Evaluation criteria are designed to help companies determine the quantity and products that can and/or are most profitable to repair. There are several opportunities for companies to use undifferentiated marketing (focus on the entire market with an offer) and differentiated marketing (focused on different market segments with different offers for each of the segments), sharpness/niche marketing to one or more small segments/niches and with a huge share of micromarketing (taking into account individual consumers or location. In tourism, separated promoting is the most widely recognized market focusing on approach nowadays. Segmentation is distinguished in three types. They are Undifferentiated segmentation: Undifferentiated segmentation means the organisation is choosing a product for the mass market. For e.g., if the product is health tourism (Ayurvedic treatment in India) the segment chosen for it would be anyone from any geographic region having varied demographic profiles from all age groups, all genders, any occupation, any behaviour etc. Differentiated segmentation: Differentiated segmentation means the organisation is choosing the same health tourism product for consumers who are from the same geographical region having the same demographic profile such as same age groups, same gender, same occupation or income, and same behavioural aspects. Differentiated segments can be applied when the market is well developed with distinct preferences among buyers. Concentrated segmentation: Concentrated segment is a differentiated one but the firm cannot reach all because of limited resources and decided to choose the limited part of the market and built it strongly. Here the health tourism products segment would be for the consumers from the same geographical region having the same demographic profile such as same age groups, same gender, same occupation or income, and same behavioural aspects but the firm chooses only specific segments due to less accessibility and develops it strategically. For e.g., high income segments for Hair or Cosmetic Ayurvedic treatments. 9.9 SUMMARY Market segmentation describes a heterogeneous market (characterized by divergent demand), like many smaller homogeneous markets. Market segmentation is a strategy in any business, in the tourism industry, that can help them strengthen their competitive position by selecting the most appropriate subgroup of tourists to specialize in, and match the goal. Segmentation criteria and databases can include socio-demographic data (for example, old vs. young, tourists), behavioural variables (for skiers vs. tourists, or 151 CU IDOL SELF LEARNING MATERIAL (SLM)
psychographic variables, tourists are motivated by the world, and attitudes toward those who are motivated to act and communicate). Concentrated segment is a differentiated one but the firm cannot reach all because of limited resources and decided to choose the limited part of the market and built it strongly. Undifferentiated segmentation means the organisation is choosing a product for the mass market. Differentiated segmentation means the organisation is choosing the same health tourism product for consumers who are from the same geographical region having the same demographic profile such as same age groups, same gender, same occupation or income, and same behavioural aspects. Features of the market segment are Measurable, Accessible, Substantial, Defensible, Durable and Competitive. Criteria of Market Segmentation: 1. the segment to be declared. 2. The segment must match the strengths of tourists. 3. The segment must be identified. 4. The segment has been reached, so adaptive in order to communicate effectively. 5. The segment must be appropriately sized. UNWTO has identified market segmentation as a process involving six basic stages. Some of the factors most commonly used as a basis for comparing segments are Access to the product (physical and booking), Accommodation capacity, Awareness and image of the destination, Carrier capacity (accessibility), Income and education level, Market share, Media usage and availability of promotional opportunities, Product fit, regional spread, Seasonal spread, Size of segment and growth trends, Value/spend (current and forecast) and Visits (current and forecast). 9.10 KEYWORDS MTDC – Maharashtra the tourism development corporation UNWTO – United Nations World Tourism Organization SWOT – Strengths, Weaknesses, Opportunities, and Threats ROI - Return on Investment Categories of Market Segmentation: Geographic segmentation, Demographic segmentation, Psychographic segmentation and behavioural segmentation 152 CU IDOL SELF LEARNING MATERIAL (SLM)
9.11LEARNING ACTIVITY 1. Select any one international tourism destination. Analyse the categories of market segmentation. ___________________________________________________________________________ ___________________________________________________________________________ 2. Analyse the stages for effective tourism market segmentation to promote India in global tourism market. ___________________________________________________________________________ ___________________________________________________________________________ 9.12 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Definemarket segmentation. 2. List the bases of Segmenting Consumer Markets. 3. Mention the importance of geographic segmentation. 4. Describe the importance of market segmentation. 5. Expand UNWTO and VFR. Long Questions 1. Describe the multiple segments to market a USP of any one urban destination of your choice. 2. Explain the categories of marketing segmentation. 3. Elaborate the stages for Effective Tourism Market Segmentation. 4. Write a note on strategies for Market Segmentation. 5. Discuss the criteria of Market Segmentation. B. Multiple Choice Questions 1. Tourism Marketing has a dominant role of __________ a. Customers b. Producers c. Travel agencies 153 CU IDOL SELF LEARNING MATERIAL (SLM)
d. Intermediaries 2. Demographic segmentation is conducting on the basis of __________ a. Market distance b. Study of people c. Economic conditions d. Psychological factors 3. Market segmentation describes ________________ a. Homogeneous market only b. Heterogeneous market only c. Both Homogeneous and Heterogeneous markets d. Neither Homogeneous nor Heterogeneous markets 4. Market segmentation is a process of ___________________ a. Assembling various market segments into a complete market b. Using segmentation variable in the marketplace c. Identifying groups of customers with similar characteristics d. Deciding on a specific market and staying with it 5. UNWTO has identified market segmentation as a process involving ________ stages a. 2 b. 7 c. 6 d. 5 Answers 1-d, 2-b, 3-c, 4-c, 5-c 154 CU IDOL SELF LEARNING MATERIAL (SLM)
9.13 REFERENCES Reference book Handbook on Market Segmentation: Maximising Market Effectiveness Arch G. Woodside and Martin D. (2008) Tourism Management: Analysis, Behaviour and Strategy, CABI. Textbook reference Martin, D. (2008). Tourism Management: Analysis, Behaviour and Strategy. United Kingdom: CABI Pub. Websites Dolnicar, S. (2008) Market Segmentation in Tourism, Tourism Management, Analysis, Behaviour and Strategy. Cambridge: CABI. Farina, T.F., Hartoyo, Sukandar, D. and Soehadi, A.W. (2016) Segmentation of the tourism market for Jakarta: Classification of foreign visitors' lifestyle typologies, Tourism Management Perspectives, 19: 32-3. https://www.tutorialspoint.com/tourism_management/tourism_management_market_s egmentation.htm 155 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT - 10: TARGET MARKETING STRUCTURE 10.0 Learning Objectives 10.1 Introduction 10.1.1 Uniqueness of Tourism Marketing 10.1.2 Characteristics of tourism marketing 10.2 Target Marketing 10.3 Understanding Target Markets 10.4 Company Objectives and Resources 10.5 Steps to Identify Target Markets 10.6 Tourism Research on Target Marketing 10.6.1 Market segmentation 10.6.2 Market Targeting 10.7 Choosing a Market-Coverage Strategy 10.8 Target market selection 10.9 Importance of target marketing 10.10 Market Positioning Strategy 10.10.1 Market Positioning 10.10.2 Market Positioning strategy 10.10.3 Approaches to positioning strategy of a product 10.11 Summary 10.12 Keywords 10.13 Learning Activity 10.14 Unit End Questions 10.15 References
10.0 LEARNING OBJECTIVES After studying this unit, you will be able to State uniqueness of tourism marketing and characteristics of tourism marketing Explain about the importance and steps to identify target markets Describe the tourism research on target marketing Outline a market-coverage strategy and target market selection 10.1 INTRODUCTION You have already known about market segmentation in the previous unit. Once again you should recapitulate what you read about the general theory of market segmentation, which are necessary segmentation, and the number of variables that will be used to segment the tourist market. However, in this section, we will try to apply the theoretical model for various tourist markets that were covered in this topic. After determining the market segment, you need to position your product, both in the physical sense and in terms of consumer perception of the product, in particular. This segmentation and targeting strategies are also discussed in the Section, along with the number of variables that will be used for this purpose. 10.1.1 Uniqueness of Tourism Marketing Marketing is a continuous, sequential process in which tourist management organises, studies, implements, controls, and analyses operations to meet both consumers' requirements and wants as well as their own organization's goals. Marketing needs the efforts of everyone in a company to be effective, and it may be made more or less effective by complementing companies' actions. Tourism is a business that provides a service. It is an ethereal experience that is being offered, not a concrete item that can be examined before purchase. A customer, for example, does not purchase a bed or a beach, but rather a night's stay at a seaside hotel. Transportation, housing, food and beverage, sights, activities, and other aspects of the service are generally included. The degree of success of each component has an impact on the success of the others. Travel intermediaries are a necessity. Because most tourism services are located far away from their potential clients, specialist intermediates are required to connect the producer and the visitors. 157 CU IDOL SELF LEARNING MATERIAL (SLM)
