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Tourism and Hospitality Marketing Module No.1 PDF
Tourism and Hospitality Marketing Module No.1 PDF
Week 1-2
Marketing has evolved from simple trade to a production orientation, and to a sales
orientation. When businesses realized that production was increasing, they began competing for
recognition within the market. The customer has become king, and building relationships with
them has been at the heart of any successful business enterprise. With the rise of relationship
marketing and social media marketing, the rules of the game have changed. Tourism has become
one of the world’s largest and fastest growing industries. Much attention has been given to how
tourism can continually grow. Just like any other business, marketing plays and integral role in its
continuing growth.
Now, I want you to grab anything you see near you. May it be a pen, a book, a glass, etc. On the
blank spaces that follow, write as much as you want promoting the thing/material that you just
grabbed. And you should write something that would convince me to buy it.
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Do you think you had given me enough knowledge about the product that you were selling? Did
you consider the price of the product to its quality? Perishability? Appearance? After the
distribution of the next module, I will let you know if I would buy your product or NOT (bought
products will earn 50pts, and rejected products will only earn 10pts.) Let’s see how well you did!
😊
Tourism has become one of the world’s largest and fastest growing industries. Many new
destinations are emerging apart from traditional favorites – Europe and North America. These
new destinations are hopeful of the economic gains that tourism can bring, which include increase
in trade, infrastructure, and job generation.
Marketing for tourism covers several levels, from the tourism destination as the product
itself, down to the specific tourism products and services that a tourist should avail to complete
the tourism experience. These products include transportation (airline, cruise ship, bus, etc.),
accommodation (hotels, inns, apartelles, bed and breakfast), food and beverage (restaurants,
catering, bars), attractions (amusement parks, museums, zoos, marine sanctuaries, etc.),
amenities, and souvenir shops, among others.
What is tourism actually selling then? Tourism is not a single product. It is a combination
of products and services which results in a holistic experience for the traveler.
UNIQUE CHARACTERISTICS OF
THE TOURISM INDUSTRY
Unlike consumer products which can be availed off the shelf, tourism products have unique
characteristics that make their marketing and promotions quite challenging. The tourism product
is intangible, inseparable, seasonal, and substitutable. Additionally, tourism is a high involvement
product.
Now, let’s discuss each of the characteristic of tourism product!
Intangible
Tourism products cannot be touched, smelled, tasted, felt nor heard prior to purchase. They
cannot be subjected to prior scrutiny. One cannot examine nor test them before purchase, unlike
consumer products which can be sampled.
A destination that promises fresh air from its beach or a scenic view of the mountains cannot send
a sample. Consumers rely on photographs of place, comments or reviews from those who have
visited the place or availed of the services, and promises from the company itself.
This is a photograph of Boracay. The beauty of this scene can only
be appreciated when one is actually in the destination. Looking at the photograph will never
equate to the experience of having one’s hair blown by the wind, feeling the sun’s penetrating
heat while basking on it, and hearing the roar of the motorboat. This is why the word of mouth of
a highly effective means of promoting tourist destinations.
Inseparable
The tourism product cannot be separated from the consumer. When tourists avail of products and
services, they have to personally go to where the products are. Since what is being sold is the
experience, the product and the consumer cannot be in two different places; they have to be in
the same place.
Variable
The tourism experience is likely to be different depending on when the product is availed, who
one is with, and how the service providers deliver the service at the time of the consumption.
One may have gone to the same restaurant several times and have a
different ding experience each time. While the first time at the restaurant may have been quiet,
the second time, one finds it to be noisy. Simply because there may have been few customers
the first time and a rowdy group of teenagers the second time. Hence, the variability of the tourism
product.
Perishable
The tourism product is one of the most highly perishable of products. Perishability, as used in this
context, refers to not being able to forward inventory to the next day. It does not refer to food
being spoiled and thrown away. Products become perishable when it can no longer be consumed
today even when no one consumed it the day before. Unlike consumer products such as a pen;
if the pen was not sold today, it can still be stored in a warehouse to available for the sale the next
day.
