Introduction: Tourism Marketing Management Assignment
This Tourism Marketing Management Assignment discusses various marketing practices used in Tourism industry. Tourism can be defined as the movement of people from one place to other which is temporary in nature and done for specific purpose under excitement or pleasure. The tourism industry worldwide is one of the fastest growing industries and it has provided lot of benefits for people working in it (Gronroos, 1978). Tourism as a business started in 2040-1786 BC when temples, tomb and other monuments got their regular travellers from across the globe for pleasure and excitement. Travel as an industry started when one of the British tour operator named Thomas Cook started the tour and travelling services in year 1850s (Aaker, 1975). After that the development in the industry was so rapid that by year 1987 it became world’s largest industry when it recorded $2 trillion of sales and employed about 6.3 percent of global workforce.
The marketing of tourism involves deciding STP (Segmentation, targeting and positioning) for the target customer segmentation, deciding right marketing mix to offer, building perceptual mapping and conjoint analysis for the customer segment which a company is targeting in order to position its product according to chosen customer segmentation (Cunningham, 1981). Along with this it involves the analysis of product/ service offered and how it can be varied in order to best suited the customer segment, analysing product life cycle of the tourism industry and then developing marketing strategy according to the life cycle period in which a particular product is existing right now since with the change in the life cycle of the product life cycle, marketing strategy adopted also get changed accordingly (Cravens, 1976).
Segmentation in tourism marketing
Market segmentation in marketing of any product/ service is very crucial since it tells about the available market opportunities in which company can operate and the characteristics of the people into the similar segments of customers (Hawkins, 1980). Segmentation is done on the basis of certain parameters such as demographic, cultural, social and physiological aspects (Jinlin, 2003). There are mainly four marketing strategy for market segmentation of tourism industry which is as follows:
- Undifferentiated marketing: In this kind of segmentation approach marketer thinks that there is highly similar people in the market and there are not much difference between them and marketer can cater to all such customers without making any difference between particular customers (Yong, 2001). The following figure shows diagrammatically undifferentiated and concentrated marketing approach.
- Concentrated marketing: When marketers develop strategy for one particular target segment and concentrate all his resources for the development of that sector only then that segmentation approach is termed as the concentrated marketing approach (Tianyuan, 2005).
- Multiple Segmentations: When marketer chooses multiple marketing segments and operates in them simultaneously then that segmentation approach is known as multiple marketing segmentation approach (Kiping, 2005).
- Customised segmentation: When marketing efforts are such that the company attempts to satisfy individual needs of customer then the segmentation approach is termed as customised segmentation (Roots, 2000).
The demographic variable includes the age, location, education and Income variable to categorise the customer for their tourism preferences (Ping, 2000). Depending upon the age variable tourism industry can be sub divided into 3 small segments:
- Picnic spots or holidays for kids (Age 5-17 years)
- Honey packages for newly married couples (20 -30 years)
- Tours for old aged people (45+ years)
Other then this major segmentation on demographic variable which is done into tourism industry is based upon the children with the parents or not (Frontistis, 1997). The family size is also important variable in deciding the cost structure for the tour package.
Family life cycle
Family life cycle is also one of the important parameter for segmenting the tourism markets since prefer to visit according to their family life cycles (Larson, 2000). There are mainly following life cycles in any family which are: Kids, bachelor, newly married, full nest1, empty nest, and empty nest 2, retired solicitor (Bachvarov, 1996). In all these life cycle preference of customers vary for tourism along with preferences, income variable also get change into these life stages for the customers (Beaver, 1999).
Psychographic variable also helps the marketer for market segmentation by answering some of the important questions a marketer faces while designing the marketing strategy of the company (Bernier, 1997):
- How to make or plan the tourist product/offerings?
- Whom to sell that product (the human characteristics)?
- How to sell the product or services (distribution related problems)?
In regards to above questions psychographic variables helps the marketers to tell about the kind of location a particular customer will like e.g. historic place, nightlife, gambling etc (Bramwell, 1996). These variables also tells the customer traits and the customer for which these traits are best suited can be offered these services (Busby, 1995). Finally psychographic variable provides a pathway a marketer can follow to reach to its target customer segment (Wvenhung, 2000).
