SUSTAINABLE TOURISM DESTINATION MARKETING

Module Name: PRODUCT DEVELOPMENT STRATEGIES

Introduction
Like in any organisation, objectives and strategies need to be identified before any activities can
be implemented.
Now that research has taken place in relation to the general business environment and impacts
by the external and internal environments, most organisations will now be able to see where
there future efforts should be aimed.
By conducting a SWOT Analysis and preparing a Marketing Report, as identified in the previous
section, a clear understanding of what needs to take place in the future.

Marketing planning and management

Marketing management is the analysis, planning, implementation and control of programs
designed to create, build and maintain beneficial exchanges with the target buyers for the
purpose of achieving organisational objectives.
It is about managing and responding to variances in demand for the product, or demand
management. The reality is that over the product’s life, demand will vary. Marketers must be
constantly aware of these changes in demand and should devise strategies to deal with them.
It is important to note that the idea of marketing planning must start before any market analysis
has begun. That is, the organisation needs to plan its marketing activities on two levels:
 The strategic marketing plan
 The tactical marketing plan.

The strategic marketing plan develops the broad marketing

objectives based on a current situation analysis and identification of
current opportunities.
The tactical marketing plan outlines specific marketing tactics or
operations. The marketing plan is the central document for directing
and coordinating the marketing effort.

Purpose of marketing strategies

Marketing strategies are designed to:
 Provide a description of how the objectives of the marketing plan will be achieved
 Identify the market segments to be targeted for:
 A specific product or service, new or existing
 A destination
 A single event
 Community products and events
 Explain how the products and services offered to them will be positioned in the market
place.
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Marketing strategies must be consistent with the direction, values and business plans of the
organisations.
Examples of marketing strategies may be:
 To target the corporate travel sector
 To increase supplementary sales to ticket purchasers.

Consider strategic questions

A marketing plan requires answers to many questions. Many of these answers will come from
your SWOT analysis. Consider the following questions:
 Who will buy your products or services?
 Why will they buy your products or services?
 How can you attract potential customers?
 How is your product or service different from or superior to
your competitors?
 Are there seasonal trends?
 Are your products or services price sensitive?
 What price will you sell your products or services for?

From the SWOT analysis of your customer base, you should now be able to identify the key
issues for your business’ marketing plan resulting from your in-depth understanding of your
current and potential customers.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: PRODUCT DEVELOPMENT STRATEGIES

SMART objectives
An objective is a goal, something that is deemed worthwhile achieving for the future of your
business. A marketing objective is the stated goal to be achieved via performance of marketing
strategies and tactics.
A strategy is a method or plan chosen to bring about a desired future, such as achievement of a
goal or solution to a problem. Objectives are the 'what is to be achieved' whilst strategies are
the 'how something is to be achieved'.
It is important to do this accurately. If we do not know what it is that we want to achieve or
where we are going, how will we know how to get there? And how do we measure whether or
not we have been successful?
The answer is, objectives need to be:
 Specific
 Measurable
 Achievable
 Realistic
 Time-actioned and trackable.
Specific
Marketing objectives should be specifically about products, services and markets. Vague
objectives, however emotionally appealing, are counterproductive. They should be specifically
about where we are now and where we want to be. This is referred to as gap analysis.
Measurable
Objectives need to be quantifiable and measurable. That is, they should have some specific
value or percentage attached to them. This can be in the form of a decrease, increase or
maintain (i.e. sales or market share) by a decided amount or percentage value.
Achievable
Objectives need to be realistic and achievable, not a ‘pie in the sky’
optimism.
Time-actioned and trackable
A specific time frame should be attached to each objective. This is
usually within a year, but can be as broad ranging as five years.
Trackability refers to the accountability that is involved when attaching
a time frame.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

Marketing objectives
Marketing objectives form part of the underlying basis for the overall business objectives.
These may be based on:
 Client development
 Geographic expansion
 Organisational growth
 Service growth
 Debt reduction
 Income development.

Examples of objectives could be:

 To increase market share by 2% in a certain market within 2 years
 To increase overall customers by 20% within 1 year
 To maintain profit margin of 10% on special discount packages in the current financial year
 To expand local area awareness of our organisation to 90% within 1 year.

Marketing objectives should be expressed in measurable terms (sales units, or $ values), and
have built into them an allowance for inflation. When setting objectives remember to make them
reasonable, attainable, and ensure that they will provide profitability for your business.
You need to strive for growth in the marketplace, whilst ensuring
that you are recovering your costs. It is pointless to capture the
majority of sales in your area by selling your product and services
below cost price. Some businesses do this to attract customers for a
short period of time but it is not a sustainable business practice.
Also remember that you need to be mindful of the operating
capacity of your business. If you are unable to meet the demand
that you have created there will need to be an urgent increase your operating capacity.
This may require more capital and other resources than you are able to access, and you may
not be able to step up volume speedily enough. Your business does not need to have unhappy
or disappointed customers – a poor reputation is easy to earn, difficult to overcome.

Focus of marketing strategies

Before specific marketing strategies can be identified it is important to identify the focus of the
strategies. Given that tourism businesses are different in many aspects including size, maturity
of business, types of products and services provided, organisational structure and aspects of
organisational strengths and weaknesses, it is important to identify where the focus of marketing
and sales initiatives will be focused.
It may not be essential to have concentrate marketing efforts and resources on aspects of the
business that are running well (e.g. business clientele), but instead focus on areas where
improvements can be made (e.g. leisure market). Marketing strategies may be for:
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: PRODUCT DEVELOPMENT STRATEGIES

 A new or existing, specific product or service

 A small or medium sized business enterprise
 A destination
 A single event.

