THM – PRELIM PERIOD LESSONS

Lesson 1 - TOURISM AND HOSPITALITY MARKETING

Tourism is one of the world's leading industries. The Philippines is getting substantial economic gains
from tourism, which the government wants to further maximize. Tourism is not a single product; it is a
combination of products and services that results in a holistic experience for a traveler.  Tourism products
and services have unique characteristics; intangible, inseparable, variable, perishable, seasonal, and
substitutable. Tourism is a high involvement product because it is expensive, complex, and has an
unrepeatable nature.
The seven core marketing functions are marketing information management, financing, pricing,
promotion, products/service management, distribution and selling. The marketing management process
involves information systems, planning, tactical campaigns, operations, and monitoring and control.
The integrated marketing communications approach is the process of using all forms of promotion to
achieve maximum impact while maintaining a consistent image for the product or service. 
1. 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.  

1. Intangible - Unlike physical products, services cannot be seen tasted, felt, heard and smelled before
they are purchased. Buyers look for tangible evidence that will provide information and confidence about
the service.
2. Inseparable - Both the service provider and the customer must be present for the transaction to
occur. Customers are part of the product.
3. Variable - Service quality depends on who provides the service and when they are provided. Product
consistency depends on the service provider’s skills and performance at the time of the exchange.
4. Perishable - Services cannot be stored. If service providers are to maximize revenue, they must
manage capacity and demand. Unsold inventory from previous day cannot be carried forward to the next
day.
5. Seasonal - Services have peak and off-peak season depending on demand due to weather and visitor
behavior.
6. Substitutable - With the new destinations emerging and competing in the global marketplace, one
destination can easily be substituted for another destination.

Tourism as High Involvement Product

Tourism products of high involvement means that there is a greater degree of thought or study involved
prior to the purchase. Marketing plays a vital role in the purchase of high involvement products. It leads
consumers to think about the product and its features as well as to assure them of its quality. It helps
clarify doubts and lessen risks involved in the purchase of the products. Since tourism products and
services are high involvement products, customers also demand a high level of satisfaction.
2. Tourism Marketing Defined
Simple definition:
“Marketing is the management process responsible for identifying, anticipating, and satisfying customer
requirements profitably.”
Goals of Marketing:
1.Attracts new customers by promising superior value.
2.Keep and grow current customers by delivering satisfaction.

"Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large."

"Marketing is a social process by which individuals and groups obtain what they need and want through
creating and exchanging products and value with others." (Kotler, 2002)
Kotler, Bowens and Makens (2010) define marketing as the art and science of finding, retaining and
growing profitable customers.
The American Marketing Association, in July 2013, approved a new definition of marketing.
Defined marketing as the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
3. Marketing as a Management Process
WHAT IS MANAGEMENT?
"Management is the process of designing and maintaining an environment in which individuals, working
together as groups, efficiently accomplish selected aims.”
Defined as the process of planning, organizing, leading, and controlling the efforts of organization
members and of using all other organization resources to achieve stated organizational goals.
Marketing as a Management Process
1. Marketing Information System – With the advent of technology, the provision for a marketing
information system enables the organization to compile an updated set of information about its customers,
competitors, and the organization's capability and effectiveness. 

2. Marketing Planning – This involves an analysis of the marketing environment in relation to the
potentials of one's business. It involves the setting up of objectives and an evaluation of the
milestones that the company has reached. The creation of marketing strategies will help increase the
business by obtaining the best fit between the company's resources and its target market position.
 
3. Planning Tactical Campaigns – This step ensures that practical and realistic tactical campaigns are
conducted in support of the comprehensive marketing strategy. 

4. Marketing Operations – This process involves the challenging part of implementing the planned
strategic and tactical campaigns by coordinating with all stakeholders, fine tuning the marketing mix as
they unfold, and ensuring that activities are conducted as planned.
 
5. Monitoring and Control – This involves the ongoing process of evaluating sales data and financial
performance versus marketing activities conducted. It also includes the handling of customer feedback
and complaints and coordination with what the staff has to say about the marketing campaigns. Finally, it
includes being aware of what the competitors are doing.  

