The document discusses marketing and managing travel demand. It covers several topics: 1. It outlines the key characteristics of services like inseparability and perishability that distinguish them from goods. This impacts how marketing is applied. 2. It describes the determinants of travel demand including economic, demographic, geographic, and socio-cultural factors. Seasonality, interdependence of products, and high fixed costs also influence tourism services. 3. Marketing practices in the travel industry must respond to the unique characteristics of services and demands. This includes managing demand and customer behavior daily to optimize sales and minimize risks from seasonality and perishability.

1. Marketing and Managing Travel Demand
Chapter 7

2. Liberty
Name Roll
Khadiza Noor 55
Zakia Shabnam Maria 27
Aaqib Md. Shatil 87
Cynthia Islam 101
Poly Talukder 47

3.  Until 1970s the significance of service industries
and service marketing was largely ignored
 Employment in service sector is rising rapidly in
the last half of twentieth century
 Large-scale commercial service operations shifted
the emphasis from marketing studies to service
 In 1980s major transnational service corporations
helped to shrink the globe with their global brands

4.  Production and sale of purpose designed
repeatable, quality controlled products
Typically branded with the producer’s name and
bearing standard prices
Products available at many places
Continuous production and availability, mostly on a
daily basis
Most marketing undertaken by head offices, which
control and direct the activities

5.  Services are performed, goods are produced
 Services are products purchased through an
exchange transaction that does not confer
ownership but permits access to and use of a
service, and goods are products purchased through
an exchange transaction conferring ownership of a
physical item that may be used or consumed at the
owner’s choice of time and place
Service products may be summarized as
1. Inseparability
2. Perishability

6.  Inseparability
Inseparability means that the act of production and
consumption is simultaneous. The performance of
the service requires the active participation of the
producer and the customer together.
 Perishability
Perishability can be explained this way, that if
service capacity of products are not sold on a
particular day, the potential revenue they represent
is lost and cannot be recovered

7.  Inseparability
Inseparability means that the act of production and
consumption is simultaneous. The performance of
the service requires the active participation of the
producer and the customer together.
 Perishability
Perishability can be explained this way, that if
service capacity of products are not sold on a
particular day, the potential revenue they represent
is lost and cannot be recovered

8. No Possibility of creating and holding
stocks
 Because of the characteristics of “Inseparability” and
“Perishability” it's not possible for service producers to create
a stock of products to satisfy daily fluctuations in demand.
 The process of stock creation and physical distribution
between factories, warehouses and retailers stability and
continuity in the production process is not available to
service producers.
 However, inventory systems for services can be created. In
1980, service marketing refined systems which made it
possible to retain details of each year's production capacity in
a computerized inventory and then to treat the inventory in
exactly the same ways that physical stocks are treated by
producers of physical goods.
 For example, a hotel may keep inventory of its production
capacity for conferences for 2 or more years ahead of the
actual performance of services and market that capacity
through contracts to deliver products at specified times

9. No Possibility of creating and holding
stocks
 Two other characteristics that distinguish between
product and service are:
1. Heterogeneity
2. Intangibility
 Heterogeneity refers that every service performance is
unique to each customer. But the practice of
heterogeneity is said to be totally academic and
application of this in service products such as those
marketed by banks, transport operators, fast-food
chains and other large scale service all of which are
committed to specification and quality control of service
performance.
 Intangibility is a important characteristic of service
products in the sense that most services can't easily
measured, touched or evaluated at the point of sale

10. Generic Characteristics distinguishing
Goods Services
Are manufactured. Are performed.
Made in premises not open to
customers.
Performed with customers’
participation.
Goods are delivered to places
where customers live.
Customers move to places where
services are delivered.
Purchase means right of ownership
to use at will.
Temporary right to use at a fixed
time and place
Tangible; can be inspected. Intangible; can’t be always
inspected.
Can be stocked physically. Perishable; can’t be stocked.

