is easy to understand and apply. 2. Product-Related segmentation – the information gained is directly related to the particular product in question. 3. Psychographic segmentation – it can be used in highly- specialized and extensively developed markets to supplement the information gained from simpler analysis. 4. Geographic segmentation – it is used to identify primary, secondary, and in some cases, tertiary markets.
- 6. Socioeconomic and Demographic Variables Age Education Sex Income Family Size Family Life Cycle Social class Home ownership Occupation Race/Ethnic Group Second home ownership Product-Related Variables Recreation activity Brand Loyalty Equipment Type Volume usage Benefit expectations Length of stay Transportation mode Experience preferences Participation patterns Psychographic Variables Personality traits Lifestyle Attitudes, interests, opinions Motivations Geographic Variables Region Market Area Urban, suburban, rural City size Population density
- 7. Product Life Cycle • The concept of the product life cycle is useful to the markets as an additional guide on what strategies should be used in choosing, attracting, and serving target markets. • It suggests that a product, service, or destination moves through distinct stages. INTRODUCTION GROWTH MATURITY SATURATION DECLINE PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5
- 8. INTRODUCTION • This phase requires high promotional expenses & visibility. • Operation in this period is characterized by high cost, low sales volume, and an advertising program which aims to encourage primary demand. GROWTH • The product or service is accepted by consumers. • Market acceptance means that both sales & profits increase rapidly, making the market attractive to competitors. MATURITY • The mature product is well- established in the market place. • Sales increase but at a slower rate. SATURATION • Sales volume reaches its peak. • The product or service has penetrated the market place to its highest degree. DECLINE • Advertising expenses are lower. • There are few competitors.
- 9. Strategic Marketing Process • 3 elements: 1. Market Planning; 2. Target Market Selection; and 3. The Marketing Mix Selection.
- 10. 1. Marketing Planning Process • 7 steps in the marketing planning process: 1. Collection of data – data can be collected in two ways: secondary sources and from primary sources. 2. Analysis of data – data is usually organizes and interpreted. This requires a great amount of skill and understanding. 3. Identification of alternative strategies for reaching the desired goal – in most cases, there are several ways to arrive at a desired goal. 4. Cost-benefit analysis - is a systematic approach to estimating the strengths and weaknesses of alternatives used to determine options which provide the best approach to achieving benefits while preserving savings. 5. Selecting alternatives and plan formation – after the variables and cost-benefit for each are identified, it is then decided which one should be carried out by the other organizations. A plan of action, including the responsibilities of the members of the organization, can then be established. 6. Control procedures – these are methods which analyze the progress made in achieving the goals of the project. 7. Plan information – putting into effect the plan of action and supervising it.
- 11. 2. Target Markets • 4 steps in identifying target markets: 1. Estimate the approval of an area’s attractions. This includes the degree of interest of the tourist on the area and the length of time the tourist will spend visiting it. 2. Estimate the distance in both travel time and travel cost. 3. Identify the potential target markets geographically by locating the population clusters within the maximum distance determined from the estimated travel time and lure of the attraction. 4. Identify the actual and potential competition in the target market.
- 12. Behavioral Characteristics of Target Market • The behavioral characteristics of potential travelers is very important in identifying target markets. • Once the target markets have been defined, the segments must be studied to know why these people travel to a specific location. • Research can determine the behavioral target markets that would be best suited for the particular product and match the attractions with those who are most likely to enjoy them and let the tourists know their existence through promotion.
- 13. Selecting a Marketing Strategy • 6 steps in determining a marketing strategy: • 1. Identifying the market segment; • 2. Determining the preferences of the market segment; • 3. Determining what influences the segment most; • 4. Realizing the importance of two clients – the traveler & the travel intermediary; • 5. Determining the marketing mix that will influence the segment identified; • 6. Establishing a price policy that will maximize profits by balancing the number of tourists with the capacity of the attraction.
- 14. 3. Marketing Mix • The marketing mix is the combination of elements – product, price, promotion and distribution that interact and complement each other to attain the objectives of the marketing plan. 1. Product a vacation consists of several parts or products such as transportation, accommodation, food & beverage, sightseeing, entertainment, and souvenirs. Criteria that should be met in deciding to provide a product or service. First, there should be a heavy demand for the product or service from at least one important segment with the possibility of additional business from other segments of the market. Second, new products & services should suit the general image of the destination area and complement existing ones. Third, new products & services should be offered in accordance with available supply od manpower, money & natural resources. Forth, any added product or service should contribute to the profit and/or growth of the entire destination.
