Unit 5 Marketing in Travel and Tourism Assignment - Thomas Cook

Unit 5 Marketing in Travel and Tourism Assignment - Thomas Cook

Introduction

This section of the Unit 5 Marketing in Travel and Tourism Assignment Thomas Cook will be looking into the topic of various the concepts and principles of marketing in the travel and tourism sector. The report will be made on the basis of the renowned company in this sector, which is Thomas Cook. The report will be written from the point of view of an Assistant Marketing Manager for the company in the business of tour operating. The basis of the report will be the management’s plan for creation of a summer 2016 holidays for visiting Morocco and Egypt. The topics which will be covered through this section of the report will include the core concepts of travel and tourism marketing with respect to Thomas Cook, the impact of the marketing environment on Thomas Cook as a part of the travel and tourism business, the factors affecting consumer motivation and demand with respect to Thomas Cook in the travel and tourism sector and the principles of market segmentation and its uses in  marketing planning  for Thomas Cook.

LO 1

P1.1 Discuss the core concepts of marketing for the travel and tourism sector

Marketing as the business process can be defined as the procedure through which the various existing as well potential customers of the business entity are informed regarding the various tangible products or intangible service which are being offered by the company. Apart from the advertising and promotion of the products or service the other phases of the process of marketing includes tasks of selling the product or service as well as carrying out the market research (Kotler, 2011). One of the most important part of the basic marketing principle includes needs, wants and demands which are faced by the consumers and the differentiation in the product or service marketing by the business entity is done basis the whether the same attempts to satisfy needs, wants or demands of a customer.

Needs can be defined as the basic requirements of the human beings which are usually satisfied through the products which generally do not require any marketing push from the companies. The wants are one level more evolved than the needs, but are usually generated from the same requirements. Demands are the wants for specific products which are usually backed by the purchasing power of the consumers and requires significant effort to be impressed by the brand. The travel and tourism sector falls in this third category and hence the importance of marketing is immense for this type of services. In view of the specific nature of this industry the marketing needs to be highly customized as well as experiential in nature the importance of the same enhances. For the purpose of this current case study, it can be said that the demands which will be faced by the consumers for the tourism to Morocco and Egypt backed by their respective purchasing powers will be the driving force for the marketing by the company.

The factors which are often searched by the consumers in the brands and their marketing, which is also inclusive of travel and tourism sector is the value in the offering by the companies and if the same is being able to satisfy the consumers to the highest possible level or not. Purchase decision by the consumers for the travel industry are made on the basis of these two factor, i.e. value as well as cost satisfaction delivered by the service providers so that these services can fulfil their wants and demands. It is important that the tour package to Morocco and Egypt are considered to be of good value for the consumers in terms of the duration of the stay or the various logistical arrangements for the tour. In view of the fact it is expected the tour will be priced at a premium range, the value satisfaction is utmost importance for the package in terms of the destinations and aforementioned factors.

The other important factor for marketing process includes the process of exchange or transaction of the goods and services by the company. If one or more entities, usually the consumers and the service providers with respect to the travel and tourism industry, agree that the deal is appropriate for each of them, then this exchange of service takes place. In case of the scenario under discussion the same will take place in Morocco and Egypt which are destinations of the tourism package.

P1.2 Assess the impact of the marketing environment on individual travel and tourism businesses with in Thomas Cook Group and tourist destinations with reference to Morocco and Egypt

The impact of the marketing environment will be analysed through a micro environmental as well as a macro environmental analysis. The micro environmental analysis will be done on the basis of a  SWOT analysis  and the macro environmental analysis will be done on the basis of a PESTEL analysis. Both the analysis will be done for travel and tourism businesses of Thomas Cook Group and the tourist destination of Morocco and Egypt. We will start with the SWOT analysis:

The landscape of the overall marketing environment has changed significantly over the last couple of decades and the same is applicable for the marketing of the travel and tourism sector as well. To understand the same, the PESTEL analysis is important which is as following:

• Political Factors - The global rise of terrorism can significantly hamper the attractiveness of Morocco and Egypt as the destinations.
• Economic Factors – Economic vagueness in the Eurozone can also hamper the attractiveness of Morocco and Egypt as the destinations.
• Social Factors – Due to the still moderate to high level of unemployment the social acceptance of high cost tourism has decreased significantly
• Technological Factors - Due to the advent of the internet and especially the social media the traditional modes of information seeking have changed drastically. These days the customers and the potential travellers seek information regarding any new destination or the tourism service primarily on the internet and the social media given that this information tend to reliable due to the user generated nature of the same and also that these are available for the consumption by the users conveniently at touch of their fingers.
• Environmental Factors –  Due to the rise of the awareness amongst the consumers for the environmental factors, the trend of responsible tourism has increased significantly.
• Legal Factors – There is no legal factor including the company at present.

Due to these various factors the marketing environment for the tourism industry has changed and the same has led to significant change for the industry. This will also impact the marketing strategy of Thomas Cook for the summer tourist destinations of Egypt. The company needs to adopt the online platforms more frequently for the entire strategic plan. It will be necessary that it can connect with and charm the virtual audiences through the online marketing activities.

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P1.3 Discuss the factors affecting consumer motivation and demand in the travel and tourism sector

Amongst the various important factors which has a lot of influence on the consumer motivation and demand in the travel and tourism sector includes the sonic cultural, technological and tourist motivation factors.  As far as the social cultural factors are concerned, the shifting dependency of the consumers towards the responsible tourism which are also low cost has been a major trend which can affect the traditional bigger players in the industry. Also due to the still moderate to high level of unemployment the social acceptance of high cost tourism has decreased significantly. 

For the technological factors the development of the online booking modules by various online based travel portal and the data exchange through social media has changed the way the new age customers are getting motivated in the industry. Hence reference from the various other people who have already experienced the destination or the service of the tourism company which the customers are opting for. The motivation for tourism has become more pull than push these days due to the advent of the websites like Tripadvisor, Tripoto etc. the consumers are searching for opinions and looking for options on these websites and the reviews made there by the other consumers previously and hence the same are also affecting consumer motivation and demand and Thomas Cook has to be cognizant of the same.

P1.4 Analyse the principles of market segmentation and its uses in marketing planning at Thomas Cook Group

Definition of market segmentation can be given as a process for marketing of the company in which a large base of customers of the market is split into multiple smaller groups of the them. For the purpose of this division of the market few basic variables are used which are chosen with respect to the specific service that is being marketed. Some of these factors for market segmentation are as following (Kotler, 2011):

• Geographic characteristics of the customers – In this type of market segmentation the market of the consumers is segregated in various smaller homogeneous group of consumers according to geographic criteria which may include countries, regions, cities, neighbourhoods etc.
• Behavioural characteristics of the customers – In this the same is done through the past usage, knowledge, attitude, responses etc. for the customers towards the brand
• Demographic characteristics of the customers – For this the factors basis which segmentation is done include variables such as age, sex, occupation, education level etc.

Segmentation can be very important for the marketing planning at Thomas Cook Group since this helps the marketers to target the service more efficiently for a group of consumers who are more likely to opt for the service. This will also help the company in its strategic marketing planning for Egypt as a summer tourism destination. Post the segmentation activity the marketing mix as well as the marketing communication can be developed for this specific set of consumers. This will also be helpful in developing the overall strategy of marketing by Thomas Cook in view of the fact that the group which is identified through segmentation tends to be consistent in its basic traits and this leads to an identification of the profitable customers for the companies (Kotler, 2008).

LO 2

Introduction

This section of the report will continue to look into the topic of marketing and will attempt to comprehend the role of marketing as a management tool in travel and tourism industry with the intention of identifying the importance of strategic marketing planning with respect to the travel industry. This report that will be basis the summer 2016 holidays to Morocco and Egypt managed by the company and will also discuss applicability of market information as well as marketing research for the travel and tourism industry. The other objective of this section will be to look into the influence of marketing on society.

P2.1- Analyse the importance of strategic marketing planning for a selected travel and tourism business (Thomas Cook) or tourist destination (either Morocco/Egypt).