Airline and restaurant seats, hotel rooms, and function rooms are perishable products. A seat or
a room that is not sold today cannot be sold some other day.
Seasonal
Seasonality does not only refer to seasons of the year or the whether conditions. It also refers to
behavioral patterns of the travel market. The seasonality of the tourism product hinders it from
maximizing its profits all year round. Hence, intensified marketing during the lean season will help
increase demand for the product. This is also the reason most tourism products, such as airlines
and resorts, have different rates throughout the year. Such differences in rates help manage
capacity and yield to maximize profitability.
Take note!
Revenue management addresses the perishability factor of the tourism product. With the
proper tools for forecasting price and occupancy, yield can be maximized.
Substitutable
Competition in the tourism industry is intensifying. With new destinations emerging and competing
in the global marketplace, one destination can easily be substituted for another destination.
With a new restaurant opens, the old favorites are relegated to second choice.
It is quite a challenge to establish loyalty among clients since there is a wide range of product
offerings to choose from. With many choices available, the tourism product is highly substitutable.
However, identifying one’s competitive advantage and a unique selling proposition may help make
a tourism product less substitutable.
Tourism as a High Involvement Product
Decision making in the purchase of tourism products is considered to be of high involvement.
Tourism products of high involvement mean that there is a greater degree of thought or study
involved prior to purchase. EXPENSIVE, COMPLEX and UNREPEATABLE are characteristics of
high involvement products.
Take note!
Marketing necessarily plays and important role in the purchase of tourism products. Because
of the aforementioned characteristics of the tourism product, a marketing strategy needs to
be developed to make the product competitive in a highly commercialized market place.
Table 1.1 High Involvement vs. Low Involvement Products
High Involvement Low Involvement
Expensive Inexpensive
Complex Simple
Unrepeatable Familiar
TOURISM MARKETING
DEFINED
In the past, marketing was associated with only advertising and selling. However, these
two activities are now part of a more complex set of strategic activities that comprise marketing.
There has been a misconception that marketing is a task that is performed solely by account
managers and marketing officers. A highly successful establishment makes marketing a concern
not only of guest contact positions but of each and every employee of the establishment.
Costumer satisfaction is at the center of marketing. It is easy to persuade a customer to make the
initial purchase, but making the customers return for more is dependent on his satisfaction from
his initial experience.
The American
Marketing
Association (2013)
approved a new
Kotler, Bowens, and definition: marketing
Makens (2010) define is the activity, set of
marketing as the art institutions, and
and science of finding, process for creating,
retaining, and growing communicating,
profitable customers. delivering, and
Philip Kotler (2002) defines exchanging offerings
marketing as a social process that have value for
by which individuals and customers, clients,
groups obtain what they need partners, and society
and want through creating at large.
and exchanging products and
values
MARKETING AS A
MANAGEMENT PROCESS
Since the provision and consumption of the tourism products and services usually occur
simultaneously, the marketing orientation should involve the entire organization. The marketing
management process involves the following key processes (Lumsdon 1997):
Table 1.2 The Marketing Management Process
Marketing
Place Price
Mix
Promotion
2. Price – is the value that the seller puts on the product or service. This includes the cost of
the product and the profit the seller wishes to make, this is also the amount a customer
has to pay in exchange of the product or service.
3. Place – is the means by which the product or service reaches the consumer.
4. Promotion – is the strategic plan by which customers are informed about the product or
service and its value, it also encourages customers to purchase the product or service.
INTEGRATED MARKETING
COMMUNICATIONS
APPROACH
Promoting and selling products have become heavily reliant on traditional advertising
techniques which have become more expensive but less effective. The Integrated marketing
Communications (IMC) approach was born out of a need to enhance the demands of businesses
to promote their products. What is IMC then? It is the process of using all forms of promotion to
achieve maximum communications impact while maintaining a consistent image for the products
or services.
Let us walk through the factors that contribute to the growth of IMC in order to have an
appreciation of the shift from traditional marketing to the growing paradigm of relationship
marketing.
To achieve company
objectives
Various studies have shown that the integrated marketing communications approach has
been an effective way for companies to reach its target market and to achieve company objectives
within the available budget. Given creativity and strategic thinking, IMC can maximize a
company’s limited resources; thus, allowing small players in tourism industry to compete with
established brands.
