Chapter-One

Introduction to Hospitality and Tourism Marketing

Chapter Introduction
In the first unit of this module, we will discuss the fundamental concepts of tourism and
hospitality marketing. The discussion will move on starting from providing the definitions of
tourism and hospitality marketing, explaining some of the important terms related to hospitality
marketing plan. We will also try to thoroughly discuss the various elements of hospitality
marketing mix marketers will apply. Included in this chapter also are different strategies
marketers pursue to implement the marketing approach.

1.1. Marketing in Hospitality and Tourism

Marketing has been defined as „the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges that satisfy
individual (customer) and organizational objectives. The marketing concept is a business
philosophy that defines marketing as a process intended to find, satisfy, and retain customers
while the business makes a profit. Central to both these definitions is the role of the customer and
the customer‟s relationship to the product, whether that product is goods, a service, or an idea.
The tourism and hospitality sector, like other service sectors, involves a combination of tangible
and intangible products. A hotel is a mixture of goods (beds, food, telephone, and
communication systems) that are linked with a range of services (front desk, housekeeping, room
service, finance and accounting). A tourist attraction such as a national park is a combination of
facilities (hotels, shops, visitor centers) situated within a physical attraction (the mountains,
forests, or rivers, for example), offering a range of services (guided tours, interpretation,
education, etc.). This whole package of tangible and intangible products is perceived by the
tourist as an experience and represents the core of the tourism product.

1.1.1. Tourism Marketing

Evolution of the concept of Tourism marketing can be associated with the various
business and social changes which have occurred since the introduction of industrialization.

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Industrialization had brought about the need for holiday and travel even in its early stages as the
workers felt the need for temporary rest and relaxation after long hours of work. The marketing
mix-the 4 Ps, target audience, segmentation, objectives and evaluations, these and other terms
are all used in the process of "marketing." In tourism and tourism related industries, success
means understanding this process.

Tourism is a powerful economic force providing employment, foreign exchange, income and tax
revenue. The tourism market reflects the demands of consumers for a very wide range of travel
and hospitality products, and it is widely claimed that this total market is now being serviced by
the world‟s largest industry. Players in this industry are increasingly operating in a global
environment, where people, places and countries are increasingly interdependent.

The globalization of tourism has cultural, political and economic dimensions. Cultural
globalization is characterized by cultural homogenization as Western consumption and lifestyle
patterns spread throughout the world, a process facilitated by the flow of travelers from the West
to the developing world. Travel also enhances friendships between peoples and facilitates
cultural exchange. Political globalization involves the undermining of the roles and importance
of nation states as borders are opened up to free trade and investment. Economic
globalization has both positive and negative effects. On the one hand, it could be argued that a
key aspect of economic globalization has been the increasing power in the hands of a small
number of travel organizations, leading to oligopolistic control in the industry. On the other
hand, tourism brings with it economic rewards and opportunities for host communities in
particular, which benefit from foreign exchange and enhanced livelihood options.

Marketing is a subject of vital concern in tourism because it is the principal management

influence that can be brought to bear on the size and behavior of this major global market. Figure
1.2 shows the vital linkages between demand and supply in tourism, which is fundamental to an
understanding of the role of marketing. The figure shows the relationship between market
demand, generated in areas of origin, and product supply, mainly at visitor destinations. In
particular, the model shows how the main sectors of the tourism industry –travel organizers,
destination organizations, transportation, various product suppliers – combine to manage
visitors‟ demands through a range of marketing influences.

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The marketing mix is in the center of the diagram. However, it is important to note that the
influence of this marketing activity is likely to vary according to visitors‟ interests and
circumstances. For example, domestic visitors‟ travelling by car to stay with friends or relatives
may not be influenced by destination marketing in anyway, whereas first-time buyers of package
tours to exotic destinations may find that almost every aspect of their trip is influenced by the
marketing decisions of the tour operator they choose. In between these two examples, a business
traveler will select his or her own destination according to business requirements, but may be
influenced as to which airline or hotel he or she selects.

Figure 1.2 The systematic links between demand and supply: the influence of marketing.

Knowledge of the customer, and all that it implies for management decisions, is generally
referred to as consumer or marketing orientation. A detailed understanding of consumer
characteristics and buying behavior is central to the activities of marketing managers.