Types of marketing strategies

Now that the focus of strategies has been clarified, it is now time to establish strategies.
Marketing strategies state how marketing objectives will be achieved.
It is important to note that different divisions within the same
organisation may have different strategies.
Strategies may include:
 Status quo
 Intense growth
 Integrated growth
 Diversification
 Market penetration
 Product or market development and may address:
 Product
 Price
 Promotion
 Distribution
 Demand
 Target market.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: PRODUCT DEVELOPMENT STRATEGIES

MARKETING PLAN FOR DESTINATIONS

Introduction
The marketing plan of your business or organisation is a flow-on
from the strategic marketing plan or business plan.
The strategic plan is usually a longer term plan outlining the
company’s broad marketing objectives and strategy. The
operating marketing plan which is between 1-3 years, outlines
specific objectives, strategies, action and control plans that will
achieve your company’s strategic objectives.
Organisations write their plans in different ways. This makes sense considering that they have
different operating environments and are in different industries.

Summary of the Marketing Plan

Below is an outline of what a marketing plan for the hospitality industry should include.
Preliminaries should include:
 Title page
 Table of contents
 Executive summary
 Mission statement.
Current Situation Analysis should include:
 Background
 Current objectives
 Current target markets and segmentation.
Current strategies
 External environmental analysis
 Internal environmental analysis
 SWOT including opportunity and issue analysis
 Customer analysis
 Marketing information requirements
 Forecasting profit and loss statement
 Controls – indicate how the plan will be monitored.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

Objectives, Strategies and Tactics should include:

 Product, service and brand strategies
 New products and services strategy
 Pricing strategies
 Placement, logistics and distribution of services strategies
 Promotional strategies – marketing communications strategy
 Media advertising and public relations strategy
 Sales promotions strategy
 Direct marketing tools and technology
 Personal selling and sales management strategy
 Positioning strategies
 People and processes – customer relationships and service delivery.
Action and control plans including:
 Action plan
 Budgeting
 Control and evaluation.
Attachments including:
 Bibliography
 Reference lists
 Appendices
 Tables, Graphs and Figures.

Sections of the marketing plan

In the following sections, detailed descriptions of each section of the marketing plan will
be discussed.

Preliminaries
An executive summary is a brief overview of the contents of your plan. It should include the aim
and purpose of the plan as well as outlining major findings and
recommendations. No detail and no new material should be included.
A table of contents such as the one in this resource is placed after the
executive summary and includes a detailed guide of the contents of
your plan.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

A mission statement is a statement of vision or purpose. It describes the business the company
is in and how it wishes to be perceived by its customers. This includes its position relative to
competitors.

Current Situation Analysis

Your current marketing situation contains background data on your company’s market, product,
competition, current strategies and macro-environment.
Market segmentation targeting and positioning
Markets can be segmented or broken down according to their
buyers’ similar needs, characteristics or buyer behaviour. From there
your organisation develops profiles or ways of describing market
segments. One or more of these segments can be selected as a
target market. Finally, a competitive positioning is set for the product
and an appropriate marketing mix is decided, which details strategy.
Possible segmenting dimensions
Customers can be described by many different dimensions.
Below are some examples of dimensions that are useful when segmenting consumer markets.
Psychographic dimensions can be:
 Socioeconomic
 Status – where education, income and occupation levels are combined to indicate status
 Values, attitudes – ‘visible achievement’, ‘something better’, ‘young optimists’, ‘socially
aware’, ‘look at me’
 Lifestyle groupings – ‘a fairer deal’, ‘basic needs’, ‘real conservatism’, ‘traditional family life’
and ‘conventional family life’
 Personality – extroverted, compulsive, authoritarian, ambitious.
Behavioural dimensions can be:

 Needs – economic, functional, physiological, psychological, social

 Benefits sought – quality, service, economy
 Thoughts – favourable or unfavourable attitudes, interests, opinions, beliefs
 Occasion – regular occasion, special occasion
 Loyalty status – none, medium, strong, absolute
 Rate of use – heavy, medium, light, non-user
 Purchase frequency – never, infrequent, frequent
 Brand familiarity – insistence, preference, recognition, rejection
 Kind of shopping – convenience, comparison, specialty, none
 Type of problem solving – routine response, limited, extensive
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 Information required – low, medium, high.

Geographic dimensions can be:

 Region of world – country
 Region in country – state
 Size of city – including population.

Demographic dimensions can be:

 Income – use ranges
 Sex – male, female
 Age – ranges
 Family size – 1-10 or more
 Family lifecycle – young, single, married, no children, divorced etc.
 Occupation – professional, technical, managerial, trades etc.
 Education – high school, tertiary or university graduate
 Nationality
 Social class – upper, middle, working.

The best dimensions to segment customers on are those which describe those groups the best.
Segmenting is an aggregating process, clustering people together with similar needs into a
market segment. A market segment is a relatively homogenous group of customers who are
likely to respond to a marketing mix in a similar way.
Target market definition
Our target market definition covers four questions.
 What product or service type?
 To meet what customer need?
 For whom – which customer types?
 For where – which geographic area?

