The travel and tourism sector is a pivotal one among industries and marketing effectively the products and services in it, is maturing on a daily basis. In the past decade or so, a lot of studies have been carried out on how to effectively market in this sphere that comes in handy for savvy marketers in the field. This study aims to be an addition to such literature.
The study takes a close look at the concepts of marketing and marketing mix, the importance of marketing information, market segmentation, strategic marketing planning and promotional mix relevant to the travel and tourism industry. Case studies of Gatwick airport and Sheraton Hotel are analysed to provide specific inputs into effective marketing in the industry.
P1.1 Discuss the core concepts of marketing for the travel and tourism sector
Tourism marketing refers to the application of marketing concepts to the Travel and Tourism industry. It can become a complex exercise owing to the product is a mix of varied industries like transportation and hospitality as pointed out by Kongalla (2013). The markets involved in the industry vary widely and deciding on the customer’s preferences could become cumbersome. The products involved are pertaining to the history, climate, culture, and amenities. A tourism product is the total of the entire factors in a region that can lead to customer satisfaction. A travel agent or his tourist amalgamates the various components to garner his or her own tourist product.
There are several characteristics of the tourism industry that decides its marketing like it being intangible, seasonal demand, consumption happening at once and widely varying consumer motivations. Also, the intermediaries like travel agents possess strong control on the product distribution, design, pricing and promotion and high fixed expenditures are often involved leading to the utilization of short-run marketing. The customer also depends on pre-purchase information for making their decisions as they have no option of viewing first-hand.
There are several features of tourism marketing like involving several steps and the product development aiming to meet the customer’s needs. The marketing strategy strives to reach the target markets utilizing advertising, promotion, distribution and pricing. Market research endeavours to understand the customer. Analysis followed by selection of target markets referred to as segmentation implies researching potential customer groups and choosing only certain groups whose wants and needs can be best satisfied by a specific producer’s product.
P1.2 Assess the impact of the marketing environment on individual travel and tourism businesses and tourist destinations
The needs, anticipated benefits and expectations from tourism sites vary widely among the tourists as noted in the Job trust website (n.d.). The differences among various tourist groups’ perceptions on destinations will benefit Thomson Holidays while strategizing on promotional and marketing activities of the products being showcased in the destinations of the cultural tour package. For example, the perception on a museum in Amsterdam might be vastly different among various groups taking the cultural tour package organised by Thomson Holidays. Depending on this perception, the intended location can be deleted or altered on its longevity or how long the guests spend there or on the importance accorded to it.
Images of destinations are really important for customers of the cultural tour package and as such they ought to be shown in the right light. Individual destinations have strong attributes that differentiate them and they have to be highlighted to make the destination look attractive. There also exist preliminary perceptions on particular destinations. Thomson Holidays should strive to identify and then change such perceptions effectively that would get the customers enthused on the destinations.
From the view point of tourism marketing, the environment is a vital element for decision making since its assessment and valuation will potently condition the market activities selected and the manner in which they will be implemented as pointed out by Nicolau (2009). The need for managers in the travel and tourism business in gauging the factors that affect the future stability and financial health of their companies has aroused considerable interest in environmental evaluation. But today for decision makers in the industry this is proving to be a tricky affair owing to the ever increasing complexity among the Business Environment. Tourism industry by its very nature is a very environmentally sensitive one.
P1.3 discuss the factors affecting consumer motivation and demand in the travel and tourism sector
The consumer motivation and demand in the travel and tourism sector depends a lot on individual decision making and attitudes, perceptions, travel motivators and images shape them as noted by Cooper et al and as described in the slideshare website (2008). A person’s perception of the world shapes their attitudes, and perceptions are made up of mental impressions on a travel firm or destination. Travel motivators are the inner urges that set forth travel demand. Images are groups of ideas, beliefs and impressions with regard to destinations and products.
Cohen in 1972 divided tourists into several categories. One is the organised mass tourist who is low on the adventure factor and the person is desperate to maintain their own self on the trip. This person buys a tour package off the shelf and is guided along the destination with little interaction with local people or culture. Another is the individual mass tourist who is like the organised mass tourist except that more scope and flexibility on personal choice is in built. But the tour is still conducted by the tourism industry. The environmental bubble puts away the person from the pristine experience of the destination. Another type of tourist is the explorer who organizes the trip independently and is on the look out to stay off the beaten track. But, reliable transport and comfortable accommodation are sought, the environmental bubble is set aside on occasions, but it steps in when the going gets tough. Another variety is the drifter who does away with all relations with the tourism industry and the trip strives to be as far from familiarity and home as possible. There is no fixed itinerary, and the person habitats among the local people, immersing in their culture and paying for his or her own travel.