1.1.2. Hospitality Marketing

Hospitality marketing is unique because it deals with the tangible product, like a bed in the hotel
or food in the restaurant, but it also deals with the intangible aspects of the hospitality and

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tourism industry. It is about the experience in a trip and social status it brings eating in a fine-
dining restaurant. Hospitality marketing is very critical in the success of any hospitality and
tourism product, organization and tourist destination. Proper marketing effort promotes a product
or service that fills the needs and wants of the consumers and at the same time, bring profits to
the organization or country that features it.

Hospitality marketing is a distinct specialization that promotes leading hospitality services and
industries such as motels, bars, clubs, resorts, restaurants and luxury hotels.

Hospitality marketing is a relatively new concept compared to other marketing plans that have
been established and widely used for promotional products and major retail companies. For
many years, hotels, spas, and restaurants were primarily satisfied with their business if they had
high occupancy rates, paying customers and a busy establishment. Today‟s hospitality industry is
highly competitive and booming with new venues competing to be at the top of the list. The
hospitality businesses want to win the hearts of certain demographics, as well as attract specific
crowds and clientele.

To be successful, hospitality-related companies should know who to target for their set product
or service and how to get the word out about their services. This focus and exposure will attract
customers and help the companies establish valued reputations.

1.2. Hospitality Marketing Mix

This topic defines what marketing mix is and it explains the core components of the marketing
mix concept in the hospitality industry. In essence, marketing mix is a combination of
elements that require a company‟s attention when bringing a product or service to the market.
For instance, we will need to consider the types of promotional efforts that are effective
for our newly introduced spa services in the hotel. In this example, decisions about our
promotional efforts are one important element of the marketing mix strategies. Apart from
promotion, what would you consider to be important when addressing strategies for the
hotel‟s spa services? Yes, you may also want to price the services carefully so that you are not
over or undercharging the customers, and we refer to such pricing decisions as the price mix
strategies.

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1.2.1. Expanding 4 Ps to 8 Ps in the Marketing Mix
Traditionally, companies need to formulate their strategies around the following marketing mix:

1. Product mix;
2. Price mix;
3. Place mix; and
4. Promotion mix.

We also call these the 4Ps (the “P” refers to the first syllable of each word). Essentially,
addressing the marketing mix is synonymous to making decisions about selling the RIGHT
product/ service (product mix) at the RIGHT price (price mix) in the RIGHT location (place
mix) using the RIGHT promotional tools and messages (promotion mix). The four Ps were
developed initially for the marketing of retail goods like cars and shoes, at the time when our
economy was fueled predominantly by manufacturing industries. The traditional 4Ps are
considered adequate when we are trying to market a specific, tangible product - something that
the consumers can touch and feel, and take home with after they purchase it. However, as the
bulk of our GDP now comes from the service industries, such as the hotel, restaurant, banking,
financial institutions and airlines, where the products offered are mostly intangible, marketing
them becomes difficult if we only rely on the traditional 4Ps in the marketing mix.

For this reason, there is a need to expand the 4 Ps to what is now the 8 Ps. This is to
accommodate the unique characteristics of the service industry. Thus, marketing mix for the
service industry like hospitality and travel are expanded to include the additional 4Ps:
People, Packaging, Programming, and Partnership. The 8Ps framework (Figure1.3) calls upon
marketing professionals to decide on the product and its characteristics, set the price, decide how
to distribute their product, and choose methods for promoting their product. They also need
to consider people (employees and customers) who are involved in the service delivery process,
how to package the product and service, and what kind of programming to offer to the
customers, and who you would like to partner with to generate more sales (Table 1).

