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 is a high involvement product because it is * expensive * complex * unrepeatable nature Seven Core Marketing Functions Marketing information management Financing Pricing Promotion Product/service management Distribution Selling Marketing Management Process involves: Information systems Planning tactical campaigns Operations Monitoring and Control Integrated marketing communications approach – is the process of using all forms of promotions (not just advertising) to achieve maximum impact while maintaining a consistent image for the product or service. Tourism Market and Segmentation 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. Needs should be met and such standard in communicating them benefits the market. 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) To marketing professionals, a market is all actual and potential buyers of a product or service (Kotler et al. 2010) The tourism industry aims to target a specific set of individuals. It is for a particular set of buyers, a niche market. Three steps to target marketing: Market segmentation; Market targeting; and Market positioning. Market segmentation is dividing the market into distinct groups who might require separate products and/or marketing mixes. (Kotler et al. 2010) A market segment is a sub-group of the total consumer market who share similar characteristics and needs relevant to the purchase of a product, service, or experience (Hsu 2008) Characteristics: • Identifiable • Cohesive • Measurable • Accessible • Substantial • Actionable Variables to Segment Consumer Markets Geographic Nations States neighborhoods Regions Countries cities barangays towns Psychographic Social class Lifestyle Personality Demographic Age Life cycle Gender Income occupation education religion race Behavioral Special occasions Benefits sought Usage rate User status Loyalty status buyer readiness 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 et al. 2010) Kotler suggests three factors to consider in evaluating which segments should be targeted. These factors are: Segment size – refers to the current sales volume, growth rate, and high profit margin. Attractiveness – refers to the potential impact of the segment to the company. Company objectives and availability of resources – refer to the main reasons for its decision making and the available resources the company will use to make its objectives a reality. Kotler et al. suggest that it can adopt any of three market coverage strategies: Undifferentiated marketing – a company ignores market segmentation and goes after the entire market with only one market offer (Kotler et al. 2010). This looks into what the market has in common and is designed to reach a huge number of buyers. Product Market • • • • Differentiated marketing – approaches 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. Example: Holiday Inn Galleria Suites and Crowne Plaza share a common management group but Crowne Plaza is more upscale than Holiday Inn Galleria Suites; thus, giving clients an option of where to stay depending on what their budget could afford. Product Market Concentrated marketing is practiced by companies with limited resources. It pursues getting a big share of a small market rather than 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. Product Market Kotler et al. (2010) suggest that the following factors be considered when choosing a market coverage strategy as follows: o Company’s Resources – 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. o Degree of Product Homogeneity – if products are standardized and identical, it is more advisable to go for undifferentiated or concentrated marketing. o Market Homogeneity – if there is a diverse market, differentiate marketing is advisable. If the market has a lot of similarities, undifferentiated marketing may be used. o Competitor’s Strategy – it is important to assess the strategy competitors are using so that 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. Market Positioning is developing competitive positioning for the product and an appropriate marketing mix (Kotler et al. 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. 3 positioning concepts: Unique selling proposition – It 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 competitors, which is gained by offering greater value either by offering lower prices or providing more benefits to justify higher prices (Kotler 2010) Top of mind – is the higher level of recall that a brand receives. It means that the brand occupies the top spot in a consumer’s mind.