Product type
This is a description of the goods and or services the customer wants. It is important to provide
additional benefits or services as well as particular goods or services in
order to satisfy your customer better than your competitors.
Customer (user) needs
This refers to the needs the product type will satisfy for the customer.
Basic needs involve needs for warmth, food, safety etc. But it is possible
to go well beyond these to emotional needs such as fun, excitement,
pleasing physical appearance or status.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

Customer type
This refers to the final user or consumer of a product.
Geographic area
This refers to where the company competes or wishes to compete for customers.
Defining or redefining geographic boundaries is serious in that it can suggest new opportunities.
Examples of target markets
An example of two target markets for the Singapore Travel Agency could be:
Group 1 – “The corporate traveller"
 Characteristics – aged 30-60, busy lifestyle, middle income- high income, budget restrictions
 Wants and Needs – convenience, essential services such as transport and accommodation
 Frequency/loyalty – 1 to 2 times a month.
Group 2 – “The high end leisure traveller”
 Characteristics – aged 40-75, married, disposable income, well educated, limited time
restrictions middle management, well-presented
 Wants and Needs – convenience, seeking experiences
 Frequency/Loyalty – 1 to 2 times a year.

Current strategies
In section 3.2 a number of overriding marketing strategies have been discussed. Therefore
more specific strategies will be discussed in this section.
Pricing products and services strategy
Your pricing strategies will be affected by internal factors such as:
 The company’s marketing objectives
 Marketing strategy
 Costs
 Organisational considerations
 External factors affecting pricing decisions include:
 The market and demand
 Competitors prices and offers
 Other external factors.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: PRODUCT DEVELOPMENT STRATEGIES

Pricing objectives
There are several types of pricing objectives:
Profit oriented:
 Target return
 Maximise profits
 Dollar or unit sales growth.

Sales oriented:
 Growth in market share.

Status quo oriented:

 Meeting competition
 Non-price competition.

Pricing strategies
Businesses must decide whether to set a higher or lower price, particularly when the product is
new. Price setting will be reflective of the nature of demand, where the product is in the lifecycle
and how fast it is moving through the cycle. Decisions need to be made on whether price should
be set at, above or below market place levels.
A price skimming policy
This aims to sell at the top of the demand curve at a high price before aiming at more price
sensitive customers.
A penetration pricing policy
This represents an attempt to sell the whole of the market at one low price.
Competitive pricing
Occurs for most organisations, regardless of what their introductory pricing policy may have
been. Generally speaking if the organisation’s product/services are well enough differentiated
from their competition there will be less pressure to meet competitors’ prices
Cost oriented price setting
Two different approaches to price setting are cost oriented and demand oriented. The areas to
be discussed under cost orientation include:
 Mark-ups, gross margins and profitability
 Types of costs – fixed, variable, total
 Average cost pricing
 Break-even analysis.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

Demand oriented price setting

Value-in-use pricing
This is setting prices that will capture some of what consumers will save by substituting the
company’s product for the goods already being used.
Customer reference prices
This is where the prices customers expect to pay for the product based on what they have paid
elsewhere.
Leader pricing or loss leader pricing
This involves setting some prices very low in order to attract customers into the store or
premises. This is often in terms of a promotion or to move inventory.
Psychological pricing
This involves setting prices that have special appeal to target customers. Price reductions within
a range do not necessarily affect the amount sold. However, at prices just below the bottom end
of the range, customers may buy more if they view the reduction as significant enough to
provide them with a saving.
Prestige pricing
This involves setting a high price in order to suggest high quality or high status. Some
customers want to buy the best and will buy at high prices. If the price seems cheap they may
be concerned about the likely quality and will not buy.
Demand backward pricing
This involves setting an acceptable final consumer price and working backward to what a
producer can charge.

Promotional strategies – marketing communications strategy

The promotional mix
“Promotion is persuasive communication, directed to its target audience. Specifically, promotion
involves communicating information between seller and potential buyer in order to influence
attitudes and behaviour.”
The promotional mix is now usually referred to as the marketing communications mix, which is
more precise because the purpose of communication to customers is not always to promote or
persuade. Often the purpose of the communication is to make people aware, to inform or to
reinforce an already promoted aspect of the product.
The most appropriate strategies to achieve communications objectives in the context of the
overall marketing mix are discussed below.
Marketing communications objectives
Choosing which methods to use depends on the marketing communications or promotional
objectives of the company, with the overall objective being to influence behaviour. Affecting
behaviour is a challenge and as we have seen in our analysis of consumer behaviour there are
many influencing variables which make consumer behaviour difficult to predict.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

There are many sophisticated promotional or communications objectives. The following are the
most basic:
 Informing
 Persuading
 Reminding.
Types of communications tools
Once you have decided on your target customer, their state of readiness and your objectives,
you can plan which communication tools would best achieve your goals.
The main types of marketing communication are:
 Personal selling
 Direct marketing
 Sales promotions
 Advertising
 Publicity
 Public relations
 Sponsorship.
Personal selling
Personal selling involves direct spoken communication between sellers and potential
customers. Face-to-face selling provides immediate feedback, enabling salespeople to adapt
their approaches to customers.
Personal selling is the strongest persuasive method of communication, far more powerful than
advertising, because the presence of another person is far harder to dismiss than a piece of
impersonal advertising.
Fostering a relationship between salesperson and customer further enhances personal selling
as a communications strategy tool.
In a service oriented industry, every member of staff is perceived as a reflection of that company
and a reflection of the organisation’s attitudes toward its customers. As we shall see in the
marketing communications process, the individual’s experience with the product or service and
its people is the strongest potential influencer as to whether they will return to that
establishment.
Even though special promotional offers may attract new customers or remind older customers
that you are still around, customer retention will be determined by your staff and their
effectiveness as personal sales people.
Once organisations in service industries understand the magnitude of this concept, many of
them begin to rethink the amount that is spent on their outside communications and focus a
greater proportion of expenditure on improving the personal sales ability of their staff.
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Module Name: PRODUCT DEVELOPMENT STRATEGIES