When you used to travel to school or anywhere, try to recall how tourism establishments and
destinations are marketing their products and services. When you looked at billboards, transit ads
(posters inside and outside buses and other public transportations), and other ways by which
tourism products and services are promoted. Express your thoughts about those marketing ads
on the space provided.
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Give five examples of tourism products that you are familiar with, and explain how the
characteristics of the tourism product are evident in each. And in box provided, choose from your
list a tourism product that you would want to promote and create poster for it.
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😊
MODULE 1
THE TOURISM MARKETING AND MARKET
SEGMENTATION
Week 3
Market segmentation, targeting, and positioning are key terms useful in any marketing process.
Identifying one’s market segments will help in identifying the market’s needs and wants. How their
needs should be met and how to communicate such to benefit them is covered in this lesson.
Market coverage strategies and identifying one’s unique selling proposition and competitive
advantage will greatly contribute to a successful marketing plan.
The Korean market is the Philippine’s top market, representing more than 25% of foreign visitors.
Have you ever wondered why they choose the Philippines? Let’s say you were a foreigner from
North America visiting the Philippines for the first time. List down at least 10 things you like about
the country.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
In an interview made by the Philippine Star with Philippine Ambassador to Korea Luis T.
Cruz, he cited reasons why Koreans remain as the top source of foreign tourists in the country.
Koreans love our holiday and leisure attractions which complement their main reason for travel,
that is, to learn English. Korean males come to the Philippines over the weekend to play golf,
women come for shopping, spa, and entertainment activities. In a Gallup Poll targeting the Korean
market, interestingly, Koreans enjoy our seafood as well.
Philippines and Korea have very strong bilateral relations. The Philippines supported
Korea during World War II and in their post-war restoration. Hence, government relations between
the two countries have been strong since the 1950’s.
On the space provided, what activities should the Philippines develop in order to keep on
attracting this markets segment?
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DEFINITION OF A MARKET
A market is a set of actual and potential buyers of a product. These buyers
share a particular need or want that can be satisfied through exchange
relationships (Kotler et al. 2010)
The tourism product is NOT for all.
The tourism industry aims to target a specific set of individuals.
It is for a particular set of buyers, a niche market.
Psychographic Behavioral
social class special occasions
lifestyle benefits sought
personality usage rate
user status
loyalty status
buyer readiness
Geographic Segmentation – divides the market into different geographic units such as nations,
states, regions, countries, cities, neighborhoods, barangays, towns, etc.
Demographic Segmentation – refers to segmenting the market based on variables such as age,
life cycle, gender, income occupation, education, religion, and race.
Behavioral Segmentation – refers to dividing groups based on their knowledge, attitude, use of or
response to a product or service.
Technographic – Cooper 92006) suggest that there is a fifth variable for market segmentation
which he calls technographic segment. With the prevalence of the Internet and the World Wide
Web, there is an increasing divide between the users and non-users of technology in searching
for travel information.
MARKET TARGETING
Market Targeting – is evaluating each segment’s attractiveness and selecting one or more of
these market segments in which to operate one’s business.
Kotler suggests three factors o consider in evaluating which segments should be targeted. These
factors are:
1. Segment size – refers to the current sales volume, growth rate, and high profit margin.
2. Attractiveness – refers to the potential impact of the segment to the company. One that
is not saturated and has few aggressive competitors would be structurally attractive.
3. Company objectives and availability of resources – refers to the main reasons for it
decision making and the available resources the company will use to make its objectives
a reality.
MARKET COVERAGE
STRATEGIES
Undifferentiated Marketing
• a company ignores market segmentation and goes after the entire market with only one
market offer
• this looks into what the market has in common and is designed to reach a huge number
of buyers
• this market coverage strategy can be used effectively for consumer products mainly
because a lot of buyers would need the same product
Differentiated Marketing
• approach the market by targeting several market segments using separate offers per
segment
• companies may offer several products for different market segments to capture a bigger
chunk of the market
Concentrated Marketing
TYPES OF MARKET
The Family Market
Wife-dominant
families form the smallest segment of the family
market. Id the wife makes the decision on
vacations, it is characterized by short planning
duration and uses the fewest information sources
for planning.