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Figure1.3 The hospitality marketing mix

Table [Link] 8 Ps in hospitality marketing mix

Example: Let us illustrate 8 Ps by using an example of the food service industry. Café de Coral
is the largest local grown fast-food chain in Hong Kong. The company claims to use premium
ingredients in their food product and quality control so it can sell at affordable prices. There are
120 restaurants around Hong Kong, so most people can dine in the Café de Coral outlets

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that are convenient located (Place). Through all these restaurants, over 300,000 customers
(People) are served daily. As the company puts it in their campaign advertisement: “To serve
you better, you can almost find a Café de Coral branch in any busy district all over the territory:
from crowded commercial district and shopping malls to well-populated estates. You can get our
best food and service no matter when or where you want it”

([Link]

The company regularly launches Promotional campaigns to feature new food items/themes, e.g.
Chinese hot pot, Korean theme, etc. The company also does a good job in packaging the outlet,
from the design, decor, to tables and chairs, food display, to give the overall impression of value
for price, and away from a standard fast food outlet. Café de Coral using Programming
technique by promoting "Club 100" where customers can enjoy non-stop marvelous rewards
provided by the "Bonus Point" Program. Café de Coral also has a limited-time Partnership
agreement with the customers that if you ride it 10 times consecutively in a week, you
would be entitled to a complimentary breakfast at its outlets. From this example, you can see
that marketing mix is a combination of key ingredients to create an effective product/service
package to reach its target market.

1.2.2. Components of the Marketing Mix (8 Ps)

We will discuss each of the 8 Ps in the marketing mix in the following section. We will spend
more spaces to examine the first P, Product because this is the most important element in
the mix: you will need a product or service that fills the needs and wants of the consumers.
Without it, the rest of the marketing mix would not be able to carry their functions effectively.

First P: Product

In the manufacturing industry, once a product is made in the factory and shipped to the retail
shop, there is always not much of contact between the customers and the manufacturer after that.
However, in the hospitality industry, it is not so clear cut. We involve customers in the
process of service delivery and sales transaction. For instance, we make the food when the
customers waiting in line at the McDonald‟s ring up the sales and they take away their food to
find seats.

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Customers to fast food outlets like McDonald‟s is expecting a meal that is consistent in its
quality, fast service, clean environment and affordable. Essentially, this is an example of a
food service company offers customers a combination of product, service and facilities to its
target customers to fulfill their needs and wants.

Customers have different expectations with products and services in different settings (i.e. Place,
Packaging, Programming, People, etc.). For instance, consider these two scenarios: 1) Selling a
cup of milk tea in a local diner for $7 to a construction worker on his tea break or a housewife on
her way to the market versus 2) Selling a cup of Earl Grey tea in the Peninsula Hotel lobby for
$40 to a Japanese tourist. Both set of customers in the two different settings of food outlets
would consider they are getting what their money worth.

The construction worker quenches his thirst and gets a boost with the caffeine and do not expect
too much from the atmosphere of the diner for that price. On the other hand, the Japanese
tourist gets what he pay for the tea (Product) plus the pleasant experience of “to see and to
be seen”. The doorman, the fleet of Rolls Royce outside, the hotel ambience (Packaging) and the
live band (Programming) in the lobby make his visit very memorable.

All products have tangible and intangible aspects. The tangible part of the product is the physical
object that you can touch and feel and take it with you, such as buying a pair of shoes from a
department store or a plasma TV. When you buy a car, you are getting the tangible part of
product, the car. So you look for the product features primarily. But you may also look or go for
certain brand because of its good after-sale service aspect as an add-on (or peripheral) feature. So
a reputable car manufacturer, like BMW or Porsche, is known to provide good service to its car
owners.

However, in the service industry like hospitality and tourism, what we offer in terms of product
is largely intangible. In fact, in the hospitality industry, our products are mainly in the form of
services, which make the product of the industry quite unique as compares to other industries.
This is the experience and service that you have paid for, for example, taking a vacation trip to
Europe. Once the trip is over, you are unable to take the product away except the pleasant
experience that lingers on. This is the same when you go to a fancy restaurant in the IFC
(International Finance Centre) Mall or having high tea in the Peninsula lobby, you are not only

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buying the meal (Product) but also experience, the ambience, decor and the service that are
provided by the restaurant.

Second P: Place

After the Product, Place is another important aspect in the marketing distribution channel.
Once a product is made and is available for sale to consumers, „where to sell‟ becomes a critical
decision. Imagine this: You may have the best product in the world, but nobody can access to the
remote Place where the product is sold, you still would not have any transaction. Thus, Place is
where an organization selects to place its product and service so that its target consumers can
easily get hold of it. In the hospitality and tourism industries, one would often hear the
expression of “location, location, location” which is critical to the business‟s success. Take a
guess: Where is the most expensive rental for a shop in Addis Ababa? You guess it! It is a small
shop in Causeway. The owner pays a premium-plus rental monthly because it locates in the
intersection of a street with a very heavy pedestrian traffic. After paying the high rental cost, he
still makes a good profit because of the businesses that brings in by this superb location.

