Marketing Research: A Guide for Travel and Tourism | STI

TH1910 THE RATIONALE OF MARKET RESEARCH Market research is defined as the systematic design, collection, analysis, and report of data and findings relevant to a specific marketing situation a company is facing. It provides detailed insights into the competitors an...

TH1910 THE RATIONALE OF MARKET RESEARCH Market research is defined as the systematic design, collection, analysis, and report of data and findings relevant to a specific marketing situation a company is facing. It provides detailed insights into the competitors and understands the customers’ pain points (real problems) and preferences, latest market trends, consumer buying patterns, economic shifts, and demographics. Tour operators, travel agencies, and other travel businesses may use these insights as leverage to create effective strategies. Market research monitors the effectiveness of sales, the existing business practices, the quality of services, and the tools used for communication. It also assesses the current market competition by evaluating the business plans of competitors. Tour operators use this to practice gathering and analyzing data about their market. It allows them to act based on real data rather than assumptions making it a crucial element of their respective business strategy. These are the following benefits of conducting market research: It understands the target market better. Market research can help tour operators and travel agencies map out the full profile of their target market, as well as gain knowledge and valuable insights on their market’s buying habits, age, location, gender, and income, which can help them come up with effective, tailored marketing and pricing campaigns. It helps gain knowledge about competitors. Conducting market research can help tour operators and travel agencies assess the market to identify who the key players are and who are on the rise. By understanding and gaining knowledge on competitors, they can figure out which business strategy will give them leverage on the market. It allows testing the product or service before being exposed. Through market research, tour operators and travel agencies may opt to experience their package holidays before being exposed and launched to the market and consumers. By doing this, companies can lessen the risk of providing package holidays to the wrong market. It helps tour operators and travel agencies with their business growth. Market research helps tour operators and travel agencies comprehend the demands of their market, detect more business opportunities, plan an efficient marketing campaign, minimize their business losses, and keep track of the competition. It allows them to classify their objectives while following the current trends and take advantage by reaching out to their target market. In summary, market research provides companies with relevant information that can help them identify and analyze the market’s needs, the market itself, and their competitors. Processing and analyzing the information obtained through market research provide them with relevant knowledge based on which they can make better decisions on the development of a product or service. The knowledge generated through market research is therefore classified into the content areas of making, enabling, or keeping a promise. CUSTOMER NEEDS AND WANTS A need is a conscious feeling of deprivation in a person. In other words, it is something that a customer requires to experience satisfaction. In the case of business travelers, the punctuality of service is a good example of what constitutes a need. In contrast, an airline failing to provide a high standard of punctuality may likely lose business to its competitors. Guests or clients may expect to have breakfast, Wi-Fi or Internet access, a fitness 02 Handout 1 *Property of STI  [email protected] Page 1 of 5  TH1910 center, and car parking facilities in a hotel. They may also demand accessible rooms if they have reduced mobility. Not every customer requirement can be put under the heading of a need. For example, a warm and friendly attitude on the part of the cabin staff, though pleasant, cannot be said to have a crucial influence on the traveler’s choice of an airline. It should, therefore, be classified as a want rather than a need. Wants are highly significant in marketing today because, in many markets, airlines can meet customer needs the same way as that of their competitors. On many routes, passengers fly similar aircraft and could notice that several airlines offer similar timetables and punctuality records. In such situations, the customers’ choice of airline is frequently based on less significant wants. A want turns into a need after being influenced by culture, society, and an individual’s personality. For instance, business travelers appreciate the product feature of a separate class of service on-board. Business passengers who have the option to travel in separate dedicated cabins with a peaceful environment, (such as being away from other passengers) where they can rest or work is an example of wants. In order to comply with the needs and wants of the customers, understanding the types of travelers (as shown in Table 1) is important (Camilleri, 2018). TYPES OF TRAVELERS Short-haul Long-haul Independent Corporate Business Leisure Needs High frequency of service (e.g., convenient Comfortable seats and Hassle-free scheduled local airport) legroom flights Suitable flight schedule Substantial (large Cheaper plane tickets Flexible seat accessibility enough to satisfy High standards of punctuality hunger) meals Ease of ticket cancellation and rebooking Wants Extra features of a Extra features of a In-flight services (e.g., Safety and security product or service product or service entertainment facilities) Pleasurable inflight as long as it is free in exchange for a Safety and security services of charge fee as long as it can make their travel experience more convenient Table 1. Assessing the customer’s needs and wants Source: Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice, 2018. pp. 32–33 The examples in Table 1 are merely applicable to travelers traveling by air, but these are similar to travelers traveling by land or sea. They will always look forward to a convenient and pleasant experience and getting to their destination safe and secured. Asking leading questions is one way of understanding the needs and wants of the customers. Listening attentively to the customers may give tour operators a better grasp of how interested customers are on a product or service. Being friendly and empathetic are ways to make customers feel that they are welcome, 02 Handout 1 *Property of STI  [email protected] Page 2 of 5  TH1910 acknowledged, and appreciated. Because of these, customers are not likely to think that money is the company’s highest priority; instead, it is the passion and dedication of the company to the travel business. THE MARKETING RESEARCH PROCESS Marketing research is the process of finding out about the market in which the firm or company hopes to succeed. It is also assessing all aspects of the firm’s marketing strategies and tactics. Marketing managers research data to personalize their products or services to their customers. For instance, the guests of ABC Tours may have their own set of needs and wants similar to that of leisure travelers. However, ABC Tours could also have business travelers and short-haul travelers who have different needs and wants. Therefore, relevant market research can help the agency in acquiring insights on its guests and their preferences. Through this research, the front liners are equipped in delivering appropriate customer service to match the guests’ profiles. This, in