UNIT 5-2.docx

UNIT 5: DESTINATION MARKETING [5.1 The Importance of marketing to travel & tourism organisations] Marketing makes travel & tourism organisations attractive to customers and they are attracted by the 4 Ps of the marketing mix. These are Product, Price, Place and Promotion which tell customers about...

UNIT 5: DESTINATION MARKETING [5.1 The Importance of marketing to travel & tourism organisations] Marketing makes travel & tourism organisations attractive to customers and they are attracted by the 4 Ps of the marketing mix. These are Product, Price, Place and Promotion which tell customers about the products and services of T&T organisations. Importance of Marketing in T&T can be seen through the following reasons. *More Customers* Marketing & promotion bring more customers to T&T organisations. More customers using services increases the sales of these organisations as they become more profitable. Profits enable the T&T businesses to pay for more marketing and promotion, and more marketing and promotion increases the market share (proportion of potential customers who use or buy an organisation's products and services) and widens the customer base (set of people who use or buy the products of a T&T organisation). *Competitive Advantage* Competitive advantage is what makes a T&T organisation more attractive than competitor organisations. For an example of competitive advantage read the Rovos Rail in the case study on South Africa's luxury train-hotels page 135. *Positive Image and Reputation for Sustainable practices* Marketing promotes what is good about a T&T organisation's product, price and place. Promotional materials create a positive image of a T&T organisation in the minds of potential customers. These positive images of products and organisations aid in attracting customers as the goal of more profitability is then met. Good customer feedback also makes for good reputations for T&T orgs. Draw figure 5.7 on page 134 in your book. *Greater Customer Satisfaction* This encourages brand loyalty (choice of customers to continue buying the same product from the same organisation) and repeat business. This choice brings more profitability which in turn enables more marketing and promotion. [5.2 Factors Affecting Marketing] T&T organisations attract customers by marketing products and services and considers some factors which affect this marketing of the products and services. The factors affecting marketing are: **Target Marketing**- The type of customer a T&T organisation tries to attract for e.g., families with children **Timing**- Appropriate Timing is planning when to market products and services and considering the most suitable time to attract customers. **Costs**- These need to be always considered like for instance the costs of promotion and place. **Brand Image**- The impression potential customers have of an organisation. **Monitoring**- checking the organisation's performance e.g., sales, usage, profitability and quality. **Reputation**- An org's basis of being well known e.g., industry awards that can be associated with the organisation in a featured promotion. Internet and social media platforms are online services that allows customers and T&T providers to exchange information. Internet platforms allows customers to research and reserve holiday apartments online. Some internet booking platforms provide an online chat a real time discussion over the internet which can be used to discuss accommodation with a travel agent in real time. Customers type the questions and the travel agent answers immediately with the conversation occurring over text. Social media platforms allow customers and providers to share information in ways that are open to other people. An example is how customers can share reviews of an accommodation with providers and other customers. Potential customers then use the social media reviews to help choose accommodation. Providers monitor social media reviews and sometimes they respond to customer reviews posted on the platform. Read the Case study on page 139. [5.3 Marketing Mix ] The marketing mix comprises of the 4Ps of product, promotion, price and place. Product include products and services of which sustainable products and services are part of the product of the marketing mix. Draw Figure **5.14** In your book from **page 141** and also copy the **Key words** and definition into your notes on **Page 142**. *Place* Place in the marketing mix includes distribution channels (ways in which products reach customers) and physical location (actual place where a travel and tourism business is located). Physical location includes: - The cost, character & features of the local area surrounding the business. - Adjacent (nearby) facilities such as toilets, car park or other businesses that may help to attract customers. - Availability of a suitable site or premises. - The availability of staff like staff who live nearby. - Access and transport links so that customers can easily reach the business. *Product Life Cycle* This is the stages in the marketing existence of a product. The four product life cycle stages are: - Introduction: a new product starts to be sold. - Growth: sales increase. - Maturity: the period of maximum sales - Decline: sales reduce. For instance, a walking tour product may sell slowly when first introduced by a tour