1. Marketing in Travel & Tourism
Unit #5 – Learning Outcome 2
Understanding the role of
marketing as a management tool in
travel and tourism
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2. Strategic Marketing
Planning
Strategic marketing planning involves careful analysis of an
organizations environment, its competitors and its internal
strengths, in order to develop a sustainable plan of action
which will develop the organization’s competitive advantage
and maximize its performance within given resource
availability.
Ranchhod and Gurau, 2008
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3. A strategy is a plan for an organization
that sets the overall direction to be taken
• It is broad in scope and takes a long term perspective.
• In marketing, strategy involves directing all of a company’s resources to meet customers’ needs.
This is achieved through:
• Market analysis
• An understanding of competitor actions, governmental actions and the global business environment
• An understanding of the implications of technological and environmental changes.
• Also need to consider the ethical and ecological implications of the company’s actions, and to be
flexible enough to adapt to rapid changes in the business and social environment.
• Strategic marketing planning is one of the core business functions contributing to an organization’s
corporate strategy.
• In a customer-oriented organization marketing is a dominant element because of its focus on
balancing the delivery of customer satisfaction and value with the generation of sales revenue.
• Marketing has a vital contribution to make in the formation of the corporate vision for the future,
through its role in interpreting customers needs’ and market trends.
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4. The Need for Strategic Planning
• Changes in market trends, unpredictable economic
recessions and declines in markets have reminded the
travel and tourism sectors of the need for planning.
• Current issues for the sector are resulting in mergers,
strategic alliances and investment in new developments
and markets.
• Just ‘doing what you’ve always done’ is no longer viable
for travel and tourism companies, and change is
essential if they are to continue.
• The need to change direction or repositioning in the
market heightens the focus on the strategic decision
process.
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5. Strategic Planning Process
All forms of strategic corporate planning processes
attempt to answer four questions:
1. Where are we now, in the industry and market spaces
we occupy?
2. What opportunities are emerging in a changing world,
which we could develop and aim to lead?
3. Where do we want our organization to be in 5 or more
years’ time?
4. What decisions do we have to make now to get to where
we want to be?
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6. The International Travel College of New Zealand
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7. Ansoff’s Matrix
• A business has the
potential to grow by
using one of four
strategies.
• These strategies
involve making the
most of existing
markets and products,
introducing new
products, or entering
new target markets.
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8. The Boston Matrix
•
A portfolio of products can be
analysed using the Boston
Matrix. which categorises the
products into one of four
different areas, based on:
•
Market share – does the
product being sold have a low
or high market share?
•
Market growth – are the
numbers of potential
customers in the market
growing or not
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9. Competitive Advantage
• Cost leadership – a company that seeks, finds
and exploits all sources of cost advantage
providing for a standard, no-frills package
• Differentiation – a company seeks something
distinctive to set it apart from others than can
bring in good profit returns.
• Focus strategy – a company selects a segment
of the market and targets that to the extent of
excluding other segments.
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10. Product Life Cycle
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Introduction
Growth
Maturity
Decline
• Product extension
strategies may help
extend the life of a
product
Source: tutor2u
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11. Marketing Research and Market
Information
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Marketing research is an organized information process which deals
with the gathering, processing, analyzing, storage and communication
of information to facilitate marketing decision making.
Most marketing decisions require answers as to ‘who, what, when,
where, how and why’?
Marketing research typically starts with information held on customer
databases and flows of ‘intelligence’ data gathered through Business-toBusiness networks, websites and destination management
organizations.
Data gathering includes regular analysis of website traffic and call
centre data.
Information gathering has been hugely facilitated through developments
in technology making it possible to gather data readily via email, online
systems and through telephone research.
External marketing uses focus groups and full scale sample surveys
on a national scale.
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12. What is a focus group?
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A form of qualitative research in which a group of people are asked about
their perceptions, opinions, beliefs, and attitudes towards a product, service,
concept, advertisement, idea, or packaging.
Questions are asked in an interactive group setting where participants are
free to talk with other group members.
Focus groups are an important tool for acquiring feedback regarding new
products, as well as various topics and often used in the early stages of
product or concept development.
Focus groups allow companies wishing to develop, package, name, or test
market a new product, to discuss, view, and/or test the new product before it
is made available to the public. This can provide valuable information about
the potential market acceptance of the product.
Participants are recruited on the basis of similar demographics
psychographics, buying attitudes, or behaviors.
Today, using audience response keypads to collect questionnaire answers
is the new industry trend.
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13. What is ‘Survey Sampling’?
•
Survey sampling describes the process of selecting a sample of
elements from a target population in order to conduct a survey.
•
A survey may refer to many different types or techniques of
observation, but most often involves a questionnaire used to
measure the characteristics and/or attitudes of people.
•
Different ways of contacting members of a sample once they have
been selected is the subject of survey data collection.
•
The purpose of sampling is to reduce the cost and/or the amount of
work that it would take to survey the entire target population.
•
A survey that measures the entire target population is called a
census.
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14. Six Main Categories of Market
Research
• Market Analysis and
Forecasting
• Consumer Research
• Products and Price Studies
• Promotions and Sales
Research
• Distribution Research
• Evaluation and Performance
Monitoring Studies
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15. Types of Research Methods
Continuous and ad hoc
•
Continuous meaning a regular research cycle, such as daily, weekly or monthly, depending on the needs of the business.