11. Particular characteristics of travel and
tourism services
 There are three characteristics of travel and tourism services:
1. Seasonality
2. The interdependence of tourism products
3. High fixed costs of operations
 Seasonality: It is a characteristic of most leisure tourism
markets that demand fluctuates greatly between seasons of
the year. Most northern Europe and northern states of USA
mostly make their holiday during June to September. Climatic
variations are not so relevant to many Mediterranean, middle
Eastern, pacific or Caribbean tourism destinations. Schools,
many business year cycles reinforce such traditions.
 Interdependence: Travel purchase is a combination of
several product and service. A vacationer chooses attractions
at a destination together with the products of
accommodation, transport, other facilities such as catering.

12. Characteristics of travel and tourism
services
 High fixed costs of service operations: When
profit and loss account of businesses in the travel
and tourism industry are analyzed, it reveals
relatively high fixed costs of operating available
capacity and relatively low variable costs.
Following costs must be incurred in order to open to
receive visitors:
1. Premises
2. Rents, leases and rates
3. Equipment
4. Heating, lighting and other energy costs
5. Insurance
6. Wages and salaries of full time employees

13. Characteristics of travel and tourism
services
 Management overheads and administrative costs
 The bulk of marketing costs
 These fixed costs are mostly committed ahead
over12 months period and have to be met whether
the attraction draws 50 or 500 visitors
 Significant element of variable cost arises in
operating catering and shops and number of part
time staff employed, the variable cost of admitting
an additional visitor is virtually nil
 Most large businesses are obligated through
competition to operate on a very narrow margin
between total costs and total revenue .

14. Marketing Response to the characteristics
of supply
 Marketing application is required in the following
main sectors of the industry:
- Inseparability
- Perish ability
- Interdependence
- Seasonality
- High fixed cost
- Fixed in Time and place.
 Role of marketing in the travel and tourism industry
in response to the six factors noted in this section
is to manage or manipulate sales, customer
behavior on a daily basis.

15. Marketing in travel and tourism differs from other
forms of marketing. Tourism and travel industry
follows a particular approach and style in marketing
practices which are based on some distinct
characteristics. These are-
1. Nature of demand
2. Nature of supply
3. Products and prices
4. Characteristics of promotion that influence
demand
5. Characteristics of distribution that facilitate
purchase

16. On the basis of these aspects, it is possible to
conclude
three propositions about marketing in travel and
tourism
1. Product in tourism are designed, adopted and
promoted
• In the context of opportunities and constraints
arise in national and international market
• To meet the long-run needs, expectations and
interests of prospective customers
2. Insuperability and perishability of service
products call for a different application of
marketing mix variables.
3. Marketing in travel and tourism industry is
shaped and determined by

17. Marketing demand and customer behavior for travel
and tourism reflect two separate dimensions
characterized by “determinants and motivation”
1. Determinants: Economical factors that set limit
to volume of populations demand for travel
,whatever individual's motivation may be.
2. Motivation: Internal factors within individuals,
expressed as needs, desires which lead people
to place a higher value on leisure travel than
others.

18. Main determinants of demand can be categorized
under eight broad headings, they are-
1. Economic
2. Demographic
3. Geographic
4. Socio-cultural and Social Attitudes
5. Comparative Prices
6. Mobility
7. Government/Regulatory
8. Media Communications

19. Economical factors
Economical variables greatly influence the total
volume of demand generated. The influence is
equally obvious in leisure travel and business travel.
The relation between income and expenditure on
travel and tourism is known as the income elasticity
of demand.
1. In any measured group in a population there is a
greater1% increase in expenditure in travel and
tourism results1% increase in disposable income
and the market is known as income elastic
2. If demand changes less than proportionately to
income, the market is known as inelastic

20. Demographic factors
The term demographics factors is just one
convenient way to identify the main
characteristics of the population that
influence demand for travel and tourism,
which can change rapidly from year to year.

21. Geographical Factors
The weather is undoubtedly one if the
principal determinants of travel demand foe
leisure purpose, and explains destination
patterns. Another geographic factor is the
size of the community in which population
live.

22. Socio-cultural factors
The term socio-cultural factors is used to
describe the broad trends in any society's
attitude that influence individual motivations. but
have a wide national imp[act in the sense that
they respect commonly held beliefs and notions
with which people are brought up as children.