The first two types of tourists make use of institutionalized tourism and are handled by the players in the tourism industry like travel agents, tour operators, transport operators and hoteliers regularly. The last two types are of the non-institutionalized type who make use of individual travel avoiding contact with the tourism and travel industry except when absolutely necessary. The demand and motivation of tourists visiting a particular destination or a tourist region as a whole needs to be well understood by the relevant players in the tourism industry to reap better monetary benefits. The six day cultural package of Thomson Holidays fall here into the first category of tourists and the promotion has to done keeping in tune with the motivation and demand of such tourists.
P1.4 Analyse the principles of market segmentation and its uses in marketing planning
Market segmentation is the process of segregating the market into different portions depending on the differences among customers as pointed out in the principles of marketing website (n.d.). The main aim of market segmentation is to understand better the wants or requirements of the customers. A seven step approach can be adopted for achieving effective market segmentation. First step identifies the type of market in which the firm will be dealing. Second step analyses the regions of satisfaction that one is striving to provide to a particular market or what needs or wants one intends to satisfy. In step three one selects dimensions by which to segment the market. Under step four, one identifies the segments in the market being studied based on the chosen dimensions. In step five, one has to assess whether the segment where one’s interest lies satisfies the four qualifiers for effective segmentation. Under step six, a profile of the consumer zeroed in, is created including expectations on purchasing behaviour. In step seven, one has to bring together market, product and business strategy analyses to the segmentation analysis.
Marketing Planning is a logical sequence that enables one to assign strategic planning objectives for the chosen segments and concoct the relevant marketing and sales activities so as to attain these objectives as pointed out in the marketsegmentation website (2014). In short this is a process for determining what one’s firm can become and how the company can achieve that goal. Under the process of strategic marketing planning, segmentation is a key component of marketing audit.
P2.1- Analyse the importance of strategic marketing planning for a selected travel and tourism business or tourist destination
One core element of the strategic marketing planning for Thomson Holidays will be differentiating itself from its competitors as pointed out in the bplans website (n.d.). Thomson Holidays should strive to establish itself as a speciality provider of cultural tour packages. The firm should also strive to provide unparalleled service to customers. This involves dishing out superior service during all stages of the transaction and includes timely follow ups. The firm should aggressively promote different cultural tour packages as eye opening and exciting for the culturally discerning tourist. Thomson should also strive to build its image and create awareness by being consistent and being distinctive in the service provision.
In order to perform well, the following SWOT analysis is proposed for Thomson Holidays:
Diversified client base that will reduce the dependency on any specific market.
Extensive marketing and advertising to promote its services and products and to enhance the firm’s image.
Lack of reputation as a specialized provider of cultural tour packages.
Lack finances to move up higher in the ladder on the value chain.
Mushrooming of a dedicated cultural tour space among tourists.
Not enough competitors in the cultural tour segment especially in the home city of Thomson Holidays.
Much bigger tour operators eyeing the cultural tour space.
Perceived higher value among big brand competitors.
The preliminary marketing expenses will be quite high as Thomson Holidays has to get differentiated in the market of cultural tours. Enough awareness has to be cultivated among the public on the competency of Thomson Holidays in the cultural tour sphere. Pricing is also a significant factor while indulging in the strategic marketing planning exercise. The pricing has to be just right, neither low nor high. If it is low, prospective customers will tarnish the offerings as one of low quality and if it is high, being a relatively new entrant, they will flock to better established names.
There are some great ideas in strategic marketing planning for destinations as noted by Martin (2013). One is providing the customer with a virtual city guide. With increased usage of smart phones and breakthrough technology like augmented reality coming to the fore this is a great way to promote a destination. Minute details of the itinerary can be informed to the tourists to make it convenient for them while visiting a destination. For example they could be informed on the best times of the day in visiting certain attractions. Providing such information will actually save a lot of time on their valuable vacation time.
P2.2- Discuss the relevance of marketing research and market information to managers in the travel and tourism sector
Marketing research provides several benefits to managers in the travel and tourism sector. By retrieving relevant information on customers, they are able to arrive at well planned plans and decisions to satisfy consumers and offer a better service as detailed in the website more business and as noted in the eHow website (n.d.). Such decisions might include entertainment activities, improvement of facilities and customer service. If the customers are satisfied this can lead to repetitive visits. These customers don the role of an advertising medium as they divulge on their experiences to others. Through marketing research, one can formulate deals and packages and communicate them in a relevant manner to the target market. Moving sure footedly towards innovation mirrors well for the reputation of the business.
The method employed for market research must be carefully deliberated upon. Adequate time should be provided for the responding customers in surveys and they must be selected randomly so that there exists no bias among the results. As noted in the website stayinginwales and as pointed out in the eHow website (n.d.), to be effective, tourism research must be repeated. Tourism trends may alter rapidly or over some time. Factors influencing such changes might be economic or political situations.