The Senior Market
- Also known as the silver market or third-age tourism
- There was even a campaign known as SKI which encourages the elderly to go on
vacations to Spend Kid’s Inheritance
- The senior market also has limitations and constraints to engage in travel: safety, security,
health issues, availability, costs, family responsibilities, poor information about suitable
options (Moscardo 2006), and previous experience (Lohmann & Danielsson 2001).
- The senior market in the Philippines can be characterized by two: those with retirement
benefits, and those who rely on their children for sustenance.
There is a growth of travel participation among the youth market that is fueled by several factors,
enumerated by Richards et al. (2006) as follows:
1. Increased participation in higher education
2. Increased travel budgets (parental contribution, savings, and work)
3. Work and travel combinations
4. The rise of low-cost/budget airlines
5. Shorter employment contracts leading to significant gaps in employment
6. The global rise of the internet culture
7. Growth of independent travel guidebooks
The MICE Market and Business Tourism
When you eat in a fast food chain restaurant, observe the kinds of people who patronize the
products in the menu. What products do children eat? How about their parents and their
grandparents? What segment of the market do these fast food chains cater to?
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Discuss the strengths of the emerging markets for Philippine Tourism covered on this lesson.
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😊
MODULE 1
THE TOURISM MARKETING AND MARKET
SEGMENTATION
Week 4-5
Consumer behavior is the process and activities people engage in when searching for,
selecting, purchasing, using, evaluating, and disposing products and services to satisfy that needs
and desires (belch & Belch 2008). Purchase decisions, especially for tourism products are usually
arrived at after a long and detailed process of information search, brand comparisons, and
evaluation. Tourism products are too expensive to be bought on impulse. Thus, a careful
examination of choices is made before an actual purchase happens. You, my dear student, will
learn from this lesson that there are many factors that influence consumer behavior, and purchase
is often not just attributed to the prices of the product.
Motivations
▪ Motivations – are inner drives that make people take a specific plan of action to satisfy
their needs.
▪ Hudson (2008) defines needs as the gap between what customers have and what they
would like to have; seen as the force that arouses motivation.
▪ Kotler et al. (2010) state that a need becomes a motive when it is aroused to a sufficient
level intensity that prompts a person to take action.
▪ A person who has the ability to understand how motivation works will have the ability to
gain competitive advantage. If one is able to identify what triggers purchase, he can
actually create the scenario to influence the purchase.
▪ Maslow’s hierarchy of Needs – the most popular theory of motivation as it is able to outline
the different needs of man, and rank them based on degree of importance in a simple and
easy to understand manner.
▪ Maslow ranked them based on their level of importance
▪ The more resources one has, the higher the likelihood that the higher order needs will be
met.
▪ Travel and tourism, for a great part, belong to the higher order needs
Physiological Needs – refer to basic needs for survival such as need for food and water.
Safety – refers to personal and perceived degree of safety and security
Belongingness – refers to acceptance in social groups
Esteem/status – refers to desire for prestige and status
Self-Actualization – refers to the goal of self-fulfillment
Dann (1977) describes travel motivators as linked with Maslow’s hierarchy of needs.
2 factors than make you want to travel Dann, 1997):
1. Push factors – are those that make you want to travel; sociopsychological factors.
2. Pull factors – are those that affect where you would want to go; cultural motives
Table 3.1 Push and Pull Factors (Dann 1977 & Crompton 1979)
Culture
Define as the collective mental programming of the human mind which distinguishes one group
of people from another.
5 Dimensions of Culture
1. Power distance
2. Individualism/collectivism
3. Masculinity and femininity
4. Uncertainty avoidance
5. Long-term and short-term orientation
6. Indulgence versus restraint (recently added)
Age – pertains to the number of years a person has been living. Age is a traditional way of
segmenting the market and also greatly influences consumer behavior.
Gender – also influences consumer behavior. The female market steadily increasing and has
been observed to be more discriminating than its male counterparts.