Direct marketing
Direct marketing is any series of activities designed to get a direct sales result such as direct
mail. The following are types of direct marketing.
Sales promotion
This involves offering incentives to buy or effect some other transaction and may be made in
combination with the following; mass media advertising, direct print offers, telemarketing, direct
response television or radio, automatic dispensing and online shopping.
Direct print and reproduction
This involves making a specific offer using printed or reproduced materials such as mailing a
printed catalogue or CD-ROM version delivered to a list or database.
Direct response television and radio
This is synchronous marketing using pay television, narrowcast television or radio, broadband
interactive television or radio, if there is a back channel order for placement.
Telemarketing
This is inbound or outbound personal selling or automated
voice response selling to a list or database. May be
synchronous where a donation is made or a vote is cast,
or where orders are taken immediately the offer is made.
Telesales
This is outbound calls, usually order taking with prompts,
from a known and stable database of customers, usually
to middlemen.
Electronic dispensing and kiosks
This is a range of technologies used in receiving orders and payments as well as delivering
products and services including the use of ‘smart’ card technologies and digital cash to a known
database of customers and potential customers.
Direct selling
This is personal selling into the home or office to potential customers or a known database.
Electronic shopping
This is recording responses including order taking from
inbound electronic signals or messages in response to
communications via a wide number of media including pay
television, the Internet (eBay), quick response direct
marketing where same day or next day fulfilment is involved.
Integrated database marketing
This is a type of relationship marketing; conversion of persons on a list to active members of a
database or generation of repeat business from a known database.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: PRODUCT DEVELOPMENT STRATEGIES

Synchronous marketing
Synchronous marketing is an interactive form of marketing, like direct marketing, where one or
more online media are used to effect a measurable response and or transaction in real time and
where both parties in the relationship learn from the exchange.
This has sometimes been called interactive marketing, direct marketing or direct order
marketing. Synchronous marketing is on one hand a form of one-to-one direct marketing, while
on the other hand it is seen as a step beyond direct marketing.
Sales promotions
Sales promotions are used to:
 Attract new triers, including non-users, loyal users, brand switchers
 Reward brand loyal consumers to retain them
 Reduce the time between purchases
 Turn light users into medium or heavy users.

Typically, sales promotions are run for a limited period of time. Sales promotions can be aimed
at the final consumer, intermediaries or at the organisation’s own employees. For the purposes
of our discussion, the two relevant areas are consumer and staff sales promotions.
Types of consumer sales promotion include:
 Samples
 Contests and games of chance and skill
 Redeemable coupons
 Cash back offers
 Cents off deals
 Aisle displays
 Trade shows/exhibitions
 Point-of-purchase promotions
 Banners and streamers
 Trading stamps
 Sponsored events
 Discounted/two for one offers.
Sales promotions aimed at staff include:
 Contests
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 Bonuses
 Meetings
 Portfolios
 Displays
 Sales aids
 Training materials.
Consumer Sales
Promotions are those incentives and special rewards aimed at making the purchase of a given
product or service more appealing in the short term. The list mentioned above is not exhaustive
as there are hundreds of different sales promotions and techniques that are used.
However, creative sales promotion is especially critical at the launch of a new product or service
or when trial of a new product may determine its future.
Sales promotion, as with other methods of communication, should be planned and executed
according to your objectives. They can be used to:
 Generate increased traffic
 Generate increased sales
 Create or maintain top-of-mind awareness
 Improve the organisation’s image
 Generate community support.

Sales promotion can be designed around:

 Calender events, holidays, anniversaries, birthdays
 Seasonal changes, summer, winter etc
 Breaking news, i.e. floods, fires etc
 Topical and timely events, i.e. celebration of casino opening
 Celebrity appearances
 Fashions and fads.
Advertising
Advertising is the main form of mass communication. “Advertising is any paid form of non-
personal presentation of ideas, goods or services by an identified sponsor. It includes the use of
such media as newspapers, magazines, radio and television, billboards and direct mail.”
Communicating with large numbers of potential customers at the same time can be less
expensive and more flexible than personal selling, particularly when the target market is large
and scattered.
If the target market is smaller and more localised, paid advertising unless it is specifically placed
to attract members of your target can be ineffective, expensive and wasted money.
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Publicity
While advertising must be paid for, another form of mass communication, publicity, is free.
“Publicity is any form of unpaid non-personal presentation of ideas, goods and services” Of
course publicity people themselves are paid for but the favourable attention they draw to the
company or an event without attracting media costs is not.
Generally, publicity has greater credibility than advertising because of the perceived neutrality
and unbiased presentation of news reporting or editorial commentary. For example, a
prospective buyer may easily skip over an advertisement but may carefully read a newspaper
article with the same information.
Public relations
Public relations are the paid communications activities of a public relations person or company
designed around improving the attitudes of various identified groups toward the company and its
products and services.
News Releases
These are news stories about a special event, celebrity guest, new promotional program or
other interesting item that is sent to the news media in the hopes that it will generate an article,
interview or photograph either online or in traditional media channels.
Press Kits
These are designed to give journalists background material about a company or product and
service.
Sponsorship
Initially classified as one of the sales promotions tools, sponsorship
is fast becoming a promotional method in its own right. It is
crossing the boundaries between public relations and publicity and
can take many forms in order to achieve different objectives.
It is defined as “An investment of cash or kind in a person, activity,
event or sport in exchange for access to the commercial potential
of that activity, event or sport.” Sponsorship comes in many forms
including:
 Sports sponsorship
 Arts sponsorship
 Broadcast sponsorship – where the company supports a particular program in exchange for
announcement on the program or the rights to be associated with its presentation
 Cause sponsorship – where a company contributes to a known cause.

