Introduction to Marketing in Travel & Tourism
Marketing generally deals with the activities of identifying and satisfying the needs of individuals. The aim of marketing is to satisfy the customers while gaining profits. Tourism industry is one of the largest and leading sectors in the world. In the industry, there is a need to communicate with the customer so that they can achieve success (Lamsoo, Niroomand and Rafsanjani, 2013). The aim of the report is to understand the general concepts and principles of marketing. The impact of marketing research and marketing mix in travel and tourism industry has also been evaluated with the help of some cases. The report also explains the consumer behavior in the hospitality and tourism sector. Use of promotion mix in travel and tourism has been explained in a
1.1 Discuss the core concepts of marketing for the travels and tourism sector
The major task of marketing in the tourism sector is to create and supply tourism services. Marketing managers are charged with the responsibility of creating and supplying the products or services that best fit the expectations of the customers .This initiative is known as market orientation concept. The core components of marketing are identification of customer needs, wants and demands, availability of products and services, and creating customer value through an exchange process. The marketers of the product have to identify the needs and wants of the existing and potential customers. The customers have to be chosen carefully according to their product preference and then business has to offer them the product and service as per their demand. Creating customer value and satisfaction lies at the heart of travel industry marketing. After having a product as per the market demand, marketers have to make aware the target market with the products in order to create an exchange process. The industry players should understand the market, so that they can construct the marketing programs to deliver superior value and satisfaction to the customers. Building good relations with the customer helps to create customer delight and the business can garner value from the customer in terms of sales, profits and customer loyalty (Chahal, 2014).
1.2 Impact of marketing environment on individual travel and tourism business
The marketing environment affects the business of travel and tourism industry. The business is affected by two types of environments micro and macro. In the micro environment, the industry is influenced by internal factors such as suppliers, market intermediaries, customers and competitors, whereas in the macro environment, the business of the travel industry is affected by the economy, society, technology, political and cultural environment. The customers are very sensitive in this industry and they need good destination packages at low rates. Travelling habits also change after a particular time and the consumers can switch to other travel agents. Suppliers in the industry are different travel agents and if the company fails to provide them proper commissions, they can give business to other competitors. The numbers of domestic travel agents decide the business of individuals. Competition in the industry influences the business of the industry by giving rise to price wars (Kwon, 2008).
Thomson holidays operate internationally, so the macro environment influences the operations of company. The state of economy, interest rates, currency exchange rates as well as the industry ownership and wealth distribution in society decides business growth. The technological environment such as product technology and the global distribution of the operational system is very important to be known. Social and cultural environment of different countries affect travels and tourism business as the customers have different cultural beliefs and values. Now customers have become socially concerned about the environmental issues so they prefer to visit safe and healthy places. Political environment including government policies, taxation system also influence the operation of individual travel and tourism business (Garrod, 2005).
1.3 Factors affecting consumer motivation and demand in travel and tourism sector
The buyer’s behavior plays an important role in the demand of travel and tourism products and services. There are different factors in the travel and tourism sector from which the customer can be motivated such as physical motivation, cultural motivation, personal motivation, prestige and status motivation etc. Every customer wants safety and security and if the selected travel company provides medical and other facilities then the customer will be motivated to use the services of that company. Culture influences the buying behavior of the individual. Like some people are born in spiritual families, then they are inclined towards visiting spiritual places, individuals from nuclear family can search the options for adventurous places. Advertisements of the travel packages can also be a motivating factor. If Thomson holidays will be able to create customer value and satisfaction it will be a positive sign for the company’s growth (O’Connor, 2005).
The generic model of the buying behavior is applicable in the industry which says that the buying process starts with need recognition. First, the customer plans to go for outings. After that he searches the available destinations and the travel agents having the various travel packages. The customers then evaluate the available options according to their own needs. After selecting the destination and the tour package, the last stage is the customer experience from the particular travel agency and its services. If the customer is satisfied then he/she will come again for the same or other services. Delighted customer becomes a source of promotion for the company (Wong and Kwan, 2001).
