8. Marketing Mix
World Tourism Organization
Manila, 20 – 22 March 2006
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
SESSION COVERAGE
•Marketing mix – implementing the marketing strategy
•Market vs. destination approach
•PRODUCT:
•Cluster development
•Public:private partnerships in product development
•PROMOTION
•Promotional basket
•AIDA - awareness, interest, demand, action
•Personal & Non-personal communications
•Marketing’s role in responsible tourism
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
SESSION COVERAGE
•PRICING
•Perception & reality in value-for-money Market vs. destination
approach
•PLACE
•Role of intermediaries
•Role of destination marketing organisations (DMOs)
•Role & impact of electronic technology
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
MARKETING MIX
Marketing mix – four Ps - product, promotion, price, place
Analogy – driving a car – all components used in unison to be
effective
Production > Consumer orientation – four Ps to four Cs:
Product > customer value
Promotion > communications
Price > cost
Place > convenience
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PRODUCT
Two approaches to strategic product planning:
Market approach
“What do we have that can be developed to appeal to
tourists?”
Destination approach
“What are we prepared to develop that tourists might be
interested in?”
Normal approach something between these extremes
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PRODUCT
Tourism is developed for the benefit of the people of the destination
The goal is to develop the right package of product offerings for the
most attractive market segments – in terms of rewards for the
destination.
Once the product mix & target markets/segments have been
determined, then follow the destination positioning & branding,
promotion, pricing and distribution to achieve the maximum benefits
from the selected product:market mix
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
TOURIST AREA LIFE CYCLE
Destinations have tourist area life cycles – TALC – similar to product
life cycles
Emergent>Growth>Stagnation>Decline
Time period of TALC depends on the product and marketing
initiatives of the destination. Appropriate action when the TALC
approaches the stagnation period can extend the growth phase.
Such actions can be product-based, market/segment-related,
promotional or changed methods of distribution i.e. the marketing
mix
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
CLUSTER DEVELOPMENT
Key approach to product development – clusters
Grouping of attractions & facilities in a location, or
Grouping of like attractions in a broader destination eg golf courses
Clusters:
1. Provide economies of scale & scope to justify promoting
the destination, and
2. Serve as the magnet to “draw” visitors to the area.
Critical advantage: allow members to cooperate & compete
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PUBLIC:PRIVATE PARTNERSHIP (PPP)
Tourism is a private sector activity
BUT
Requires public sector guidance & direction
WHY?
1. Tourism takes place where other people live so impacts their
living environment
2. Tourism has major infrastructure, education & training, regulatory
& organisational needs
3. A destination identity has to be developed & communicated to the
market
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PUBLIC-PRIVATE PARTNERSHIP (PPP)
PPP most suitable for:
* improving a destination’s attractiveness (A)
* marketing (M)
* productivity (P)
* management of its tourism system (M)
PPP recognises:
* increasing difficulty of differentiating destinations
* high cost of “reaching” the marketplace
Pooling resources gives good value-for-money and consistency of
message
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PUBLIC-PRIVATE PARTNERSHIP (PPP)
Critical success factors (WTO 2000):
* balanced structure with clear roles
* shared leadership between public & private sectors with
common goals, realistic expectations & benefits for all
parties
* flexible approach and genuine spirit of partnership
* understanding that tourism must be sustainable
* commitment to combination of long term strategic vision &
shorter term goals and measurable initiatives
* periodic evaluation of each partner’s inputs
* good communication: partners & stakeholders
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PUBLIC-PRIVATE PARTNERSHIP (PPP)
Key to successful PPP is to understand the motives & methods of
the private sector – particularly of the foreign operators with which
the destination does business – and to enlist the cooperation and
commitment of the private sector:
- in pursuing practices that are mutually beneficial to both
operator & destination – short term priorities – and
- in the realisation of strategies determined by the
destination – a longer term goal
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PROMOTION
Purchase cycle:
Pre-transactional>transactional>post-transactional
Expectations>experiences>memories
Communications campaign planning built around the AIDA model
Awareness
Interest
Demand
Action
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
COMMUNICATIONS OBJECTIVES
Three categories:
Informing – creating awareness
Persuading – generating interest>desire and on to purchase
Re-inforcing – building support/loyalty
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
COMMUNICATIONS OBJECTIVES
Which are these?