4. Core Marketing Functions

Marketing's key functions briefly discussed as follows:
1. Marketing Information Management - entails gathering information about customers to better serve
their needs and improve decision making.
2. Financing - involves planning to ensure that resources are available to maintain and improve the
business. 
3. Pricing - ensures that the value and cost of goods and services offered to customers will be at the level
that customers are willing to pay.
4. Promotion - prepares the various promotional strategies that will enable the products to be introduced
and sold to the customers.
5. Product/ Service Management - involves designing, developing, maintaining, improving, and acquiring
products and services to meet the needs of the customers.
6. Distribution - involves bringing the products and services to the customers in the best way possible.
7. Selling - is the ultimate measure of marketing success. Strategies on following up the sale, closing the
sale, and making a repeat sale are crucial tasks of marketing. 

5. The Marketing Mix

The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or
product in the market.
The 4P's make up a typical marketing mix - Price, Product, Promotion and Place.
The product or service is what the company is offering to satisfy a consumer's want or need. The 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. The price is also the amount a customer has to pay in exchange of the product
or service.  The place is the means by which the product or service reaches the consumer. Promotion is
the strategic plan by which customers are informed about the product or service and its value. Promotions
also encourage customers to purchase the product or service. A well-planned and executed marketing mix
will enable marketers to move their products or services successfully to the consumers.
7P's of Tourism Marketing
1. Price
2. Place
3. Product
4. Promotion
5.  People – a tourism organizations most valuable resources.
6. Process – is inseparable product. If any part of the process is found to be unsuitable by the consumer, it
could result in a negative evaluation of the whole product.
7. Physical Evidence – is the tangible aspect of the tourism product. Defined as the built environment
owned and controlled by a tourism organization.

6. 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 ARE INTEGRATED MARKETING COMMUNICATIONS?
IMC is the process of using all forms of promotion to achieve maximum communications impact while
maintaining a consistent image for all products or services.
Factors that led to the growth of IMC
1. Growth of technology
2. Incentive-based compensation
3. Consolidation of the retail industry
4. Database Marketing

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.

Lesson 2 - THE TOURIST MARKET AND SEGMENTATION

A market is a set of actual and potential buyers of a product. There are three steps to target marketing:
market segmentation, market targeting and market positioning. A market segment has to be identifiable,
cohesive, measurable, accessible, substantial, and actionable. Markets can be segmented using different
varables that are geographic, demographic, psychographic, and behavioral in nature. The factors to
consider in evaluating which segments are to be targeted are: segment size and growth, segment-
structured attractiveness, and company objectives and resources.
There are three market coverage strategies: undifferentiated, differentiated, and concentrated
marketing. Top of mind is the highest level of recall a brand can achieve in the customer's mind. Unique
selling proposition differentiates the product or service from others. Competitive advantage means the
greater value the product has over its competitors. New and emerging markets include the family market,
the senior market, the youth market, and the MICE market.
1. Definition of Market
A market is a set of actual nad potential buyers of a product. These buyers share a particular need or want
that can be satisfied through exchange relationships. The meaning of the term market has evovled over
the years. To marketing professionals, a market is all actual and potential buyers of a product or service.
(Kotler, 2010)
DIFFERENT MARKET LEVELS
1. Total Market is the sum of the actual and potential customers of product.
2. Potential Market consists of those consumers that profess some interest in a defined product
3. Available Market consists of those consumers who have the interest and the necessary income to visit a
destination, along with no constraints.
4. Served Market is part of the available market. The destination management can decide to pursue only
well-defined segments or limited target.
5. Penetrated Market consists of the set of consumers who actually purchased the tourist products. It must
be clear that this is only a fraction of the total population

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. There are three steps to target marketing: (1) market
segmentation, (2) market targeting, and (3) market positioning.

2. Market Segmentation
A market is comprised of varied profiles and characteristics that can be further segregated. Imagine the
market as an entire pizza that can be divided into several pieces or an oramge fruit with several segments.
Each slice or segment has different characteristics from the others. These segments differ in their wants or
desires, socio-economic status, age, travel behavior, etc. 
Market segmentation is dividing the market into disctinct groups who might require separate products
and/or marketing mixes. A market segment is a subgroup of the total consumer market who share similar
charactersitics and needs relevant to the purchase of a product, service, or experience. Each segment is
profiled based on its characteristics. 

