Chapter 5 managing marketing for mice industry


Published on

Published in: Business, Travel
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Chapter 5 managing marketing for mice industry

  1. 1. Chapter 5 Managing the Market for MICE industry E-mail: 081-082- 1 . 081-082-7273
  2. 2. Objectives 1. understand the contemporary Thailand marketing environment in which MICE industry professionals must operate 2. identify customer needs inherent to both corporate and association conference organisers in choosing a MICE destination or venue 3. determine how market segmentation, product positioning and product differentiation apply to the marketing efforts of various service providers within the Australian MICE industry 4. understand the overall marketing relationship and orientation of primary and secondary service providers to identified level I and level II decision makers 5. appreciate how the issues of business objectives, capacity and demand, price and marketing mix apply to select primary and secondary service providers in the Thailand MICE industry 6. evaluate how relationship marketing can be conducted between select service providers and MICE decision makers 2
  3. 3. Outlines 1. Marketing the business travel and tourism product 2. The current market environment 3. Characteristic of Marketing 4. Marketing fundamentals; application for MICE industries 5. The stakeholders: a marketing perspective 6. Relationship Marketing as it applies to the MICE industry 7. Destination marketing 8. The marketing action plan & sales 9. 3
  4. 4. Introduction • This chapter discusses contemporary services marketing issues as they relate to the convention and meetings industry in Thailand. It assumes that students will have an understanding of marketing principles as they apply to service industries. • Factors affecting the current conventions and meetings marketing environment are outlined. The interface between the major stakeholders, their potential customers and the marketing distribution system is examined, including the methods by which the main providers of the MICE service or product market their activities to the key convention or meeting decision - makers. • Finally the chapter explores the concept of relationship marketing as it relates to the convention and meeting industry organisations. 4
  5. 5. What is Marketing? “ Marketing is that function of event management that can help keep in touch with the event’s participants and visitors (consumers), read their needs and motivations, develop products that meet these needs, and build a communication program which express the event’s purpose and objectives 5
  6. 6. 1. Marketing the business travel and tourism product 6
  7. 7. Marketing the business travel and tourism product • Marketing in business travel and tourism is a complex matter reflecting the diverse nature of the industry. industry. 7
  8. 8. 2. The current market environment 8
  9. 9. The current market environment • Primary MICE industry service providers (Stakeholders) in Thailand, such as five-star hotels, resort, CVBs, and purpose-built convention and exhibition centers have faced increase completion. • MICE events, large and small, are being booked in shorter lead times (i.e. within 2 weeks). This may be due somewhat to technological advances such as greater use of e-mail and Internet. 9
  10. 10. The current market environment • The use of advance technology offers both benefits and many pitfalls for marketers. On the one hand, such accessible technology is facilitating the dissemination of product information more effectively and easily. • Customers are becoming more conscious of their product and service options in purchasing a venue and site. 10
  11. 11. The current market environment • Talking about these issues influencing the MICE industries, e.g. 1. “Political policies & commitment made by the Political”: Political government resulting the MICE business strengthening; other confidential indices e.g. safety, investment, etc. 2.“Economic environment MICE industries generally Economic environment”: relate to the levels of industrial development & the well beings of the people at local, national, regional & international levels. 11
  12. 12. The current market environment 3 “Societal issues norms, psychographics or lifestyle-related Societal issues”: attributes, environmental awareness and other societal issues have influenced the ways of MICE industries operations & marketing 4. “Legal or regulatory issues Legal issues”:regulatory implications might include; immigration practices, tax or vat applications, local legal and other relevant regulatory that MICE operators are to follow. 12
  13. 13. 3. Characteristics of marketing 13
  14. 14. Characteristics of marketing 14
  15. 15. Characteristics of marketing (cont.) 15
  16. 16. 4. Marketing fundamentals; application for MICE industries 16
  17. 17. Marketing fundamentals; application for MICE industries 1. Market segmentation 2. Product & service positioning 3. Product differentiation 4. Product features & benefits 5. The marketing mix 6. Promotional or communication channels 17
  18. 18. 1. Market segmentation • Market segmentation involves grouping potential customers within a market in such a way that their response to the service provider's marketing efforts will be about the same. 18
  19. 19. 1. Market segmentation • The MICE industry is segmented in to 1. Meetings (Small and Large) 2. Incentive Groups 3. Convention Groups 4. Product Lunches (Exhibitions) 19