The decision on the Product and Service to sell determines the location that you select. For
example, you would only find Four Seasons Hotels and Resorts in major gateway cities around
the world. Why? This is because only these cities can afford enough rich clientele that
appreciate its product and services and willing to pay the premium. Similarly, for a
restaurant that locates in a prime “A” location is definitely attracts more foot traffic than a
“B” location on a side street.

On the other hand, there are also times that location determines the product or service that you
would offer. Hotels built as center city hotel, resort hotel, airport hotel or a motel along the
highway are pretty much determined by the locations that they are on. This in turn dictates the
type of clientele that these hotels will attract.

There are many factors to consider when we determine the right location for our hotels,
restaurants or theme parks. These factors include, accessibility, traffic pattern, supporting
infrastructure establishments (e.g. Hospitals, schools, office buildings, residential and etc.) in the
vicinity, demographics and income distribution of the people living in the area. If you
choose to put your restaurant next to an office building, a factory, a hospital or even a

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school, you are guaranteed to have businesses from these establishments. We also need to
consider number of direct competitors in the radius where you want to draw your customers. For
example, picture an exotic resort locates at a remote area where there is no good
infrastructure to support it. People cannot get to it easily, surely it will not be as crowded as it
wishes to attract.

Moreover, location does not mean that it has to be stationary and permanent. We need to
remember that a good location at the time when you open for business may not be a good
location for ever. You must constantly monitor trends in the town planning to keep track of any
changes that may affect you. Take the example of Regal Hotel at the old Kai Tak Airport. Built
across the old airport, the hotel was established to target to the tourists that used the airport and
did a good business then. As soon the new airport at Chek Lap Kok opened in 1997 and the old
airport at Kai Tak stopped operation, Regal Hotel has lost its competitive advantage and is forced
to change its target market to survive.

Third P: Promotion

Now that we have the product that the consumers want and good location to sell it, we need to
consider the third P in the Marketing Mix: Promotion. A company has a good product is not
enough; it will not generate any sales unless the consumers are aware of the product‟s existence
and also can access to the product. This is where Promotion comes to play its part. Promotion
helps to get the message of the product out so consumers are aware of it and want to
purchase it.

There are many promotion tools that you can consider to market your product. These tools
include: Advertising, sales promotion and merchandising, personal selling, and public relations
(you will discuss these promotion tools in chapter five). Each of the tools has its functions, cost
and disadvantages. Hospitality organizations can consider these tools to match their product
nature, the brand image and the stage of life cycle.

Fourth P: Price

How much do you want to sell your product and service? Or put it another way: how much
should you charge that you think your customer would pay and yet you still make a profit? Price

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is the monetary value that you charge to cover the cost of the product plus the other costs
associated with the product, such as labor cost, promotional cost, etc., plus a profit. The
decision on pricing would make or break your business. Consider this: If your price cannot even
cover the cost to produce it, you will operate in a loss and eventually go out of business. On the
other hand, if the price you charge is so high that it may drive you out of the market.

Price also conveys the message to the consumers that indicates the price-quality
relationship: The higher the price, the better the quality. You also pay for the brand name rather
than just the product itself. There are some companies that choose to mark up their product
slightly than the cost in order to go for the volume in sales. For example, consider a $200 hotel
room per night versus staying in a hotel room that charges $2000. What is the difference of
expectations for the customer who pays for the $200 hotel versus the one who pays $2000 a
night? Often times, customers are willing to pay premium for a product that they perceive to be
of good value. The closer the price to value relationship, consumers are more likely to be
satisfied and likely to have return purchase. For example, a Valentine‟s Special for a romantic
dinner at a five-star hotel‟s restaurant is often fully booked even though the price is several times
higher than in regular time.

Pricing Methods: How much to charge for a product or service is an art and a science. It is a
science because you can charge the price based on the cost calculation and mark up accordingly.
It is an art because the price is more than the cost of the product, it is a combination of company
philosophy‟s on its image, competition and customer demand which determine what the
market would bear.