operator. Later there is a growth in sales reaching maximum during their maturity stage. Afterwards sales decline. A new walking tour is then introduced to restart the cycle of product life. When the tour ins introduced only a few customers know about it hence sales being low. The tour becomes well known after there has been some promotion and positive customer reviews. More people becoming aware makes the sales to increase till a maximum number is reached. Sales reach maximum during the stage of maturity. Potential customers may begin to find newer, cheaper or better competing tours and so sales start to decline. The tour operator may decide to market a new tour and then the product life cycle begins again. Draw **Fig 5.15 on page 143** for the Product life cycle and read the case study on the same page. [5.4 Market Research and Analysis] T&T orgs research the market for T&T products and services and they do different types of market research. The types of market research include: *Primary Research* This is direct research with the goal of getting direct information from the customers directly. For example, T&T orgs can use questionnaires, surveys, interviews, and focus group to get this direct information by asking about products and services provided by the organisation. *Secondary Research* This is using sources of information like documents that already exist. An example would be a T&T org using existing sources like government reports and statistics from the National Tourism Organisations (NTO). To put it in easier sense, a hotel that is interested in catering for Business tourists can utilise such reports and statistics to research on the numbers and behaviours of these tourists. Quantitative & Qualitative Methods These two methods are used to research markets by T&T orgs. Quantitative methods are interested in collecting data as statistics (numbers) in their research while Qualitative methods are about uncovering the underlying reasons behind patterns of customers. An example for Quantitative is customer surveys where customers fill in and answer survey questions with the number of customers who answer in a certain way being regarded as a percentage. Qualitative market research methods include, observation, interviews and informal conversations. T&T orgs can observe customer behaviour, talk to customers informally, or interview them to find out their needs and wants. **[Market Research Tools]** Market research provides information for travel and tourism organisations (orgs) to analyse. They use tools to analyse the T&T markets and the tools include SWOT analysis and PESTLE analysis. *SWOT Analysis* 1\. Strengths: These are internal factors within a tourism business or destination that give it an advantage over others. For example, it could be a unique tourist attraction, excellent customer service, or a prime location. 2\. Weaknesses: These are also internal factors but represent areas that are lacking or need improvement. For instance, a tourism destination might have poor infrastructure, limited accessibility, or seasonal fluctuations in visitor numbers. 3\. Opportunities: External factors that could positively impact the tourism business or destination. This might include new trends in travel preferences (like eco-tourism), government initiatives promoting tourism, or emerging markets. 4\. Threats: External factors that could negatively affect the tourism business or destination. This could be competition from other destinations, economic downturns, natural disasters, or changing travel regulations. when conducting a SWOT analysis for Travel and Tourism: \- Strengths could be explored in terms of local culture, historical sites, or natural landscapes. \- Weaknesses might include inadequate transportation infrastructure or environmental concerns. \- Opportunities could involve growing interest in sustainable tourism or new partnerships with travel agencies. \- Threats might include political instability in nearby regions or shifts in exchange rates affecting international tourism. *PESTLE Analysis* 1\. Political Factors: These include government policies, regulations, stability, and political relations that can impact the travel and tourism industry. For example, changes in visa regulations, taxation policies affecting tourism businesses, or political instability in a region can all affect tourism flows. 2\. Economic Factors: Economic conditions such as GDP trends, exchange rates, inflation rates, and economic stability greatly influence the travel and tourism sector. For instance, a strong currency in a destination country may make it more expensive for international tourists, whereas a weak currency could attract more visitors seeking affordability. 3\. Social Factors: These factors encompass demographic trends, cultural attitudes, lifestyle changes, and social norms that affect travel behaviour. For example, increasing interest in sustainable tourism practices, changing demographics (such as aging populations with different travel preferences), or cultural events that attract tourists can impact the tourism industry. 4\. Technological Factors: Advancements in technology influence how tourism services are delivered, marketed, and experienced. This includes innovations in transportation (like high-speed trains or electric vehicles), digital marketing strategies, use of social media for tourism promotion, and advancements in online booking systems. 