Selecting target customer segment in Tourism Industry
The selection of target customer segment is a step by step process which starts with finding niches in the marketplace (Shin, 2000). The main aim of the marketer is to find out the niches which are available in the marketplace which are not tapped by other players in the market and company can deal in these niches to get the business (Cooper, 1997). After identifying the niches next aim would be to identify the different customers which come under that niche and organisations working in that niche (Cristureanu, 1996). Then alternative in terms of target market available would be evaluated to compare them with the current target market. Then based on this comparison a target market strategy would be chosen by marketer (Enghagen, 1990).
Alternate Segment evaluation
For the evaluation of the alternate segment which can be used for targeting customers following parameters should be taken care of (Nilson, 1990):
- Industry competitors and the threat of segment rivalry
- Threat of substitute products
- Buyers and supplier in that relevant market
- Suppliers and their relative power
- New entrants in that industry
Positioning into tourism industry
Positioning of the service product like tourism product poses several challenges due to the following two nature of the service sector (Goledner, 1988):
- Intangibility: Due to intangible nature of the travel & tourism services since the service can’t be seen by the consumer so the level of uncertainty get arises and the consumer become sensitive before buying the services and not able to believe the service provider easily (Haltsman, 1995). Hence to combat this problem of positioning service provider can position the products as the explicit product and can provide customer a mental fix so that customer can be assured about the kind of service he/ she will receive from the service provider (Jithendran, 2000).
- Heterogeneity: Due to heterogeneous nature of service i.e. services are not delivered with same standard every time and are not identical (Kaplan, 1982). So problem of inconsistency arises in the process of service delivery hence the service provider should position the product in such a way to ensure the consistency in the service provided every time by service provider (Kasper, 1989).
Market selection by the marketer is different every time and based upon the kind of strategy chosen by him based on his situation analysis (Ketyler, 1982). There can be 3 different market selections which are as follows:
- Position itself in the centre of all segments hoping to cater all the segments present into market. It is done when market segments are not defined clearly.
- Positioning itself into the largest and profitable segment
- Developing several sub brands and launching them in segments according to their needs
Cluster analysis finds out the cluster of objects which shows the resemblance among them while they try to differ from other clusters significantly (King 1980). In cluster analysis groups are formed based on the relevant score given by objects to certain parameters. There are several questions which cluster analysis requires before dividing the objects into clusters which are (King, 1996):
- How the cluster differs
- Optimal number of clusters
- How good is the fit of cluster for particular object
Discriminant analysis is the technique used to differentiate the objects within a group (Khwaya, 1990). It is very helpful techniques as it tells about the characteristics of the objects which buy a particular product and the characteristics of the repeat customer in order to identify those traits and categorise the customers in terms of priority customers and differentiate them from other customers of the company (Kirlova, 1990).
Conjoint analysis is the procedure used to find out the trade off which customers make in order to get one particular aspect of the product leaving other feature. It shows the customer priority and the feature which is most important for the customer while making a purchase of the product or service (Kievla, 1997).
Also Read: Marketing Analysis Report Australian Tourism
This technique is used in order to find out the relationship between various variable when similarity and dis-similarity among them is given (Lavery, 1989). It is done in order to find out relationship which are then transformed into distances and these distances represent the relationship between various objects (Laws, 1995), if two objects are near means they are more similar in nature while if they are distant from each other then they are not well related to each other.
Product life cycle
Tourism product life cycle also vary as with the product life cycle. Tourism has two parts in it: One is experience and other being destination (Lawson, 1974). The destinations also pass through the life cycle. Basically there are 3 stages of any destination which are:
- Discovery: In which a small number of tourist discover the place and get attracted by beauty of the place and spread the word among other people as well.
- Local response: In this local initiatives are taken by the people in order to enhance the image and tourism at that place.
- Development: It is the final stage of product life cycle in which number of tourist visit the place and place get popularised (Leisle, 1993).
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- David A. Aaker and John G. Myers, “Advertising Management”, Prentice-Hall, Inc., Englewood Cliffs, New Jersey. 1975.
- E. Brown and E. F. Fern,”Goods Versus Services Marketing: A Divergent Perspective.”, American Marketing Association, Chicago, Illinois. 1981.
- John A. Czepiel, “Managing Customer Satisfaction in Consumer Service Businesses.” Marketing Science Institute, Cambridge, Massachusetts. 1980.
- William H. Cunningham and Isabella C. M. Cunningham, “Marketing: A Managerial Approach”, South-Western Publishing Company, Cincinnati, Ohio. 1981.