Placing products and services

Placement of products and services is called distribution or the logistics of placement.
Logistics is the process of planning, implementing and controlling the efficient cost effective flow
and storage of materials, in process inventory, finished goods and related information from the
point of origin to point of consumption for the purpose of conforming to customer requirements.
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Distribution objectives and strategies

Distribution is how the product or service flows from the original production process to the end
consumer. Distribution is about getting the right product to the right customer in the correct
quantity at the right time.
Traditionally, it is considered that physical distribution relates only to the transportation of
physical goods.
Services which are viewed as intangible are unable to be transported or stored. However,
physical distribution is relevant for some services. Producers of services need to consider the
logistics of providing customers with the physical items that facilitate the provision of their
services

Action and control plans

Action Plans
These are step by step plans of how, who, why, when and at what cost strategies and tactics
will be actioned in order to achieve the objectives of the plan.
Budgeting
Budgeting – determines how much will be required to
achieve your marketing plans. After the action plan is
developed, a budget can be developed accordingly. The
budget shows expected revenue through sales forecasting
in unit volume and average price. It also shows expected
expenses such as sales, marketing and cost of goods sold.
The difference between the revenue and expenses is the
projected profit.
Procedure for allocating a budget
After setting your marketing plan, an annual budget is required to plan what is to be done and to
control various functions. How much is required in total to achieve marketing plan objectives
and how the budget is to be split between components of the action plan need to be
determined.
It is important to note that:
 Budgets are usually set annually but may need to be changed if they are falling short of
forecasts
 Marketing expenses are charged across all departments (often on a revenue ratio basis)
unless costs can be specifically allocated
 Marketing expenses are always in advance and in anticipation of sales
 At least 10%-15% of a budget should be held in reserve as a contingency fund to cover
unexpected competitive moves and unanticipated increases in marketing costs.
Methods of budgeting
The most common include:
 Affordable budgeting – what the organisation feels it can afford
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 Historical or arbitrary budgeting – using past expenditure as the basis for future expenditure
 Rule-of-thumb budgeting – allocating a percentage of
forecast revenue or sales based on industry norms
 Competitor parity – matching competitive expenditure
 Zero-based – justifying each expense before it is included in
the budget
 Anticipated budgeting – companies set aside all
uncommitted revenue, including budgeted profits in anticipation of future sales and invest in
marketing
 Objective and task method – basing the budget on the task to be done.

The task method is generally accepted as the most useful method of budgeting. Although it
must be stressed, particularly as an organisation develops and grows, it is necessary to
calculate more in-depth financial analyses and ratios including break-even method and various
statistical forecasting techniques.
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Introduction
In the Section 1 we focused on the collecting of marketing information on factors relating to the
internal business environment.
In Section 2 we will look at the likely impacts the external business environment will play on a
travel and tourism organisation, and how these impacts will influence a marketing strategy.

Concept of comparative marketing information

Comparative market information may include:
 Best practice information, including local industry standards,
recommendations by regional, national bodies and world-wide standards
 Benchmarking, such as comparing host enterprise performance and
practices against accepted world-wide or industry-wide best practice
 Competitor information, including service levels, staff numbers, trading
hours, locations, prices charged, special deals, promotional activities,
products and services offered, level of user satisfaction with opposition
service provision.

Understand current marketing situation

The first area for evaluation in marketing planning and management when looking at the
external environment is to understand the current market situation.
Information on the current marketing situation is normally drawn from a database of information
that the organisation constantly updates. This includes information on the market, product,
competition, current strategies and macro-environment.
Market situation
 Total market characteristics – size, growth, trends
 Customer needs, perceptions and buying behaviour
 Products – service characteristics
 Prices
 Customer service and distribution
 Communication – principal methods of communication used.
Competitive situation
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 Industry structure – type of competition, marketing methods, new entrants, mergers,

competitive arrangements
 The geographic market in which they compete
 Their current marketing performance
 Their competitive position (growing, contracting)
 Strengths and weaknesses, and vulnerabilities of each
significant competitor
 Their objectives and competitive strategies
 Industry profitability – financial and non-financial barriers to entry, relative performance of
individual companies, volume, source of and cost of investment, effect and return on
investment of changes in price.
Product situation
 For each product or service that the organisation offers, sales, profits, contribution margins
and growth should be displayed
 Product lifecycle and expected demand over the product’s life should be considered
 Growth of the product or service should be contrasted to total market growth.
Current strategies
 Current product, price, place and promotional strategies should be included
 Current people, processes and physical evidence strategies should also be included.

Trend Analysis
Introduction
Understanding trends of the industry is vital in ensuring that what you are seeking to provide to
the market is not only fresh and relevant but is in demand.
Your research should seek to:
 Determine what the trend is
 Identify whether it is a positive or negative trend
 Calculate how long the trend has been identifiable – to ensure it is actually a trend and not
an aberration
 Determine the possible threat or opportunity this trend presents or provides, so action can
be taken in terms of developing appropriate business strategies.
Regardless of types of trends being researched, the keys are to:
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 Be proactive
 Keep an open mind
 Using a variety of sources
 Recording what you find.

Definitions of trends
There is a need to be aware of any venue-specific requirements regarding definition of what is
actually a trend.
For example:
 A one-off event or statistical anomaly is not likely to be interpreted as a trend
 There may be a requirement for the identified issue (‘something’) to be present in at least
four consecutive analysis processes before it can be deemed a ‘trend’
 Things under a nominated value or amount will not be considered for the purposes of trend
identification
 Matters impacting certain classifications of people as
identified by nominated demographic characteristics will
not be considered
 A nominated software package must be used for the
purposes of identifying and quantifying trends
 A specific data analysis method/technique must be used
to determine trends.