The process of strategic marketing planning has the following activities:

The strategic marketing plan process typically has three stages:

• Segmentation of the market: Market segmentation is the process for marketing of the company in which a large base of customers of the market is split into multiple smaller groups of the them. For the purpose of this division of the market few basic variables are used which are chosen with respect to the specific service that is being marketed (Kotler, 2011). Segmentation is important for Thomas Cook Group since this helps the marketers to target the service more efficiently for a group of consumers who are more likely to opt for the service. This will also help the company in its strategic marketing planning for Egypt as a summer tourism destination. Post the segmentation activity the marketing mix as well as the marketing communication can be developed for this specific set of consumers.
• Profiling the market segments: In this the customers are profiled basis their revenue generation capability etc. This will also be helpful in developing the overall strategy of marketing by Thomas Cook in view of the fact that the group which is identified through segmentation tends to be consistent in its basic traits and this leads to an identification of the profitable customers for the companies (Kotler, 2008).
• Develop a market segment marketing strategy: This is the final stage in the strategic marketing planning that can be used by Thomas Cook for its holiday destination in which the marketing strategy is decided upon to identify if mass marketing or targeted marketing will be used through direct or indirect sales. This process which is top-down for strategic marketing plan developing helps for ensuring that various programs for tactical marketing for the company can benefit the overall strategic goals and objectives for the company in addition to conveying a consistent message for the consumers. This also improves if the efficiency of the company in various areas those help in improving growth in revenue as well as market share for the company apart from minimizing the expenses leading to enhanced profitability and sustenance of the company.

P2.2- Discuss the relevance of marketing research and market information to managers in the travel and tourism sector with reference to Thomas Cook Group.

The relevance of marketing research, as well as market information for the managers in the travel and tourism sector as well as Thomas Cook Group, is quite significant. Both of these are similarly necessary for the tourism industry as well. Some of the following are the factors due to which the relevance of marketing research as well as market information relevant is high for the marketing managers of Thomas Cook with respect to the travel and tourism sector:

• Due to the dynamism of the tourism market, it is necessary that the companies are well aware of the changing customer tastes and  demand and supply  and these two factors are helpful in identifying the same which help in designing new services according to the taste of the consumers. With respect to the company which is being discussed here, it is necessary that prior to designing the tourism package to Egypt and Morocco that if the customers would be liking this tourism package or not.
• These help in pre-empting the future market pattern changes or trends as well as the preferred tourist destinations. This in turn is helpful for marketing and product planning for the managers of the companies in the travel and tourism sector including Thomas Cook. This will help Thomas Cook in identifying if it should start offering any specific type of tourism packages more predominantly or not (e.g. responsible tourism, adventure tourism etc.)
• The companies in the service industry need to have a detailed understanding of the customer satisfaction which is more important for the travel and tourism companies like Thomas Cook. Marketing research and market information helps in identification of the satisfaction level of the consumers. This will help them in gauging that if the existing consumers are liking the tourism package to Morocco and Egypt and if not then the factors which are causing customer dissonance.

P2.3 – Assess the influence of marketing on society

For the purchase decision making of the consumers, one of the most important influencing factor is marketing and hence it can be said this is a fairly influential factor on the society. The objective of the marketing is to inform and influence the people from the society through the marketing strategy and communication. Hence the influence of marketing on the society is present and high. As far as the marketing of Egypt by Thomas Cook is concerned, this will not only influence the target market and its society but also will influence the society of the destination and the society of the destination. The impact of the same on the destination, i.e. Egypt can be only positive influence as a tourist destination. In view of the fact that the destination marketing does not have any element of negativity there can only be positive influences of the marketing with respect to Egypt as a tourist destination. This will also lead to driving of the consumer economy in which the company will be able to promote the tourism packages to a more refined set of target consumers most. Successful marketing will lead to creation and expansion of jobs, higher tax revenue for governments and, eventually, overall economic growth. The other ore benefits which can be delivered by marketing to the society include the following:

• It gives information to the consumers: For the case study the marketing campaign will let the consumers know regarding the tourism package to Morocco and Egypt
• It offers choices to the consumers: For the case study the marketing campaign of the company will offer various other packages along with the tourism package to Morocco and Egypt which leads to the choice for the consumers
• Marketing engages the consumers through earning their loyalty as well as interest
• This helps in brining good quality and innovation to the consumers

