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  • 1. Chapter 3 Tourism MarketingIt’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc.John Walker publishing as Pearson [imprint]
  • 2. Objectives• After reading and studying this chapter, you should be able to: – Describe the steps in the marketing system • Explain why marketing is important for companies in the tourism industry – Explain the role of a market situation analysis • Name four aspects of the SWOT analysis and how they can be used for strategic planning It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 3. Objectives (cont’d.)– Identify steps in the marketing segmentation process– Name and describe tourism marketing Ps– Outline significant trends in tourism marketing– Explain how sales are conducted and managed in the tourism business It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 4. Introduction• Marketing – Critically important to success of tourism organizations – All about tourists’ needs and wants • Providing them at a reasonable cost and profit – Begins with a philosophy, vision, and mission statement It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 5. Introduction (cont’d.)• Creating great tourist experiences – Means finding a product or service that a number of people need or want• Many people believe marketing is the same as sales – Sales is one of the tools of marketing used to promote and build business It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 6. Introduction (cont’d.)• Marketing orientation – Philosophy of understanding what tourists want and need – Developing products and services that best meet their needs – Communicating with them to generate awareness, interest, and purchases It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 7. Introduction (cont’d.)• Sales orientation – A company develops products and services that it thinks tourists would like and then sells the services • Marketing orientation listens to tourists – Ensures tourists will like and buy products • Sales orientation dictates to tourists It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 8. The Marketing System• Businesses market on a continual basis – Systematic and continuing activity – Must be constantly involved in all steps of the purchase process • Offering different products and services meaningful and relevant ways It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 9. The Marketing System (cont’d.) Figure 3–1 • The Marketing System It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 10. Importance of Marketing• Marketing is about: – Attracting the right tourists – Delivering superior service quality and value – Exceeding tourist expectations – Establishing a relationship that ensures continuous loyalty It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 11. Importance of Marketing (cont’d.)• Tourist loyalty – Very important concept in tourism • Measured in several ways – Loyal tourists: • Use/visit the same place/business more frequently • Spend more there • Recommend the business to others • All decisions and actions should improve tourist service It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 12. Importance of Marketing (cont’d.) • Tourists pay salaries of tourism employees – The tourist is really our boss • We should look at things through tourists’ eyes • Leading tourism corporations have a strong marketing orientation – Philosophy of providing value and exceptional service for tourists It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 13. Importance of Marketing (cont’d.)• Marketing is important for any business that wishes to sell a product or service – A way to find out what tourists want – Informs of an available product and encourages use – Explains product advantages and distinct characteristics – Makes it easier to exchange products, services, and money It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 14. Tourism’s Unique Product• Tourism product – Perishable • Cannot be stored for later sale at a later date – Intangible • Destination cannot be experienced until arrival – Variable • Heavy human element • Service quality and output are subject to extreme variability It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 15. Strategic Planning• Sound strategy starts with sound research – Successful tourism entities continually scan for: • New market opportunities • Emerging threats • Internal and competitive environments It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 16. Strategic Planning (cont’d.)• Market situation analysis is composed of the: – Industry in which business is conducted – Macroenvironmental factors (e.g., sociocultural, economic, and technological, and political-legal) – Competition – Internal business environment It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 17. Market Situation Analysis• SWOT analysis – Strengths and weaknesses • Factors within the organization • Positive impacts • May be controlled internally – Opportunities and threats • External factors • Negative impacts • Out of ownership/management’s control It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 18. Situation Analysis (cont’d.)Figure 3–2 • Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 19. Situation Analysis (cont’d.)• Strengths – Positive internal characteristics of the entity (e.g., good employees)• Weaknesses – Within the control of the ownership/management • Typically, organizations evaluate a list of factors on an internal and competitive basis It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 20. Situation Analysis (cont’d.)• Opportunities – Positive possibilities • Originate in outside environment (e.g., strong economy)• Threats – Negative factors in the outside environment • Out of the management’s control (e.g., high gas prices) It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 21. Situation Analysis (cont’d.)• Competitive analysis – Done utilizing information from strengths and weaknesses of SWOT analysis • More detailed analysis of key competitors • Leads to an action plan of how to increase market share• Market potential – Estimation of potential market • Total available demand It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 22. Marketing in a Recession• More complex due to shrinking markets – Generalization: people will take shorter, less costly vacations to destinations closer to home – Solution: offer greater value for the money (e.g., airline promotion packages, destinations pairing packages) It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 23. Marketing Segmentation• Process of market segmentation – Market is divided into different groups with similar characteristics – Tourism entity creates a profile of each segment – Entity analyzes which segments it should target based on size, profit potential, accessibility, and desire of each group It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 24. Segmentation (cont’d.)• Geographic segmentation – Focuses on segmenting the market based on where people live or are from • Often done by zip code• Demographic segmentation – Market is sliced into groups of people who exhibit similar demographic characteristics (e.g., age, income, gender, ethnicity, and educational) It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 25. Segmentation (cont’d.)