Unit 5: Marketing and promotion Flashcards
Why is Marketing & Promotion important to T&T Providers ?
- Increased sales/profitability/market share - more sales, more profit. TTPs need to widen customer base by attracting new customers.
- Competitive advantage - TTPs should attract more customers than its competitors to survive the competitiveness of the market.
- Customer satisfaction - If customer needs are met by the product or service, they may return for repeat purchase/leisure/business purposes OR spread the positive word amongst family & friends. This creates more sales and increases usage/market share/profit/brand loyalty.
Primary Market Research
It requires organisations to go out into the market & find out about customer needs & wants.
Types of Primary Research
- Self-completion questionnaires - series of open-ended closed or multiple choice questions given directly to the customer to fill in.
- Telephone & Internet surveys - customers are randomly contacted by phone/email or when visiting a website.
- Exit surveys - carried out as a visitor leaves an attraction in which opinions about the overall experience whilst at a particular facility is sought.
- Focus Groups - a number of customers are led by a member of staff to discuss their views on a certain product/service. It is costly & time-consuming.
Secondary Market Research
Using existing information that has been collected by a third party for a different purpose or using data from the organisation’s own records.
It can be time-consuming as there is a lot of information to research through and find specific information related to the organisation.
Types of Secondary Research
Internal Source - data from organisation’s old sales record or a customer database detailing how often a customer uses a particular facility.
External Source - Government produced data or trade reports accessed through membership accounts via the Internet.
Academic research findings within journals.
SR is usually unreliable and the research was originally carried with a different objective in mind. Thus, making it irrelevant or outdated.
Qualitative & Quantitative Data
Information collected about customer’s opinions & attitudes towards products & services.
Information is usually numerical or statistical by nature. It allows trends/patterns in the market to be displayed visually in chart or graph forms.
Analysis
Situation Analysis - TTPs must be able to carry out an accurate assessment of the business environment they operate in.
It helps TTPs identify +&- influences on its business activities.
Internal Influences - allows organisations to recognise influences within its own control.
External Influences - influences beyond the organisation’s control.
SWOT Analysis
Strengths - internal
Weaknesses - internal
Opportunities - external
Threats - external
It allows to recognise an organisation/product/destination position in the market.
If there are more Ws & Ts, then the TTPs will less likely expand.
If there are more Ss & Os, then TTPs will more likely to expand & develop.
PEST Analysis
Political - terrorism/politics
Economic - exchange rates
Social - diseases/cancel holidays
Technological - infrastructure dev
It allows to recognise the influences beyond the organisation’s control on the market.
Marget Segments
Geographic - by area of residence or country of origin.
Demographic - age, gender, ethnicity, level of income.
Lifestyle - level of education, profession, interests.
In order to build customer profile and target customers according to characteristic.
Products created to cater needs of customers in different segments
Package Holidays(Family/Group) - transport & accommodation OR car rental & excursions are sold together. - Product Bundling.
Transport(Group/Business)- luxury cruises, hot air ballon ride, business class tickets.
Accommodation & Catering(Group/Family/Business) - luxury over-water bungalows to tents.
Tourist Attractions(Group & Family) - theme parks, museums, historic infrastructures. Different offers for different customers.
Types of Customers
Different age/gender - Grey Market to Youth Market.
Specific needs - disabilities, religious laws, dietary needs.
Specific interests - eco-tourists, medical tourists, sports tourists, cultural tourists.
Product Characteristics
Tangible - you can see & physically hold the product e.g. meals.
Homogeneous - having the same kind of product e.g. hotel rooms.
Separable - you can tell the difference between 2 products due to features of each product.
Storable - products will last and is not perishable.
Service Characteristics
Intangible - cannot be seen or physically held.
Heterogeneous - services are different, every experience is individual.
Inseparable - not possible to separate service from experience.
Incapable of being stored - services cannot stay forever and cannot be transferred for used for a later date.
Product Life Cycle
Introduction - limited volumes of sale, high cost of production and no competition.
Growth - demand/sales volume/levels of profitability increases. This stage is critical to the success of the product.
Maturity - competition is strong, sales curve peaks, profit made continues.
Decline - sales fall, organisation decides whether or not to discard the product or re-launch it.
Creation of Brand Image
- A method to clearly make a product/service different from and more attractive than its competitors’.
- it forms a set of associations that an existing or potential customer has of the company/product/service/destination.
The associations can also be a result of the customers’ experience of a business or organisations own efforts made promoting through marketing mix.
Product/Service Mix Purpose
- To gain recognition as an innovator in the market
- To extend operations into new territories
- To imitate the success of a more successful competitor
- To keep abreast of technological advances
- To reposition themselves in the market.
Product/Service Mix Examples
Luxury accommodation, fine dining options, health club & spa facilities With added free Wi-Fi or a piece of laundry.
Pricing Policies
- market penetration
- market skimming
- discount pricing
- variable pricing
- loss leader pricing
- promotional pricing/special offers
Market penetration
setting low prices to attract customers when entering a new market. Aim is to gain large sales volume and create a customer base.
Market skimming
when launching a product to a low competitive market at high prices.
Discount pricing
adding a discount on original price when the product has not sold sufficiently.
Variable pricing
different prices are set at different seasons of the year. High prices during peak seasons due to high demand, low prices at low seasons when demand decreases. Prices also vary between customer Types
Price Bundling/loss leader pricing
pricing few items together in a bundle at a reduced rate
Promotional pricing/special offers
used to pull customers away from a rival attraction by offering customers something free
Factors affecting Pricing policies
Fixed & Variable Costs - money spent on overheads.
Profitability - business orientation of an organisation will affect the final price charged which means profit-seeking organisations operating within the private sector.
Seasonality - depending on the demand of customers.
Competitors - depending if the competitors offer the same product or not.
Customers’ expectations - income of customers and willingness of how much to pay for the product/service.
Location Factors when choosing Place
Costs - ensuring the cost of place is under the budget and is affordable by the organisation. City centres tend to be more expensive.
Adjacent Facilities - what other tourism facilities are available nearby which can benefit tourists to easily access or if any competitors are nearby.
Access/transport links - high volumes of visitors should be able to access the TTP through road & railway networks and have sufficient carrying capacity.
Availability of Staff - local population close to the centre to be enable workforce to run the centre.
Distribution Channels
- direct selling
- wholesalers
- retailers
- Internet
- Global Distribution Systems
Direct selling
customers are able to obtain products/services directly from the provider.
Wholesalers
tour operators buy products directly from TTPs and sell them onto retailers-travel agents who sell to customers.
Retailers
travel agents act as intermediaries for TTPs by selling products/services through high street & online outlets and receive commission fee.
Internet
24 hour access to products/services purchase. It is convenient and easily accessible as tourists can purchase items from home without assistance.
Methods of Promotion
Advertising - usually expensive and only affordable by leading TTPs. e.g. TV, radio, cinema, newspapers, billboards, leaflets.
Point of sales display - to bring linked products & services to the attention of customers at or close to a sales counter.
Direct Marketing - provider makes direct contact with the customer by post, email or telephone. Allows to target specific customers or segments.
Sales Promotions - coupons, special offers, loyalty incentives or competitions.
factors that are considered when producing effective promotional materials
- costs
- stages of the promotional campaign
- target market segments
- timing
- brand image
- AIDA (attention, interest, desire, action) in designing effective promotional materials
