Tourism and Hospitality Marketing Midterm Reviewer PDF

lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 7: TOURISM MARKETING AND COMMUNICATION PROCESS MARKETING this model are ‘encoding,’ ‘decoding,’ Is a process that seeks to...

lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 7: TOURISM MARKETING AND COMMUNICATION PROCESS MARKETING this model are ‘encoding,’ ‘decoding,’ Is a process that seeks to inform, persuade and ‘response,’ and ‘feedback.’ And, the last bring consumers into action. Information and feature is ‘noise.’ Noise is random and other persuasion are mainly achieved through competing messages that more often interfere communication with the communication. This model emphasizes on the major key COMMUNICATION factors that play an important role in effective It is simply the act of transferring information communication. It is imperative to know the from one place, person or group to another. market response and your target audience before you send any message. MARKETING COMMUNICATIONS are those techniques that the company or a business individual uses to convey promotional messages about their products and services. Experts of marketing communication design different types of persuasive communication and send it to the target audience. MARKETING COMMUNICATION TOOLS TYPES OF COMMUNICATION MODEL 1. LINEAR MODEL In linear model, communication is considered one way process where sender is the only one who sends message and receiver doesn’t give feedback or response. The message signal is encoded and transmitted through channel in presence of noise. The sender is more prominent in linear model of communication. IMPORTANCE OF MARKETING COMMUNICATION The sole purpose of marketing communications is to increase the volume of sales by persuasive, informative, and positive messages. Marketing communication provides new facts through encouraging messages about products/services. Marketing communications is meant to inform and persuade target audience and reinforce market credibility. MARKETING COMMUNICATION PROCESS The diagram explains various components − first two components are ‘sender’ and ‘receiver’. Second two components are ‘message’ and ‘media.’ The other features of Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 2. TRANSACTIONAL MODEL To Whom is refers to “Audience In this model, senders and receivers both are Analysis” known as communicators, and both play With What Effect is refers to “Effect equally important role in communication. Analysis” Transactional model relates communication with social reality cultural up-bringing and relational context (relationships). Non-verbal feedback like gestures body language is also considered as feedback in this model SHANNON AND WEAVER MODEL OF COMMUNICATION This model is specially designed to develop the effective communication between sender and receiver. Also, they find factors which affecting the communication process called “Noise”. At first the model was developed to improve the Technical communication. Later it’s widely applied in the field of Communication. 3. INTERACTIONAL MODEL Interactive model or Convergence model is similar to transactional model as they are both two-way communication model. Interactive model is mostly used for new media like Internet. in interactive model people can respond to any mass communications like videos, news, etc. people can exchange their views and ideas. BERLO’S SMCR MODEL OF COMMUNICATION Berlo’s model follows the SMCR model. This model is not specific to any particular communication. Berlo’s model includes a number of factors under each of the elements COMMUNICATION THEORIES LASSWELL’S MODEL OF COMMUNICATION In this model, the communication component OSGOOD- SCHRAMM MODEL OF who refers the research area called “Control COMMUNICATION Analysis”, It is a Circular Model, so that communication is something circular in nature. It can happen Says what is refers to “Content within our self or two people; each person acts Analysis”, as both sender and receiver and hence use In which channel is refers to “Media interpretation. Analysis”, Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER Encoder – Who does the encoding or sends the message (message originates) Decoder – Who receives the message Interpreter – Person trying to understand (analyses, perceive) or interpret COMMUNICATION PROBLEMS Language Barriers Varied connotation of words, signals and symbols Cultural differences Faulty word choices Mistranslations Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 8: TOURISM