Introduction to tourism and hospitality Marketing reviewer.pdf

Introduction to tourism and hospitality Marketing product and the consumer cannot be in two different places; they have to be in the same place. Marketing has become a buzzword in the world...

Introduction to tourism and hospitality Marketing product and the consumer cannot be in two different places; they have to be in the same place. Marketing has become a buzzword in the world of business when the competition to gain market share began among For Example! A tourist who avails of airline ticket need to be physical businesses. present inside the airplane to avail of the product. Products cannot be Marketing has evolved from simple trade, to production delivered to where the consumer is. Most of the time it is the orientation, to sales orientation. consumer who goes to where the product is to avail the product. When businesses realized that production increasing, they began competing for recognition within the market. Activities within the destination can only be enjoyed when one is a The customer has become king and building relationships part of it. Spectators have a different experience compared to actual with them become the heart of any successful business participants in the tourist activity. enterprise. Tourism is one of the leading industries of the future. Next Variable to information technology and telecommunications, The tourism experience is likely to be different depending on when tourism contributes largely to the generation of jobs and the the product is availed, who one is with, and how the service providers strengthening of economies. deliver the service at the time of the consumption. Much attention has been given to how tourism can continually grow. Just like other business, marketing plays For Example! One may have gone to the same restaurant several an integral role in its continuing growth. times and have a different dining experience each time. While the first Marketing for tourism covers several levels, from the time at the restaurant may have been quiet, the second time, one tourism destination as the product itself, down to the finds it to be noisy. Simply because there may have been few specific tourism products and services that tourist should customers the first time and a rowdy group of teenagers the second avail of to complete the tourist experience. time. Hence, the variability of the tourism product. These products include transportation (airline, cruise ship, bus, etc.) This is the primary reason why standardization of operation is crucial Accommodation (hotels, inns, apartelles, bed and in the tourism industry. Chain and franchise establishments make it a breakfast) point to standardize the way they provide products and services to address the variability component of the industry. Food and beverage (restaurants, catering, bars) Attractions (amusement parks, museums, zoos, marine sanctuaries, etc.) Perishable Amenities, souvenir shops. The tourism product is one of the most highly perishable of products. Perishability, as used in this context, refers to not being able to What is tourism actually selling then? Tourism is not a single product. forward inventory to the next day. It does not refer to food being It is a combination of products and services which results in a holistic spoiled and thrown away. Products become perishable when it can no experience for the traveler. longer be consumed today even when no one consumed it the day before. Unlike consumer products such as a pen: if the pen was not sold today, it can still be stored in a warehouse to available for the sale UNIQUE CHARACTERISTICS OF THE TOURISM INDUSTRY the next day. - Unlike consumer products that can be availed of the shelf, tourism products have unique characteristics that make their marketing and Airline and restaurant seats, hotel rooms, and function rooms are promotions quite challenging. The tourism product is intangible, perishable products. A seat or a room that is not sold today cannot be inseparable, variable perishable, seasonal, and substitutable. sold some other day. Additionally, tourism is a high involvement product. For Example! For instance, a hotel with 100 rooms that was half full yesterday will only again have 100 rooms today. The 50 rooms that Intangible were unoccupied the day before cannot be sold the following day; the hotel fails to earn from the unsold rooms. A hotel will always have the -Tourism products cannot be touched, smelled, tasted, felt nor heard same number of rooms for sale at any given day. prior to purchase. They cannot be subjected to prior scrutiny. One cannot examine nor test them before purchase, unlike consumer products which can be sampled. Seasonal Seasonality does not only refer to seasons of the year or the weather - A destination that promises fresh air from its beach or a scenic view conditions. It also refers to behavioral patterns of the travel market. of the mountains cannot send a sample. Consumers rely on The seasonality of the tourism product hinders it from maximizing its photographs of place, comments or reviews from those who have profits all year round. Hence, intensified marketing during the lean visited the place or availed of the services, and promises from the season will help increase