• Psychographic segmentation – Focuses on attitudes of tourists in terms of social values and lifestyles (e.g., attitude towards technology)• Behavioral segmentation – Slices market into groups of people with similar consumption behavior (e.g., regular versus first-time visitors, or special occasion versus get away) It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 26. Targeting• Identifying target markets – Segments are reviewed regarding attractiveness in terms of size and value • People who are visiting friends and family, domestic and international • Leisure travelers, domestic and international • Business travelers, domestic and international • Group tours travelers, domestic and international It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 27. Positioning• Market positioning – Most look to position product in tourists minds ahead of the competition • Better than the competition • Different from the competition • Opposite of the competition – Creating an image for the product that will make people desire it and hopefully buy it It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 28. Brands and Brand Marketing• Most important considerations when developing a brand: – It must be easy to remember – It must have a positive connotation – It must be graphically shaped in a way that it can be easily recognized on different kinds of packages and in different sizes It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 29. Brands (cont’d.)– It should look good in color and black and white– It must be easily seen so that it will catch tourists’ eyes wherever it is– It must be usable, positive, and inoffensive It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 30. Marketing Management• Professor Neil Borden: six elements – Product, price, place, promotion, servicing, and marketing research• McCarthy: reduced to four elements (four Ps) – Product, price, place (distribution), and promotion • Additional Ps were added: process, physical attributes, and people It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 31. Marketing Management (cont’d.)• Product – Items sold by companies in the tourism and hospitality industries • Services • Tourism destinations – Tourist expectations are central It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 32. Marketing Management (cont’d.)• Product life cycle – Introduction • Destination becomes readily accessible – Growth • Destination grows in popularity It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 33. Marketing Management (cont’d.) – Maturity • Number of tourists levels off and growth and market share flatten – Decline • Number of tourists visiting a destination declines as well as use of the tourism- related businesses It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 34. Marketing Management (cont’d.) Figure 3–4 • A Destination’s Product Life Cycle It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 35. Marketing Management (cont’d.)• Methods for pricing – Cost-plus pricing • Company calculates fixed and variable costs for one unit of the product and desired profit is added – Price-floor pricing • Used when demand is low • Some products are sold lower than target price It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 36. Marketing Management (cont’d.) – Demand-based pricing • Based on demand and not production costs – Penetration pricing • Low price is charged from the beginning – Trial pricing • Low initial price is raised after trial period – Parity pricing or price matching • Follows competitors pricing It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 37. Marketing Management (cont’d.) – Value pricing • Focuses on how much tourists value the product – Negotiated pricing • Price is open for negotiation – Quantity pricing • Discounts are given for large orders It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 38. Marketing Management (cont’d.) – Cash and seasonal discounts – Two-part pricing • Two components of the total price – Pricing by priority • Those who pay the most have first priority – Price bundling • Products are sold as a package It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 39. Marketing Management (cont’d.) • Place/location/distribution – Availability in traditional marketing means the market can access the product • In tourism, place is often discussed as location • Promotion – Several ways of promoting • The best way depends on the product, target market, and other factors It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 40. Marketing Management (cont’d.) Figure 3–5 • The Distribution System for Tourism It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 41. Marketing Management (cont’d.) Figure 3–6 • The Effect That Promotion Has on the Buying Process It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 42. Marketing Management (cont’d.) • Frequently used tools for promotion: – Sales promotion – Advertising – Magazines – Personal selling – Public relations – Direct mail and e-mail – Websites, television, and radio It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 43. Understanding Markets• Successful marketers understand differences and need for proper research – A product may be the best available, or give the the best value • No guarantee tourists will buy it – A product popular in one area may not raise much interest in another • People have different interests and preferences It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 44. Markets (cont’d.)• Destination marketing – Business of marketing a country, state, or city is still marketing – Basic principles of creating value still apply • Product: features of the destination • Price: total cost to the target market • Place: may refer to accessibility • Promotion: value for the money – Use of marketing tools It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 45. Marketing Action Plan• Extension of how each tool will be used to construct a strategy to achieve goals – Who the competitors are – How the entity fares in the marketplace – In the case of a new entity, how it can be expected to fare in comparison to the competition It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 46. Marketing Action Plan (cont’d.)• Once the target market is identified: – An entity can decide what is to be accomplished by marketing – Next, the questions flow • Action plan provides answers It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 47. Marketing Action Plan (cont’d.)• Outline for a marketing action plan: – Overall marketing objective – Target market description – Strategic actions • Product • Price • Promotion It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 48. Marketing Action Plan (cont’d.)• Marketing plan sections: – Executive Summary – Corporate Connection – Positioning Statement – Environmental Analysis and Forecasting – Segmentation and Targeting – Next Year’s Goals It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 49. Marketing Action Plan (cont’d.) – Action Plans: Strategies and Tactics – Resources Needed to Support Strategies and Meet Goals – Marketing Control – Presenting and Selling the Plan – Preparing for the Future It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 50. Sales• Marketing focuses on the tourist• Sales focuses on the product or service – Sales department is responsible for making sales to tourists in the target market • Increases market share – Sales team may be split up according to various target markets • Maintains account files with follow-up ticklers It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 51. Trends in Tourism Marketing• Important trends: – Likely be a strong potential for growth in terms of tourism marketing • Consequence of pent up demand for tourism resulting from the economic downturn – Tourism and hospitality market is becoming increasingly more global • Issues such as cultural diversity and ethical responsibility become more important It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]
  • 52. Trends (cont’d.)– More tourism entities are realizing the true importance of retaining tourists • Companies are marketing heavily to current and previous tourists– There will continue to be tremendous growth in marketing and sales over the Internet It’s Tourism: Concepts and Practices Copyright ©2011 by Pearson Education, Inc. John Walker publishing as Pearson [imprint]

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