The quality and quantity of services are typically under the authority of the marketing agencies that promote vacation locations. The level of satisfaction of the guest is determined by the service team. Tourism demand is extremely elastic and seasonal, and it is impacted by a variety of variables including pricing and the physical attractions available at the location. Because tourism services are intangible, visitors' travel experiences are only remembered after the trip is finished. 10.1.2 Characteristics of tourism marketing Production and consumption are inextricably linked. Competition as a notion. There is a lot of coverage. There is no transfer of ownership of the tourism product. Tourism marketing is a type of internet marketing that focuses on promoting tourist attractions, excursions and activities, locations, and lodging, among other things. Using internet marketing methods to advertise your brand goes a long way in today's tech-driven society. 10.2 TARGET MARKETING Market segmentation is a method in which a group of consumers with similar needs and the purchasing behaviour of the population in the market are the same. These segments are the basis for more targeted marketing, which is a more efficient and effective form of marketing and advertising to the general public. As a marketing approach, segmentation is essentially a customer orientation that is compatible with both the product and the offer to meet the consumer's interests. These changes are designed to better reflect the characteristics and behaviour of segments or groups of consumers. A market segmentation is implemented by performing some very simple steps that are designed to regulate the correlation of images of a large number of consumers. Segmentation begins by identifying constellations from data that will be used as a basis for determining how the number of consumers is growing. A distinctive feature of target segments is the creation of individual consumers, or profiles that are used in a cluster, or a group of users in order to have an effective marketing strategy. A feature of target market segmentation is the creation of consumer personas or profiles that are used to cluster or group consumers for more effective marketing. Target market selection is a natural part of market segmentation. As the controlled variables that a company gathers together to satisfy its target audience, it is referred to as the marketing mix. The choice of a target market has a significant impact on and frequently dictates the marketing mix of hospitality businesses. Following the determination of the market and the calculation of each segment's potential, the marketing management of the lodging company moves on to the stage of selecting which departments or segments to turn to, or determining the suitable target market segments. When deciding on target markets, take into account each segment's present and future sales 158 CU IDOL SELF LEARNING MATERIAL (SLM)
potential, competition and quantity, and the capacity to offer a marketing mix that will successfully influence each segment. Furthermore, the cost of service for each segment, as well as its contribution to attaining overall corporate goals, should be examined independently for each area. Identifying target markets is the desired outcome of defining markets and identifying homogeneous groupings. To put it another way, it is critical to be informed of the markets in order to take advantage of the best possibilities for businesses. Responding to the demands of target markets is more challenging than responding to the needs of complicated markets. As a result, in order to overcome challenges, the company's resources, product features, product life cycle stages, market structure, and competition should all be thoroughly examined. 10.3 UNDERSTANDING TARGET MARKETS As part of the success of selling products or services to those who work and those who ultimately buy. That is why firms devote a significant amount of time and resources to defining and monitoring their target market. This is due to the fact that not all items and services are appropriate for all consumers, who are typically frugal with their money. Age, geography, income, and lifestyle are the most common categories used to define target consumers. A firm can focus on certain market variables to reach and engage with customers through sales and marketing activities by defining a specific target market. A target market is frequently tested before a product is introduced. Limited product rollouts and focus groups may be used during the testing phase to help product managers to gain a sense of which elements of the product are the strongest. Once a product is released, a company can continue to follow the demographics of its target market through sales tracking, customer surveys, and other activities that help the firm understand what its consumers want. For every business, defining a target market is critical because it may make the difference between selling a product or service and waiting on the sideliners as competitors increase their income. A firm might make a major error if it doesn't know who it's aiming for. Trying to entice new clients or consumers without understanding who you're going after may waste a lot of time and money for a company. Target markets are the precise consumer segments to which firms want to offer their goods and services. The pleasure market is one of the most reliable target audiences in the tourist business. According to reports, more than 60% of US visitors engage in enjoyable activities such as seeing animals and visiting friends, implying that firms whose target markets are pleasure markets have a better chance of success. 10.4 COMPANY OBJECTIVES AND RESOURCES Some attractive segments may be rejected because they do not meet long-term goals 159 CU IDOL SELF LEARNING MATERIAL (SLM)
Although tempting, they might divert a company from its main goal They might be a poor choice from an environmental, political, or social responsibility viewpoint If a company does not have the strengths necessary to succeed and be able to compete in a particular segment, and it is not so easy to get them, it will not need to enter the market. A company can enter segments only where it can gain sustainable advantages over competitors 10.5 STEPS TO IDENTIFY TARGET MARKETS There are four steps involved to identify the target market. 1. Estimate the approval of an area’s attractions. This includes the degree of interest of the tourist of the area and the length of time the tourist will spend visiting it. 2.Estimate the distance is based on travel time and travel costs. The higher attraction the longer the distance, potential for tourists to travel. 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 attraction. 4. Identify the actual and potential competition in the target market 10.6 TOURISM RESEARCH ON TARGET MARKETING Target marketing involves three major steps: market segmentation, targeting and positioning Segmentation Targeting Positioning Figure 10.1 Steps in target marketing 160 There are three major steps in target marketing. CU IDOL SELF LEARNING MATERIAL (SLM)
First, market segmentation is the division of the market into separate groups, which can be selected products and / or marketing mixes. The second step is market targeting, evaluating each segment’s attractiveness and selecting one or more of the market segments. The third step is positioning in the market, as well as developing the competitiveness of the product and the corresponding marketing mix 10.6.1 Market segmentation Market segmentation certainly is not the newest and best tool available on the market. The reality began to take shape in the 50s, when such brands as Proctor and Gamble\", \"General Foods\" appeared, which began with the fall of big money in brand management and marketing, as we know it today. In 1956, Wendell Smith came across the concept of market segmentation in product differentiation and market segmentation as alternative marketing strategies (a fascinating read, it will save you some time). When Smith is at the bottom, his foundation is rock solid. A fragmented market based on personal qualities, values, and contracts helps advertisers meet the specific needs of individual groups. Your message has been sent, and therefore is in the product development stage, instead of trying to be everything to all people. Market segmentation has become one of the most important marketing practices that helps identify different groups of consumers. These groups share the same needs, desires, opinions, history, media, price sensitivity, and other characteristics. The goal of segmentation is to identify homogeneous groups of consumers to meet their own needs, desires, and preferences, especially since a mass marketing strategy must be able to do so, while at the same time increasing turnover, efficiency, and efficiency. The information obtained through market segmentation is crucial in the process of strategic marketing planning, as managers must be able to develop products and services for specific groups of consumers and, thereby, gain a competitive advantage. Therefore, marketing activities are both more efficient and more effective. The examination of market segmentation comes before selecting a target market and is crucial to a marketing strategy's effectiveness. The essential question is which categories are most likely to help you accomplish your marketing goals. The answer varies depending on the criteria employed to assess each market segment's respective qualities. The following are the parameters for assessing segment attractiveness Market potential. Competition and segment structural attractiveness. Marketing organization’s vision, goals, and objectives. 161 CU IDOL SELF LEARNING MATERIAL (SLM)
Serviceability; and Costs Influences on consumer buying behaviour: Consumer behaviour is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. As it has been observed in the hospitality and the tourism industry, customers buying designs are affected by different variables. Quite possibly the most powerful factor is the corporate picture of the business association. Being important for the general public, purchasers anticipate that business corporations should be effectively engaged with cultural advancement projects like wearing or other improvement projects. Brands have likewise been uncovered to affect a great deal on the buying examples of buyers. For this situation, business associations in the friendliness and the travel industry should shape vital unions with likely brands to upgrade their standing. Benefits of Market Segmentation: Better understanding of your own needs and the needs of individual customer groups Easier creation of a space in the minds of potential customers in target groups about the product High accuracy in the selection of advertising vehicles and vehicles 10.6.2 Market Targeting Once market segmentation is complete, the company will need to be aware of the needs for the selected segments as well. It is in the company's best interest to skip the market needs, because they may be customers who are not controlled by competitors. Therefore, it is necessary to determine the most profitable segments, and in order to decide which segments are supported. There are three possible ways to reach the market: Undifferentiated marketing Differentiated marketing Concentrated/niche marketing 162 CU IDOL SELF LEARNING MATERIAL (SLM)