AND HOSPITALITY PRODUCTS TOURISM AND HOSITALITY PRODUCTS 3. SUPPLIERS A group of selected components or elements brought together in a ‘bundle’ to satisfy needs Transportation and wants Accommodation Food and beverages KEY PLAYERS IN THE TOURISM INDUSTRY Attractions Events and Conferences Sport and Adventure Tourism 4. TRAVEL INTERMEDIARIES They bring the tourism products to the costumers. These are also known as the channel of distribution or referred to as the middlemen. This refers to the Travel agents, Tour operators, Web-based distributors (Online Travel Agency or OTA) 5. TOURIST/TRAVELLERS They are the hearth of the tourism industry and the consumer of the tourism products 1. PRIVATE AND NON-PROFIT SECTORS COMPONENTS OF TOURISM PRODUCTS Industry associations that have been established to protect special interest group. ATTRACTION EXAMPLE: ACCESSIBILITY - PHILTOA (Philippine Tour Operator ACCOMMODATION Association) IMAGE - PTAA (Philippine Travel Agencies PRICE Association) - OLFU (Our Lady of Fatima University) DESTINATION ATTRACTION 2. PUBLIC SECTOR It is the collection of attractions, which the element of the tourism product that pulls They are the national, regional, or provincial people to a destination tourism organization ACCESSIBILITY EXAMPLE: - TIEZA (Tourism Infrastructure and For a tourism product to be successful, Enterprise Zone Authority) transportation systems and infrastructure - TPBPHL (Tourism Promotion Board should be put in place. Philippines) - DOT (Department of Tourism) ACCOMODATION A wide range of tourist facilities within the destination Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 IMAGE PRODUCT LIFE CYCLE Central to the product is its image. Destination DEVELOPMENT – begins with an idea of a image helps the visitor form expectations of new product that could possibly satisfy an what they will experience. It also motivates existing need or want in specific market them to decide to visit the said destination INTRODUCTION – the period wherein the product is introduced to the market. PRICE GROWTH – the period of rapid market acceptance and increasing profits. It allows consumers to determine the level of MATURITY – the period where sales plateau services they may receive at the destination. It because the product achieved acceptance by also creates an expectation of excellence, high most of its potential buyers. standards and quality of the product. Factors DECLINE – the period when sales fall off such as seasonality, distance, product quickly and profit stops classification and length of time may affect pricing. TOURISM PRODUCT TYPES Convenience Tourism Product Shopping Tourism Product Unsought Tourism Product Industrial Tourism Product Capital item PRODUCT LEVEL TO PREVENT DECLINE CORE PRODUCT – what the consumer is Market Modification buying (ex. hotel room) Product Modification FACILITATING PRODUCT – goods and Marketing Mix Modification services that helps the core product to be enjoyed by the consumer (ex. check- in / DESTINATION LIFE CYCLE (BUTLER, 1980) check-out service) SUPPORTING PRODUCT – add value to Richard Butler (1980) developed a concept the core product and help differentiate it to popularly known as destination Life cycle competitors (ex. business center and room which uses the product life cycle as its service) foundation. It is a widely used model to study AUGMENTED PRODUCTS – helps the the evolution of a particular tourism consumer consider the product over the other destination. The model suggests that a tourism products (ex. accessibility, location, area evolves through six predictable different interaction with service providers) stages, namely, exploration, involvement, development, consolidation, stagnation and PHILIP KOTLER’S FIVE-PRODUCT decline or rejuvenation. LEVELS MODEL STAGE 1: Exploration STAGE 2: Involvement STAGE 3: Development STAGE 4: Consolidation STAGE 5: Stagnation Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 During this stage, the number of visitor has STEPS IN TOURISM PRODUCT peaked DEVELOPMENT The destination is no longer considered Fashionable Research the Market It is at the stage of consolidation, stagnation or Match the Product with Market decline that managers need to intervene and Assess the Destination take action to avoid the decline Understand the Stakeholder Role Product Building Marketing and Promotion PRODUCT DEVELOPMENT Providing Human and Technical Resources Product development should be an ongoing process to ensure profitability and sustain interest on the product line. NEW