‘Something’
The following are examples of what emerging trends can relate to:
 Online presence
 Where and how clients access their information about the business
 Regular customers from a new market segments
 An increase or decrease in enquiries from a certain target market or market segment
 A new need, want or preference being identified by market research, customer comments
and feedback
 Increases in sales in specific products , services,
destinations or packages
 Mention customers no longer want a nominated product
or service
 A growth in certain booking or payment methods
 Stated environmental or social concerns raised by clients
 Lower or higher average spend-per-person
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 Increase or decrease in the number of sales made by agents or through the venue.

Emerging trends
The aim of ‘analysing information’ in this context is to identify emerging trends.
The data and statistics you gather must provide the basis for determining whether or not a trend
exists or is emerging.
An emerging trend may be seen as:
 Something (see above) which did not previously exist but
now does
 A variation to a previous pattern – the variation may be:
 Positive – a ‘growing’ trend
 Negative – a ‘declining’ trend
 A change in the degree of the variation. For example, a
previous trend was 5% growth whereas current figures
show a 50% increase.

Sources of trend information

There are a number of sources that will be a great starting point to get an overview of the
industry as a whole and the trends that may impact a business and the selection of new
products or services they are thinking of introducing.
These trends may be identified through:
 Direct observation
 Personal surveys
 Internet research
 Colleagues, supervisors and managers
 Head office
 Customers
 Industry suppliers
 Developing your own industry network
 Conferences and seminars
 Product launches
 Industry statistics from industry bodies or associations
 Data from relevant government agencies
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 Trade magazines
 Industry publications
 Newsletters and brochures
 Advertisements
 Reference books.

Types of trends
Industry and customer trends will refer to current and projected or anticipated issues and may
include:
 Economic factors, including currency exchange rates, recessions and value of relevant
currencies
 Ecological and environmental factors, including carrying capacities, issues relating to
organisational values, sustainability and responsible tourist functions and activities,
environmental impact statements and reports
 Social and cultural factors, including the impact of tourism activities on local societies and
their enjoyment of, respect for and protection of their culture
 Technological changes and how they might impact on customers in terms of sourcing
information, lodging bookings, making payment and receiving tickets
 Industrial factors, including the capacity and capability of support service providers to deliver
the required underpinning products and services to enable the delivery of identified products
and services.

Market trends
An analysis of the general business environment gives you
information about current conditions within your industry. It is
equally important to identify favourable and unfavourable
changes and trends. They indicate possible opportunities and
threats to your business.
Considerations include:
 Is the economy currently in a boom or recession cycle and
where is it heading in the immediate future?
 What is the general confidence level amongst business persons and families?
 Demographic factors in the area, and projected growth – include population characteristics
such as age, gender, occupation, home ownership, education levels, attitudes
 Cultural trends and changes regarding life styles
 Technological changes impacting on business and family life.

Social trends
Social significance relates to how a society deems something to be important in their lives.
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In terms of tourism, more people work harder and therefore want to enjoy their relaxation time
Social trends show society has:
 A better quality of life
 Greater need for tourism products
 Greater community pride
 Great understanding and appreciation of the world
 Increased appreciation of culture
 Greater understanding of other people.

Customer trends
The key to knowing about changing trends, from a marketing
perspective, is that this information needs to be related to customer-
focussed concerns.
Your market research will have identified the areas and issues that are
important to your various target markets, so profiling the business’s
customers requires that you relate these to the products and services you
are offering.
The point being that you need to be able to identify, understand and
explain how your products meet the specific classifications of
customer demands that exist within your different market segments.
These customer demands may vary according to:
 Personal preference
 Health factors
 Age
 Cultural group
 Dietary issues
 Price
 Contemporary eating habits
 Media influence
 Cultural and ethnic influences
 Seasonal and popular influences
 Major events and festivals.

Tourism industry statistics and trends

Understanding industry statistics and trends is essential when trying to create products and
services to meet the needs of existing and potential clients. Statistics prove a ‘snapshot’ of
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important information which can be examined and applied to improve business operations,
attract new markets or build confidence in the eyes of a consumer.
Whilst there are endless industry trends and statistics that can be researched, some of these
include:
 Types of tourism and tourism businesses
 Types and demographics of customers
 Top destinations
 Hotel occupancy percentages
 Reasons for stays
 Current industry information
 Destination countries
 Departure months
 Length of stay
 Type of organisation for the trip
 Transport mode
 Accommodation type
 Expenditure
 Popular tourist attractions
 Tourism patterns
 Technology.

Legal, Ethical and Environmental Constraints

Introduction
All businesses, regardless of their industry, size or mode of operation will have legal, ethical and
environmental constraints that will impact on their operation.
In this section we explore in more detail the various legal, ethical and environmental constraints
that impact on an organisation.

Types of legal, ethical and environmental constraints

Legal, ethical and environmental constraints may include:
 Organisational policies relating to business ethics, company values and beliefs
 Legislated operational obligations
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 Registration compliance requirements

 Compliance with industry, peak body and
government agency codes of practice
 Complying with cultural expectations and influences of
local communities
 Ensuring promises made in relation to non-
mandated issues are met
 Supporting social responsibilities by being a responsible corporate citizen.

Importance of law
For any business it is important to understand the different types of laws that govern business
operations and activities.
Laws are legally binding requirements established under legislation or
Acts.
In addition to laws, there are many other 'rules' or 'conditions' set
down by governments, local councils and industry authorities which not
be legal, but advise you to adhere to in addition to legislative
requirements.
There are many, many pieces of legislation, licences, permits, fees etc
that will apply to travel and tourism businesses. They will differ from
country to country and to different types of tourism and travel related
businesses.
In addition, legislation, licences and fees are always subject to change over time so it is
essential you develop knowledge of where to go to obtain current information and who to speak
to.