1.4 Principles of market segments and use of marketing planning
In the travel and tourism sector, customers cannot be served in the same way. So, the company needs to select only those customers who can be served well and profitably. In order to create value and satisfy the customers, the company should decide whom to serve. The task can be done through market segmentation. In the segmentation process, the company can divide the market into groups having similar needs. Then the company goes for target marketing, by which the company can, easily become aware about the needs and wants of the consumer in target market (Hemmington, 2007). There are several basis on which the travel and tourism industry can be segmented such as; demographic, economic, psychographic profile, purpose of travel, buyer needs & motivations and buyer behavior or the characteristics of product usage and the price. Market segmentation helps the business in marketing planning, as by having knowledge about a particular segment’s customer needs and wants, the company can design its marketing mix. The product can be created within the budget criteria of target customers (Andreu and et.al, 2005). The company can adopt promotion strategies by which the target consumer can be attracted. Thomson Holiday Traveler Company desires to create a cultural package of six days to visit Denmark, Amsterdam, Lisbon and Porto; it can be done through proper segmentation of the market. The company can decide the package price and promotion by analyzing the demand in the marketplace (Middleton, 2000).
2.1 Importance of strategic marketing planning
Strategic marketing planning includes all the decisions used to formulate and implement the strategies designed to achieve the marketing objectives of an organization. Travel and tourism organisations’ goal is to understand the customers’ demands and create value satisfaction. Strategic planning helps the companies to plan their strategies according to the market. It involves situational analysis in order to identify the factors of both internal and external environments that could have an impact on the achievement of the objectives. Strategic marketing planning assists the company to identify its strengths and weaknesses. By evaluating the external environment, one can know the possible opportunities and threats of business. The company can know the areas of product life cycle. It will help the company to identify the possible opportunities to develop a new product. Strategic marketing in the tourism industry can be done through tourism lifecycle. The different stages from which the tourist area passes through are exploration, involvement, development, consolidation, stagnation and decline. After the decline stage, a further step has to be taken in order to maintain the desired position. It also helps the company to have competitive advantage as business can develop its superior strategy by identifying the strategies of its competitors (Kozak, 2002).
2.2 Relevance of marketing research and market information to managers in travels and tourism
Marketing research in the tourism industry is about understanding that in what manner the placement of marketing elements such as product, price, promotion and distribution should be in order to meet the customer needs so as to succeed in the marketplace. Through the market research, travel agency can anticipate and identify the demand of the existing and potential customers (Gök and Hacioglu,2010). Through market research, a target market consisting of a whole group of potential customers can be developed and individual customers can be satisfied. Market research gives all the required information by which marketing strategies can be developed (Raimund, 2008). The research plays important roles for managers as they can forecast budget for future sales. Market information helps the managers in taking effective business decisions.The activities in marketing research should be planned in order to take specific decisions that drive marketing strategies. Having market information, companies can forecast the future sales of travel packages and can also measure current demand and the tourism trends. The company has to maintain proper marketing information system in which they can record dates of previous consumers (Kotler, Bowen and Makens, 2003). In this way they can also develop CRM (customer relationship management) which involves managing detailed information about individual customers in order to maximize customer loyalty (Eliot, 2013).
2.3 Assess the influence of marketing on society
Marketing operates in an environment external to the business unit so it influences the society in both ways, positive as well as negative. Marketing's relationship to its external environment has a significant effect on the success of the organization. The important function of marketing in the tourism industry is to understand the needs and likes & dislikes of the customers. Marketing helps the society to become aware about the products that can satisfy their needs (Dobrivojevic, 2013). The role of travel agencies is to offer such a product that can meet customer needs. The company has to follow the existing rules and regulations in the marketing practices. The concept of consumerism is to be followed in which the customer is to be given the priority by providing quality products at fair prices and at the right time according to its convenience. Social responsibility in marketing has to be considered by which consumer satisfaction, and social well-being can be given equal value (Retseptor, 2005). Marketing ethics and social responsibility are the issues in marketing. Companies need to reflect ethical behavior while providing the services to the firm. Companies should make the customers aware about all the correct information while offering them a travel package ( Oh, Kim and Shin, 2004).
3.1 Discuss issues in product, price and place element of marketing mix of London Gatwick airport
Gatwick airport is the second-largest international airportand thesecond-busiestin number of total passenger traffic in the United Kingdom.It is also Europe’s leading airport for point-to-point flights. The marketing mix of the airport and the issues related to it are as follows:
Product: The products of airport are its services such as Flight tracking, shops, taxi services, communications, security, accommodations, hotels, restaurants, lounge, parking facility for more than 2 days etc. The product of the airports is intangible in nature so the main issue related to services of the airport is that of standardization.
Prices: As the airport is an international airport it has to set the prices of different services very high. To set the prices is very difficult as the services are intangible. The company can offer lower charges on flights and other services to attract more visitors (Eliot, 2013).
Place: Gatwick is located in the Southern and Northern portion of London city which helps them to attract more visitors. The customer can easily get taxi service from anywhere in the city.