Characteristics of a Market Segment

Lumsdon (1997) identified six characteristics of a segment, as follows:
1. Identifiable. The people who comprise the segment can be located and identified such that targeting
them would be easy.
2. Cohesive. The consumers should be part of a whole whose specific qualities are common to all.
3. Measurable. The marketer should be abe to estimate the size and potential spending of the members of
the market segment.
4. Accessible. The members of the segment should be accessed by marketing efforts and promotional
activities to be conducted. If they are difficult to reach, efforts to reach out to the specific segment might
be futile.
5. Substantial. Segments should be large in order to be substantial. If the segment is small, it should have
a high spending capability to make a significant impact on the business' bottom line. 
6. Actionable. The company has enough resources and commitment to enable effective penetration of the
identified segment to ensure effective positioning. 
Variables for Market Segmentation
1. Geographic Segmentation. To group potential tourism customers based on their location. It is
considered as the oldest and simplest basis for market segmentation. (Nations, Regions, Countries,
Towns)
2. Demographic Segmentation. To group the consumers according to variables that define them in an
objective, easily measurably way. (Age, Gender, Income)
3. Psychographic Segmentation. Involves grouping people on how they live, their priorities, their
opinions, their attitudes and their interests. Personal lifestyle and personality. With similar hobbies, sports
and musical interests. (Social Class, Lifestyle, Personality)
4. Behavioral Segmentation. Also known as Product-related Segmentation is multifaceted and aims to
group consumers according to their relationship to the product. (Benefits sought, User Rate, Loyalty
Status)
5. Technographic Segmentation. With the use of Internet and World Wide Web. (Between users and non-
users of technology in searching information for technology.)

3. Market Targeting
Market segmentation shows the various market segment opportunities available for a company. A careful
assessment of these specific market segments will help the firm identity which ones it should
target. 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 to 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 would be structurally attractive.
3. Company objectives and availability of resources – refers to the main for its decision making and the
available resources the company will use to make its objectives a reality.

Market Coverage Strategies

In the selection of specific market segments, a company decides on a market strategy that is in line with
its objectives and resources. Kotler et al. suggests that it can adopt any of three market coverage
strategies. 
1. Undifferentiated Marketing
2. Differentiated Marketing
3. Concentrated Marketing

In 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 approaches the market by targeting several market segments using separate
offers per segment. Companies may offer serveral products for different market segments to capture
bigger chunk of the market. 

Concentrated Marketing is practiced by companies with limited resources. It pursues getting a big share
of a small market rather a small share of a large market. Companies are able to allot its resources in
making its presence felt in a specific market with greater impact. If the segment is well chosen, it may
yield high returns for a company. 
Kotler suggest that the following factors be considered when choosing a market coverage strategy as
follows:
1. Company's Resources. This refers to how much money and resources the company has which can be
allocated to marketing. If the company has limited resources, it is logical to use concentrated marketing.
2. Degree of Product Homogeneity. If products are standardized and identical, it is more advisable to go
for undifferentiated or concentrated marketing.
3. Market Homogeneity. If there is a diverse market, differentiated marketing is advisable. If the market
has a lot of similarities, undifferentiated marketing maybe used.
4. Competitor's Strategy. It is important to assess the strategy competitors are using so the the correct
strategy can be implemented to counter their marketing efforts. If competition is doing undifferentiated
marketing, it would be advantageous to do differentiated or concentrated marketing. If competitors are
doing segmentation, concentrated marketing is a must.

4. Market Positioning
Market positioning is developing competitive positioning for the product and an appropriate marketing
mix. (Kotler, 2010)
Positioning has everything to do with the deliberate way by which marketers would want to position their
product in the consciousness of its prospective customers. Its goal is to identify the product's unique
characteristics in a way that will differentiate it in the marketplace. Theses three positioning concepts will
help reinforce the idea of market position: (1) unique selling proposition, (2) competitive
advantage, and (3) top of mind.

Unique selling proposition (USP) is a term used to identify what makes the product or service different
from others. This USP may occur due to the product's physical attributes, added services, personnel,
location, or image (Kotler et al. 2010).
Competitive advantage is the product's advantage over competitorss, which is gained by offering grater
value by offering lower prices or providing more benefits to justify higher prices (Kotler et al. 2010).
Top of mind is the highest level of recall that a brand receives. It means that the brand occupies the top
spot in a consumer's mind. The ultimate top of mind level a brand can reach is when it becomes a
synonymous to the generic. Market positioning is a deliberate way of making sure that the product has a
high recall in the consumer's minds relative to its competitors.