DISCOVER EAST TIMOR
ERITREA: THREE SEASONS IN TWO HOURS
INCREDIBLE INDIA
SMILE – YOU’RE IN THE CANARIES
VISIT BRITAIN
SO WHERE THE BLOODY HELL ARE YOU?
WOW! PHILIPPINES
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
STIMULUS-RESPONSE MODEL
Five stages:
Stimulus input – product offering
Communications channels – paid & non-paid
Buyer characteristics & decision process – filter all
communications & other influences to determine
needs/wants/goals
Motivation
Response – purchase choice
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
MARKETING COMMUNICATIONS
Personal:
- telephone/email
- website
- trade fairs & exhibitions
- familiarisation visit
Non-personal
- advertising
- public relations/publicity
- brochures & other printed material
- sponsorship
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
TOURIST OFFICES’ FACILITATION ROLE
- research data for the private sector
- representative offices in marketplace
- facilitating participation at overseas trade shows
- organising fam trips
- preparing & distributing travel trade manuals
- joint marketing & promotional schemes with private sector
- support for new tourism products
- information (& reservations) system
- consumer assistance & protection
- intermediary between private sector & government
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
THE CASE OF NORTHERN TERRITORIES
- FLOW OF RESEARCH INFORMATION & CLEAR
STRATEGY – AVAILABLE TO ALL
- ‘SHARE OUR STORY’ STRAP LINE AND SUITE OF
MARKETING TOOLS FOR IDENTITY CREATION
- COOPERATIVE ADVERTISING: WITH OPERATORS IN
NT, NATIONAL PARTNERS & FOR INTERNATIONAL
MARKETS
- FULL WEBSITE www.nttc.com.au
- CLOSE COLLABORATION WITH TOURISM AUSTRALIA
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
MARKETING PARTNERSHIPS
Not easy because of differing objectives & levels of commitment of
relevant stakeholders
Difficulty of persuading:
- public sector to give up some of its control, and
- private sector to contribute more resources
Most successful example: Maison de la France
From start in 1987 now has 1,200 members with an annual budget
of over Euros60mn, over half from the private sector
Growing role of consumer in forcing public:private partnerships?
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
SUSTAINABLE & RESPONSIBLE MARKETING
Respond to – and encourage – consumer demand for tourism
related to natural & cultural resources of destination
Support operators who meet the development & operating criteria &
quality standards laid down
Give marketing & promotional support to developers & operators of
sustainable tourism products/services
Provide incentives for developers & operators of sustainable
products/services to enable them to sell at prices acceptable to the
market – consider the soft core/hard core model of ecotourism
Implement a code of ethics to make ir-responsible marketing
unacceptable in the marketplace and among stakeholders
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
SUSTAINABLE MOTIVATION
Tourism at the forefront in that emotional factors (including
perceived value-for-money) play a central role in decision-making
Psychographic research identifying consumers most likely to be
sensitive to the sustainable or responsible tourism message so they
can be “ring-fenced” for product offerings & marketing
communications eg TIA/National Geographic Geotourism survey
Conversion achieved through persuasion & stimulation rather than
hectoring or haranguing
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PROMOTING TOURISM INVESTMENT
Tourism development characterised by high capital costs with only a
gradual build up of income so profitability only achieved in 3 – 5
years
Role on incentives to encourage appropriate developments
Incentives: specific & regularly reviewed
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PRICING
Accelerator or brake
Targets: those who could otherwise not afford to travel to the
destination, or who consider standard prices too high
Tactical pricing in tourism:
- seasonality
- inflexibility/rigidity of supply
Need to attract only those who would otherwise not visit and
segments that are compatible with existing ones – “other tourists
part of destination experience”
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PLACE - DISTRIBUTION
Especially vital in travel & tourism:
- growing size of businesses
- several units within a group – owned or strategic alliances
- growth of long haul travel – weak consumer knowledge
- reaching & attracting first time customers