5\. Legal Factors: Legal factors encompass laws and regulations that directly affect the travel and tourism industry. This includes health and safety regulations, employment laws, environmental regulations, and licensing requirements for tourism businesses. Compliance with these laws can significantly impact operational costs and business practices. 6\. Environmental Factors: Increasingly important in the tourism industry, environmental factors include sustainability concerns, climate change impacts, natural disasters, and conservation efforts. Tourists are becoming more conscious of the environmental impact of their travel choices, influencing destination preferences and tourism activities. In applying PESTLE analysis to Travel and Tourism involves examining how each of these factors can create opportunities or pose challenges for destinations or tourism businesses. It helps students understand the broader external environment in which tourism operates and prepares them to evaluate strategic decisions, adapt to changes, and capitalize on emerging trends in the industry. **[Reasons for Market Research]** 1\. Understanding Customer Needs and Preferences: Market research helps tourism businesses and destinations understand what travellers want and expect. This includes identifying preferences for types of accommodation, activities, cultural experiences, and travel services. By knowing these preferences, businesses can tailor their offerings to better meet customer demands. 2\. Identifying Market Trends: Research allows businesses to stay updated on current trends in the travel and tourism industry. This includes shifts in consumer behaviour, emerging travel preferences (such as eco-tourism or adventure tourism), technological advancements affecting travel booking and experiences, and changes in popular destinations. 3\. Assessing Competitors: Market research helps businesses analyse their competitors in the tourism market. This includes understanding their strengths, weaknesses, pricing strategies, marketing approaches, and customer satisfaction levels. By benchmarking against competitors, tourism businesses can identify opportunities for differentiation and competitive advantage. 4\. Planning Marketing Strategies: Research provides insights into effective marketing strategies to attract tourists. This includes understanding the most effective channels for reaching target audiences (such as social media, travel websites, or traditional media), crafting compelling messaging that resonates with travellers, and timing promotional campaigns to maximize impact. 5\. Forecasting Demand: Market research helps forecast future demand for travel and tourism services. By analysing historical data, economic trends, seasonal variations, and demographic changes, businesses can anticipate fluctuations in visitor numbers and adjust their operations and offerings accordingly. 6\. Supporting Business Decision-Making: Research provides data-driven insights that support strategic decision-making in tourism businesses. Whether it\'s expanding into new markets, investing in infrastructure improvements, diversifying tourism offerings, or optimizing pricing strategies, market research helps mitigate risks and maximize opportunities. 7\. Improving Customer Satisfaction: Understanding customer feedback and preferences through research allows tourism businesses to enhance customer satisfaction. By addressing pain points, improving service quality, and offering personalized experiences, businesses can build loyalty and encourage repeat visits. In essence, market research in Travel and Tourism serves as a foundational tool for understanding the market environment, identifying opportunities, mitigating risks, and effectively meeting the needs of travellers. It equips students with analytical skills and knowledge essential for success in the dynamic and competitive tourism industry. Read Case Study from page 149 **[5.5 Market Segmentation and Targeting]** The markets of T&T orgs are divided into different parts called segments. These T&T organisations develop the product/service mix to target different market segments. *Different Market Segments* Markets for T&T products and services have different parts or elements which are termed segments. Draw the Chart on **Figure 5.25** showing T&T market segments page 153. *The Development of product/service mix to target different market segments* T&T orgs develop their product/service mix to target different market segments. An example is the geographic segments of a destination's market which can be made by dividing the market into: 1. The different localities, areas or regions that customers are from. 2. Customers who are domestic tourists and customers who are inbound tourists. The T&T orgs develop their product/service mix by evaluating their products, services and facilities. These organisations evaluate the relationship between their product/service mix and market segments. Travel & Tourism organisations evaluate: - Types of customers targeted. - Quality, economy and value for money of products and services - Accessibility of facilities. - Sustainability. Product/service mix is the blend of T&T products and services developed by T&T organisations in a destination. Read the Case study from page 154.