demand for the product. This is also the company itself. reason most tourism products, such as airlines and resorts, have different rates throughout the year. Such differences in rates help manage capacity and yield to maximize profitability. Inseparable The tourism product cannot be separated from the consumer. When tourists avail of products and services, they have to personally go to where the products are. Since what is being sold is the experience, the Take note! Revenue management addresses the perishability factor TOURISM MARKETING DEFINED of the tourism product. With the proper tools for forecasting price ◦ In the past, marketing was associated with only advertising and occupancy, yield can be maximized. and selling. However, these two activities are now part of a more complex set of strategic activities that comprise Substitutable marketing Competition in the tourism industry is intensifying. With new destinations emerging and competing in the global marketplace, one ◦ There is a misconception that marketing is a task that is destination can easily be substituted for another destination. performed solely by aacount managers and marketing managers. For Example! With a new restaurant opens, the old favorites are relegated to second choice. ◦ A highly successful establishments makes marketing a It is quite a challenge to establish loyalty among clients since there is concern not only of guest contact positions but of every a wide range of product offerings to choose from. With many choices employee of the establishment. available, the tourism product is highly substitutable. However, identifying one's competitive advantage and a unique selling proposition may help make a tourism product less substitutable. ◦ Customer satisfaction is at the center of marketing ◦ It is easy to persuade a customer to make the initial purchase but making the customer return for more is Tourism as a High Involvement Product: dependent on his/her satisfaction from his/her initial Decision making experience. -in the purchase of tourism products is considered to be of high involvement. Tourism products of high involvement mean that there ◦ Hence, marketing becomes not just the concern of the is a greater degree of thought or study involved prior to purchase. marketing officer but the concern of everyone in the EXPENSIVE, COMPLEX and UNREPEATABLE are characteristics of company to ensure that the customer’s needs are met; high involvement products: he/she leaves the establishment happy, satisfied, and willing to come back; and better yet, thet he/she will be Purchase of (1) expensive products is likely to go through a long and willing to tell others how extremely satisfied he/she is with detailed process of canvassing and comparing of brands, suppliers, the quality of the product or service the establishment and product features. provide. If the product commands a high price worth more than one's monthly salary, one would surely make detailed comparisons before finalizing ◦ In summary, tourism marketing can be defined as a any purchase. Travel products, home appliances, and real estate management process where destinations, products, and properties fall under this attribute. services are designed, promoted, and distributed to meet the needs and wants of prospective tourists Consumers may find (2) complex products difficult to purchase. The difficulty may arise from the need to understand the features or Marketing as a Management Process details of the products. Travel packages can be considered as complex Since the provision of tourism products and services usually mainly due to the variety of products and services available, and the "jargons" (technical words) used in explaining some of these occur simultaneously, the marketing orientation should involve products. The same holds true for highly technical products such as the entire organization. The marketing management process electronic gadgets and computers. involves the following key processes: 1. Marketing Information System The (3) unrepeatable nature of travel makes it a "once-in-a-lifetime" -It enables the organization to compile an updated set of purchase. With the novelty-seeking behavior of most tourists and the information of customers, competitors and the organization’s high cost of travel, travel purchases may not be repeated or may be infrequent. Hence, more careful scrutiny is exercised prior to capabilities and effectiveness. purchase. Aside from travel products, special events such as weddings and debuts fall under this characteristic. 2. Marketing planning -This involves the analysis of marketing environment in relation to the potentials of one’s business. Take note! - It also involves the setting up of objectives and evaluation Marketing necessarily plays and important role in the purchase of of the milestones that the company has reached. tourism products. Because of the aforementioned characteristics of - the creation of marketing strategies will help increase the tourism product, a marketing strategy needs to be developed to business by obtaining the best fit between company’s resources make the product competitive in a highly commercialized market and its target market position place. 