Micro targeting marketing Undifferentiated marketing: An undifferentiated marketing approach ignores any differences in the marketplace. Thus, the strategy refers to the number of customers in the market. Nowadays, deviations from customers are becoming more and more demanding. It will be difficult for companies to develop a product or brand that meets all the needs, desires, and expectations of consumers. Differentiated marketing: A differentiated marketing strategy, and it usually goes hand in hand with a focus on a number of segments. A marketing strategy involves developing a single product or service that you can offer, as well as creating a marketing plan for each industry segment. Therefore, the company must conduct a thorough market analysis to know how to deal with the currently selected line. This will cause more costs than the cost of a single-size strategy. Therefore, it is very important for the company to determine which services are needed for the selected segment. The marketing manager will have to determine whether there is a significant margin or not if you decide to have a differentiated marketing strategy. For example, legacy Airlines offer additional amenities such as separate check-in counters, an airport lounge, separate cabins, comfortable seats for first class and business class passengers, and excellent on-board meals, which will result in higher costs for airlines. Concentrated/Niche marketing: Companies that have limited resources tend to move to one or more market segments. If a segment is selected, it is likely that the company will be able to get a high return on investment. However, this type of marketing may also be associated with a higher risk factor. Being in the selected market segment, the company may incur significant losses. In short, both the market and the strategy can be determined by a number of factors. Financial resources of the company. If your resources are limited and targeted marketing is the most logical choice. About the nature of the services provided. For example, airlines offer charter and scheduled flights or a full range of services, both on long and short distances, as well as services for business and entertainment, etc. Companies must meet the requirements of our customers. For example, independent and business people have completely different needs than people in the IT industry that is sponsored by their employers. 163 CU IDOL SELF LEARNING MATERIAL (SLM)
About your strategy to reach your competitors and markets. For example, if they are competitive, the airline has successfully applied segmentation techniques, and it is likely that this would be impractical to use a single marketing strategy. Which segment should be chosen? Companies need only those segments of the market that makes a profit. So that they should focus on profitable customers in these segments and encourage long-term relationships with them. Micro targeting marketing: Micro targeting, or narrowcasting, is a new attempt to separate themarketers from the market and target audience. It was originally used to use a portion of the electorate in elections, including the 2008 U.S. presidential election. Micro targeting will be a collection of all available data about people-their tax and phone records for the directories they receive. The company, with all this information, is called Acxiom \"as is\". For an additional fee, Acxiom will be able to provide you with a list of many Latin American consumers who have two pets, and also have a caller-ID, as well as a sedan / limousine, drive a car, buy certain products, personal care products, subscribe to certain TV channels, read magazines, newspapers, and income and education levels in a particular field (Shifman and Kanuk, 2010). Of course, micro targeting has ethical implications and requires addressing privacy concerns. 10.7 CHOOSING A MARKET-COVERAGE STRATEGY When deciding on a market-coverage strategy, businesses must consider a number of variables. The company's resources – focused marketing makes the most sense when resources are limited Homogeneity of product - undifferentiated marketing is better for homogenous items Restaurants and motels, for example, are more suited to distinction or concentration than other products It may be practical to launch only one version of a new product when launching a new product, thus undifferentiated or focused marketing makes the most sense. 10.8 TARGET MARKET SELECTION The selection of a target market is a crucial stage in developing a marketing plan. In tourism, a target market is a market group that a travel company chooses to service, and it is made up of passengers that have similar qualities. One tourist place or organisation can rarely, if ever, offer all things to all travellers. The major goals of target market selection are to increase the 164 CU IDOL SELF LEARNING MATERIAL (SLM)
efficacy of marketing programmes, to make better use of limited marketing resources and budgets, and to provide the most economic advantages. In today's tourist industry, target marketing is becoming increasingly important. Travellers today seek a far larger range of travel experiences, thanks to increased disposable incomes and more leisure, as well as a much bigger diversity of tourist offers. The immediate challenge for tourism organizations is how to meet these diversified traveller needs. Target marketing necessitates a significant emphasis on certain traveller groups and the creation of products that are tailored to satisfy their special needs. Tourism marketers with limited resources who focus enhance their chances of marketing success and are more likely to meet their marketing goals. However, as the travel industry fragments and becomes more complicated, one of the most difficult issues is determining the appropriate set of market categories. This study addressed this issue by presenting a method for assessing the attractiveness of different travel market sectors. There should be five phases in the process of selecting a target market. (1) Determining segmentation variable or variables. (2) Conducting market segmentation. (3) Profiling identified segments. (4) Evaluating segment attractiveness; and (5) Selecting target markets 10.9 IMPORTANCE OF TARGET MARKETING After analysing the tourism market, as well as determining the goals and objectives of the tourism sector and identifying this segment of the tourism market, the marketing strategy should be aimed specifically at this goal. Tourist market targeting is the practise of directing a company's or government's marketing efforts toward defined categories of potential visitors who are reachable in terms of promotional media and product design. It is based on the dual recognition that tourists travel for a variety of reasons, including communing with nature, visiting attractions, enjoying heritage, participating in spans, participating in other forms of entertainment, relaxation, health, shopping, and business activities; and that this diversity should be reflected in companies' marketing mix, of which promotion is a part. The tourism market is faced with the process of concentrating the marketing efforts of a company or government agency in the identified groups of potential tourists that open up for the company or organization, both from the point of view of mass media 165 CU IDOL SELF LEARNING MATERIAL (SLM)
and from the point of view of product design. It is based on an earlier recognition of the fact that tourists will travel for a variety of reasons, ranging from contact with nature, recreation and heritage enjoyment, participation in surveys, participation in various sports, recreation, health, shopping and meetings, and that this diversity is reflected in the structure of the marketing company, of which advertising should be a part. The market aims to be part of integrated production, marketing, as part of the company's business plan, namely defining marketing and sales, the position it currently occupies, and what it believes it can achieve, and the steps that should be taken to help it achieve its goals, and where the company believes it should be placed in the future in the market. The effectiveness of a company depends on its ability to identify sales markets, and also on its ability to produce goods or services that are identified in groups of tourists, for example, providing a sufficient number of advantages for buying. In this sense, the goal of marketing is to apply it to a situation where a product, a slave, appears on the market. 10.10MARKET POSITIONING STRATEGY 10.10.1 Market Positioning The last stage in target marketing is product positioning. Companies are more formally “positioning statements” that indicate the position in which they would like to engage primarily with their target audience, and in comparison, with the products or services of other competitors. To save customers, we compare products or services. Therefore, sellers should build their position, develop strategies to improve the quality of consumer perception (and prospects) of their products. An effective product with four key features. First of all, they are built around advantages and potential customers. Secondly, it is the ability to distinguish specific services or products from those of its main competitors. Third, interested businesses must have the necessary skills, resources, and credibility to deliver their intended presentations and promises. At the end of the day, an effective point of view works, which means an aggressive competitor, not one that is quickly neutralized or located in a positioning location? For example, national airlines, with a full range of services, were able to stand out from other competitors as the only airline offering excellent service in certain markets. Business travel management needs to be distinguished from competition, or it may choose to position itself alongside competitors, or work in uncharted niche areas. This allows you to have high standards of service, additional services, and so on. 10.10.2 Market Positioning strategy 166 CU IDOL SELF LEARNING MATERIAL (SLM)
Positioning is a marketing strategy, also referred to as product positioning, which refers to how a brand wants to be perceived in the mind of customers relative to competing brands. The positioning of a destination is the process of establishing a distinctive area of that destination in the minds of potential customers. An effective positioning strategy considers the strengths and weaknesses of the destination. 10.10.3 Approaches to positioning strategy of a product There are seven approaches to position a product. They are Using product characteristics or customer benefits The price-quality approach The use or applications approach The product-user approach The product-class approach The cultural symbol approach The competitor approach Using product characteristics or customer benefits:In this case, segmentation is done in tourism market where utmost preference is given to the product characteristics or customer benefits. The price-quality approach:This approach indicates various price-quality categories of the tourism productsmore in terms of service, features or performance. The use or applications approach:A positioning of a product is done based on its applications. Example: Virtual tourism is positioned as a pre-tour activity in order to increase tourist attention. The product-user approach:This deals with positioning a product based on the user. Example: Wellness tourism product is focussed for customers who seek relaxation. The product-class approach:Some products require to make critical positioning decisions that involve product-class associations. For example, Goa ispredominantly positioned as leisure destination though it has variety of heritage attractions. The cultural symbol approach:Most of the tourism product are positioned based on the cultural implications of that destination. Example: Destination weddings with that destination’s cultural wedding style is a part of wedding tourism. The competitor approach:The positioning can be based on competition. It depends on reputation of the company and services given to the customer. A destination always attracts tourists where services are given at its best. 167 CU IDOL SELF LEARNING MATERIAL (SLM)