Tourism law
Tourism Law is commonly defined as a body of rules or principles of action which deals with the
regulation, authority, relations and obedience among members of a society involved in tourist
travel and accommodation.
It includes persons travelling from place to place for
pleasure (tourist), and business establishments or persons
engaged in the occupation of providing various services for
tourists.
Therefore tourism laws deal with the various laws governing
tourism in different ASEAN countries. It includes various
government agencies, both at a national and regional level

Types of laws and regulations

Following is a list of various laws and regulations that impact the travel and tourism industry.
Law
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The system of rules which a particular country or community recognises as regulating the
actions of its members and which it may enforce by the imposition of penalties.
Legislation
Legislation is that source of law which consists in the declaration of legal rules by a competent
authority. Legislature is the direct source of law. Legislature frames new laws, amends the old
laws and cancels existing laws in all countries. In modern times this is the most important
source of law making. The term legislature means any form of law making. Its scope has now
been restricted to a particular form of law making. It not only creates new rules of law it also
sweeps away existing inconvenient rules.
Another source of law is judge-made law or case law.
Common law
This is law which is not the result of legislation.
It is law made by the decisions of judges over time. It is a set of rules developed by judges and
these rules are based on ‘precedence’ meaning the judge must follow previous binding
decisions when deciding a case.
If a judge does not follow precedence then the decision is not
legally binding.
Common law looks at ‘fault’ and damages will be awarded based
on the degree of fault, age of the victim and the extent of the pain
and suffering.
Act of Parliament
An Act of Parliament is a statute enacted as primary legislation by a national or sub-national
parliament.
Regulations
Regulations are principles or rules, with or without the coercive power of law, employed in
controlling, directing, or managing an activity, organisation, or system.
Regulations are enforced usually by a regulatory agency formed or mandated to carry out the
purpose or provisions of legislation. They are also called regulatory requirements.
Codes of Practice
Where codes of practice are established under legislation, these have legal weight.
Compliance codes support and supplement the intent of legislation. They provide advice,
information and direction on how businesses can achieve compliance with the legislation.
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Compliance with these codes is not mandatory. You may elect to

comply with your obligations in other ways other than as set out in
the codes, however in practical terms, compliance with codes
equates to compliance with the Act or the regulations.
If a venue breaches these codes, they cannot be penalised at law.
It is up to the industry bodies to take action on the breach and bring
the offending property back into line by the use of explanations or
sanctions.
The key is to research the legal standing of any Code of Practice you have to deal with to
determine the legal standing of the code.
Civil and criminal law
Civil law deals with disputes between individuals.
An example would be where a staff member sued you for negligence in failing to protect their
safety while at work. It provides for compensation through the awarding of damages or
injunctions.
Criminal law deals with issues between the government and an individual.
An example is failure to comply with the requirements of an Act. This law provides for
punishment of the wrong-doer such as via fines and gaol.

General areas to which legal requirements apply

The industry has numerous legal compliance requirements covered by an assortment of
legislation.
These apply to areas including, but not limited to:
 Business establishment
 Business operation
 Licensing
 Consumer protection and trade practices
 Duty of Care
 Fair trading legislation
 Employment relations
 Employment of foreign workers
 Superannuation / Pension Funds
 Contributory Negligence and Personal Injuries legislation
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 Contracts
 Income and company taxation
 Goods and Services taxation
 Financial recording and management
 Anti-corruption
 Copyright, patent, design and trademark protection, trade
secrets
 Occupational health and safety (OHS)
 Fire Safety
 Environmental legislation
 Insurance requirements.

Legal considerations
Analysis of legal factors should include the laws and regulations the business must comply with
as well as any new laws being proposed and how these may impact the business.
You may consider the following:
 Changes to legislation and regulations that have impacted, or
have the potential to impact on the business
 Industry codes of practice
 Consumer expectations
 Social responsibilities.

Ethical considerations
Ethical requirements relate to issues about which a personal judgement has to be made
regarding the way the business elects to conduct its business.
In some cases, the ethical behaviour of a business may be governed by legislation, and in other
cases it is purely up to the individual operator to determine what is acceptable as ethical
behaviour and what is not.
The basis of many ethical decisions comes down to personal values.
It is a fact of life that the economic imperatives of a business can often influence the ethical
business decisions that are taken.
Aspects of business requiring an ethical component
There are numerous aspects that can be considered under ethical requirements ranging from
specific actions to general operating protocols.
In short, nearly every aspect of operating a business has an ethical component.
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When operating a business that is highly people-focussed, such as any tourism business, this
rises even more.
From an ethical perspective there exists a need for you to determine what your ethical
standards, practices and platforms are in regard to:
 Products – do you buy from companies that are environmentally
responsible or from the company that gives you the cheapest
price?
 Service provision – do you make sure that staff you employ are
provided with the resources, training and supervision to do their job
properly, safely etc?
 The environment – do you apply sustainable and environmentally
sensitive practices or don’t you bother to consider issues such as
recycling, energy management, noise pollution etc?
 People – do you provide working conditions to employees that are
over and above the basic requirements of the employment instrument or do you strictly
adhere to the legally imposed minimum basics? Do you care for patrons that appear
distressed even though there is no legal obligation to do so?
 The community – do you operate on a strictly ‘for profit’ basis or do you respond to and
participate in your local community, over and above purely economic considerations?
 Money – there will often be situations where you are able to obtain money out of the
business for personal use
 Promotions and advertising – legally you are prevented from advertising in a false or
misleading manner but there is always a ‘grey area’ where the real truth can be blurred.
What will be your orientation to ‘truth in advertising’? Will it be a genuine transparent
approach or are you prepared to tell small lies?
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 Intellectual property – what will be your standpoint

regarding using without appropriate payment or
permission information that is not yours to further the
ends of your business?
 Conflict of interests – if you are working for more than
employer, where does your loyalty lie? Are you able to
keep confidences, or is it acceptable to tell one business
what the other business is doing, how much revenue they
are earning, what their costs, what new customers they
have won, what markets they are targeting?
As you can see there are lots of instances where there is a need to consider ethical behaviour in
setting the direction for the business and in the normal everyday working life of the business.
Many of these decisions are not simple, and it is usually the case that once you compromise
your values and ideals and make an unethical decision it is easier to make the next unethical
decision.