3. Planning Tactical Campaigns. -This step ensures that practical and realistic tactical campaigns are conducted in support of the comprehensive marketing strategy.  4. Marketing Operations. Integrated Marketing Communications Approach: -This process involves the challenging part of implementing the The promoting and selling of products have become heavily reliant or planned strategic and tactical campaigns by coordinating with all dependent on traditional advertising techniques which have become stakeholders and ensuring that activities are conducted as planned. more expensive and less effective. The Integrated Marketing Communications was born from the need of businesses to enhance 5. Monitoring and Control. the promotion of their products. -This involves the ongoing process of evaluating sales data and financial performance versus marketing activities conducted. What is IMC? - It also includes the handling of customer feedback and (Integrated Marketing Communications Approach) complaints - It’s is the process of using all forms of promotion to achieve - it includes also being aware of what the competitors are doing maximum communications impact while maintaining a consistent image for the products or services. Core Marketing Functions: - IMC approach has been effective way for companies to reach their Marketing key functions: target market and to achieve company objectives within the ◦ Marketing Information Management – entails gathering available budget information about customers to better serve their needs FACTORS THAT CONTRIBUTED TO THE GROWTH OF IMC and improve decision-making. 1. Growth of Technology ◦ Financing – involves planning to ensure that resources are 2. Incentive- based compensation available to maintain and improve the business. 3. Consolidation of the retail industry 4. Database Marketing ◦ Pricing – ensures that the value and cost of goods and services offered to customers will be at the level that the TO REACH TARGET MARKET customers are willing to pay. I TO ACHIEVE COMPANY OBJECTIVES ◦ Promotion – prepares the various promotional strategies I that will enable the products to be introduced and sold to WITHIN THE AVAILABLE BUDGET the customers. ◦ Product/Service Management – involves designing, ------------------------------------------------------------------------------------------- developing, maintaining, improving, and acquiring products and services to meet the needs of the customers. ◦ Distribution – involves bringing the products and services to CHAPTER 2: the customers in the best way possible. DEFINITION OF A MARKET ◦ Selling – is the ultimate measure of marketing success. A market is a set of actual and potential buyers of a product. Strategies on following up the sale, closing the sale, and making repeat sale are crucial tasks of marketing. The tourism product is not for all. The tourism industry aims to target a specific set of individuals. It is for a particular set of buyers, Marketing Mix: a niche market (a specific segment of consumers who share Kotler says that marketing facilitates the exchange process and the characteristics and, because of those characteristics, are likely to buy development of relationships by carefully examining the needs and a particular product or service. wants of consumers. (4 P’S) Marketing Mix Product or service – this is what the company is offering to There are three steps to target marketing: satisfy a customer’s want or need. 1. Market Segmentation Price – the value that the seller puts on the product or 2. Market Targeting service. (this includes the cost of the product and the profit 3. Market Positioning the seller wishes to make.) Place – the means by which the product or service reaches Tourist Market and Segmentation the consumer. Promotion is the strategic plan by which customers are Tourist Market The tourist market encompasses all the potential informed about the product or service and its value. customers—domestic and international—who have an interest in -It also encourage customers to purchase product or traveling for leisure, business, cultural, or other purposes. This market service. is vast and diverse, including a wide range of preferences, needs, and behaviors. Understanding the tourist market is essential for A well-planned and executed marketing mix will enable marketers destinations, tour operators, and other stakeholders to effectively to move their products or services successfully to the consumers. cater to and attract different segments of travelers. *  Components of the Tourist Market Examples of Tourist Segments: Domestic Tourists Individuals traveling within their own country. This Family Travelers Typically looking for child-friendly accommodations, segment often accounts for the majority of tourist activity in many activities, and attractions. Marketing to this segment often countries, driven by ease of access, familiarity with the destination, emphasizes safety, convenience, and family bonding experiences. – and lower travel costs. – Solo Travelers Individuals traveling alone, often seeking unique International Tourists Individuals traveling to foreign countries. This experiences, self-discovery, and adventure. This segment might value market is influenced by factors such as visa policies, exchange rates, flexibility, social opportunities, and safety. – international relations, and global