10.11 SUMMARY Target marketing is a required strategic strategy for travel and tourism companies due to changes in consumer habits, interests, and preferences, as well as the emergence of new enticing locations. Furthermore, owing to variations in the number and makeup of target groups, essential stages of target marketing should be done on a regular basis in order for tourist companies to function properly and profitably. The advent of new technology and social media that allow user-generated content and trip ratings will affect consumer tastes and choices of tourist services and places. As a result, social impacts may begin to play a bigger role in influencing customers' interests, tastes, and purchasing patterns, perhaps leading to changes in the tourism industry. Selective target marketing was found to be a viable addition to existing sustainable tourism management approaches, which focus on visitors at the location who may or may not be engaged in environmental protection. 10.12 KEYWORDS Market Segmentation – Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference. Target Marketing –it is a group of people toward whom a firm markets its goods, services or ideas with a strategy designed to satisfy their specific needs and preferences. Niche marketing – the business of promoting and selling a product or service to a specialized segment of a market. Market Positioning – It refers to the process of establishing the image or identity of a brand or product. Positioning is a marketing strategy, also referred to as product positioning, which refers to how a brand wants to be perceived in the mind of customers relative to competing brands. 168 CU IDOL SELF LEARNING MATERIAL (SLM)
10.13LEARNING ACTIVITY 1. Imagine your target market is special interest tourists. List the possible ways to reach this target market. ___________________________________________________________________________ ________________________________________________________________________ 2. Imagine you have to promote Goa as event-based tourism destination. Identify your target market. ___________________________________________________________________________ ___________________________________________________________________________ 10.14 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define positioning strategy. 2. Write the difference between differentiated and undifferentiated marketing. 3. Describe characteristics of target marketing. 4. Describe your understanding about target markets. 5. Give the major resources for target marketing. Long Questions 1. Analyse the major steps involved in target marketing to market a heritage destination. 2. Explain the importance of target marketing in tourism management. 3. Elucidate the factors that influence customer purchasing decisions. 4. Imagine you have to promote an adventure tourism destination. State the basic steps that help to identify the target markets. 5. Outline a detailed research on target marketing. B. Multiple Choice Questions 1. ________ is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. a. Target marketing b. Psychographic segmentation 169 CU IDOL SELF LEARNING MATERIAL (SLM)
c. Product Differentiation d. Consumer behaviour 2. The process of grouping people within a market according to similar needs, characteristics, or behaviour is known as ___________ a. Tourism marketing b. Segmentation c. Targeting d. None of these 3. Which marketing is a new attempt to separate yourself from the market and target audience? a. Niche marketing b. Narrowcasting marketing c. Undifferentiated marketing, d. Differentiated marketing 4. Market research, product promotion, and product distribution are all steps in ___________ a. Promotional mix b. Marketing process c. Environmental analysis d. None of these 5. The controllable variables a company puts together to satisfy a target group is called the ____________ a. Marketing mix b. Marketing strategy c. Strategic planning d. Marketing concept 170 CU IDOL SELF LEARNING MATERIAL (SLM)
Answers 1-d, 2-b, 3-b, 4-b, 5-a 10.15 REFERENCES Reference book Kotler, P., Bowen, J. and Makens, J. (1999). Marketing for Hospitality and Tourism (2nd Ed.) Prentice Hall. NJ. Middleton, V.T.C. (2004) Marketing in Travel and Tourism (3rd Ed.) Elsevier. Oxford. Textbook reference Camilleri, M. A. (2017). Travel Marketing, Tourism Economics and the Airline Product: An Introduction to Theory and Practice. Germany: Springer International Publishing. Rodoula, H. Tsiotsou and Ronald, E. Goldsmith. Target Marketing and its Application to Tourism. Strategic Marketing in Tourism Service 2012, 1-15. Jang, S. (Shawn), Morrison, A. M., and O’leary, J. T. (2004). A Procedure for Target Market Selection in Tourism. Journal of Travel & Tourism Marketing, 16(1), 19–33. Websites http://www.tourism.bilkent.edu.tr/~eda http://www.hotelsmag.com http://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/S001827/P001854/M03021 9/ET/152594977913.29_ET.pdf https://www.indeed.com/career-advice/career-development/positioning-strategy https://www.yourarticlelibrary.com/products/7-approaches-to-positioning-strategy-of- a-product-explained/22190 171 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT - 11: DESTINATION MARKETING MIX STRUCTURE 11.0 Learning Objectives 11.1 Introduction 11.2 Destination and Marketing 11.3 Tourism Marketing 11.4 Marketing Mix 11.4.1 Importance of Marketing Mix 11.4.2 Destination Marketing Mix 11.4.3 Four Ps of Destination Marketing Mix 11.5 Summary 11.6 Keywords 11.7 Learning Activity 11.8 Unit End Questions 11.9 References 11.0 LEARNING OBJECTIVES After completing this unit, you will be able to: Describe the destination and marketing Outline the importance of marketing mix Explain marketing mix to tourism product 11.1 INTRODUCTION This unit will focus on the marketing mix of a product in the tourism industry. In the beginning some basic ideas of destination and marketing are discussed to refresh the concepts. Later on in the unit, detailed discussions on various components of the marketing mix with examples are the focus of this unit. The marketing of a destination can be via word
of mouth, digital marketing, outsourcing market agencies and many more. Hence it is inevitable to understand the marketing mix to promote a destination. 11.2 DESTINATION AND MARKETING According to WTO, a tourism destination is a distinctive place where a tourist spends a minimum of one night and demonstrates tourism products like attractions, services, and other resources of tourism along with precise administration, tangible and managerial limits, and a popular identity. Tourist destinations as an idea and definition is destinations are locations which have established an amalgamation of tourist products and services utilization is the name of a destination. The destinations are elucidated as a geographic and seen by the tourists as distinctive establishments and showcase various key amenities. These amenities are accessibility, tour packages, and supplementary services. A tourist destination is simply a place of travel which allures huge numbers of tourists to it. Tourists might stay in these places to visit some archaeological sites, natural places and some infrastructures. Certain tourist places also have past times like rides and or different entertainment. Souvenirs are also usually sold in these attractions, and most of these places depend on the revenue created by the tourists who visit their place. A tourist destination is a site or region which highly depends on the advantages brought in by tourism economically. A tourist destination could be huge, for instance, a city, and it can be tiny for instance, a shopping mall in a city. A tourist destination is any area, large or small, that attracts and caters for tourists, with tourism being the dominant, or one of the dominant, income generators for the area. In fact, the term tourism destination is somewhat subjective, and there isn’t really a universal definition. In other words, what one person may say is a ‘destination’, another person may not agree. Marketing could be described as any effort put in by an organization which will allure the crowd to an organization’s products and services. Marketing focuses on delivering discrete value for potential and current customers through information, with the long-term objective of displaying value of the product, building loyalty to brand, and finally improving sales. The aim of marketing is to explore and examine its customers every time, perform focus groups, conduct surveys, research on the shopping patterns, and answer a fundamental query: place, time and method through which the customer would like to interact with the business. Marketing is the procedure of making the audience intrigued by the organization’s products and services. This takes place via studying the market, examining it and comprehending the perfect consumer’s interests. Marketing concerns with every characteristic of an organization, including development of product, distribution, sales and marketing. 173 CU IDOL SELF LEARNING MATERIAL (SLM)
11.3 TOURISM MARKETING Tourism marketing is the common term offered to the different marketing strategies utilized by organizations in the tourism industry. This consists of, for instance, the hospitality sector like hotels, resorts, motels etc., airlines, taxis and other transport services, restaurants, tour operators and travel agents, entertainment spots etc. Tourism marketing refers to that occupational area through which tourists are allured to a specific destination – it may be a state, city, a monument, hotel, entertainment venue, convention centre etc. The aim behind tourism marketing is to develop the organization, keep it unique from the competitors, allure tourists, and create brand awareness. Many contemporary tourism marketing plans utilize the internet for creating websites, publishing advertisements, sending emails and using the social media handle for promotional videos and updates. As tourism is the world’s biggest industry, it is highly competitive. This could mean that the organization running in the industry must have to look for ways to be distinctive from competitors, market themselves as one of the superior choices for tourists, and put spotlight on things which make them unique, or best. Marketing is vital for accomplishing this and most of the great marketing tips in tourism emphasizes on assisting organizations to identify a USP and market it. Certainly, it is also important that the organizations are in line with the current trends, so that they could develop a varied marketing mix and utilize the top ways of sending the message. 11.4 MARKETING MIX The marketing mix is defined by the usage of a marketing technique which integrates a number of elements so as to become strong and enhance the product’s brand and to assist in selling the product and service. Organizations which deal with products and services must develop strategies to sell their produce and developing marketing mix is one among them. Organizations have always utilized techniques of marketing to propagate and sell their products. However, the concept of marketing mix was first conceived only in the 20th century. It was initially used in 1953 in American Marketing Association where a professor in Harvard and a specialist in marketing Neil Bordon defined the way marketers plan and implement a marketing plan successfully. Marketing mix is a set of techniques and methods of marketing, which is utilized to promote a product or service in the industry and sell it. It is about product positioning and ensuring it sells in the correct place, at the correct price and correct time. It generally refers to the 4 Ps categorization for scheming an efficient marketing plan, which consists of product, price, place and promotion. When the marketing mix is focused on services, it could also consist of three more Ps called people, process and physical evidence, 174 CU IDOL SELF LEARNING MATERIAL (SLM)
