TOURISM

MARKETING
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 Definition of Marketing

In relation to tourism, marketing the systematic process by which an organization tries to maximize
the satisfaction of tourist demand through research, forecasting, and the selection of tourism products and
services to meet that demand. Another definition is a management philosophy which, in the light of
tourism demand, makes it possible through research, forecasting and selection to place tourism products
on the market in line with the organization’s purpose for the greatest benefit. This definition suggests
three things. First, it shows that marketing balances the
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organization or destination. This can be explained by an examination of the development of an
appropriate orientation. Second, it emphasizes tourism research which leads to the selection of tourism
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demand. The concept of market segmentation is useful at this point. Third, the concepts of the product
cycle and positioning are useful to stress the proper placement of tourism products on the market and to
suggest the suitable marketing policy and strategies which result from that decision.
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 Uniqueness of Tourism Marketing

Although the theories and methods of marketing tourism are the same as those of other
products, there are some unique qualities. Tourism is a service. An intangible experience is being sold,
not a physical good that can be inspected before it is bought. For example, a consumer does not buy a
bed or a beach, but buys a night lodging in a hotel at the seashore. Because it is a service, production
and consumption take place at the same time. In manufacturing, goods are produced, stored, sold,
shipped, and delivered. The inventory for tourism is a seat on a plane, a hotel room, a nice beach or a
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beautiful or an excellent place for scuba diving. Unlike manufactured goods, if the inventory is not
sold, it is not sold forever. Manufactured goods can be stored, and while sometimes perishable, they
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generally are not lost if not sold one day on a given day. Tourism supply cannot be stored. Unlike a can
of food which, if not sold one day, can be sold for the next day. Airline seats, hotel rooms, or restaurant
seats not sold today lose that particular sale forever. This means that market forecasting and research
are extremely important. Producers should effectively plan the proper amount of facilities and after
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developing them, use them as completely as possible.

 Marketing Orientation
 
Before embarking on a program to market tourism in general or a specific tourism product or service
in particular, it is necessary to develop philosophy or orientation to guide one’s marketing efforts. Some
destination areas have marketing efforts that are guided by product orientation. A product orientation
emphasizes the product or services that are available. It may be successful if there is a surplus of demand
over supply. Thus, the destination which offers the best product will get the tourist. The old adage that
reflects this is “build a better mousetrap, and the world
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When there is more supply than demand, the consumer orientation is used. Consumer orientation
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places the needs and wants of the tourist foremost in the mind of the marketer who seeks to provide a
product or service that will satisfy those needs and wants. It involves serving breakfast when the tourist
wants it rather than when it is convenient for management, as well as providing an experience tourists
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need and want rather than what the marketer feels they should need or want.
 Marketing Segmentation
The second aspect of the definition of tourism marketing is the selection of tourism demand.
Market segmentation is a universally accepted way of analyzing demand. It is the grouping together
of people with similar needs and wants for the purpose of serving the market better.
 
Segmentation is based on four assumptions. First, the market for a product or service, such as a
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vacation, is made up of particular segments whose members have particular needs and preferences
related to the product or service being marketed. Second, these potential tourists can be grouped into
segments whose members have similar characteristics. Third, a single product offering such as a trip
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to Baguio will appeal to some segments of the market more than others. Fourth, some firms and
organizations can improve their marketing efforts by developing specific product offerings to reach
specific segments of the market. A cruise package will be suitable to one part of the market but a
historical tour may be more suitable to another
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 Table 6. Recreation and Tourism Market Segmentation Bases

Socioeconomic and Demographic Variables Product - Related Variables

 
Age Recreation activity
Education Equipment type
Sex Volume usage
Income Brand loyalty
Family size Benefit expectations
Family life cycle Length of stay
Social Class Transportation mode
Home ownership Experience preferences
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Second home ownership Participation patterns
Race or ethnic group
Occupation
 
 
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Psychographic Variables Geographic Variables

 
Personality traits Region
Lifestyle Market area
Attitudes, interest, opinions Urban, suburban, rural
Motivations City size
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Population density
 Socioeconomic or Demographic Segmentation
Socioeconomic criteria are the most commonly used at present due to the ease of collecting data, the
comparability of such information through census, as well as media data, and the fact that such data is easy
to understand and apply. Age and income are very successful predictors of recreation participation. However,
the changing nature of society makes it impossible to rely on demographic data as a means of devising
marketing strategy.
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Product- Related Segmentation

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  A major advantage of product- related criteria is that the information gained is directly related to the
particular product in question. A major defect in some studies is that the information is acquired from the
potential tourists that deals with general benefits obtained or, in the case of psychographic segmentation,
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from general attitudes about types of products and services rather than specific products and services.
 Psychographic Segmentation

This segmentation technique, although expensive difficult, is useful in describing segments. It can best be
used in highly- specialized and extensively- developed markets to supplement the information gained from
simpler analysis. Demographic data may be likened to the bones of skeleton while psychographic data is to
the flesh. The bones form the basis of the stricture but it is only by covering the form with flesh that the
features become recognizable. Information about an individuals attitudes, interest and opinions give much
closer picture of the segment being described.
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Geographic Segmentation
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Geographic considerations are very important in tourism. At present, destinations use
geographically based studies to identify primary, secondary, and in some cases tertiary
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markets. State and national tourist offices use geographic segmentation to determine the
extent of their promotional efforts.
 Product Life Cycle
 