connectivity. – Millennials A generation known for seeking authentic, off-the-beaten- Leisure Tourists These tourists travel for relaxation, recreation, and path experiences and valuing digital connectivity. Marketing to entertainment. Their motivations include visiting beaches, cultural millennials often involves social media, influencer partnerships, and sites, or natural attractions. – eco-conscious messaging. – Business Tourists These tourists travel primarily for work-related Senior Travelers Often retired individuals with more time and purposes, such as attending conferences, meetings, or corporate resources for travel. This segment may prioritize comfort, cultural events. Business tourists often have specific needs related to experiences, and guided tours. accommodation, transportation, and communication services. – ------------------------------------------------------------------------------------------- Special Interest Tourists This segment includes tourists with specific interests, such as eco-tourism, adventure tourism, medical tourism, Tourist market segmentation is a powerful tool that enables or heritage tourism. Their travel choices are driven by a strong tourism businesses and destinations to better understand their preference or passion for a particular activity or experience. customers, develop tailored offerings, and create more effective marketing strategies. By catering to the specific needs and desires of different segments, stakeholders can enhance the overall travel experience, foster customer loyalty, and drive business growth. Tourist Segmentation: Tourist segmentation involves dividing the overall market into distinct Tailored marketing refers to strategies that are customized groups of individuals who share similar characteristics, needs, or to target specific segments of the market, with the goal of better behaviors. Segmentation allows businesses and destinations to tailor meeting their needs and increasing engagement, conversion rates, their products, services, and marketing strategies to better meet the and customer satisfaction. Here are some examples of tailored specific needs of different groups, thereby increasing customer marketing in the tourism industry: satisfaction and loyalty. * Family Travelers Basis for Segmentation: Demographic Segmentation Dividing the market based on Marketing Strategy: Family-oriented resorts and destinations often characteristics such as age, gender, income, education, occupation, highlight their kid-friendly amenities, such as children's pools, play and family size. For example, luxury resorts may target high-income areas, babysitting services, and family-oriented activities. – couples, while budget hostels may cater to young backpackers. – Example: A beach resort might run a marketing campaign during Geographic Segmentation Segmenting the market based on location, school holiday periods, offering special family packages that include such as country, region, or city. This helps in tailoring services to the discounts for children, free meals for kids, or complimentary tickets to cultural preferences and travel habits of tourists from different parts nearby attractions. Advertisements may feature happy families of the world. enjoying time together, emphasizing safety, convenience, and the joy of family bonding. Psychographic Segmentation Dividing the market based on lifestyle, personality traits, values, and interests. For instance, adventure Millennials tourism may attract thrill-seekers, while wellness tourism appeals to Marketing Strategy: Millennials are often drawn to authentic, unique, those seeking relaxation and rejuvenation. and experience-driven travel. They also value sustainability and social Behavioral Segmentation Focusing on the behavior of tourists, such responsibility. – as their travel frequency, loyalty, purpose of travel, and spending Example: A travel company targeting millennials might create a social patterns. For example, frequent travelers might be targeted with media campaign featuring influencers or travel bloggers who share loyalty programs, while occasional tourists could be attracted with their real-life experiences of visiting off-the-beaten-path destinations. special promotions. – The campaign could emphasize eco-friendly accommodations, Benefit Segmentation Segmenting tourists based on the specific immersive cultural experiences, and the use of local guides. Hashtags, benefits they seek from travel, such as convenience, price, luxury, or user-generated content, and contests encouraging followers to share cultural experiences. This allows businesses to emphasize different their own travel stories can further engage this segment. aspects of their offerings to attract various segments. Solo Travelers Competitive Landscape: Companies must evaluate the level of competition within each segment. Targeting segments with less Marketing Strategy: Solo travelers often look for independence, competition or where the company has a strong competitive adventure, and opportunities to meet new people. Safety and ease of advantage is often more attractive. – navigation are also important considerations. – Strategic Fit: The chosen segments should align with the company’s Example: A tour company might offer group tours specifically overall