and three Cs – cost, consumer and competitor. Based on the industry and the target customer, the marketing mix would be developed accordingly. Recognizing and setting the component of a marketing mix permits an organization to make profit making decisions for marketing in all levels. These decisions assist the organization to: Advance their strengths and reduce their weaknesses Become competitive and flexible Increase profit making alliances with other divisions 11.4.1 Importance of Marketing Mix Assists in Creating Clear Mix Marketing mix must have every P aligning with one another. The price must be aligned with the positioning of the product. The product must be harmonious with the promotions. Normally every one of the Ps are naturally connected to one another. So, while developing a marketing mix, it forms a strong connection. And these connections would help to move forward in creating bigger connections. When a business is thinking of including a unique feature or modifying current things, one has to see the complete picture, which assists in developing a clear marketing mix. Assists in New Product Development At the time of developing an existing product, there could be numerous ideas which could be developed for a concerned product which could be outlined by the organization. The price, place and promotions could be varied for those products. Nevertheless, it could be categorized as a new product, and therefore, while developing a marketing mix, the organization could come up with good ideas for new product development also. Assists in Increasing Product Portfolio If an organization wishes to improve the product line and bring in more products, some modifications need to be done in the product and hence some modifications should also be done in the marketing mix. Modifications are done to the features of the products, prices and also the promotions. Because of which, by changing the marketing mix, and some elements in it, the organization can have a bigger product portfolio. Assists in Improving Business Physical evidence is a significant P in the service marketing mix. If a café, or tourism organization understands their significance, then eventually they could work on it and better the physical evidence of their product and, hence getting more business. The significance of 175 CU IDOL SELF LEARNING MATERIAL (SLM)
marketing mix is apparent in more than one P. Process and people are significant to the business as well and improving both could enhance the comprehensive operation of the business. Therefore, marketing mix is a better guide if an organization wishes to develop their business. Assists in Differentiating When a business examines the marketing mix of their rivals, there are various methods the business could distinguish themselves from the rivals. The rivals could have bad promotions and by examining them, the organization can develop better marketing for the product. The rivalry may have bad positioning of products or they may have incorrect resources, or processes. All of this could be enhanced by developing a better marketing mix and hence attaining a competitive edge. Assists in Being Dynamic An organization which is completely ready is also ready when there is a calamity. During a depression or when the situation is bad in the industry, the organization must be prepared to react. In those situations, the organization requires to be vigorous in nature. Organizations like that are required to know their products, people, process, promotion and the entire Ps better. If they know them, then they will acknowledge with more rapidity. Therefore, there are various manners that marketing mix could be significant to a business. The good thing is that, examining and knowing the marketing mix is not a long process and the return on investments for the effort is higher. 11.4.2 Destination Marketing Mix The part played by marketing mix in tourism is to get maximum tourists to the destination, purchase the product or service that the organization wants to sell. After a tourism administration and marketing plan has been done, destinations would start creating their marketing mix. This will make it possible for them to seek out every target market with a complete portfolio of products and offer a consolidated answer to the requirements and necessities of the customers. Creating a marketing mix for tourism destinations is dependent on every destination, the type of market, and the challenges of the environment. 11.4.3 Four Ps of Destination Marketing Mix Destination Product: Destinations are a combination of singularly developed tourism facilities and services like hotels, transport, restaurants, entertainments etc. and a huge variety of public assets like terrain, surroundings, beaches, ponds, culture, etc. Every one of these components are labelled together in the name of the destination. The universality of the theory of destination efficiently refers to the fact that the tourism product for every potential 176 CU IDOL SELF LEARNING MATERIAL (SLM)
tourist is highly intuitive, and it is dependent on their ideology and expectations of the destination. However, the tourism product for an area includes a complete variety of amenities and services provided locally, along with socio-cultural situations, and common facilities. Knowing the key product and also opening doors for related and enhanced products for every market segment is of high significance for marketing of a destination. The enhanced environment will consist of intangible components as well like communication and consumer involvement and also transportation and physical surroundings. DMOs have the entire responsibility for the complete product and via provocations and regulations ensure the development of the destination, which is good when it comes to demand, and also it will not endanger the local assets. DMOs must hence be the safeguards of the image and assets of the destination. Hence, all over the globe, tourism services are provided by SME tourism companies that are managed by a family. The issue for the DMOs is hence to offer leadership in the improvement of unique products and develop connections with the locals for providing flawless experiences. These connections must bring together both the government as well as private sectors and must make sure that the long-term hustle of the tourism products triumphs over all other decision makings. DMOs also require to improve and transform their products by improving their distinctiveness. Destination marketers will require re-examining the complete set of the available assets and selecting an apt tourism product for every specific market segment. Theme based tourism plans allow destinations to offer distinctive encounter for tourists. Alluring the correct sect of tourists would also help in the decrease of the impact of seasonality, as distinct concept products, as well as events and festivals could allow destinations to improve their tourist inflow during off season. Destination Pricing: A huge variety of pricing methods could be used for tourism destinations. But pricing is the most complicated procedure for a destination product as it is always ascertained by the prices and policies of the singular organizations both at the destination and also the middlemen in the starting place. Local organizations could have their self-policies and hence cooperating and setting a single pricing for the destination is not viable. Moreover, the national economic policies and the international economic situations will also impact pricing in a destination product. Hence, both micro and macroeconomics ascertain the pricing mix of the tourism industry at the local level. The expenses of living and job vacancies, inflation, rates of currency exchange, and local effectiveness and rivalry are part of the pricing mix. Pricing the entire destination as well as the singular segment of the local tourism amenities is a completed process. Major companies have the tendency to set their own pricing mix and policies. DMOs could control those components of pricing only through orders, guidance and forming relations with the organizations. Nevertheless, DMOs regularly offer instruction by 177 CU IDOL SELF LEARNING MATERIAL (SLM)
proposing bottom line rates to safeguard the small bodies from intense competition and highest-level rate to safeguard the customers from overburdening. For instance, in various destinations, the public sector ascertains the bottom-line rates for some elements like accommodation, suggest on the MRPs for customer products and eatables, transportation and other rental services. Even though imposing policies on pricing is complex, DMOs must develop connections with these major bodies and educate them on the significance of administering a fair and standard pricing scheme policy. In various tourism destinations, tourism businesses play a vital role in ascertaining the price customer’s offer for the product in the destination. This has important inference for destinations which are dependent on the middlemen for obtaining customers, and specifically for those destinations which have unlimited supply of amenities. The bigger tour agencies employ bargaining and forceful behaviour as they are ones who are bringing in a huge number of tourists to the destination. As local bodies might not be able to get much profits from these products, they will increase the price of other products to raise their profits. Place/ Destination Distribution: Distribution channels could be described as the list of interconnected businesses that are connected to the process of ensuring that the products are accessible for utilization of the consumer. The final aim of the distribution network could be summed up as offering the correct quantity and quality of the product, in the correct place at the correct time, with correct rate to the correct consumer. Various significant distribution and marketing jobs are done by the distribution businesses like transportation of products, promotion and generation of demands, doing market research, risk taking, financial support, after sales support etc. Distribution is developing to be a vital element and one source of competitive edge in the industry. Other than impacting pricing, distribution channels also help and ensure product differentiation by increasing the value of the product and through contribution to the entire customer experience of the brand and creating a good image. The complete set of organizations which makes the tourism demand and supply for an area develop its distribution channel. Destination distribution is a significant issue as it ascertains if and in what situation local bodies will be able to accomplish their targets. The presence of information in the internet and the development of electronic media has transformed distribution channels. Destinations which value the novel developments and construct complete techniques for their local bodies to quickly enhance their capability to fulfil their targets. Destination Promotion: Promotion of a destination mainly consists of development of communication channels with the customers and all other stakeholders for better recognition and induce them to purchase the products. Destination promotion necessitates a synchronized drive and a word to every one of the local organizations and businesses. 178 CU IDOL SELF LEARNING MATERIAL (SLM)