For managers in the travel and tourism sector, vital and apt questions asked during market research can help them in making strategic, practical and tactical decisions on the markets to pursue, what messages to add to marketing materials, the various product development strategies that need to be pursued and other sticky points that require information in supporting a sound decision as noted in the Government of Canada website (2013).
Vital questions that can be answered by market research for managers in the travel and tourism sector include on who are the visitors for the particular business, where do they arrive from, what activities they indulge in while at the tourist destination, are the services provided meeting the expectations of the customers, is the price, quality, the range of activities and options meeting customer needs and more. The satisfactory answers to these questions are vital for managers in the sector for planning their business activities in an efficient manner and achieving the desired results.
P2.3 – Assess the influence of marketing on society
Marketing helps the society by helping people learn about location of stores, clearly indicated prices, favourite brands and modes of payments as noted in the Canyon Crest Academy website (n.d.). Thus, in an overall sense, it helps in satisfying needs of customers. This higher level of customer satisfaction leads to a reduction in the prices of products and services. Marketing provides better goods at lowered prices. The needs or wants and dislikes and likes pave way for improvement in products and also gives rise to development of new products. The products also meet consumer wants. A higher sales volume is achieved and this rise in sales enables firms to make goods in a more efficient mode. Prices are brought down with effective marketing.
Marketing also helps to manage consumer expectations as pointed out by Hartman (n.d.). Customers bank on reliable brands and on the persistence arising out of brand loyalty. It also bolsters a consumer driven economy by promoting goods and services. It also targets customers most probable in turning purchasers. A business having higher sales resulting from effective marketing strategies turns into better job creation, expansion and better tax revenue for the ruling establishment thus ensuring all round economic growth. The marketing machinery creates jobs and wealth with companies seeking innovative and new manners in promoting themselves as well as their products. Marketing informs and educates customers. It often begins when a firm identifies a need of the customer and strives to delve on how its services or products satisfy that need. For those with clearly specified needs, marketing offers a way of learning on new goods and their functions.
P3.1 Discuss issues in the product, price and place elements of the marketing mix
Gatwick airport as a product in the words of its chief executive Stewart Wingate endeavours to build genuine competition in the market by offering lower fares with its impending expansion for which it is waiting for approval from the Airports Commission as noted in the Argus website (2014). Without the much needed expansion at the airport, monopoly by Heathrow would mean higher airfares are passed on to the next generation. As principles of good economics dictates, an absence of monopoly augurs well for the customers with the increased competition from Gatwick driving down the prices. Common sense also dictates as it has done long ago that as a product, Gatwick being a second airport is a must for a bustling metropolis like London. On the place front, Gatwick’s location, South of London implies that far lesser will be affected by noise. The land is also earmarked already for expansion, thus avoiding the need for tunnelling part of M25 which is the busiest motorway in Europe leading to humongous traffic disruption. Increasing limitation on space in central urban areas for the future implies the need to look at lesser congested areas for airport development and Gatwick fits the bill here perfectly.
Gatwick is thus the sensible option for London’s burgeoning air traffic, as it can drive down considerably the airfares with its proposed expansion and as a marketing executive of this airport, I would definitely accost to the Airports Commission to take up the cause of its expansion.
P3.2-Assess the importance of service sector mix elements to the travel sector
The service sector mix incorporates three more P’s to the conventional four P’s of the product marketing mix of product, pricing, promotions and placement. These three P’s are that of process, people and physical evidence.
In the travel sector since the product is an aggregation of services, the people behind the services are vital for the success of the transaction as noted by Markgraf (n.d.). Providers in this sector should possess top level service capabilities for initially completing the sale and in encouraging repeat customers. People are vital for the travel sector as they don the role of ambassadors of service provided to the customers. Those who are employed in the travel sector should have characteristics such as competence, initiative, caring attitude, goodwill, reliability, responsiveness, problem solving ability as pointed out by Chauhan (2013). The process mix in Gatwick airport consists of flight information, reservation, delivering quality service, facilities at the airport and baggage handling. The physical evidence at Gatwick airport would consist of ticket counters or booking offices, brand logo, ticketing and paperwork. The provision of physical evidence experienced by the customer while partaking the specific tourism product can aid sales as pointed out by Markgraf (n.d.). Supplying branded products and giving out professionally taken photographs of the consumers during key events are effective methods in promoting specific tourism products that can be followed by Gatwick airport.
An eighth P namely programming is also added to the Marketing Mix in the travel sector. One method of adding value to the standard product or service in the travel sphere is to distinguish a specific product or service from competitors by way of exclusive programming as noted by Markgraf (n.d.). Consumers in this space will buy a service or product that appeal to their specific interests. Such preferences can be addressed through special programming and bring in additional customers.