business strategy, resources, and capabilities. – designed for solo travelers, where individuals can join a group of like- minded explorers. The marketing campaign could highlight the ease Accessibility: The segment should be reachable and serviceable of making new friends, the safety of traveling with a group, and the through the company’s distribution channels and marketing efforts. freedom to explore destinations at one’s own pace. Testimonials from past solo travelers and photos of people enjoying themselves in small Market targeting is a strategic process that enables groups can further attract this segment. companies to focus their marketing efforts on the most promising market segments. By carefully selecting target markets based on Senior Travelers factors like size, profitability, competition, and strategic fit, companies can maximize their chances of success. However, they must also be Marketing Strategy: Senior travelers may prioritize comfort, safety, aware of the challenges involved, such as changing market dynamics and culturally enriching experiences. They might also have specific and the need for accurate data. When done effectively, market needs regarding accessibility and health services. – targeting leads to better resource allocation, stronger competitive Example: A travel agency might design packages that cater to senior positioning, and greater customer satisfaction. travelers, with an emphasis on guided tours, comfortable transportation, and cultural experiences like museum visits, historical site tours, and local cuisine tastings. Marketing materials could feature Market Positioning testimonials from older travelers, detailed itineraries that minimize Market positioning refers to the process by which a company creates strenuous activities, and highlights of health and safety protocols. a distinct image and identity for its product or brand in the minds of the target market. It is about carving out a unique space in the MARKET TARGETING marketplace that differentiates a brand from its competitors. Effective Market targeting is a crucial step in the marketing process that positioning allows a brand to communicate its value proposition involves selecting specific segments of a market to focus on. After clearly, ensuring that customers perceive it as different from and identifying various market segments through market segmentation, better than competing offerings. companies must decide which segments to pursue. The goal of market targeting is to efficiently allocate resources by focusing on the most Three positioning concepts will help reinforce the idea of market promising segments that offer the best potential for growth, position: profitability, and alignment with the company’s strengths. 1. Unique Selling Proposition Importance of Market Targeting: 2. Competitive advantage Market targeting is essential for several reasons: 3. Top-of-mind Awareness Resource Allocation: Companies have limited resources, and targeting USP is a term used to identify what makes the product or service allows them to focus their efforts where they can achieve the greatest different form others. This USP may occur due to the product’s impact. Instead of spreading resources thin across many segments, physical attributes, added services, personnel, location, or image companies concentrate on a few key areas. – Competitive advantage is the product’s advantage over its Competitive Advantage: By targeting specific segments, companies competitors, which is gained by offering greater value either by can tailor their marketing efforts to meet the specific needs and offering lower prices or providing more benefits to justify higher preferences of those segments, leading to a stronger competitive prices. position. – Top-of-mind awareness is the highest level of recall that a brand Customer Satisfaction: When companies target the right market receives. It means that the brand occupies the top spot in consumer’s segments, they are better able to meet the needs and expectations of mind. The ultimate top-of-mind level a brand can reach is when it their customers, leading to higher levels of customer satisfaction and becomes synonymous with the generic. loyalty. Some positioning strategies include the following: Criteria for Selecting Target Markets: When deciding which market segments to target, companies typically 1. Specific product attributes such a price and special features consider several key criteria: can be used to position a product. Market Size and Growth Potential: Companies often look for 2. The product can also be positioned based on its benefits and segments that are large enough to be profitable and have potential the needs the product fills. for growth. 