Developing a profitable promotion mix is complicated due to the availability of numerous suppliers and the market is also around the globe. Accomplishing coordination in a marketing drive and also getting sufficient money to develop and execute it is one the biggest and challenging works for the destination marketing team. Generally, DMOs are forwards in promotional drives, and the other local bodies give their support. A huge variety of tools are utilized. Like providing advertisements in TVs, radios, newspapers and also in posters. Advertisements utilize taglines, which modify regularly so as to meet the tourism demand trends and to upgrade the image of the place. DMOs also take part in tourism fairs in international destinations to promote their products. They also get a chance to interact with middlemen and sponsors to promote their products. They develop brochures and distribute to potential clients and other promoters to give detailed information on the destination including the facilities, activities, attractions, etc. it has to offer in order to intrigue their interest in the destination. Moreover, DMOS are also required to be actually selling the products as the clients are looking for a one stop shop. So direct marketing also utilizes destinations that could recognize the potential consumers and promote components of the destination which would fulfil their demands. Developing relationship marketing and loyalty clubs allows old clients to be identified and appraised. Discounts and other rewards programs are being developed for some destinations to offer the clients the experience at a better rate. At last, public relations are also highly utilized for many destinations, where representatives set up tourism offices in the target market and deliver brochures and information about the destination. 11.5 SUMMARY A tourist destination is simply a place of travel which allures huge numbers of tourists to it. Tourists might stay in these places to visit some archaeological sites, natural places and some infrastructures. Souvenirs are also usually sold in these attractions. A tourist destination is a site or region which highly depends on the advantages brought in by tourism economically. Marketing could be described as any effort put in by an organization which will allure the crowd to an organization’s products and services. Tourism marketing refers to that occupational area through which tourists are allured to a specific destination – it may be a state, city, a monument, hotel, entertainment venue, convention centre etc. 179 CU IDOL SELF LEARNING MATERIAL (SLM)
The aim behind tourism marketing is to develop the organization, keep it unique from the competitors, allure tourists, and create brand awareness. The concept of marketing mix was first conceived only in the 20th century (1953) by a Harvard professor Neil Bordon in American Marketing Association. Marketing mix is a set of techniques and methods of marketing, which is utilized to promote a product or service in the industry and sell it. Marketing mix indicates the 4 Ps categorization of an efficient marketing plan: product, price, place and promotion. When the marketing mix is focused on services, three more Ps are added: people, process and physical evidence, and three Cs – cost, consumer and competitor. Marketing mix has a lot of significance: developing product portfolio, being dynamic, improving business, differentiating, and creating clear plans. The part played by marketing mix in tourism is to get maximum tourists to the destination, purchase the product or service that the organization wants to sell. Destinations are a combination of singularly developed tourism facilities and services like hotels, transport, restaurants, entertainments etc. and a huge variety of public assets like terrain, surroundings, beaches, ponds, culture, etc. Every one of these components are labelled together in the name of the destination product mix. Pricing is the most complicated procedure for a destination product as it is always ascertained by the prices and policies of the singular organizations both at the destination and also the middlemen in the starting place. Public bodies propose the bottom-line rates to safeguard the small organization from intense competition and the highest-level rates to safeguard the customers Aim of the distribution network could be summed up as offering the correct quantity and quality of the product, in the correct place at the correct time, with the correct rate to the correct consumer. The presence of information in the internet and the development of electronic media has transformed distribution channels. A promotion of a destination mainly consists of development of communication channels with the customers and all other stakeholders for better recognition and induces them to purchase the products. 11.6 KEYWORDS WTO – World Tourism Organization 180 CU IDOL SELF LEARNING MATERIAL (SLM)
Destination – A region which attracts tourists for leisure purpose Marketing – Actions of an organization to promote and sell its product for higher profits Tourism Marketing – Marketing of various a tourism destination along with all the facilities and attractions it has to offer Marketing Mix – Combination of elements like product, price, place and promotion to market a product DMO – Destination Management Organization SME – Small and Medium Enterprises Promotion – activity which pulls customers to the product Distribution – channels through which products are delivered 11.7 LEARNING ACTIVITIES 1. Prepare a marketing mix for any cultural tourism product with justification as a proposal to the Government of India for project approval. ___________________________________________________________________________ ___________________________________________________________________________ 2. Imagine you are preparing a tour package for Delhi. Analyse the importance of pricing while preparing this package. ___________________________________________________________________________ ___________________________________________________________________________ 11.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define destination marketing mix. 2. Describe destination promotion. 3. List the four Ps of marketing mix. 4. Give the meaning of price. 181 CU IDOL SELF LEARNING MATERIAL (SLM)
5. State the meaning of the term promotion. Long Questions 1. Elucidate the role of DMO in marketing mix. 2. Elaborate the importance of marketing mix. 3. Describe the need of pricing in designing a tour package for offbeat destination. 4. Outline the suitable tourism promotional techniques to position any dark tourism destination of India in global environment. 5. Explain importance of the marketing mix with focus on the tourism industry. B. Multiple Choice Questions 1. _________________ is a destination a. Dubai b. Burj Khalifa c. Dubai Mall d. Atlantis 2. Marketing is a function whose goal is to _____________ a. Produce b. Make profit c. Satisfy customers d. Sell products 3. _________ coined the term “marketing mix” a. Henry Ford b. Ray Kroc c. Neil Borden d. Steve Jobs 4. ___________ are the 4 Ps of marketing mix 182 a. Product, Place, Position, Promotion b. Product, Price, Place, Promotion CU IDOL SELF LEARNING MATERIAL (SLM)
c. Product, Position, Price, Promotion d. Product, Position, Place, Price 5. ___________ mix deals with classification of the actual product and how it is connected to the consumer a. Price b. Product c. Place d. Promotion 6. _____________ are extended 3Ps of marketing mix a. Physical evidence, people and process b. Process, position, and people c. Both [a] and [b] d. Product, Position, Place, Price 7. ____________is the importance of a marketing mix a. Being dynamic b. Developing poor product portfolio c. Decreasing business d. Being inactive 8. _____________ are 3 Cs of service marketing mix a. Cost, consumer, competitor b. Cost, customer, competitor c. Consumer, competitor, Channels d. Channels, Cost, competitor 9. _________is the most complicated marketing mix in tourism 183 a. Promotion CU IDOL SELF LEARNING MATERIAL (SLM)
b. Price c. Product d. Place Answers: 1-a, 2-d, 3-c, 4-b, 5-b, 6-a, 7-a, 8-b, 9-b 11.9 REFERENCES Reference book 50MINUTES.COM. (2015). The Marketing Mix: Master the 4 Ps of Marketing. Belgium: 50Minutes.com. Textbook references Pondicherry University – Destination Marketing and Development Richter, T. (2012). International Marketing Mix Management: Theoretical Framework, Contingency Factors and Empirical Findings from World-Markets. Germany: ISD. Websites https://www.tutorialspoint.com/tourism_management/tourism_management_marketin g_mix.htm https://hbr.org/1985/09/rejuvenating-the-marketing-mix https://www.igi-global.com/dictionary/tourist-destination/39274 184 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT - 12: PRODUCT STRATEGY STRUCTURE 12.0 Learning Objectives 12.1 Introduction 12.2 Nature of Product 12.3 Characteristics of Product 12.4 Managing existing Tourism Product 12.4.1 Elements of Tourism Product 12.4.2 Tourism Product management 12.5 Summary 12.6 Keywords 12.7 Learning Activity 12.8 Unit End Questions 12.9 References 12.0 LEARNING OBJECTIVES At the end of this topic, you will be able to Explain concepts of product strategy Describe nature and characteristics of product strategy Outline the ways to manage existing tourism product 12.1 INTRODUCTION A product strategy is a high-level plan describing the methods and strategies to position the product to carry out a business. This strategy should answer the following key questions 1. For whom the product will serve? 2. How will it benefit? 3. Will it add value to the company?