P3.3 Apply the concept of the total tourism product to an individual tourism business – London Gatwick airport
Increasing airport capacity at Gatwick is important for boosting the number of visitors to the UK as pointed out by Phillips (2014). London Gatwick airport is also a major contributor to the UK tourism industry and ensures that the UK tourism industry remain a world leader. On the price front, Gatwick will be able to offer airlines with lower price structures over a longer period of time with lower regulation, speeding up investment and improving incentives as laid down in the press release from Gatwick airport cited in the airportwatch website (2013). Gatwick has to move ahead with the new deal that would free it from regulation thus enabling it to maintain prices that are more competitive.
Gatwick has to continue aggressively promoting itself as the “airport of choice” for the city of London. The promotion machinery has to be geared to reflect this message amply across to the customers. Connectivity of London Gatwick with important airports across the globe has to be stressed throughout the campaign. There are a host of reasons why Gatwick makes more sense than Heathrow in handling higher capacities for the future and this has to be amply highlighted.
Under the process mix, Gatwick airport has to stress on the facilities at the airport to gain an advantage over the competition. It has been noted that half or 50% of Britishers save so that they can spend at airports as noted by Gohel (2014). To tap into this tempting and humongous segment, the convenience and huge savings accruing from shopping at the airport have to be conveyed to the public. Towards this end, the airport has to stress on the existing shopping facilities it offers.
P4.1 Assess the integrated nature and role of the promotional mix
Advertising, sales promotion and personal selling would be the main components of the promotional mix of the Piccadilly Sheraton. The promotional strategies have to be necessarily creative and innovative as pointed out by Parvathy (2013). A major aim of the marketing division of the hotel ought to be increasing the occupancy ratio at the Piccadilly Sheraton. Sales promotion ought to be through providing adequate discounts. The website of the hotel and other promotional material should be filled with natural and attractive photography of the various types of available accommodation with an accent placed on the comfort aspect.
Sales promotion will be carried out effectively by dishing out several incentives. Frequent corporate customers should be especially provided with oodles of such discounts as they form an integral part of the hotel’s loyal customer base. Discounts also apply to leisure visitors. Care should be taken not to push discounts too much as such a strategy would only backfire in the luxury space where value is placed more importance than outright value. Discounting strategy should only be pursued at times.
Advertising should be targeted more at the relevant customers and as such advertisement in traditional media like television would only be a futile exercise. Advertisements should be carried in up market publications that are read by the target population of the hotel.
P4.2 Plan and justify an integrated promotional campaign for the Sheraton hotel.
Prospective customers of the Piccadilly Sheraton have to be provided with information on the hotel through various modes like direct marketing, personal selling and advertising. The hotel has to be pitched as one that offers extremely high quality service and product offerings to the discerning business and leisure traveller. Service levels provided by the hotel have to be given a lot of importance and visibility in the promotional campaign. Service always is a cutting edge in the high end hospitality space and the hotel has to lay emphasis on how its service is distinct from other high end hotel properties in its vicinity.
Personal selling will enable the hotel to build long term corporate relationships especially in the city of London. This ensures that there are enough repeat customers from key corporate accounts for the hotel. Since the hotel is situated in an important business hub like London, important corporate accounts would be vital. The property has to be chalk out attractive corporate discount schemes. The promotional campaign has to lay stress on the fact that Piccadilly Sheraton is a relaxing and luxurious destination for business and leisure. Both sets of travellers require distinction in the promotion campaign. While targeting the business consumer, enough emphasis should be laid on the facilities at the hotel that enables smooth carrying out of business activities within the confines of the hotel itself.
This study is a pointer to the need for effective marketing in the tourism and travel sector. The right marketing and promotional mix with judicious usage of adequate components in it, is vital for the sector. Marketing as evinced by the developments in the recent years in the sector has to be planned religiously and in tune with the defining characteristics associated with the industry. Effective market segmentation along with adequate market information is vital for success in this industry. The recommendations provided to the different firms put under the scanner in the study would definitely serve as a guide for marketing practitioners in this industry.
AIRPORTWATCH. (2013) The Gatwick Airport business plan to 2024.[Online] Available from: http://www.airportwatch.org.uk/?p=595. [Accessed: 30th July 2014].
BPLANS. (n.d.) Travel tour agency business plan.[Online] Available from: http://www.bplans.com/travel_tour_agency_business_plan/strategy_and_implementation_summary_fc.php. [Accessed: 30th July 2014].
Canyon Crest Academy website (n.d.) Marketing impacts society.[Online] Available from: teachers.sduhsd.net/bbaum/documents/Marketing-Lesson2_000.ppt. [Accessed: 30th July 2014].
Chauhan, P.V.S. (2013) Marketing mix in airlines industry.[Online] Available from: http://www.slideshare.net/premvirchauhan/marketing-mix-of-airlines-industry. [Accessed: 30th July 2014].
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