  20. 20. 1. Market segmentation • This has been evident in the marketing collateral material produced, with one piece of conference information, or one F&B price lists, provided for all SEGMENT. • For example, – Incentive customers are being “REWARDED for their REWARDED” REWARDED productivity within their organization. And they generally purchase up-market or five-star products. up- five- – Convention are a different market segment and have different need. They have more need of large and small meeting spaces, hold exhibitions and trade displays and undertake fewer social activities. 20
  21. 21. 2. Product & service positioning • Product positioning involves the development of an appropriate marketing orientation, or service and marketing mix, to occupy a specific place in the mind of customers within the market segments targeted. 21
  22. 22. 3. Product differentiation • Product positioning is tired closely with product differentiation. Service providers to the MICE industry strive not only to meet the needs of select target market segments, but also to appear “DIFFERENT from DIFFERENT” DIFFERENT their competitors in positioning strategies. 22
  23. 23. 4. Product features & benefits • Is knowing its product or service, knowing it well and approaching it from the correct perspective. A correct perspective involves a clear understanding of the product or service features and the resulting customers benefits. 23
  24. 24. Example of Product features & benefits PRODUCT FEATURE CUSTOMER BENEFIT Fast, quality and Four separate kitchens consistent service for large group Affordable accommodation Located next to TWO hotels with convenient access for convention delegates Located on scenic waterway Memorable and relaxing social activities Professional and experienced No hassles with clients staff coordination 24 hrs a day 24
  25. 25. 5. The marketing mix and business tourism • The marketing mix consists of those variables which are controllable or heavily influenced by an organization. They are divided into the 4 Ps, 1. product, 2. price, 3. place and 4. promotion 25
  26. 26. The marketing mix (4Ps) PRODUCT PRICE Event venue Cost of ticket Quality of food Cost of travel Quality of entertainment Time taken to travel Cleanliness of venue Other inconvenience MARKETING MIX PROMOTION PLACE Adverting Ticket sellers Public relation Tour wholesalers Sales promotion Tourist information center venue 26
  27. 27. 1 - Product • The diversity of business travel and tourism makes it difficult to generalize about the nature of the product. • The business tourism product does, however share certain characteristics with the leisure tourism product. These are illustrated in Figure 27
  28. 28. 28
  29. 29. 29
  30. 30. 1 - Product • Like leisure tourism it could also be argued that business travel and tourism is not a • product, but rather an experience. The nature of this experience will reflect, for example: 1. the elements of the product 2. the ambience of the destination and the venue 3. the personality and experience of the business traveller. 30
  31. 31. 2 - Price • The value consumers place on the event experience and are prepared to pay. • This value determined by the strength of the need the leisure experience satisfies and alternative leisure experience offered by other events and other leisure service providers. 31
  32. 32. 3 - Place • Place or distribution is concerned with how business travellers or tourists actually purchase the products they need. There are several dimensions to this: 1. Customers can buy whole packages such as an incentive travel package or individual elements such as air tickets, venues and accommodation. 2. Customers can purchase products directly or make use of the services of specialist intermediaries 32
  33. 33. 4 - Promotion • To many people, promotion is synonymous with marketing; it is the visual face of marketing. However, promotion is simply one element of the marketing mix, fulfilling the function of making potential customers want to purchase a particular product. Figure shows the different methods of promotion. 33
  34. 34. 34
  35. 35. How the Marketing mix fits in context of event organization The Event Customer The Marketing Mix (Product, Price, Place, Promotion) Organization’ Event Organization’s resources The Event Environment 1. Venue 1. Demographic 2. Plant and Equipment 2. Competitive 3. Staff 3. Political 4. Image and 4. Economic 5. Reputation of Event 5. Physical 6. Financial resources 6. Technological 7. Creative talent 7. Social/culture 35
  36. 36. 6. Promotional or communication channels • Now all that is necessary is to communicate those benefits successfully to the target customers or decision makers – Professional marketer can communicate benefits through a range of communication channels: 1. Collateral material 2. Advertising 3. Publicity and Public relations 4. Direct marketing 5. Direct Sales 6. Sales Promotion 36
  37. 37. 5. The stakeholders: a marketing perspective 37
  38. 38. The stakeholders: a marketing perspective 1. Overview of the distribution system 2. Level one: decision makers 3. Level two: decision makers 4. Primary service providers 5. Secondary service providers 38