Promotion: The airport promotes its services mostly through online booking counters and websites. Their existing customers are also the source of company’s promotion. Low quality of service delivery always becomes the cause of customer dissatisfaction. By collaborating with some flight company, advertising can be made more effective (Kolb, 2006).
3.2 Assess the importance of service sector mix elements to travel sector
Gatwick airport is a part of Aviation industry which is a service sector industry. The extended marketing mix for the service sector is people, process and physical evidence. In case of London Gatwick Airport, these elements play an important role in order to create market image.
People: People refer to employees and the staff of Gatwick airport. It also includes the technical staff, fuel dealers and the other employees. People are important because through them the company provides its services to its customers. For the success of the company, it is important to maintain quality relationship with the customers. The staff can be motivated towards organizational goals by providing proper trainings. A quality staff can attract more customers (Morrison, 2013.).
Process: The services are provided to the customers through a process in the service sector. The process of delivering services has to be easy and should be understandable by the customers. A trained employee can deliver the services in an effective manner in order to satisfy the customer (Simkin, 2012).
Physical evidence: It is the material part of a service. In the case of Gatwick airport physical evidence, includes; Packaging, Internet/web pages, brochures, furnishing of airport and its nearby area, signage on aircraft, uniforms of staff, business cards etc. The environment has to be attractive in which the product or the service is delivered in order to attract more visitors and customers (Holloway, 2004).
3.3 Concept of total tourism product on London Gatwick airport
The customer can be satisfied through providing products and services having features to fulfill the needs and wants of the customer. The total product concept of London Gatwick airport means that the airport should have the facilities to satisfy its customer. The customer should get all the services under a single roof. The airport could provide taxi services and cab services to its customers. The parking services for private cabs can also be given for a specific time. The company can provide the facility to land the private flights and jets for consumers. Customers can book the tickets over telephone through mobile banking services. At the time of booking their tickets, the customers can book taxies or cabs for the place they are going. It will give the customer the value for their time (George, 2008). The accommodation services can be given as soon as the customer reaches at the airport premises. The business can offer the drinks to customer as they come into flights. The airport can have the facility to keep the luggage for a specific time. In order to attract the upper middle class and the middle class customers, the company can offer cheap flights with good service quality. Airport should have play station for kids so that they can enjoy the free time. Personal transportation facilities for heavy things can be included in the services of the airport (Panda, 2007).
4.1 Assess the integrated nature and role of promotional mix
As soon as the company produces products and services for the target customers, the main role of the business is to communicate with the target market the features and benefits of products. In order to communicate with the customer, they can follow the marketing communications process. In this, firstly the company sets the goals and objectives, identifies the audience, and after that it develops the message and its strategies to make the potential customers aware about the message. The message can be communicated through various communication channels. At last, evaluation of whole process has to be done in order to measure the success. Promotion mix is the element of marketing through which the company passes its message to its audience. The main task of promotion mix is to inform, persuade and remind the target audience about the product and service. Advertising is the most preferable way to promote products. Through advertising, the company can reach to large number of buyers. It is an effective and flexible way to create a brand image. Through personal selling, message can be delivered to specific individuals and two way communication process can eradicate irrelevant question from the customer’s mind and the customer can be well motivated. Sales promotion can be effective in changing the behaviour for a short time and in promoting sales. Public relation is a cost effective way of promotion. Media plays an important role in developing relations with potential consumers. On the other hand direct marketing can be prepared quickly and facilitate relations with the consumers (Ceylan, 2008).
4.2 Integrate promotion campaign for Sheraton Hotel
The Sheraton Hotel is a leading company operating in tours and travels industry. The company is going to launch its boutique hotel which has several luxurious double rooms and the company wants to target the cultural and upper middle class customers and the hotel is planning to launch it after summer. The hotel can promote the product through television advertising campaign so that the message can reach to the mass audience. Another source of promotion is to tie up with different travel agents like Thompson Cook. By this the company can reach directly to the customer like advertising through direct and indirect marketing. Sheraton Hotel can also put hoardings and banners on the airports. Advertising through broadcast videos will create an image about the message. As the target of the business is cultural and upper middle class customer, so the company can give advertisement in different city newspapers. Online marketing will be helpful to attract huge customer group. In this way the company can promote its boutique hotel and services.
The above report explains the importance of marketing concepts in travel and tourism sector. The concept of total tourism product for London Gatwick airport has been explained. The report also suggests the different promotional techniques for a new unit of Sheraton hotel such as, advertising, sales promotions and online marketing.
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