To find the optimum pricing for your product or service is not an easy task. In addition
to the material cost and other costs that associated with it, you must find a price level that the
market would bear. In other words, pricing will depend on the competition and also the supply
and demand situation of the market.

Fifth P: People

Picture this: With the right product, superb location and a price that is right for the target market,
an effective promotional tool to reach the market with the right message, customers are at your
door to buy your product or services that you have to offer. This is a scenario every merchant

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and company would like to see. Here comes the moment of truth. Customers come with their
expectations of the product and services. How their expectations are met, whether customers
enjoy their visit, have a good experience and vow to return to your property will entirely
depend on one thing: your employees. We all know that hospitality industry is a people business,
where service is provided by employees within the organization to their customers. People in the
hospitality marketing mix means employees as well as customers.

In the hospitality and tourism sectors, employees must do two things:

1. Provide good product to customers such as: meal, room, airline seat, holiday package,
rental car and etc.
2. Provide good service of a standardized service quality.

The quality of the product is very important but the quality of service is equally
important. For 5-star hotels, Grand Hyatt Hotel and InterContinental Hotel may have similar
hardware in terms of facilities (fancy lobby and elegant ballroom, swimming pool and spa,
diverse food outlets, etc.), however, what makes it different between the two hotels may lie in the
personalized service that its people deliver.

Nowadays companies consider People to be its human capital, rather than a cost. For this reason,
a company has to commit to training of employees and develop them professionally. Employees
come from a diverse background so the company needs to provide standardized operating
procedure to ensure consistency delivery of product and service every time. The company also
needs to provide a conducive working environment for their employees to learn and grow.

People in the hospitality industry also mean customers. In the service industry, customers are
partial employees where they are part of the service delivery system. Just like employees, they
come with different family, educational and religious background, and even nationality. They
have different expectations and the company‟ job is to manage that expectation and make sure
customers are satisfied with the products and services.

Front-line employees give customers first impression of the company. If customers are happy,
they will tell their friends by word of mouth, but if they are not happy with their experience, they
also would not mind to repeat the unpleasant incident with their friends. Thus, there is a need to

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ensure the service encounter between the two parties (employees and customers) meets the
company standard. For example, to ensure good service, a telephone operator must answer his
phone within three rings.

Sixth P: Packaging

Packaging “epitomizes a marketing orientation. It results from finding out what people need
and want and then assembling various services and facilities to match these needs. It is the
combination of related and complementary hospitality service into a single-price offering”
(Morrison, 2002,). To provide good product and services is a must; however, good packaging is
equally important, so it will appeal to consumers‟ needs and wants. The elegant design of a
box of Godiva or Agnes b chocolate denotes high quality and luxurious status that consumers
are willing to pay premium price to enjoy themselves or as gifts.

Similarly, the blue color of the Tiffany‟s jewelry box becomes its signature color and consumers
around the world associate it with high quality, brand, status and willing to pay for high price.
Japanese are known for their aesthetic packaging of food products. Customers not only find the
food taste good but also pleasing to the eyes.

For service industry like hospitality and tourism, where we offer products that are largely
intangible, packaging is also seen as overall presentation. We need tangible items to give
consumers a sense of the quality for the intangible service that we offer. In other words,
tangiblize the intangible, so to speak. Travelers equate the sharp and neatly pressed uniform
that flight attendants wear and their smile the feeling of a pleasant journey.

A mint left in the pillow by the room attendant after the turn-down service is also a reminder of
the personalized service a 5-star hotel provides. A hotel chain in the United States, Doubletree
would give their customers, upon check-out a bag of home-made chocolate chip cookies to
take home, to remind them of the pleasant stay they have in the hotel. The packaging gives
consumers an indication of quality standard and reduces the uncertainty that is associated with
purchasing product and service that are mostly intangible, that you cannot touch or feel.

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Good packaging entices customer‟s desire to purchase. However, in the hospitality and tourism
industry, a customer‟s total experience of the product and service that you offer would not be
complete if there is no good programming.