LO 3

Introduction

Marketing mix is one of the most important factor to be identified and managed for the overall marketing activities by the companies in the various industries. The travel and tourism sector is also no exception and it is important for Thomas Cook to address these topics at the time of developing any marketing plan. In this section, which will aim to identify the roles of marketing mix for the industry of tourism and travel, the topics which will be discussed will include product, price and place elements of the marketing mix for the company. Also the significance of service sector mix elements for this specific industry will be looked into apart from applying the concept of the total tourism product to the tourism business of Thomas Cook.

P3.1 Discuss issues in the product, price and place elements of the marketing mix

For the marketing mix, especially for the companies in the  travel and tourism industry, the important elements include the product, price and placement of same. Following are the details of the same with respect to the Egypt package that is being designed by Thomas Cook:

1. Product: In this scenario the product is the tour package to Egypt that is being designed as well as marketed by Thomas Cook. This is the most basic offering by the company and is highly strategy in nature. For deciding and designing on the same, it is necessary that requisite market intelligence is collected by the company. Without the same any product or service offering that is crafted for the consumers may fail to attract the interest of the consumers and thus leading to a failure for the same.
2. Pricing: Pricing is also an integral factor of the marketing mix which decides the strategy of the company in terms of the price they decide for the entire tourism package for the Egypt trip. One of the major factors which decide the type of consumers who are to be targeted for the marketing activity for this specific package is the pricing of the same. The company can also chose to undercut the rival companies and their similar offerings basis the aggressive pricing one for the package.
3. Place: Place is the areas or ways in which the marketing communication as well as the information regarding the Egypt tourism offering to its potential customers. As a result of the change in the conventional method of marketing the places which are needed to be chosen by the company as the preferred medium for imparting this information should be the World Wide Web and related channels. In view of the fact that the marketing of this industry needs to be highly content and information driven which can help in developing potential clients as well as their interests for the Egypt tourism, within the constraints of the marketing cost, as per the current trend for the tourism marketing the practice of inbound marketing needs to be used as the core concept. This is different from the traditional outbound marketing as the focus is on making the business easy to find on the online space as well as directing the customers to the website of the company through interesting and relevant content. The social media and own website of the company can also be used to great extent for these activities.

P3.2 Assess the importance of service sector mix elements to the travel sector

The elements of service sector mix are very pertinent and relevant as well as important for the companies in the travel and tourism industry. Apart from the 4 P’s of the product marketing mix which are product, pricing, promotions and placement, the other factors which are included in the service marketing mix are 3 other P’s which are inclusive of process, people, and physical evidence. These factors are highly essential for best possible delivery of service.

• Process – Service process can be deified as the means through which the service is delivered to the end consumers of the company. In the case of the tourism packages made by Thomas Cook companies it is necessary to develop processed for quick as well as hassle free service delivery which can be helped by robust and confident processes of the company. It is also necessary that the service is delivered optimally without any compromise in the quality of the package. It is also a very important constituent of the service blueprint, in which prior to the establishment of the service offering, the company outlines the way the service of the company should be reaching the end consumers.
• People – People, the other component of the service marketing mix ensures the quality of the front end executives and professionals of the company who interact with the consumers at the time of sales process as well as pre or post that. The employees of the company in addition to the way they behave with the customers define the chance of developing a loyal base of consumers for the company. People is a very important aspect of the service marketing in view of the fact that the same can make or break the reputation and likeability of the organization in the eyes of the consumers.
• Physical Evidence – Given that most of the services which are offered by the tourism companies are intangible in nature, for developing a good customer experience, it is necessary that company adds various tangible elements to the service delivery which is also physical evidence for the service. For the travel and tourism industry, the physical delivery can be the various tokens of service, the type of hotel in which the stay of the customers is arranged, the type of food which are offered to them etc. Physical evidence can be used as a major differentiator for Thomas Cook to develop a competitive advantage over its nearest rivals in the industry as a part of its service marketing.  