PRODUCT DEVELOPMENT PROCESS CREATION OF TOURISM PRODUCT Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 9: PRICING IN TOURISM AND HOSPITALITY KEY FACTORS TO CONSIDER WHEN PRICE SETTING A PRICE It is the amount that the customer pays for a product; it is the amount of money charged for a good or service. The only Marketing mix element that produces revenue Changing too much chases away potential customers, charging too little cuts revenue Price makes the products available to the target market and reflects the value of the GENERAL PRICING APPROACH product. It is the sum of values that consumers Cost-based Pricing exchange for the benefit of having or using the Break-even product. Analysis and Target Profit Pricing Buyer-based Pricing (Value-based) KEY CONCEPTS RELEVANT TO PRICING Competition-based Pricing SALES - is the total amount that a company PRICING STRATEGIES gets based on quantity sold multiplied by selling price NEW PRODUCT PRICING STRATEGIES REVENUE - is the total income / profit that the company keeps after all the expenses have 1. PRESTIGE PRICING been paid for It used when the product or service is FIXED COSTS - are costs incurred due to the positioned to be luxurious and elegant operations of the business. They do not fluctuate with the volume of sales 2. MARKET SKIMMING PRICING PROFIT MARGIN is the level of income is Products and services that have high demand desired by the company. This usually comes usually set higher prices to achieve higher out in percentage form as the amount of mark profit margin up placed on the top of fixed and variable cost of a product 3. MARKETING PENETRATION PRICING VARIABLE COST - are cost that vary based It is used when setting a low initial selling on volume or quantity price to penetrate the market quickly and BREAK-EVEN POINT - is the point where attract many buyers for a large market share total cost is equal to total revenue. A company incurs a loss if cost exceeds revenue and 4. PRODUCT BUNDLING PRICING generates an income when revenue exceeds A strategy used to attract buyers to purchase cost because of reduced rate of the bundle compared to the total cost of the items if purchased individually Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 EXISTING-PRODUCT PRICING STRATEGIES REVENUE MANAGEMENT It is concerned with optimizing financial results and is especially popular in industries like hospitality, which must contend with high fixed costs and a perishable inventory. For example, hotels have a certain number of rooms and fixed costs which must be met, regardless of how many rooms are sold. In such industries, revenue management is employed in an effort to predict demand and optimize inventory and price availability. When utilized correctly, this will ultimately result in higher revenue. It is a systematic approach to matching demand for services with an appropriate supply in order to maximize revenues (Shoemaker et al 2007) REVENUE MANAGEMENT IS BENEFICIAL TO THE HOTEL AND AIRLINES (SHOEMAKER ET AL 2007) 1. Product is perishable 2. Capacity is fixed 3. Demand fluctuates 4. Different market segments have different lead times for purchase MARKET RECOVERY THROUGH PRICE Price can represent a significant incentive to encourage visitors to offset their fears and to return. It can also be done through price changes. PRICE CHANGES Initiating price increases Buyer reactions to price changes Competitor reactions to price changes Responding to price changes Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 10: TOURISM PROMOTION INFORMATIVE VS PERSUASSIVE PROMOTION INFORMATIVE PERSUASIVE Gives precise Only gives the The coordination of all seller initiated efforts details of the good points about to set up channels of information and product as well the product persuasion to sell goods and services or as its dangers promote an idea (Belch 2008) PROMOTION MIX In forms the Encourages public about the customers to buy IT IS A COMPANY’S TOTAL MARKETING prices, quality the advertiser’s COMMUNICATIONS PROGRAM, AND IT and where to product CONSISTS OF A SPECIFIC BLEND OF: buy Advertising Used to Uses attractive introduce new devices e.g., color Direct Marketing products and music Personal Selling Sales Promotion Used to notify Aims to increase Public Relations the public about and maintain major events sales and profit ADVERTISING Defined as any paid form of non-personal REMINDER ADVERTISING communication about an organization, Very important for products that have product, service, or ide by an identified reached the maturity