•
Ad hoc is research undertaken ‘as needed’
Quantitative and Qualitative
•
Quantitative research measure volumes or percentages of people, for example, who take coach tours, or who are aged between 60-70, or
who live in a particular city.
•
Qualitative studies explore, for example, feelings about products, or levels of personal satisfaction with a product or service.
Primary and secondary
•
Primary data specifically commissioned by a business to contribute to its decisions.
•
Secondary data is information gathered originally for a purpose not related to the needs of a particular business but which may be used by
it as part of its market information system.
Omnibus and syndicated
•
Large market research companies operate their own regular sample surveys and sell space in them to a range of other businesses. Such
surveys are known as ‘omnibus surveys.
•
Syndicated surveys are usually commissioned by a group of clients on a cost-sharing basis.
Occupancy studies
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A common system used to establish occupancy levels (eg hotels) in destinations in order to establish trends, peaks and troughs.
•
In an area a small but representative sample of businesses maintain daily records of arrivals and departures and rates paid for the
segment of the market they deal with.
•
Data analysed to provide a rich source of data for marketing planning purposes and can be measured on a weekly, monthly or quarterly
•
The data can be communicated to the sector as a whole to help their own decision-making.
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16. Research Methods for Travel and Tourism
A. Desk Research (secondary sources)
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Sales/bookings/reservation records; daily, weekly etc, by type of customer, type of product etc
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Visitor information record, eg guest registration cards, booking form data, call centre or website data.
•
Government publications/trade association data/national tourist office data, abstracts and libraries
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Commercial analyses available on subscription or purchase of reports
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Previous research studies conducted; internal data bank
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Press cuttings of competitor activities, market environment changes
B. Qualitative or exploratory research
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Organized marketing intelligence, such as staff feedback, sales-force reports, attendance at exhibitions
and trade shows.
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Focus group discussions and individual interviews with targeted customers/non-users, especially to
identify the perceptions and attitudes of key users and non-user groups.
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Observational studies of visitor behaviour using cameras, electronic beams or trained observers.
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Marketing experiments with monitored results.
C. Quantitative research (syndicated)
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Omnibus questions to targeted respondents
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Syndicated surveys, including audits
D. Quantitative research (ad hoc and continuous)
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Studies of travel and tourism behaviour and usage/activity patterns
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Attitude, image, perception and awareness studies
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Advertising and other media response studies
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Customer satisfaction, value for money and product monitoring studies
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Distribution studies amongst the range of distribution channels being used or investigated for future use.
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17. Measuring demand
and
tourism trends
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18. Forecasting Tourism Demand
A National Activity
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In an industry as volatile as tourism and in times as uncertain as today it is important for both
governments and the tourism industry to have reliable and accurate forecasts to allow them to
plan and make decisions for the future.
The accuracy of a forecast is an essential consideration in any tourism management or
investment decision.
Too high a forecast and hotel beds will lie empty, theme park rides will be unused, staff will be
laid off.
Too low a forecast and opportunities will be missed, too few beds will be provided and theme
parks and other tourism attractions will be congested – leading to low customer satisfaction
levels.
These problems arise from the nature of tourism as a ‘perishable’ product: aircraft seats, hotel
beds, theme park rides and restaurants cannot be stored.
Three key reasons why tourism demand forecasting is important:
The inseparability of the production and consumption of tourism means that enterprises have to
be aware in advance of the level of demand for their products.
The tourism product comprises a range of complementary providers – forecasts ensure that
these are available when they are needed.
The tourism product needs large investment in fixed costs meaning that accurate forecasts of
demand are essential
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19. Why measure market demand?
•
Measuring market demands helps you keep on top of trends so that
you can gear up ‘production’ (in travel and tourism, this might mean
adding more flights or tours, changing departure dates to cope with
demand) or slow it down, (reduce capacity on an unpopular tour or
route)
•
Tourism operators need to keep on top of demand in order to be
ready to raise or lower selling prices as needed in order to maintain
optimum occupancy levels or load factors.
•
Anticipating market demand also helps with labour force planning
and helps project forward for peaks in demand or troughs due to
lack of demand.
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20. Forecasting Factors + Methods
in Travel & Tourism
Forecasting Factors:
Forecasting methods:
• Purpose of the forecast
• The time period required
• Level of accuracy
required
• Availability of information
• The cost of the forecast
and available budget
• Quantitative approach
• Qualitative approach
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21. Marketing Information Systems
• A marketing information system is a
management information system designed to
support marketing decision making.
• “A system in which marketing data is formally
gathered, stored, analysed and distributed to
managers in accordance with their informational
needs on a regular basis.”
Jobber (2007)
• “People, equipment, and procedures to gather,
sort, analyze, evaluate, and distribute needed,
timely, and accurate information to marketing
decision makers.”
Kotler, et al. (2006)
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22. Components of Marketing
Information System
Source: Kalyan-City.Blogspot.com
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23. Market information used in a travel
or tourism business
• Previous periods actual sales results measured against
product availability
• Profitability of individual products over typical operating
periods (a season, a year, a month)
• Numbers of staff required to operate a product or service
• Numbers of enquiries by product over a given period
• Conversion rates of enquiries to sales
• Cancellation rates over a given period
• Customer satisfaction levels by product
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