Seventh P: Programming

Your family just booked a cruise ship for a family reunion. You will be spending 7 days in a
ship. What is your expectation with this type of travel? Non-stop food offerings, clean cabins,
swimming pool and yes, lots of programming on the ship. Programming in a cruise
journey is very critical because the guests are basically captive audience while on abroad
between ports of call. The seventh P, Programming deals with the development of special
function activities, events, or programs that stimulates customer spending or give added value
to a package or other hospitality service as an incentive.

If Packaging entices a tourist to visit a destination, then Programming provides him a pleasant
experience and makes him wants to stay longer or even return for the second time. To boost
sales, there are many packages that one can develop and offer. For example, Star Cruises offers
the cruise ride to the guests and also offering them live entertainment such as musical shows and
magic shows as their packaging and programming techniques.

Similarly, in promoting Hong Kong as a tourist destination, Hong Kong Tourism Board
works hard to offer different activities, parades, events and festivals to give tourists a
reason to visit all year round. Some programs are suitable for tourists who only has one day to
spare, some with longer period of time. Some activities and attractions may be suitable for
tourists that are interested in cultural heritage or eco-tourism, while the other may go for
golfing, hiking or other recreational sports. Shopping malls in Hong Kong attract a bigger
crowd with theme programming to celebrate Christmas, New Year and major festivals like
Valentine‟s Day, Easter, etc. In Asia, many people go to the Philippine for snorkeling activities
or riding elephants in Thailand.

Eighth P: Partnership

What is partnership and why is it important as part of the marketing mix? Partnership is
cooperative promotions and marketing efforts by two or more hospitality companies to

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enhance sales of their products. Again, this is important in the service industry because of the
mostly intangible nature of its businesses. By partnership with other tangible products or with
companies with proven reputation of good quality, it would reduce the perceived uncertainty by
customers and they would be more willing to try your offering. Often times, it is one company
forms a closer relationship with its operator-customer, in order to increase the profit and
awareness.

In airlines industry, partnership can be seen in the form of loyalty or frequent flyer program. To
encourage travelers to fly more often with their companies, this type of program allows travelers
to accumulate their air mileage. Eventually they can use these mileages to redeem a free ticket
or receive free gifts. To be attractive to travelers and share operating costs among companies, a
group of airlines join partnership in the program. United Airline has its own frequent flyer
program for its loyal customers while it also belongs to the Star Alliance Program. Its
counterparts, Asia Miles are popular among Asian travelers. Some Asia Miles members include:
Cathay Pacific Airways, Finn air, British Airways, Dragon Air and etc. Star Alliance members
include: Air Canada, Thai Airways, Air China, Lufthansa and so on. These are examples of such
program where different airlines join partnership in one program so they stay competitive.
Moreover, many hotels form partnership with airlines in their frequent flyer program. If you
become a member for the Asia Miles, a loyalty program where Dragon Air and other Asian
airlines belong to, you may also earn mileage if you stay in designated hotels. You can also
earn airline mileage each time you use certain credit cards to pay for your purchases.
Essentially, you want your customers to feel that you are offering them more value for their
money, or give them more reasons to purchase your product or services.

As you can see, each component or P in the marketing mix has its functions and is equally
important to the overall success of bringing your product and service to the market. Marketing
Mix is about a series of critical questions you have to consider regarding your product and
services. These include: Choosing what to sell (Product and services), where to sell it
(Place), how to tell customers about your product (Promotion), how to sell it
(Packaging), how much you would sell it for (Price), who will sell it for you and who
your target customers are (People), what kind of activities you will offer associated with

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your product (Programming), and finally, who you would invite to be your business
partners to create more value for your customers (Partnership).

1.2.3. The Importance of the Hospitality Marketing Mix

When opening up any kind of business that provides services, the marketing mix will be an
important part of that process. However, the hospitality industry has its own mix called the „the
hospitality marketing mix‟. What many businesses don‟t realize is how important planning
and forecasting is. Businesses don‟t just go bankrupt for no reason. To achieve success in
marketing a hospitality operation, a manager must closely examine and understand all of the
components of the marketing mix.

“Many hospitality operations fail because they are not able to combine the elements of the
marketing mix into effective marketing programs, or they fail to implement them properly”. So
in conclusion, all these components for the hospitality marketing mix are very important. They
can either make or break you!