stage. Also, it is sponsor (Belch, 2008) used in order to foster loyalty and retain customers, which is typical for the bottom of the funnel OBJECTIVES NATURE To inform Reach many ADVERTISING COVERS THE VARIOUS To persuade buyers MESSAGES THAT A CONSUMERS RECEIVE To remind Repeat message FROM: many times Impersonal Television Expensive Radio Newspapers Magazines OBJECTIVES OF ADVERTISING Billboards Transit plays INFORMATIVE ADVERTISING Online (Banner Advertising, Skyscraper Ads, used to introduce a new product or to Pay per click Ads) build up primary demand for the product PERSUASIVE ADVERTISING Used when competition is stiff Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 GOALS IN HOSPITALITY NATURE ADVANTAGES Nonpublic Precision Tangibilize the service element so the reader Immediate targeting mentally grasp what is offered Customized Personalized Promise a benefit that can be delivered and/or Interactive messages provide solutions to problems Privacy Differentiate the property from that of the Faster sales competition Variety of Have positive effects on employees who must packaging options execute the promises Less competition Capitalize on word of mouth from other media content TYPES OF ADVERTISING EXECUTION Immediate results Measurability PERSONAL SELLING Sales representatives are the company’s link to the customers The salespersons represents the business to its customers TASK OF A SALES NATURE PERSON Personal Prospecting 1. SLICE OF LIFE - shows how people use the interaction Targeting product in a normal setting Relationship Communicating 2. LIFESTYLE - Shows how the product fits building Selling with one's way of life Most expensive Servicing 3. FANTASY - creates a "wonder" world around the product or its use promo tool information 4. MUSICAL - uses simple but catchy Gathering effectively through product jingles or songs Allocating 5. PERSONALITY - creates character that represents the products such as Jollibee, the friendly bee SALES PROCESS 6. MOOD OR IMAGE - builds positive images or moods around the product such as beauty, love, fun or serenity TYPES OF ADVERTISING EXECUTION TECHNICAL EXPERTISE - reveals company's expertise with the product or service SCIENTIFIC EVIDENCE - presents research or scientific evidence that the brand is better than competing brand TESTIMONIALS EVIDENCE - features a SALES PROMOTION high credible person such as celebrity Direct inducements that offer extra value or endorsing the product incentive for the sales force, distributors or the ultimate consumers with the primary objective DIRECT MARKETING of creating an immediate sale. An interactive system of marketing that uses one or more advertising media to affect a measurable response Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 PATRONAGE REWARDS - are bonuses in the form of cash or items of value that can be FACTORS TO redeemed for regular purchases made Point of CONSIDER IN purchase OBJECTIVES SETTING UP A SALES PROMOTIONS – includes displays and PROMOTIONAL promotions that take place at point of sale. PLAN CONTESTS AND GAMES – give customers a chance to win something such as a trip or Increased short- Objectives of the cash upon the purchase of the product or term sales campaign service Help build long Type of market to term market share be tapped Entice consumers Competition PUBLIC RELATION to try a new Cost and product effectiveness of The process of creating a positive image and Lure consumers each tool customer preference through third-party away from endorsement competitors Banks on the idea of that if a credible person- Hold and reward not related to your business-says something loyal customers good about your productor service, then Building stronger consumers may be more certain that it is really customer good relations Obtaining new accounts NATURE OBJECTIVE Very Believable Building Dramatize a Product NATURE TARGET company or awareness ◦ Wide assortment Consumer product Creating of Tools Trade Underutilized interest Rewards quick intermediaries Providing response Sales force information Efforts short- Stimulating lived demand Reinforcing the brand COMMON SALES PROMOTION TOOLS MAJOR CONTRIBUTION OF ACTIVITIES PR TO MARKETING Press Relations Assist in the Product launch of new Publicity ◦ product Corporate Assist in Communicatio repositioning a ns mature product SAMPLES - offers of a trial amount of a Lobbying Build up interest in product Counseling a product category COUPONS - are certificates that offer buyers Influence specific savings when they purchase specific products