Some positioning strategies include the following:

1. Specific product attributes such as price and special features can be used to position a product.
2. The product can also be positioned based on its benefits and the needs the product fills.
3. Positioning the product based on certain classes or segments of users can also be done.
4. A company can decide to position itself against an existing competitor and present its edge over said
competitor.

Lesson 3 - TOURISM AND CONSUMER BEHAVIOR

Consumer behavior is the process and activities people engage in when searching for, selecting,
purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and
desires. Tourism marketing scholars identify key factors that have an influence over consumer behavior:
motivations, culture, age and gender, social class, lifestyle, life cycle, reference groups, and personality
and self-concept. High quality service results in tourist satisfaction, creating positive word of mouth
leading to repeat visits. 
The organizational buying process is more complex and has the following stages: problem recognition,
general need specification, product specification, supplier search, proposal solicitation, supplier selection,
order routine specification, and performance review.
1. Factors That Influence Consumer Behavior
Consumer behavior is the process and activities people  engage in when searching for, selecting,
purchasing, using, evaluating, and disposing products and services to satisfy their needs and desires.
Factors That Influence Consumer Behavior
1. Motivation
2. Culture
3. Age and Gender
4. Social Class
5. Lifestyle
6. Life Cycle
7. Reference Groups
8. Personality and Self-concept

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.
Maslow Hierarchy of Needs
Push & Pull Factors
The push factors are those that make you want to travel  while the pull factors are those that affect where
you would want to go.
Crompton (1979) identifies nine motives which are divided into push and pull  factors. The push factors
are the socio-psychological  factors while the pull factors are classified  as cultural motives.
Culture - Defines culture as the collective mental programming of the human mind which distinguishes
one group of people from another.
Dimensions of Culture
Power Distance
Individualism/  collectivism
Masculinity and Femininity
Uncertainty avoidance
Long-term and short-term orientation
Indulgence  and restraint

Age and Gender - Likes and preferences of consumers are normally dependent on their ages. Travel
packages are normally tailor-fit depending on the generation of the target market.
Gender also influences consumer behavior.

Social Class - Social class is one’s position within society and is determined by factors such as income,
wealth, education, occupation, family  prestige and value of home/ neighborhood.
Social class has commonly  been referred to into the Philippines through letters – A, B, C, D, E market.
Lifestyle - A lifestyle is a person’s pattern of living as expressed in one’s activities, interests and
opinions.
Lifestyles are by no means universal since it also interacts  with culture, economic situation and
personality.
Life Cycle - The family  life cycle model (Pearce, 1993) suggests that the travel patterns and destinations
differ as people move on through the life cycle.
Life cycle refers to the stages an individual goes through in their  lifetime.

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, 
word of mouth plays an  important trigger for purchase decision.

Personality and Self Concept - Personality refers to distinguishing psychological characteristics that 
lead to relatively consistent and enduring responses to the environment. This has great influence over
one’s buying behavior.
A consumer’s self-concept refers to their personal mental picture.
2. The Buyer Decision-Making Process
Stages of Buyer Decision-Making Process
Need/Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Post-Purchase Evaluation
3. Customer Satisfaction Through Service Quality
Benefits of Service Quality
Customer Retention
Avoidance of Price Competition
Retention of Good Employees
Reduction of Costs

Service Quality
Relationship of Service Quality, Customer Satisfaction and Word of Mouth
SERVICE – SATISFACTION – REPEAT PURCHASE – REFERRALS TO FRIENDS
4. Organizational Buyer Behavior
The purchase decision process in organizations is more complex than that of individual purchases.
Problem recognition
General need specification
Product specification
Supplier Search
Proposal Solicitation
Supplier Selection
Order Routine Specification
Performance Review
5. Typology of Tourists
Plogs’s Tourist Motivation Model
Psychocentric – derived from “psyche” or self-centered” where an individual  center thoughts or
concerns on the small problems, areas of life. Travelers tend to be conservative in their travel patterns,
preferring “safe and familiar” destinations and often taking many return trips.Type of tourists as
“repeaters”. 
Allocentric – where the derivation of the root “allo” means “varied in form”. Adventurous, and motivated
to travel or discover new destinations. Rarely return to the same place. Type of tourists as “wanderers”.
Cohen’s Four Classification of Tourists
Organized Mass Tourist
Individual Mass Tourist
Explorer
Drifter
Stewart’s Model of Holidaytaking
Bubble travelers
Idealized-experience seekers
Wide-horizon travelers
Total Immersers
The Non-user
Non-users can be classified as:
Ex-users who stopped using products/ services for various reasons,
Customers who are aware of the product/ service but need to be persuaded to purchase.
Those who are not aware of the product/ service’s existence.