  39. 39. Overview of the distribution system Secondary Cooperative Primary - airlines - CVBs - tourist bureaus - purpose-built convention activities - wholesaler travel & exhibition centers companies - hotels - ancillary service - resorts providers Service Providers Venue/destination decision maker Marketing Marketing PCOs Level II - retail travel companies Level II orientation - incentive houses orientation Marketing Consumers/end users Marketing Level I - companies Level I orientation - associations orientation - individuals & groups 39
  40. 40. Level one: Decision makers • Level one decision makers are an end user of MICE products and services; they generally are divided into: 1. “Associations”; may be small and local; national and Associations” international 2. “Companies”; profit-oriented organizations who might Companies” prefer to organizer either internal, external or in/external activities 3. “Individuals & groups”; e.g. wedding, group parties, groups” etc. 40
  41. 41. Level two: Decision makers • Those who have been authorized or contacted by the level one decision makers in arranging & managing MICE events, there are: 1. Professional Conference or Congress Organizers or PCOs 2. Retail travel operations 3. Incentive houses; are companies whose business objectives is to increase productivity from their client’s employees through a variety of motivational and other reward measures 41
  42. 42. Primary service providers • Hotels & resorts offering MICE facilities & services • Convention & visitors bureaus; trying to provide “one-stop-service” including: – The price & availability of venues – The arrangement of site inspection – The preparation of bid documentation – Special events & theme ideas – Pre- and post-event tour options • Purpose-built convention & exhibition centers 42
  43. 43. Secondary service providers • Airlines, e.g. the campaign of Star Alliance’ s MICE Promotions • Tourist bureaus, e.g. TAT • Wholesale travel operations • Ancillary service providers; they provide tours and transportation, tour escorts and guides, sporting activities, theme parties, flowers, speakers, entertainments, AV equipment and all parts of that go together to make up the whole event 43
  44. 44. 6. Relationship marketing & applications in MICE industries 44
  45. 45. Relationship marketing & applications in MICE industries • It is an important for primary service providers to target their marketing efforts effectively toward those decision makers deemed to return the highest benefits. • Therefore, the focus is on building good relationships, which will in turn generate profitable transactions. 45
  46. 46. Relationship marketing & applications in MICE industries • Five different levels of marketing relationships that can be applied to the MICE industries (Kotler, 1996) 1. “Basic”; the service provider sells the service & product Basic” but does not conduct any post-sales follow-up with the customer 2. “Reactive”; the service provider provides products & Reactive” services and encourages the customer to call if they have any questions 3. “Accountable”; the service provider follows up after the Accountable” sale to solicit service delivery and product quality feedback 46
  47. 47. Relationship marketing & applications in MICE industries 4. “Pro-active”; the service provider follows up with Pro-active” the customer on a regular basis to obtain consistent product or service feedback 5. “Partnership”; the service provider works Partnership” continuously with the customer and with other customers to discover ways to deliver better value 47
  48. 48. 7. Destination marketing 48
  49. 49. Destination marketing • Is a strategy that is particularly utilized by service providers in the MICE industry • Destination can be defined as places with some form of actual or perceived boundaries, physical, political or market-created; e.g. entire country, region, province, island, etc. • To create customer or decision maker’s mind a single image or brand awareness of destination • Figure out competitive advantages; e.g. natural resources, industry professional, capital & infrastructure, etc. 49
  50. 50. 8. The marketing action plan 50
  51. 51. The marketing action plan Steps in developing the marketing action plan include: 1. Conduct situation or SWOT analysis 2. Product destination factor endowment profile/feature and benefit analysis 3. Select target & segment (level I & II decision makers) 4. Conduct market research 5. Produce positioning and marketing mix strategies 6. Design market & sales action plan 51
  52. 52. 9. 52
  53. 53. Meetings & Incentives 1. 2. – – 3. • • • 53
  54. 54. Conventions 1. 2. 3. 4. PCO 54
  55. 55. Exhibitions 1. 2. 3. 4. 55
  56. 56. Summary • Marketing in the MICE industry has increased in importance over the last two decades as the industry has developed. MICE service providers face increased competition at a time when customer expectations and product knowledge are increasing. • All MICE customers are not alike, and to market effectively, service providers need to aware of the distinct differences that exist between the market segments and to understand the specific needs of each of these market segments. 56
  57. 57. Summary • Once MICE service providers have chosen which market segments they wish to target, they must position their product accordingly. To be successful, they also need to differentiate their product from the competition. • The stakeholders in the MICE industry are many and varied, so marketing efforts need to be highly focused and directed. Two levels of decision makers can be identified, to whom primary and secondary service providers directs their marketing efforts. 57