target groups PACKAGES – involve putting together a set Defend products of of complementing products to come up with that have one bundle at a special price encountered public PREMIUMS - are goods offered either free or problems at a low price to provide an incentive for consumers (A mug that comes free with the purchased coffee) Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 PUBLIC RELATIONS PROCESS MAJOR TOOLS IN MARKETING PR Publications Events News Speeches Public Service Activities Identity Media Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TOURISM AND HOSPITALITY MARKETING LECTURE | 2ND SEMESTER WEEK 11: DISTRIBUTION CHANNELS IN THE TOURISM INDUSTRY INFORMATION DISTRIBUTION CHANNEL Distribution Channels are exposed to information about that the market needs and A set of independent organizations involved in wants the process of making a product or service available to the consumer or business user. PROMOTIONS It moves goods from producers to consumers, it overcomes the major time, place and Distribution Channels help in developing and possession gaps that separate goods and spreading persuasive communications about services from those who would use them. the company’s current offer A distribution Channel is a delivery arrangement used by a supplier, carrier, or CONTACT destination marketing organization Distribution Channels are the company’s link DISTRIBUTION SYSTEM to finding and communicating with prospective and current buyers The Distribution Channel may be direct or indirect. MATCHING Direct distribution channels are those the company uses on its own without the Distribution Channels know what products can assistance of independent intermediaries. A do and what the buyer needs direct system of distribution is one where the supplier communicates directly with NEGOTIATION consumer. An indirect distribution channel uses the Distribution Channels represent the company assistance of independent intermediaries to to the consumer during negotiation distribute its product PHYSICAL DISTRIBUTION TOURISM DISTRIBUTION CHANNEL Distribution Channels handle the physical It is an operating structure, system, or linkage transport of goods and services to consumers of various combinations of organizations through which a producer of travel products FINANCING describes, sells, or confirms travel arrangements to the buyer. The capital outlay of Distribution Channels should cover the costs involved in the actual distribution of products DISTRIBUTION CHANNEL AND ITS FUNCTIONS CHANNEL LEVELS Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 MARKETING INTERMEDIARIES TOURISM DISTRIBUTION CHANNEL MARKETING INTERMEDIARIES SELECTING CHANNEL MEMBERS Travel Agents / Retailers Tour Operators / Wholesalers KNOWING the needs of your customer Travel Specialist ATTRACTING channel members Hotel Sales STUDYING economic feasibility MAINTAINING control Representatives Government Tourist Associations BUSINESS LOCATION Consortia Reservation Systems UNDERSTAND Global Distribution Systems Understand the marketing strategy and Concierges Online target market of the company Travel Agencies CONDUCT TRAVEL AGENTS / RETAILERS Conduct a regional analysis, which involves the selection of geographic The most widely used in marketing market areas intermediary in the tourism industry. Travel agents offer a wide array of products and SELECT services Select an area within that region TOUR OPERATORS / WHOLESALERS CHOOSE Choose individual sites that Offers tour package that includes any compatible with the business components of travel (Transportation, Transfers, Accommodation, Tours, Meal, Etc.) FRANCHISING TRAVEL SPECIALIST Is a method of doing business by which a franchisee is granted the right to engage in Are organizations that focus on one or more offering, selling or distributing goods and functions of the distribution system services under a marketing format which is designed by the franchisor (Kotler 2008) HOTEL SALES REPRESENTATIVES Granting the right to engage in offering, selling, or distributing goods or services under Sell hotel rooms, function rooms, and other a marketing format which is designed by the services in a particular market area franchisor CONSORTIA A group of hospitality organizations that are allied for the mutual benefit of the members. Example of thisis the Logis de France, an association of small hotels in France Downloaded by MARCHEN MAXIME DIONIO ([email protected])  lOMoARcPSD|31962700 TO THE FRANCHISE TO THE FRANCHISOR Downloaded by MARCHEN MAXIME DIONIO ([email protected])