Lesson 4 - TOURISM AND HOSPITALITY MARKETING AND THE COMMUNICATION

PROCESS
1. Models of Communication
The marketing process seeks to inform, persuade, and bring consumers into action. Information and
persuasion are mainly achieved through communication. Communication is defined as transmitting,
giving, or exchanging information using oral or written means. Hence, marketing and communication go
hand in hand.
Communication is a basic human need. Filipinos, in particular, are very fond of communicating with
others. 
Communication theories can help us understand how to communicate better. Some communication
scholars have come up with theories that will enable marketing practitioners to understand how to
effectively communicate with their target market.
Besides the use of celebrity endorsers, there are different strategies that can be used to effectively
communicate messages to specific sets of individuals. 
MODELS OF COMMUNICATION
There are various coomunication models available and below are some of the most  relevant to our area of
study. 
1. Harold Lasswell's SMCRE Model. The communication process begins when the source selects
words, symbols, pictures and the like to represent the message that will be delivered to the receiver(s).
The message can be verbal or non-verbal, oral or written, or in symbolic form. Encoding is the process by
which thoughts are expressed in the form of words, symbols, pictures, and gestures. A good
communicator identifies who they are talking to before crafting the message and deciding on the best way
to transmit it. The type of receiver will determine the following: how and when you said it, and which
medium you used. Interpreting messages can become quite a challenge depending on who the receivers
are. Decoding is the process of transforming the sender's message into the receiver's thought. How the
message is received and understood is heavily influenced by the receiver's field of experience.  
2. Shannon and Weaver's Mathematical Model. Shannon and Weaver (1949) describe communication
as a linear process. the process begins with the information source, which produces a message or set of
messages to be transmitted. The message is formed into signals by a transmitter. The signals are the
adapted into a channel (affected by noise interference which may alter how the message is received) that
leads to the receiver, which then reconstructs the message to reach the destination. There maybe a
difference between how the sender's original message is received by the destination, mainly due to
transmission problems. This is resolved by the availability of feedback wherein the receiver sends back a
message to the original sender. 
3. Berlo's SMCR Communication Model. David Berlo (1960) introduces factors that may affect the
process of communication from the source, message, channel, and receiver (SMCR). The source and the
receiver of the message have different levels of communication skills, attitudes, knowledge of the topic
being discussed, and social system, which covers various aspects of society and culture. The message is
affected by certain factorsthat may help get the message more easily understood. Different chammels can
be used to get the message across. It could be through any of the five senses or a combination of two or
three senses. The source and the receiver should be on the same level for effective comminication to take
place. 
4. Osgood and Schramm's Model of Communication. This model is dynamic in nature. It looks into
communication as circular in nature. The encoder is able to send a message to a decoder who interprets
the message and sends feedback to the original message sender. A central feature of this model is that
both sender and receiver can send feedback . Also, the sender and the receiver can easily switch roles.
Interpretation of the message is also an important element of the model as the receiver tries to understand,
analyze, and perceived the meanings attached to the message. 
2. Marketing Communication
Communication is Influence
Communication has a lot to do with shaping influence. The way we communicate with people determines
the level of influence we have on others. Understanding the different communication models and theories
gives us an appreciation of the practical ways we can market products and services.  Marketing is all
about communicating the best our products, services, and ideas have to offer. A lot of marketing
situations neccessitate a cohesive and effective communication plan.
Word of mouth is communication at its finest level. Its value is verbally passing on of information from
one person to another. Positive word of mouth still is the most effective means to sell products and
services. The higher the influence a person has, the more effective word of mouth is; thus, the value of
celebrity endorsers, opinion formers, opinion leaders, influencers, and early adopters.
Communication Problems
Most of the comunication models show how information can flow effecively from sender/source to
receiver/destination through various channels. However, communication fails when a message is received
differently from how thhe sender intends it to be. In other words, the sent message is different from the
received message. Misunderstanding happens when communicators fail to realize that how they send the
message may be different from how the receiver interprets the message. This failure in communication
may be due to several factors such as:
1. Language barriers.
2. Varied connotations of words, signs, and symbols.
3. Cultural differences..
4. Faulty word choices.
5. Mistranslations.
Goal of Marketing Communication
The goal of marketing communication is to achieve common ground between the sender and the
receiver. The bigger the union of the two circles, the easier it is to encourage and influence the other
person. Wilbur Schramm's model of communication (1954) encapsulates the goal of marketing
- achieving understanding and common ground.