1.3. Implementing the Marketing Approach

After undertaking the situational analysis and identifying potential opportunities, threats,
strengths, and weaknesses, operational strategies are used by marketing managers to implement
actions that will move an organization from its current position to where it wants to be. Such
strategies allow the organization to match its products and services to the relevant target markets,
to the goals of sustainable tourism, and to allocate resources to generate consumer demand for
such products. Translating sustainable tourism development goals and objectives into marketing
terms is a major undertaking that will affect the entire organization. This involves determining
any modifications that should be made to the organization‟s existing marketing activities and
processes in order to ensure that day-to-day activities are performed in a manner consistent with
sustainable tourism objectives.

The key operational marketing strategies used during the implementation stage include:

 Target market strategy

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  Product strategy
 Competitive strategy
 Market strategy
 Positioning strategy.

The principles of sustainable tourism can be incorporated into each of these strategies in order to
influence consumer behavior to being more sustainable.

1.3.1. Target Market Strategy

Effective forms of visitor management commence by targeting appropriate and desirable market
segments that exhibit characteristics compatible with the goals of sustainable tourism. According
to Middleton and Hawkins (1998), two guiding principles of sustainability should drive any
marketing initiatives aimed at changing the existing practices of an organization or overall
destination, in order to incorporate more sustainable tourism practices in the day-to-day
operation. These guiding principles relate to the need to:

 Understand the nature of market segments at any given destination and target those that
maximize environmental benefits and minimize environmental damage (including physical,
social, and cultural environments)
 Develop specific management techniques to achieve the optimum sustainable balance of
segments at the destination. These must respond to the known behavior patterns of the
particular segments that visit specific destinations for particular purposes at specific times.

Marketing activities should consider customers‟ needs regarding sustainability. This will require
changes to the organization‟s market research efforts. This feedback can affect the way products
are designed, produced, packaged, marketed, and promoted. In some cases new markets may be
added or existing markets redefined (IISD, 1994).

1.3.2. Product Strategy

The essence of marketing is to design a product to fit the market. A product strategy is
“concerned with the offering of different products and services to satisfy market needs” (Lewis
et al. 1995). Research suggests that there is a growing demand for quality tourism products that
are sensitive to their surrounding cultural and physical environments. Therefore, product

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strategies should be directed at developing more sustainable tourism products that cater for this
demand.

As many sectors of the travel and tourism industry are faced with increasing competition it will
become necessary for firms to develop products that are differentiated from their competitors‟
offerings. One way to do this is to identify the unique attributes of the local environment in
which they operate and capitalize on them in a way that maximizes benefits for the local area
without degrading the physical, social, and, cultural environments.

1.3.3. Competitive Strategy

In developing a competitive strategy the firm chooses its competition including when and where
it will compete. Based on objective situational analysis of where it is now, where it wants to be
and how it can get there. In order to succeed, it is important to find a market where there is clear
advantage and matching the product strengths with the chosen market (Lewis et al. 1995).

In choosing where to compete, tourism firms should adopt a long-term view. There are numerous
examples of firms that have opted for a short-term view, focusing on attracting the maximum
number of visitors and associated expenditure in the shortest period of time. Such a short-term
outlook has resulted in many firms contributing to the degradation of the attractions at the
destination that appealed to tourists in the first place leading to a decline in tourist visitation and
revenue in the long term. Such an outlook is incompatible with sustainable tourism operations.

Porter (1980) suggested that firms compete using one of three generic strategies: cost leadership,
differentiation, and focus or niche marketing. In marketing for sustainable tourism, firms need to
consider how each of these strategies might impact upon the achievement of sustainable tourism
objectives.

Cost leadership

Cost leadership is a strategy commonly used by tourism firms aimed at reducing operating costs
and in turn product prices in an attempt to increase the volume of tourist visitation. To ensure
that such a strategy is consistent with the sustainable tourism objectives of the business,
managers should consider how their pricing strategy will impact not only on tourist demand for

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their products but also on the environments at the destination. Issues for consideration here
include:

 The volume of tourist flow that is deemed appropriate

 The types of tourists being attracted
 The activities undertaken by such tourists&
 The compatibility of these factors with the goals of the local community.