3. Positioning the product based on certain classes or segments of users can also be done. Segment Profitability: It is important to assess the potential 4. A company decide to position itself against an existing profitability of each segment, considering factors such as pricing, cost competitor and present its edge over said competitor. structure, and customer lifetime value. –  CHAPTER 3: Types of Tourists Based on Behavior: Tourism and Consumer Behavior Explorers: Tourists seeking adventure and novelty, often visiting lesser-known destinations. How Travelers Make Decisions Organized Tourists: Prefer planning in detail, guided tours, and comfort. Introduction to Tourism and Consumer Behavior: Spontaneous Tourists: Often decide at the last minute, Tourism involves travel for leisure, business, or other value flexibility, and are less price-sensitive. purposes, often creating economic, cultural, and social Luxury Tourists: Seek high-end experiences, exclusive exchanges between travelers and locals. accommodations, and personalized services. Consumer Behavior in Tourism focuses on the decision- Budget Travelers: Prioritize affordability, looking for deals making process of tourists, including what motivates them and value for money. to choose a destination, their travel preferences, and their overall behavior before, during, and after the trip. The Role of Technology in Tourism Consumer Behavior: Online Reviews: Websites like TripAdvisor and Google Importance of Studying Consumer Behavior in Tourism: Reviews influence traveler decisions by providing honest Understanding Demand: Businesses can design better feedback. products and services by knowing what tourists want. Social Media: Instagram and YouTube influence tourist Market Segmentation: Identifying various types of tourists behavior through images, videos, and user-generated (e.g., adventure seekers, cultural tourists, luxury travelers) content. helps target specific groups more effectively. Booking Platforms: Websites like Airbnb, Expedia, and Trend Prediction: Helps forecast future trends, such as the Booking.com simplify the comparison and purchase rising popularity of eco-tourism or digital nomadism. process. Customer Satisfaction: Businesses can enhance customer Mobile Apps: Enable real-time booking, navigation, and experience and improve loyalty by anticipating needs. trip management on the go. Key Factors Influencing Tourist Behavior: Emerging Trends in Tourism Consumer Behavior: 1. Psychological Factors: 1. Personalization: Consumers are increasingly seeking Motivation: Desire for relaxation, adventure, cultural customized travel experiences that cater to their individual exposure, or social interaction. preferences. Businesses that offer tailored itineraries or Perception: How travelers perceive destinations based on personalized services tend to attract more attention. marketing, word of mouth, or past experiences. 2. Sustainability and Responsible Travel: More tourists are 2. Social Influences: prioritizing sustainability, looking for eco-friendly travel Family, friends, and social media play a significant role in options, and choosing destinations that focus on destination choice. responsible tourism. This trend reflects a shift in consumer values and behavior. 3. Cultural Factors: Cultural background can influence preferences for 3. Digital Influence: With the rise of digital platforms, tourists destinations, activities, and travel experiences. now have access to vast amounts of information, reviews, and travel inspiration online. Social media, online travel 4. Economic Situation: agencies (OTAs), and travel blogs have a major impact on Personal income and financial constraints affect the choice how tourists choose and plan their trips. of destination and travel mode. 4. Experience Over Materialism: Many consumers are Tourist Consumer Decision-Making Process: shifting their focus from material goods to memorable Need Recognition: The tourist realizes the need to travel experiences. This trend is particularly strong among (e.g., a vacation, attending an event). millennials and Gen Z, who place a higher value on unique Information Search: The tourist researches potential and authentic experiences. destinations, reviews, and packages using websites, travel agents, or personal contacts. 5. Health and Safety Concerns: In the post-pandemic world, Evaluation of Alternatives: The tourist compares the consumer behavior in tourism has shifted towards available options, such as destinations, accommodations, destinations and services that offer high levels of health transportation, and activities. and safety assurances. Travelers are more likely to choose Purchase Decision: The tourist books the trip, finalizing destinations that have clear health protocols, less details like flights, hotels, and tours. crowding, and are perceived as safe. Post-Purchase Behavior: The tourist reflects on the experience, shares reviews, and may become a repeat Challenges in Understanding Tourism Consumer Behavior: customer if satisfied. Diverse Motivations: Tourists come from different backgrounds and have varying reasons for travel, making behavior complex to understand.  Changing Preferences: Trends and preferences shift rapidly, especially with the influence of social media and global events. Overreliance on Data: While data analytics provide insights, human emotions and experiences still play an unpredictable role in decision-making. SUMMARY: Understanding consumer behavior in tourism helps businesses and destinations create better products, market effectively, and provide memorable experiences. As technology and consumer preferences evolve, so too must the strategies of tourism-related businesses. Continued focus on sustainable tourism, personalized experiences, and technological integration will shape the future of the tourism industry.