In addition to this, product strategy gives three main valuable business purposes. They are Providing clarity to the company or organization Prioritizing the tourism product roadmap Improving the decision-making skills 12.2 NATURE OF PRODUCT i. It has the capacity to fulfil the needs of tourists. ii. A product can be a physical good or service. iii. It is a collection of tangible and intangible features that is offered by a seller to a buyer. iv. It can satisfy both commercial and personal needs of the customer. v. It is the subject and the object of all marketing activities. 12.3 CHARACTERISTICS OF PRODUCT The characteristics of a product can be classified into explicit and implicit characteristics. Figure 12.1 Flow chart for characteristics of product 186 CU IDOL SELF LEARNING MATERIAL (SLM)
Explicit Characteristics: Explicit product characteristics are those which are recognised almost uniformly by all observers. The buyers and sellers do not exhibit much disagreement about the existence of these characteristics in the product. There are five such attributes. They are: 1. Physical Configuration: Every product has its own size, shape, colour, density, odour, texture, taste and a host of other such physical attributes. On the basis of its physical characteristics, it has a set of functions to perform. For example: Natural beauty of a destination that includes beach view, mountains, high altitudes. 2. Associated Services: The associated services in tourism products may include complimentary facilities. For example: Complimentary coupons along with the tour package to attend a New Year party in a destination. 3. Package and Brand Name: Any product can be sold at the best with a brand name. Hence much priority is given to brand recognition and marketing the brand name in the global environment. 4. Product Mix: This points out the relationship of the product to other products sold or made by the firm.The consumer does not think of the product in isolation as the consumer is aware of the producers of those multiple products. 5. Product Life Cycle: A product life cycle has important characteristics as it provides an opportunity to position the same product again in the market or to come up with new similar products. The sales of a given product follows a characteristic format of increasing, then at a decreasing rate and finally absolute sales begin to decline. The time required for each of these stages varies widely among the products. Implicit Characteristics: In intrinsic characteristics, the buyers and sellers exhibit much disagreement about the existence of these characteristics in the product. There are four such features: 1. Product Symbolism: A product is a group of symbols. When it comes to destination, a product can be identified with symbols, taglines and usages. For example: Atithi Devo Bhava is recognised by the Namaste symbol. It may be a symbol of status, style, recognition, performance, achievement, and marketing. 2. Communication Media: Because a product is a bundle of symbols it is a bundle of communication also. Every product is marketed by a proper communication channel. For example: The products of India are promoted in the global environment through a campaign called Incredible India. 3. The Product Perception: Products are perceived or viewed in different ways by different consumers. This perception can be analysed to produce the relevant product. Relevant Product is the product that is perceived by the consumer as the seller intended the consumer 187 CU IDOL SELF LEARNING MATERIAL (SLM)
to perceive it, because it is relevant to the realized or aspired behavioural pattern of those people who comprise the market of the product. For example: Though Goa has many historical places to visit, tourists perceive Goa as Leisure destination known for parties. 4. The Product Evaluation: It is highly impossible to separate the perception of the product from its evaluation. Along with perception, evaluation indicates the setting up of criteria to determine expected satisfaction and delight of the consumers. 12.4 MANAGING EXISTING TOURISM PRODUCT Medlik and Middleton (1973) term tourism products as “a bundle of activities, services, and benefits that constitute the entire tourism experience.” This bundle consists of five components: destination attractions, destination facilities, accessibility, images, and price. A tourism product can be managed easily, if it is understood in the right way. In order to understand the tourism product, the elements of the tourism product are discussed below. 12.4.1 Elements of Tourism product An onion shell diagram represents elements of a tourism product. The outermost shell shows the maximum consumer involvement. The interaction among all these five elements is important. The Physical Plant: Physical plant is nothing but the destination with interesting and catchy architecture that enhances tourists’ experience. It can be A natural attraction such as a landscape, mountains, beaches. A man-made attraction such as resorts, forts and palaces. A fixed property such as an accommodation and movable property such as a ship or an airbus. A natural or manmade environment such as weather, crowd, infrastructure at the destination. 188 CU IDOL SELF LEARNING MATERIAL (SLM)
Figure 12.2 Elements of Tourism product Service: The features or facilities of the physical plant that are given as service for the tourists. It must result in customer satisfaction and delight. For example, serving food in a hotel is a service by the staff there. Hospitality: It is the attitude with which the service is provided. Hospitality includes performing the service with smile, enthusiasm and dedication. For example, the arrangement of Guest rooms, lobby. Freedom of Choice: It is offering the tourist some acceptable options as per their needs and demands that leads to enhancement of their experience. The degree of freedom varies greatly depending on the type of tourism, budget, previous experience, knowledge, and reliance on a travel agent. For example: Freedom can be given in choosing the mode of transportation. In the case of airways, the type of class can be selected by tourists. Involvement: It depends upon the quality of the inner four elements. These four elements make tourists get involved physically and emotionally. More involvement leads to more repeated tourists and hence brand recognition of a destination. Thus, a combination of tourists’ involvement, freedom of choice, service with hospitality and perfect destination with all five A’s can make the best tourist product. 189 CU IDOL SELF LEARNING MATERIAL (SLM)
12.4.2 Tourism Product management Tourism product managers analyse the market, research potential offers, develop products, plan and organise the distribution and marketing processes. There are certain points which have to be remembered while managing a tourism product. The authenticity of the products is to be preserved. The product must not be over utilized. Several precautionary measures such as preservation techniques, getting patents for indigenous products can be useful to handle the products in a protective manner. For example: Books that are available for literary tourism for tourists should be safeguarded well. Local communities and tourists shall work together to manage a tourism product. It can lead to sustainable usage of the products. Travel agents and tour operators shall explain to the tourists the need for and importance of handling a tourism product meticulously. Frequent evaluation shall help to manage the tourism products. Demand and supply shall be checked often to manage the products from loss. Analysing the frequency of visitors and utilization of resources can lead to tourism product management as it denotes the need to exhibit tourism products to the tourists. Inventories shall be maintained properly. The collaborative work and effort from all the tourism stakeholders shall support in managing tourism products. 12.5 SUMMARY Medlik and Middleton (1973) term tourism products as “a bundle of activities, services, and benefits that constitute the entire tourism experience.” Explicit tourism product characteristics: Physical contribution, Associated Service, Package and Brand Name, Product Mix and Product Life Cycle. Implicit tourism product characteristics: Product Symbolism, Communication Media, Product Perception and Product Evaluation. 190 CU IDOL SELF LEARNING MATERIAL (SLM)
Product strategy gives three main valuable business purposes: Clarity to the company, Prioritize the product roadmap and Improvement in decision making. Tourism product is a collection of tangible and intangible features that is offered by a seller to a buyer. A product strategy is a high-level plan describing the methods and strategies to position the product to carry out a business. A product life cycle has important characteristics as it provides an opportunity to position the same product again in the market or to come up with new similar products. Relevant Product is the product that is perceived by the consumer as the seller intended the consumer to perceive it, because it is relevant to the realized or aspired behavioural pattern of those people who comprise the market of the product. For example: Though Goa has many historical places to visit, tourists perceive Goa as Leisure destination known for parties. Freedom of Choice is providing the tourist some acceptable choices as per their needs and demands that leads to enhancement of their experience. Physical plant is nothing but a destination with interesting and catchy architecture that enhances tourists’ experience. 12.6 KEYWORDS Physical Plant - Physical plant is nothing but the destination with interesting and catchy architecture that enhances tourists’ experience PLC-Product life cycle TPM: Tourism product Management DMO: Destination Marketing Objectives Physical Configuration: Every product has its own size, shape, colour, density, odour, texture, taste and a host of other such physical attributes. Product Symbolism: A product is a group of symbols. The Product Perception: Products are perceived or viewed in different ways by different consumers. 191 CU IDOL SELF LEARNING MATERIAL (SLM)
12.7 LEARNING ACTIVITY 1. Choose any one cultural tourism product. Analyse the five elements of a tourism product. ___________________________________________________________________________ ___________________________________________________________________________ 2. Identify the major tourism products of Rajasthan and analyse its implicit characteristics. ___________________________________________________________________________ ___________________________________________________________________________ 12.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define a physical plant. 2. Give the meaning of a tourism product. 3. List the three main valuables of tourism product. 4. Give the meaning of product strategy. 5. Mention any four attributes of implicit tourism product. Long Questions 1. Goa has versatile tourism products. Analyse the explicit characteristics of Goa. 2. Kerala is known for wellness tourism. Analyse the implicit characteristics of this tourism product. 3. Elaborate on elements of tourism products. 4. Outline points to be remembered by tourism product managers in handling a doomsday tourism product. 5. Explain the nature of product. B. Multiple Choice Questions 1. _________ is the nature of tourism product a. Fulfil the need of tourists b. Environment pollution c. Environment degradation d. Wasting resources 192 CU IDOL SELF LEARNING MATERIAL (SLM)
2. __________ is the innermost element of a tourism product. a. Physical Plant b. Service c. Involvement d. Hospitality 3. __________ is not the implicit characteristics of a tourism product. a. Product Symbolism b. Communication Media c. Product Mix d. Product Perception 4. _______ is the outermost element of a tourism product. a. Physical Plant b. Service c. Involvement d. Hospitality 5. ______________ is nothing but a destination with interesting and catchy architecture that enhances tourists’ experience. a. Physical Plant b. Service c. Involvement d. Hospitality Answers: 1-a, 2-a, 3-c,4-c, 5-a 193 CU IDOL SELF LEARNING MATERIAL (SLM)