turn, may contribute to providing the guests with total customer experience. There are different stages in marketing research, as shown in Figure 1 (Camilleri, 2018). Developing Implementing Defining the the research the research Interpreting and problem and plan for plan (Collecting reporting the research collecting and analyzing findings objectives data) information Figure 1. The Marketing Research Process Source: Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice, 2018. p. 34 1. Defining the problem and the research objectives is the initial stage of the marketing research process. This is where the research problem and the research objectives can be identified. Market researchers should decide what form of information they would require. Exploratory research gives an insight into problems that are in the preliminary stage of investigation. It helps the marketer better define the problem and hypothesis; Descriptive research is used to describe the characteristics of a population or phenomenon being studied. It could reveal information on the market potential, demographics, consumer attitudes, and so on. It allows researchers to test a hypothesis about cause and effect relationships. 2. Developing the research plan for collecting information is where the designing of the research plan takes place. This involves the following: a. Specifying the type of data to be collected and the sources from which these may be collected b. Determining the methods to be used for data collection c. Deciding whether to use random or non-random samples d. Calculating the time and cost of research Researchers may collect primary and/or secondary data. Primary data consists of pieces of information which are not presently available but needed to deal with the issue/s under investigation. Secondary 02 Handout 1 *Property of STI  [email protected] Page 3 of 5  TH1910 data consists of existing information that may be used for the problem at hand, although not originally gathered for this purpose. These data may be gathered from internal sources such as booking data and fare type analysis or external sources such as data compiled by government sources, airport authorities, consultant reports, and the chamber of commerce reports. Marketing research techniques refer to the different techniques that may be used for data collection purposes, which are as follows: Survey questionnaires allow researchers to gather information with a considerable level of accuracy at an affordable cost. These are a vital element of market research and should be skillfully and intelligently constructed. The questions must elicit information that researchers seek to know or understand. In-flight survey is a data collection method used in the aviation industry. It aims to understand the customers’ feelings toward product specifications—for instance, seating comfort, quality of meals, and other airline services. Face-to-face interviews and focus group meetings are where researchers explore the informants’ reactions, opinions, and behaviors. The findings from this technique may give an insight into existing trends. Telephone interview is a good way of accessing research participants. It is often perceived as a way to invade one’s privacy, however, which may damage the corporate image of a company. Test marketing is a remarkably versatile market research technique. It may be a costly exercise and may lead to confusion among travelers, especially if new product features are discontinued at the end of the testing period. For instance, ABC Tours is considering to launch a 3D/2N Siargao Package. The agency plans to open its newest package holiday to select tourists for a short period before officially considering it as one of its package holidays. The first impression, reaction, and feedback from the select tourists who experienced a particular package holiday will all be recorded for researchers to subsequently analyze and interpret. Depending on the result, the agency will then decide whether to add it to their package holidays officially or move on from the project. Complaints and complaint analysis is a valuable and simple indication of customer dissatisfaction on the businesses’ existing products or services. A consistently high frequency of complaints is a clear indication of customer argument on certain aspects of the business. Respective businesses must operate a system for classifying complaints and compliments before being implemented. Customer contact staff refer to the sales and customer service staff who provide a company with first-hand information on the customers’ feelings toward its products and services. They are the bridge that connects the customers to the management or the company itself. Desk research involves the analysis and interpretation of available data. This market research technique is considered practical and provides fast results, but the changes in the marketing environment should also be taken into consideration. 3. Implementing the research plan (collecting and analyzing data) is known as the most expensive part of the marketing research process. Typically, data collection begins by reviewing any existing research and 02 Handout 1 *Property of STI  [email protected] Page 4 of 5  TH1910 data that provide information about or insight into the problem. As a rule, this is secondary research. Prior research projects, internal data analyses, industry reports, customer-satisfaction survey results, and other sources of information may be worthwhile to review. Even though these resources may not answer research questions fully, these may further make the problem to be solved easier. Secondary research and data sources are nearly always cheaper than capturing new information alone. After exhausting everything from secondary research, the next thing to do is to conduct primary research. This involves asking questions and then listening to and/or observing the behavior of the target audience being studied. In order to generate reliable, accurate results, use the proper scientific methods for primary research data collection and analysis. These include identifying the right individuals and the number of people to talk to using surveys and interview scripts and capturing data accurately. 4. Interpreting and reporting the findings are where marketers interpret their findings. Interpretation is easier if the data analysis methods are carefully planned in the research process. How the data gathered is analyzed and presented is an influential factor in how valuable the research will be. These findings will be analyzed and interpreted by the researchers and will be presented to the respective marketing managers. It is important that the researchers will be in a position to understand the main findings and research implications. Individuals who are knowledgeable of the business should be involved in interpreting data because they are in the best position to identify significant insights and make recommendations from the research findings. Marketing research reports incorporate both the analysis and the interpretation of data to address the project objectives. The final report for a marketing research project may be in written form or in a presentation format, depending on the organization’s culture and management preferences. References: Camilleri, M. A. (2018). Travel marketing, tourism economics and the airline product: An introduction to theory and practice. Cham, Switzerland: Springer. Claravall, B. G. (2013). Travel and tour operations in the Philippines. Sampaloc, Manila: Accumiro I.T. Solutions. Holland, J. & Leslie, D. (2017). Tour operators and operations: Development, management and responsibility. Boston, MA: CABI. 02 Handout 1 *Property of STI  [email protected] Page 5 of 5