23. The importance of
attitudes
Attitudes are not of course based simply on
facts, they are formed of ideas, fears, aspirations and
beliefs which people hold about their lives. Attitudes
to tourism do not exist in isolation: they are sub-sets
of a wider view of the desired quality of life and how
to achieve it. Quality of life is not simply quantifiable
but it is recognized intuitively and experienced as
satisfactions, enjoyment, stimulation and through a
sense of physical and mental well-being.
Changing Attitude
Most commercial businesses understand that and
invest heavily in market research to assess the
implication of attitude shift on purchasing behavior.
The more affluent customers are and the more
discretionary their expenditure the more likely it is
that purchases reflect their ideas about business in
travel and tourism to understand changing attitude
especially to marginal shifts in annual tourist volume.

24. Attitude Grouping for
Residents
There are types of attitude groups of purchasing behavior. These are:
1. Sustenance driven group
2. Outer directed groups
3. Inner directed group
Sustenance driven group: these are the people of all ages attitudes and
behavior patterns are organized around fear for future and needs for
security. Many such people are old and economically disadvantaged and
live in constant fear of losing income, health or what they have managed to
achieve of stability and status in their lives.
Outer directed groups: people of all social groups with sufficient income
and confidence to overcome their security worries, who strive to achieve
their perception of social esteem and status. Typically materialistic and
acquisitive in outlook and often in their twenties to forties members of this
group organize their purchasing behavior around the way they look and the
excepted effects on others of the possession they own and the holyday they
take.
Inner directed groups: in this group people of all social categories and
income levels are mostly educated beyond school leaving age and usually
40 who have achieved the self-confidence maturity of personality and
tolerance to be able to live easily with themselves and social contacts

25. Comparative prices
Price which represents value to customers and is relative to their
spending power reinforces the economic determinates. In case
of international tourism, price is complicated by the combined
effects on holiday prices of exchange rates between countries of
origin and countries of destination and by the comparative level
of inflation in the destination area compared with the area in
which tourists live. The cost of oil which is especially important
in all forms of air transport adds a third variable to these price
complication. The concept of comparative price is highly
complex in practice and the effects are far from easy to protect
with any perception.
Personal mobility factors
The personal mobility provided by cars has become a prime
determinant of the volume and nature of tourism.

26. Government regulatory
factors
Almost all governments impose laws and regulations to
safeguard the health and safety of their populations and the use
of land and most penalties for non-compliance.
There are three principle reasons that directly influence
demand and supply and often have a particular impact on travel
and tourism which marketing managers have to understand:
The first regulation is to ensure fair competition between
suppliers.
The second is regulation to ensure that customers have
choices and rights against suppliers which may be enforced.
The third which is relatively new but expected to have a
particular impact on travel and tourism is regulation to ensure
that project developments and business practices do not
damage the environment.

27. Tour operators and the
hotels
Computer reservation s systems (CRS):
CRS system, such as SARBRE, WORLDSPAN,
GALILED, and AMADEUS could inhabit
competition
New regulation for the development:
The Rapidly expanding influence of environmental
legislation now affects most sectors of the travel
and tourism

28. Mass media
communication
The most powerful and influential factors
over the demand for travel and tourism
.Television is of course also a main medium
for advertising many products in travel and
tourism.
Example: Television, Radio, Internet etc

29. Characteristics associated
with high and low demand
for tourism:
Underlying factors determine the
volume of demand for tourism are
common to all countries.
It is useful to distinguish between
gross propensity and net propensity.
1. Net propensity is the proportion of a
population that takes at least one
holiday in a 12-month period.
2. Gross propensity is the total number
holidays taken. Expressed as a
proportion of a population.

30. The response of
marketing managers
To research and monitor the external
factors that influence movements in the
particular markets.
 To forecast the direction and
speed of change in the determinants.
 To identify opportunities and threats
emerging in the business environment.

31. The scale of opportunity to
engage in travel and
tourism
Low propensity characteristics:
1. Low income per household
2. single parent household.
3. Educated to minimum age.
4. Rural community dweller.
5. Older people 75+.
6. No private transport.
7. 3 or less weeks paid holiday.
High propensity characteristics:
1. High income per household.
2. Two parents household .
3. City community dweller.
4. Younger people
5. 6 or less weeks paid holiday.