Lesson 5 - THE TOURISM AND HOSPITALITY PRODUCTS

The tourism product is a conglomeration of different products and services both from the publi and
private sectors. It also covers products and services in the transport, accomodation, food and beveerage,
MICE and attraction sectors.  The tourism product is not just a single product, it is an overall experience.
The components of the tourism product include the destination attractions, destination facilities,
accessibility, image and price. Product types include core, facilitating, supporting, and augmented
products. Factors to consider in purchasing tourism products include accessibility, atmosphere, customer
interaction with the service system and with other customers, and the involvement of customers in co-
producing the product.
The product life cycle and the destination life cycle can help marketer understand how the product can
remain competitive in the market and apply interventions depending on what stage the product is
currently on. The stages of the product life cycle include product development, introduction, growth,
maturity, decline, and phase out. Butler's destination life cycle has six discrete stages: exploration,
involvement, development, consolidation, stagnation, and decline. Product development planning
invloves idea generation, idea screening, concept development and testing, marketing strategy, business
analysis, prototype creation, test marketing, commercialization, and evaluation. 

1. Key Players in the Tourism Industry

The tourism industry is a conglomeration of various products and services, individuals and organizations,
each with specific economic and/or political interests. Hudson (2008) enumerated these players:
1. Private and non-profit sectors - include industry associations which have been estavlished to proctect
special interest groups, such as travel agency associations, financial services, academe, media, and
insurance companies. 

2. Public sector services - cover either national regional, or provincial tourism organizations. They come
up with marketing programs to promote their destinations to both intermediaries and individual tourists.
The Department of Tourism and provincial tourism offices fall under this category.

3. Suppliers
          
a. Transportation industry - crucial to the success of tourism. Without an effiecient transport system and
road networks, tourists would not be encouraged to come to destinations that have lengthy, tiresome, and
costly travel. This industy includes airlines, cruises, buses, and railways.
b. Accommodation sector - covers a huge part of tourists expenditure during travel. There are a variety of
accomodation facilities to meet the customer's needs, preferences, and budget. Types of accommodation
facilities range from five-star to economy hotels, apartelles, inns, lodges, motels, bed and breakfasts,
timeshare apartments, and campsites.
c. Food and beverage sector - another important supplier of the tourism industry. Restaurants, bars, food
stalls and coffee shops help shape the total travel experience of tourists. These can range from
establishments serving local food to multinational franchise restaurants such as McDonalds and
Starbucks.

d. Attractions - basic requirements in having a successful tourist destination. These can be classified as
natural or man-made. Tourists are drawn to attractions for various reasons such as entertainment, leisure
and recreation, education, adventure, etc. A variety of attractions should be made availabe in destinations
for tourists to keep coming back to your destination.

e. Events and conferences - play a key role in attracting both leisure and business travelers to a
destination. Huge sporting events such as the Olympics and the World Cup attract tourists from all over
the world either as participants or spectators in the event. Festivals such as Sinulog Festival in Cebu and
Panagbenga Festival in Baguio are able to attract thousands of tourists, both local and foreign. 

4. Travel intermediaries - help bring the tourism product to the customer. These are also known as
channels of distribution. Travel intermediaries include travel agents, tour operators, web-based
distributors, etc. They normally offer travel packages that make the experience less complicated to the
tourists. These packages include transportation, accommodation, food, city tours, etc.

5. Tourists - the center of the tourism industry. Being the main consumers of tourism products, they
choose where they want to go, what they want to eat, and what they want to do. The tourist's satisfaction
is the utmost goal of all other key players in this industry. For the tourism industry to grow, more people
need to be attracted to travel.
2. The Tourism Product Defined
In consumer marketing, a product is anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need. It may include physical objects, services, places,
organizations, and ideas. In tourism marketing, products have different components that make up the
over-all tourism product but there are many products and services that form the entire tourism experience.