Social Class
Social class – is one’s position within the society and is determined by factors such as income,
wealth, education, occupation, family prestige, and value of home or neighborhood.
Lifestyle
A lifestyle is a person’s pattern of living as expressed in one’s activities, interests, and opinions
It portrays the whole person interacting with external forces.
Life Cycle
Life Cycle refers to the stages an individual goes through in their lifetime.
Single people choose destinations that have fun and adventure more
than those who are married and have young children.
Reference Groups
Reference groups are known to be a set of people who have a direct or indirect influence on other
people’s attitudes or behavior.
Reference groups are extremely important in selling tourism products because the product is
intangible; hence, word of mouth plays an important trigger for purchase decisions.
•it is extremely
important for
product or service
Post-purchase providers to
ensure that
Evaluation customers have a
good experience
with the product.
Repeat
Service Satisfaction Purchase
Quality
Referrals
to friends
Figure 3.5 Relationship of Service Quality, Customer Satisfaction and Word of Mouth
ORGANIZATIONAL BUYER
BEHAVIOR
▪ The organizational buying process is a more formal version of the consumer buying
process discussed earlier in this lesson.
▪ Organizational buyers commonly respond to both economic and personal factors
▪ Major influencers of purchase would include cost and economic outlook, organization’s
objectives and personal agenda, interpersonal factors at play between buyers and sellers,
and personal motivations, perceptions, and preferences.
The purchase decision process in organizations is more complex than that of individual purchase.
Kotler et al. (2010) describe the process as follows:
1. problem recognition
2. general need specification
3. product specification
4. supplier search
5. proposal solicitation
6. supplier selection
7. order routine specification
8. performance view
TYPOLOGY OF TOURISTS
Plog’s Tourist Motivation Model (1974) – classifies travelers as allocentrics and psychocentrics,
adds “energy” as a determinant of (high or low) levels of activity
Allocentrics – prefer what is new, unstructured, exotic or unusual in terms of trips or destination
choice
Psychocentrics – are those who prefer the structured and familiar
Midcentrics/midcentrism – wherein a tourist could portray characteristics of both allocentrics
and psychocentrics depending on the situation or season
Cohen’s Model (1972) – proposed four classifications of tourists: the organized mass tourists, the
individual mass tourist, the explorer, and the drifter.
The organized mass tourist – is the type of tourist who buys all-inclusive tour packages and
ensures that everything goes as planned.
The individual mass tourist – is more autonomous that the organized mass tourist preferring to
travel independently, but still chooses popular destinations and activities.
The explorer – seeks new areas but would sometimes opt for the comfort of familiar
accommodation
The drifter – is the free spirit who avoids any kind of traditional tourist establishments
1. Bubble travelers – have low affluence, low travel experience, and observe foreign culture
from a bubble. This gives them basic confidence to travel.
2. Idealized-experience seekers – have more affluence and a base of overseas travel
experience, which gives them more confidence.
3. Wide-horizon travelers – have more affluence, greater confidence, and more travel
experience; now ready for more individually oriented travel to a wider range of
destinations.
4. Total immersers – do not seek to merely observe but to be exposed fully to another
culture’s language, food, heritage, and lifestyle.
The Non-Users
Successful marketing efforts should cover the different segments of the market. While relationship
marketing. Which focuses on customer retention, has become a popular marketing alternative,
marketers should continue to make efforts to acquire new customers. The best way to do this
would be to target the non-users.
Non-users can be classified as:
(1) Ex-users who stopped using the products/services for various reasons
(2) Customers who are aware of the product or service but need to be persuaded to purchase,
and
(3) Those who are not aware of the product or service’s existence
Though research shows that it is more expensive to acquire new customers, a company needs
to have a steady flow of new customers for it to survive and eventually flourish.
Application
What are the factors that influence consumer behavior? Give examples of how they are in the
Philippine setting.
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Assessment
Interview a friend or relative who frequently travels out of town or out or the country. Ask about
the factors that influence his/her destination choices. Write a 500-word essay about his/her
consumer behavior.
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If you put off everything till you're sure of it, you'll never get anything
done."