The concept of the product life cycle is useful to the markets as an additional guide on what
strategies should be used in choosing, attracting and serving target market. It suggests that a product,
service, or destination moves through distinct stages. Specific marketing strategies on price, product,
promotion and distribution are developed within the context of a market planning approach.
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1. Introduction
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The introductory phase of the product life cycle requires high promotional expenses and
visibility. The most opportune time to advertise a product or service is when it is new. Operation in this
period is characterized by high cost, low sales volume, and an advertising program which aims to
encourage primary demand. At this stage of the life cycle, there will be a high incidence of failure
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 2. Growth
In the growth period, the product or service is accepted by consumers. Market
acceptance means that both sales and profit increase rapidly, making the market attractive to
competitors. Promotion emphasizes selective buying motives by trade names rather than the
number of outlets handling the product or service increase. More competitors enter the
marketplace.
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3. Maturity
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  At this stage, the mature product is well- established in the market place. Sales
increase but at a slower rate. Many outlets are selling the product or service. They are very
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competitive especially with regard to price. Companies try to find out ways to hold on to
their share of the market.
 
 4. Saturation

  At this stage, volume reaches its peak. The product or service

has penetrated the market place to its highest degree. Mass production
lowered the prices to make it available
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to everyone.
 
5. Decline
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  In the decline stage, advertising expenses are lower. There are

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few competitors
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 Strategic Marketing Process
A strategic marketing process can be divided into three elements:
1. Market Planning
2. Target market selection
3. The marketing mix selection
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Market Planning Process
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In market planning, the objectives are stated and the methods

of attaining them are identified. There are seven steps in the
market planning process, these are:
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 1. Collection of Data – Data can be collected in two ways- from secondary sources and from primary
sources. The second method is expensive and time consuming. Since many organizations are not
skilled to do market search planning, they usually ask the help of other organizations or people who
are experts in it.

2. Analysis of data – Data is usually organized and interpreted. This requires a great amount of skill
and understanding. At present, computers shorten the process of organizing and interpreting data.
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3. Identification of alternative strategies for reaching the desired goal – in most cases, there are
several ways to arrive at a desired goal. For example, an airline company wanting to increase its
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percentage of occupied seats may adopt several alternatives. First, it can create a special fare with
certain restrictions such as the seven-day advance buying. Second, it can create a special fare based
on age such as discounted fare for those below 21 years of age. Third, special contracts for surplus
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seats may be arranged with groups.

 4. Cost-benefit analysis
The cost – benefit analysis of several methods for reaching the goals would
indicate which of the alternatives or combination of them would be best from a
financial standpoint. Some elements are not quantifiable such as the goodwill and
improved attitude toward the company that a program can generate. Frequent flyer
programs which airlines offer are quantifiable since discounts for mileage flown can be
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5. Selecting alternatives and plan formation

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After the variables and cost – benefit for each are identified, it is then decided
which one should be carried out by the other organizations. A plan of action, including
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the responsibilities of the members of organization, can then be established.

 6. Control procedures – are methods which
analyze the process made in achieving the goals
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7. Plan information – putting into effect the plan

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of action and supervising it.

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 Target Markets

Tourism USA suggested four steps in identifying target markets. These are :
 
1. Estimate the approval of an area’s attractions. This includes the degree of interest of the tourist in the area and the
length of time the tourist will spend visiting it. For example, a three-day festival would be more important than a one-
day festival. A Disney- type theme park would create more interest than a crocodile farm;
 
2. Estimate the distance in both travel time and travel costs.c The greater the attraction, the longer the distance
potencial tourists will travel;
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3. Identify the potential target markets geographically by locating the population clusters within the maximum
distance determined from the estimated travel time and lure of the attractions; and;

4. Identify the actual and potential competition in the target market.

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 Behavioral Characteristics of Target Markets
 
The behavioral characteristics of potential travelers is very important in identifying target markets.
People travel for different reasons. Some people are interested in historical or cultural activities such as
museums and monuments; others prefer sports events or entertainment, while still others prefer the sun,
sea and sand. Once the target markets have been defined, the segments must be studied to know why
these people travel to a specific location. Research can be determine the behavioral target markets that
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would be best suited for the particular product and match attractions with those who are most likely to
enjoy them and let the tourist know their existence through promotion.
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Marketing Mix
The marketing mix is the combination of elements - product, price, promotion, and distribution
that interact and complement each other to attain the objectives of the market plan.
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 1. Product
A vacation consist of several parts or products such as transportation, accomodation, food and
beverage, sightseeing, entertainment, and souvenirs. Several providers will offer one or more of these
products or services. Thus, each provider is interdependent upon the others to offer an attractive and
satisfying vacation experience. The philosophy of a consumer marketing orientation suggests that
products should satisfy the needs and wants of the consumer. It is necessary to select a target market and
then provide products or services that will satisfy its needs.
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2. Price
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Price is the result of supply and demand. When supply exceeds demand, price tends to decrease.
When demand exceeds supply, price tends to increase. For example, higher prices are charged during
peak seasons. While lower prices are charged during off- seasons, prices are usually lower for
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destinations that are open the whole year while destinations that are not open the whole year have higher
price rates.
THANK
YOU!
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