Product components

1. Destination Attractions. A destination is a collection of attractions which is the element of the tourism
product that pulls people to a destination. Philippine attractions mainly fall under the sun, sand and sea
category but should also include our old churches, historical and cultural artifacts, festivals and many
others. The Filipinos, known to be the friendliest people in the world, are also a major tourist attraction.

2. Destination Facilities. A wide range of tourist facilities within the destination are those products and
services that will help the tourist enjoy the destination attractions. These include accommodation facilities
(hotels, inns and apartelles), transportation (taxi, rent a car), food and beverage (restaurants and bars),
shopping centers and many other support facilities.

3. Accessibility. For a tourism product to be highly successful, infrastructure services ( airports, roads,

bridges) and transportations systems (direct flights of airplanes, trains, buses etc) should be put in place.
4. Image. Destination image helps the visitor form expectations of what they will experience when are in
the destination. It also motivates them to make a decision to visit said destination.

5. Price. Pricing allows consumers to determine the level of services they may receive in the
destination. Pricing products highly will create an expectation of excellence and high standards while
pricing it too low might give consumers doubts on the product’s quality. Factors such as seasonality,
distance, product classification and length of time may affect pricing.

Product Types
In most destination facilities, products and services have different types. These include (1) core, (2)
facilitating, (3) supporting, and (4) augmented products. 
1. Core products are products that the consumer is really buying.
2. Facilitating products are goods and services that must be present for the guest to enjoy and use the core
product.
3. Supporting products on the other hand, add value to the core product and  help differentiate it from its
competitors. If properly planned, they offer the product’s competitive advantage.
4. Augmented products are factors that help the consumer consider the product over other products
because these include product accessibility, geographical location, hours of operations, atmosphere,
customer satisfaction and customer interactions with each other.

Product Considerations

1. Accessibility refers to how available the product is to the consumer, in terms of location, hours of
operation, and ease of availing the products and services.

2. Atmosphere is the over-all feel of the place. This is much appreciated through the five senses. The
product or service should be appealing to the eye, soft to the ears, gentle to the touch, and smelling
sweetly. Another term for this is the ambiance of the place. 

3. Customer interactions with the service system is inevitable for the tourism product. Consumption
happens within the destination. Hence, customer interaction with service staff should be pleasant and
memorable. 

4. Customers interact with other customers consuming the product or service along with them. The
experience becomes highly variable depending on how customers behave and interact with each other. 
5. Customers also do co-production of the product or service. As such, involving the guest in the delivery
of the service can actually improve customer satisfaction, reduce expenses, and increase capacity. The
presence of self-service counters, for instance, is aimed at making customers become co-producers of
value. 
3. Product Life Cycle
In tourim and hospitality, product life cycle can be referred to in two levels. First is specific product and
service on a business or corporate level such as hotels, restaurants, resort property, etc. Second is an an
aggregate of offerings within a whole destination. Understanding the concept of the product life cycle will
help a marketer analyze the kind of promotional tools and activities that will be most effective.
Introducing a new product entails a more aggresive information drive than a product that is at its maturity
stage. The following are the stages of the product life cycle.
Product Development. The product development stage begins with an idea of a new product that could
possibly satisfy an existing need or want in a specific market. The product idea is further developed
through market research and product testing  to determine the feasibility of the product. A business plan
with a sound financial and marketing strategy is also prepared during this stage. 

Introduction. The introduction phase is the period wherein the product is introduced to the market. It may
be a period of rapid or slow sales growth depending on market acceptability of the new product. As the
product is being introduced into the market, profits may be non-existent on this stage since investments
have been made during the product developement stage. An aggresive marketing strategy should be
implemented to ensure market awareness and penetration. Since the product is new, the features of the
ptoduct should be introduced extensively to its target market.

Growth Stage. The growth stage is a period of rapid market acceptance and increasing profits. As the
product becomes popular with its target market, an increase sales is projected at this stage. Return on
investments will materialize at this stage of the product life cycle. 

Maturity Stage. The maturity stage is a period where sales plateau because the product has achieved
acceptance by most of its potential buyers. It is also likely that competition has come in and attempts to
grab the product's market share. At this stage, to prevent decline, the company can introduce some
innovations, as follows:

1. Market Modification. The company may introduce innovations to the product in order to attract a
related segment of the market and increase consumption further. 