- providing convenience for repeat customers
- growing competition where excess destination capacity
- need to sell capacity ahead of production for cash flow
- need to maximise promotion & tactical pricing through
modern distribution channels – yield management
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PLACE - DISTRIBUTION
Five main choices:
1. Principal>Customer (on producer’s premises)
Producer=Retailer
2. Principal>Customer (in customer’s home) - reservation system
3. Principal>Owned retail outlet>Customer (on retailer’s premises)
– vertically integrated
4. Principal>Independent retail outlet>Customer (on retailer’s
premises) – agent commission system
5. Principal>Tour operator>Independent retail outlet>Customer (on
retailer’s premises) – bulk sale to tour operator
TOUR OPERATOR HYBRID – WHOLESALER/PRINCIPAL
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
PLACE - DISTRIBUTION
Reservations systems accessed through electronic technology
can be developed by principals, tour operators or travel agents
so these five systems can still apply
BUT
the balance of power can be manipulated in favour of the
destination principal through easier direct communication with
prospective customers
Need for high quality & well-connected destination websites that
enable searches from initial enquiry through to direct booking to
be done through a single web hit with appropriate links
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
DESTINATION PLAYERS IN DISTRIBUTION
1. Tourist office – nothing to sell!
2. Facilities/attractions – remote from main marketplace
3. National airline but half traffic comes on foreign carriers
4. Source market tour operators – key providers bur foreign-owned
with little commitment to specific destinations
5. Source market travel agents – major influence but all owned in
source countries – little concern which destination chosen
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
DESTINATION MARKET REPRESENTATION
1. No representation
2. Individual public relations(PR)/information officer
3. PR company appointed
4. Marketing representation company (MRC) appointed
5. Both PR & Marketing Representation companies appointed
6. Destination marketing organisation (DMO) appointed combining
PR & MR functions
7. Own office established
ISSUES: communications with prospective travellers; ensuring
no conflict of interest; national vs provincial; budgets
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
ELECTRONIC TECHNOLOGY
Electronic reservations systems now dominant
One-in-five Britons buy their holidays on-line –and a far higher
proportion carry out web research
Advantages - destination “parent” website a vital entry point for
interested tourists to research attractions and what’s on offer
through themed linked pages to “activities”, “places within the
destination”, “accommodation” etc
Linked access to individual suppliers’ websites enable tourist to
make bookings
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
ELECTRONIC TECHNOLOGY
Problem still exists for small destination supplier
How do I identify my prospective customer? Or, rather, how
does my prospective customer identify my operation?
Needle in a haystack - luck if he/she continues the web search
down through the pages as small producers not on initial pages
.travel domain now established www.tralliance.info
Enable a better match between buyers & sellers through more
precise results to would-be traveller’s on-line enquiry
Role in relationship/ one-to-one marketing
R. Cleverdon
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
TRAVEL DIRECTORY
Information retrieval from an integrated, classified data set
Directory controlled vocabulary of 1,800 travel/tourism terms
.travel Directory process
Where do you want to go? DESTINATION
What do you want to do?
ACTIVITIES
What is your lifestyle?
LIFESTYLE
How do you want to get there? TRANSPORTATION
How would you like to stay? ACCOMMODATION
What services do you need?
R. Cleverdon
TRAVEL SERVICES
THE MARKETING MIX: PRODUCT,
PROMOTION, PRICE, PLACE
LOCAL LEVEL ACTION
1. Money from the centre is tight
2. Need for tightly focussed niche marketing on a highly
targeted basis
3. Counterbalance to the international tourism distribution
system’s push for standardisation in destination tourism
products
4. Exploiting growing consumer trends
Local level action: only way the differentiation vital for long term
survival as distinct & distinctive destinations can be achieved
R. Cleverdon
Time out !!
R. Cleverdon