Service marketing is a concept in which B2C as well as B2B marketing is done for letting the potential as well as existing customers know regarding the intangible service offering of the company. Some of the core concepts of tourism marketing which is needed to be kept in mind by the marketers at the time of developing the marketing plan for the companies in this sector are as following:

1. Intangibility of the marketed offering: The services which are offered by the companies in the tourism industry are mostly intangible due to lack of any physical existence. Hence the marketing of the same needs to be catering to this type of specific factor which primarily differentiates it from a product. It will be necessary to link various tangible attributes to these service offerings which are intangible.
2. Variability of the offering: In view of the specific nature of this industry the marketing needs to be highly customized as well as experiential in nature so that the same cannot be repeated exactly by the company.
3. Importance of brand identity: For having success it is necessary that the business in the tourism sector has a specific brand that can communicate and influence the purchase decision making of the target markets which include the existing as well as the potential customers of the company. Hence the marketing of this industry needs to be highly content and information driven that can generate various potential clients within the constraints of the marketing cost. Hence as per the current trend for the tourism marketing the practice of inbound marketing has become a core concept in which contrary to the traditional outbound marketing the focus is on making the business easy to find on the online space as well as directing the customers to the website of the company through interesting and relevant content.
4. Importance of customer satisfaction due to the perishability of the services: In view of the fact that the services which are typically rendered by the companies in the travel and tourism industry cannot be returned or resold after the consumption of the same by the initial consumers, it is highly important that the customers are satisfied with the marketing mix of the tourism company which includes the service offerings in addition to the places in which the delivery of the service is carried out.  

P3.3 Apply the concept of the total tourism product to an individual tourism business

The total tourism product can be defined as the process in which the tourism business can cater to the primary as well as secondary tourist needs for the consumers. As has been confirmed by Jovicic (1988), tourist needs are the needs those are satisfied when tourism movement happens including the sojourn and travel outside the place of residence. For this reason, a need can be confirmed as a tourist need only if it necessitates a departure from one’s place of residence. Following are the categories of these needs (Paul, 1977)

1. Primary tourist needs: These are the tourist needs which urge a person for making a tourist trip with the intention of satisfying the same
2. Secondary or derived tourist needs: These are the tourist needs which arise from the decision to make a tourist trip

The total tourism product is the one which takes care of all of these needs to for the consumers. In terms of the specific tourism package of Thomas Cook for Egypt and Morocco, the total tourism product will be the one in which the company delivers different types of varied as well as exhaustive services for the consumers of the company. This will include the travel to and from Egypt and Morocco for the consumers, the hotel stay arrangement at the destinations, the options of having food at different  tourist destination  through the hotels, the end to arrangement of sightseeing including arrangement of cars, guides etc. This proposition or the product will have various characteristics as following:

1. Mix of tangible and intangible – The proposition will be a mix of tangible and intangible product. The hotels, food, flights, cars etc. will be part of the tangible features. On the other hand, the sightseeing, the experiences etc. will be part of the intangible features for the Egypt and Morocco package. Different types of varied as well as exhaustive services for the consumers of the company in Egypt and Morocco will also be intangible features.
2. Core Product – The core product will be the specific tourism package of Thomas Cook for Egypt and Morocco which will consist of factors like duration, places covered etc.
3. Product Development – The product development is a crucial factor for the travel and tourism sector in view of the fact this will decides the success of the new tourism package of Thomas Cook and hence it is necessary that the consumer feedbacks are collected for new product development.

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References

Burkart, A.J. and Slavoj Medlik (1981), Tourism: Past, Present and Future, 2nd ed., Butterworth-Heinemann, Oxford
Coltman, Michael M. (1989), Tourism Marketing, Van Nostrand Reinhold, New York
Jovicic, Zivodin (1988), A Plea for Tourismological Theory and Methodology, Revue de Tourisme , No. 3, pp. 2-5
Kotler, P. (2008). Marketing Management. Princeton
Kotler, P. (2011). Marketing Management. Princeton 
Mrnjavac, Zeljko (1992), ÒDefining Tourist Product, Acta Turistica , Vol. 4, No. 2, pp. 114-124

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