2. Product Modification. The company can opt to change product characteristics such as product quality,
features, and style to attract new users and stimulate more usage. 

3. Marketing Mix Modification. This is when the company attempts to improve sales by changing one or
more of the marketing mix elements to attract new customers and prevent consumers from switching
brands. 

Decline Stage. Some successful products stay in the business for along period of time. By employing
product modification, market modification, and marketing mix modification, some products stay in the
market and avoid decline. The decline stage is the period when sales fall off quickly and profits drop. 
Phase-out. Without a shift in strategy to adapt to the prevailing business environment, phase-out may be
inevitable. This is the stage when the production of the product or availability of the service will be shut
down or deleted from the company's product line. 
4. Destination Life Cycle
Butler (1980) developed a concept popularly known as the Destination Life Cycle (DLC) which uses the
product life cycle as its foundation. The DLC provides a framework for the marketing and management of
destinations as it develops over time. The six discrete stages of the DLC, as follows:
1. Exploration - characterized by a few adventurous tourists, close interaction with locals, minimal effect
on social, cultural, and physical environments, and local facilities are used.

2. Involvement - characterized by  an increase in tourist arrivals, interaction with locals still high, some
changes in social, cultural, and physical environment. Infrastructure development begins.

3. Development - tourist arrivals are fast increasing, loss of local control, rise of foreign owned facilities,
migrant laborers, and promotion of artificial attractions.

4. Consolidation - tourism has become a major economic factor. There is heavy advertising and
promotions. Facilities begin to deteriorate and growth rates decline.

5. Stagnation - when the carrying capacity of the destination has been reached or exceeded. It is also
characterized by social, environmental, and economic problems. Inflow of tourists comes from repaet
visits and conventions. 

6. Decline - characterized by a downward rate of tourist arrivals. The decline stage, can be mitigated
depemding on management and marketing efforts to uplift the destination. Improvements in the
destination such as changes in attractions, development of more exciting products, and market
modification strategies may be applied to rejuvenate the decline of a destination.

When modifications and innovations are introduced to the destination, rejuvenation takes place. With
rejuvenation, a destination may experience continued growth, stablility, or slower decline rate. 
5. Product Development
Product development is an integral part of the success of any business. Competition can come up with a
new and innovative product that may affect the sales of your existing product. The market always tries to
find exciting new products for their changing lifesyles and trends. Customers have become more
discriminating and quality conscious as they use products and services. They can get tired of using same
thing over and over again. As the products go through the product life cycle and maturity point, it is best
that product development becomes an ongoing process to ensure profitability and sustain interest on the
product line. Coming up with a new product is risky; hence, companies need to ensure that they practice
strong product planning and have a systematic approach to product development. The stages in product
development, are as follows: 
1. Idea Generation. Is a systematic way of coming up with new ideas. Sources of new ideas include the
external environment, internal sources, customers, competitors, distributors and suppliers, and other
sources.
2. Idea Screening. Idea generation leaves you with so many new ideas that need to be screened to see
which ones match the company’s objectives and can be developed further. A new product committee can
screen the ideas generated in a logical  and objective manner.

3. Concept Development and Testing. The products that pass through the screening can now be developed
further. A product concept is developed and tested. The customers should be consulted on which product
concepts are actually helpful to them because they are the primary users of the product.
4. Marketing Strategy.  A new product or service is developed to try to gain a marketing edge and to
differentiate itself from its competitors. A marketing strategy should be kept in mind as the new product 
is introduced to the market. 

5. Business Analysis. The business analysis stage looks more deeply into how much revenue the product
could generate, what the cost will be, how much  market share the product may achieve and the expected
life of the product.
6. Prototype Creation. A prototype of the product is created. Presented to its target market for comments
on which adjustments and enhancements should be done.
7. Test Marketing. The product is then launched in a small geographical area to test the components of the
marketing mix. There may be a need to adjust any of the maketing mix components before it is launched
in a larger scope.

8. Commercialization. This is when the product is fully launched to the entire target market either
nationally or internationally. It is expected that the stages of the new product development, if fully
observed, can merit market acceptance of the product.

9. Evaluation. This is the stage wherein the company will know whether the product has gained market
acceptance; hence, if production will be continued or be stopped.