- 15. 2. Price Price is the result of supply and demand. When supply exceeds demand, price tends to decrease. When demand exceeds supply, price tends to increase. Price is influenced by competition. If products & services of an agency are similar to those of its competitors, its price will be similar to theirs. Price is also related to the needs of the market segment that is served. If a destination is perceived by the members of the market segment as serving their needs & wants, they will be willing to pay a higher price.
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Editor's Notes
- #3: Although the theories and methods of marketing tourism are the same as those of other products, there are some unique qualities. Tourism is a service…. An intangible experience is being sold, not a physical good that can be inspected before it is bought. For example, a consumer does not buy a bed or a beach, but buys a night’s lodging in a hotel at the seashore. Same time…. In manufacturing, goods are produced, stored, sold, shipped, and delivered. The inventory for tourism is a seat on a plane, a hotel room, a nice beach, or a beautiful or an excellent place for scuba diving. Unlike manufactured goods, it the inventory is not sold, it is not sold forever. Manufactured goods can be stored, and while sometimes perishable. They generally are not lost if not sold on a given day. Stored…. Unlike a can of food which, if not sold one day, can be sold the next day. Forever…. This means that market forecasting and research are extremely important. Producers should effectively plan the proper amount of facilities and after developing them, use them as completely as possible. A second significant characteristic of tourism is that ….. The like…….. The degree of success of any one component influences the success of the other components. Travelers who have a poor experience on an airline to a particular destination may choose a different airline next time or suggest friends and relatives that the trip was not worthwhile or the destination is not worth visiting. A necessity……. Bcos most tourist services are located far from their potential customers, specialized intermediaries or organizations are necessary to bridge the gap between the producer and the tourist. Ex. Travel agencies, tour operator, travel agent, booking agent, reservation agent, retailers ***intermediaries - a person who acts as a link between people in order to try to bring about an agreement or reconciliation; a mediator. And fashion…. There are a number of options available to consumers to satisfy a wide variety of tastes. Sun, sea, and sand, for example, can be found in many places around the world. They offer many choices to the prospective traveler.
- #4: Before embarking on a program to market tourism in general or a specific tourism product or service in particular, it is necessary to develop a philosophy or orientation to guide one’s marketing efforts. Some destination areas have marketing efforts that are guided by product orientation. **adage -a proverb or short statement expressing a general truth. Wants…. It involves serving breakfast when the tourist wants it rather than when it is convenient for management, as well as providing an experience tourists need and want rather than what the marketer feels they should need and want. Consumer orientation satisfies the needs of the buyer. Community….. All marketing activities will be guided by the philosophy of those responsible for the marketing campaign. It is essential that any marketing effort has an agreed-upon philosophy to guide the further development and marketing efforts of any destination. A type of orientation that satisfies the needs of the community.
- #8: INTRODUCTIOM ----- Visibility… The most opportune time to advertise a product or service is when it is new. SATURATION ------ degree…. Mass production lowered the price to make it available to everyone.
- #10: Primary method – expensive & time – consuming while secondary method usually ask the help of other organizations or people who are experts in it. -- For example, an airline company wanting to increase its percentage of occupied seats may adopt several alternatives. First, it can create a special fare with certain restrictions such as the seven-day advance buying. Second, it can create a special fare best on age such as discounted fare for those below 21 yrs of age. Third, special contracts fro surplus seats may be arrange with groups.
- #11: For example, a 3-day festival would be more important than a 1-day festival. A Disney-type theme park would create more interest than a crocodile farm. The greater the attraction, the longer the distance potential tourists will travel.
- #12: People travel for different reasons. Some people are interested in historical or cultural activities such as museums and monuments; Others prefer sports events or entertainment, While still others prefer the sun, sea, and sand.
- #13: 3. Price, product, image, sales persuasion, customer service, product availability, among others. 4. Travel agents or tour operators
- #14: Souvenirs…. Each provider is interdependent upon the others to offer an attractive and satisfying vacation experience.
- #15: Increase….. For example, higher prices are charged during the peak season (demand is high; supply is low). While lower prices are changed during off-season (demand is low; supply is high). Price…… The remaining two elements of the marketing mix which are promotion and distribution will be discussed in the next two chapters.