A strategy to be a cost leader involves reducing operational costs through the identification of
suitable suppliers, which offer competitive prices, so that such savings can be passed on to the
consumer. Therefore, it is important that a firm‟s procurement procedures adhere to the overall
sustainable tourism objectives of the business. As such, suppliers with sustainable tourism
objectives of their own should be chosen over suppliers that demonstrate little concern for
sustainable tourism.

Differentiation

Differentiation means differentiating a product or service from those of other firms in the entire
potential market (Lewis et al. 1995). If a business can distinguish its product or service from that
of its competitors, then it is assumed that the customer will perceive greater utility, better
price/value, or better problem solution in the firm‟s product, and this will result in increased
demand for the product.

Tourism firms can differentiate their product by offering a sustainable alternative to existing
products on the market. Differentiation may be through attributes of the product itself such as
environmentally friendly features, or through advertising and promotion, which emphasizes the
benefits of using sustainable alternatives.

Focus/niche/ marketing

This strategy involves a business seeking out a unique market niche so as to avoid confrontation
with other large competitors. Here the firm dedicates itself to serving one tourist market or
focusing on one specific tourist activity so as to reduce the amount of overall direct competition.
Ongoing market research can allude to emerging sustainable tourism markets and associated

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needs and demands upon which individual firms can choose to focus their marketing efforts so as
to create new products.

1.3.4. Market Strategy

Market strategy is concerned with reaching the market with the product. This can be done by
taking the product to the market or by getting the market to the product. A market strategy is
important because if a business cannot reach the desired market then even the best product and
most well-defined strategy will fail (Lewis et al. 1995).

Taking the product to the market

Incorporating sustainable tourism principles into this strategy would involve using the
distribution system to take the sustainable tourism product to the market. Once appropriate
markets have been identified, this strategy involves making the new more sustainable tourism
products more accessible for these markets and, as such, location is an important factor here. It
may involve a business forming new cooperative relationships with travel intermediaries to
distribute the new products.

In developing countries, in particular, tour operators are a powerful influence over the type of
tourist attracted, when they visit and the activities they undertake. Therefore it is important that
the objectives of these tour operators are in accordance with the sustainable tourism objectives of
the business.

This strategy may also involve using new or different types of distribution channels such as the
Internet, which involves a reduced level of resource consumption and enables the business to be
accessible to a greater number of potential tourists irrespective of where they are located.

Getting the market to the product

This strategy involves marketers choosing appropriate tools from the promotional mix to reach
potential tourist markets with relevant images, messages and information about sustainable
tourism product alternatives. Increasingly this will involve taking advantage of new technologies
such as the Internet, to increase the awareness of potential tourists of new sustainable
tourism products, allowing them to make online reservations, and to disseminate pre-trip

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information aimed at educating potential tourists about the benefits of choosing a more
sustainable tourism product.

1.3.5. Positioning Strategy

Positioning is the act of designing the company‟s offer and image so that it occupies a distinct
and valued place in the target customer‟s minds (Kotler, Ang, Leong, Tan, 1996).

It involves the company deciding how many differences and which differences to promote to the
target customers.

Many of the demand patterns in tourism reflect the unsustainable lifestyles of industrialized
consumer societies. The over consumption of resources by tourists and tourism infrastructure is
incompatible with sustainable tourism development.

Tourists often lack information and awareness about their impact in a different culture and
environment, about their impacts on socio-economic and socio-cultural development and about
the environmental costs of tourism. Firms are often unaware of inappropriate behavior and have
little guidance on how to improve them. This is where tourism marketers have a role to play in
increasing awareness of sustainable tourism principles. The mass media are increasingly
influential on travel decisions and consumer behavior in the destination region. Consumer
behavior can and must be influenced by addressing unsustainable forms of tourism, and
promoting tourism activities and behavior that is sensitive to the principles of sustainable
development. Marketing managers can assist this process by creating tourist awareness of
responsible behavior and promoting examples of best practice in this area.

Buyers tend to remember “number one‟ messages or positions, such as “best quality‟, “best
service‟, and “lowest price‟. At a time when there is increasing consumer concern for the
environment firms can also position themselves in the minds of their target customers by
emphasizing “best environmental practice‟. If a tourism firm continues to reinforce this position
and convincingly delivers on it, it will probably be best known and recalled for this strength.

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