12.9 REFERENCES Reference book Mason, P. (2012). Tourism Impacts, Planning and Management. (N.P.): Taylor & Francis. Textbook reference Sharma, J. K. (2007). Tourism Product and Services: Development Strategy and Management Options. India: Kanishka Publishers. Websites https://www.tutorialspoint.com/tourism_management/tourism_management_developi ng_product.htm https://www.unwto.org/tourism-development-products 194 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT - 13:NEW PRODUCT DEVELOPMENT IN REGIONAL TOURISM STRUCTURE 13.0 Learning Objectives 13.1 Introduction 13.2 Definitions of Tourism Product 13.3 Components of Tourism Product 13.4 Managing existing Tourism Product 13.5 New Product Development 13.5.1 New Product Development in Tourism 13.5.2 Stakeholders in a Regional Tourism Product Development 13.5.3 Phases of New Tourism Product Development in the Regional Level 13.5.4 Challenges in New Product Development in Regional Tourism 13.6 Summary 13.7 Keywords 13.8 Learning Activity 13.9 Unit End Questions 13.10 References 13.0 LEARNING OBJECTIVES After completing this unit, you will be able to: Describe the meaning of tourism product Outline regional tourism Contemplate on new product development in regional tourism and the challenges
13.1 INTRODUCTION This unit focuses on conceptual understanding of what a tourism product is and how the tourism industry can develop new products in a new region. We will be able to see the different types of tourism products which could be developed and how to do so to attract tourists to a specific region. The chapter will give emphasis on developing new products, the steps involved in developing new products, and the challenges faced which will define the success or failure of the project. 13.2 DEFINITIONS OF TOURSIM PRODUCT As UNWTO describes, a Tourism Product is “a mix of physical and non-physical components like natural, ethnic and human made assets, amenities, attractions, activities and services around a particular place which constitute the focal point of the marketing mix of the destination and forms an entire experience for the tourist which includes psychological feature for the prospective clients. A tourism product is sold using the channels of distribution at a price and it also has a life cycle.” Tourism products can also be defined as the sum total of the tangible and intangible experiences of a tourist in the course of their journey and stop over at the destination. In simple words, a tourism product is a parcel of tangible and intangible encounter for the tourist which results in contentment or discontent depending on the encounter of the entire tour. Tourism products consist of products and services which a tourist uses during his travel to and stay at a destination. 13.3 COMPONENTS OF TOURSIM PRODUCT Attractions: Attractions consists of nature-based ones (landscape, beach, weather etc.), man-made attractions (resorts, historic buildings and theme parks etc.) culture-based attractions (festivals, beauty pageants, folk shows, museums etc.) and societal attractions (meeting with the community, local experiences etc.) Facilities: Destination facilities mean the components in a destination which helps in the tourist’s visit to the destination and participating in the activities. E.g., Accommodations, restaurants and bars, transport facilities at the destination, information desk etc. Accessibility: 196 CU IDOL SELF LEARNING MATERIAL (SLM)
Accessibility implies the transportation infrastructure available to and from the destination which consists of airports, roadways, railways, harbours etc. which calculates the costs of travelling and the duration of travel to visit a destination. Images: Image usually represents the innate characteristics of the tourism product, its map, types of attractions, and the social surroundings. Images represent every aspect of the tourism products in the sense the perception which includes ideology and credence’s of tourists regarding the product they put their money in. Images are hence important as they have an impact on the behaviour of the tourist. Price: Price is the entire cost of the travel to the tourist which includes the costs of accommodation and other activities the tourist partakes at the destination. There were only 3 major components i.e., Attraction, Accessibility, and Accommodation also known as the 3 as of tourism in the literature. Later the other components were added so that it gives a better product experience for tourists. 13.4 REGIONAL TOURSIM Regional tourism is a type of tourism which is focused on a particular region. A region is a place or a locality which can be differentiated from others because of its unique culture and surroundings. A regional tourist is a person who is travelling to a region other than that where he lives but within a specific geographical area. Regional tourism consists of not just traveling but also of the fascination and presumption of what they are going to witness on the journey, difficulties they will face, what activities to participate in and which new person they will meet. What will the landscape look like, the food to try, buildings etc. Accessibility to that beautiful region should be easy and pleasant, whether it is by flight, rail or road. Within the region, the routes need to be safe and in satisfactory condition as much as possible depending on the type of tourists travelling. 13.5 NEW PRODUCT DEVELOPMENT “In regards to new product, it means indigenous products, enhancing a product, changes in a product, and unique brands which an organization launches as a result of its research and development endeavours” – Stanton, Elzel and Walker. 197 CU IDOL SELF LEARNING MATERIAL (SLM)
Reflecting on the above definition, a new product is anything which is considered so by the clients or something the organization launching did not have any prior expertise in the product. It indicates a customer sees a product as new only when they use it and feel an experience which they haven’t had before. New product development is the procedure of launching a unique product in the market. Any business might be forced to develop a new product because of modifications in the likes of customers, rising rivalry and development in technology or to grab on some great opportunities. Creative business prospers through grasping the requirements in the market, creating new products and enhancing the products to fulfil the needs and expectations of the consumers in the market. New product development is not only done by current business, even new organizations, sole proprietors and also freelancing agents could create a place for themselves through research and development and launching new products. 13.5.1 New Product Development in Tourism According to UNWTO and European Travel Commission (2011), tourism product development is the procedure in which the resources of a specific destination are modified to fulfil the requirements of domestic and international tourists. It consists of those activities, attractions and amenities which are especially offered to the tourists only. In other words, tourism product developments refer to launching new and creative experiences, products and services in the market for the tourists to purchase. Product development could happen in different types. For instance, a tourism organization finds a gap in the market and thinks to enhance that product in order to fulfil the wants of the customers. Product development could refer to launching an experience which is already existing in the market but it is new to the organization. Or, for a tourism organization, they will look at expanding their services to incorporate extra services, experiences or physical items like souvenirs. Tourism product development is a significant process in regional tourism planning and development. Using tourism product development, one can transform the assets available into something with value so as to satisfy tourists and offer employment opportunities for the local community in the destination. For example: An idle beach, with some investment could be developed and promoted as sunset or sunrise point which will attract tourists and result in inflow of cash and at the same time provide business opportunities to the locals like maybe set up food stalls, sell souvenirs or even work directly for maintaining and administering the spot. 198 CU IDOL SELF LEARNING MATERIAL (SLM)
In the case of regional tourism, a region in a country which has a unique attraction in terms of culture, some unexplored nature like a forest trek, river rafting places etc. could be developed along with accommodations, cab facilities, public transport etc. A development of a resort in the forest or on the sea side will also be considered a new product development. Marketing of the destination will attract the tourists from nearby places to visit the property or experience the attractions the destination has to offer. In India, new tourism products come in the form of folklores, festivals, hills, forests, community service, beaches, resorts, temples, archaeological findings etc. 13.5.2 Stakeholders in a Regional Tourism Product Development A stakeholder is any person who is connected with any assignment, business or industry. A stakeholder can be a person, a company or community who will be affected by the outcomes of the assignment. They are those who are interested in the accomplishment of the assignment. In the tourism industry, a stakeholder could be any individual like a tourist or a commuter. They may be a set of individuals like a family or employees, a company or community. The tourism industry is seen as the largest industry in the entire world. This indicates that there are a large number of people, organizations and communities who will be part of the project at every phase. As shown in the diagram below, there are some significant stakeholders who are generally a part of the tourism industry: Government: Visa, immigration checks etc. Tourism Organizations: Airlines, tour operators, travel agents etc. SMEs: From petty shops to electrical shops providing bulbs to hotel rooms NGOs: E.g. The Travel Foundation, The Tourism Society Tourists: Because of whom tourism is possible Suppliers: From factories to farmers who facilitate comfort and enjoyment to tourists Employees: One of the key stakeholders in tourism is the workforce. Utilities/ Infrastructure: Local power plants, builders, road workers and engineers are as they offer and sustain the required infrastructure. Transport: Transport and tourism go hand in hand Communities: Need to make sure that this significant stakeholder is empowered in the entire procedure of tourism product development. 199 CU IDOL SELF LEARNING MATERIAL (SLM)
Tourism Organization Government SMEs Utilities Tourism NGO's /Infrastructure Stakeholders Tourists Local Communities Transport Suppliers Employees Figure 13.1 Stakeholders of tourism 13.5.3 Phases of New Tourism Product Development in the Regional Level The acclaim of tourism as an element of socio-economic growth, the diverseness and convenience of tourism assets in the world enhances rivalry between the tourism destinations for arrivals of tourists. In the meantime, the creation of sustainable inflow of tourists along with returns on investments in more developmental projects of tourism necessitates the answers to so frequent issues for developing destinations as a seasonal factor of arrivals of tourists and no. of days they stay. A number of academics have been done to justify regional tourism development strategies which are on the basis of constitutional and practical examination of regional tourism and 200 CU IDOL SELF LEARNING MATERIAL (SLM)
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