SWOT Analysis
Introduction
As previously mentioned, the process of gathering marketing information is to identify what
factors are likely to impact on an organisation and how these impacts can best be utilised for the
benefit of the organisation.
To date, in Section 1and2 we have explored both the internal and external environments and
the likely impacts related factors will have not only on marketing planning but also on all aspects
of the organisation.
Once all relevant information has been collected, it is now time
to collate and analyse the information with the hope of
determining key strengths and opportunities that may exist and
which organisations will base their marketing strategies around.
In addition, they will also identify various weaknesses and
threats that must be considered.
In this section we will identify the various strengths, weaknesses, opportunities and threats on
an organisation and how to collate this information into suitable marketing reports.

Role of a SWOT Analysis

The process of assessing internal strengths and weaknesses in conjunction with external
opportunities and threats is referred to as a Situational Analysis (SWOT analysis).
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Most businesses undertake a SWOT analysis to gain an understanding of what is happening

both external and internal to the business and the effect it will have on the business. This
process ultimately tries to identify:
 Strengths – what the business does well
 Weaknesses – what the business can improve upon
 Opportunities – where the business can improve or take
advantage
 Threats – where the business may become disadvantaged,
weakened or susceptible.

Identifying strengths and weaknesses

In the internal structure, operations and ability or capacity may appear in terms of:
 Finance – available cash flow debt-equity rates, level of
assets, profitability, capital available: this reflects the previous
results the business has experienced and takes into account
the effects of previous marketing programs
 Production – extent and quality of systems and technology to
enable the business to operate. Is it up-to-date or in
desperate need of an upgrade or a replacement?
 Resources – the level, variety and availability of products, raw
materials, ingredients and other requirements to produce the
goods and services offered for sale
 Offerings – taking into account the product mix of the business (the products and services
available). Is this mix ‘sufficient’ or does it need growing/expansion into other areas,
products or services?
 Marketing – can relate to customer database information available or existing within the
business, details about price structure including discounts and commissions, distribution
channels such as other agencies or establishments as a source of bookings, location of the
business including Internet exposure, promotion undertaken, as well as the extent of service
and product range
 Product life cycle – a product/service nearing the end of its product life cycle can be a
negative indicating a need to replace it, refine it, re-brand it or add some new option to re-
create it under a different name
 Business relationships – assessing the nature and effectiveness of the arrangements with
suppliers, agents and head office; how have they changed over time? Are you dependent on
just one supplier or carrier? Are you getting the right quality products and the service you
want? Are you being supported by those who are
supposed to serve and support you?
 Relationships with customers – analysing the extent
and effectiveness of the CRM and the information it
contains in terms of currency, quality, type, quantity
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 Personnel – this looks at number of staff employed, their knowledge, skills and abilities, the
level of morale, leadership and internal communication in the business.

Opportunities
Local opportunities must relate to specific opportunities identified by the internal and external
analysis of the business environment and may relate to:
 Specific business objectives and directions
 Identified target markets
 Strengths of the organisation
 Competitive advantages that the organisation holds in the
marketplace
 New markets, including niche markets, which may be
pursued by the venue in terms
 New or up-dated or modified products, services or packages which can be introduced to the
service menu
 Occasions where new prices may be charged
 Problems being experienced by other providers which result in an opening for you
 Closure of an opposition business
 Fresh markets now available to you as a result of previous action you have taken – such as
how you have trained your staff, new resources you have purchased, refurbishments you
have undertaken, new database of information you have about potential customers.

Threats
Threats may include issues relating to:
 Introduction of new or more severe legislation
 Opening of a new competitor
 Worsening economic conditions
 Staff shortages
 Difficulty in obtaining physical resources
 An unsettled domestic situation which scares off tourists
 Negative comparative monetary exchange rates with countries who are major clients.

Identifying opportunities and threats

Opportunities and threats should relate to:
 Market growth trends and projected potential, including general market trends as well as
specific data relating to identified target markets as appropriate to the business
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 Risk factors relating to the industry sector under consideration, including weather events,
terrorism, political unrest and travel warnings
 Competition, including identifying new entrants, businesses that
have left the industry, activities being undertaken by competition,
impact of competitor activity on business performance including
sales and profits, their marketing strategies, objectives, strengths
and weaknesses
 Legislation and government policy, including how these changes
may impact on the business and the local area, events and similar
 Identifying changes in technology that have demonstrated the ability,
or the potential to impact the industry, such as e-commerce
initiatives, including web-based promotion, on-line booking,
electronic payment and e-ticketing
 The economy, identifying inflation, interest rates, credit availability, level of unemployment,
availability of suitably trained, experienced and qualified staff to undertake identified duties
within the business, level of economic activity and population changes
 Suppliers, including consideration of mergers/monopolies, prices, distribution, competition,
franchise arrangements, sub-agencies, national and multi-national companies.
Political considerations
Analysis of political considerations should include:
 The political stability of the country
 Is a change of government imminent and if so what implications can be expected?
 Feelings in relation to international trade and dealings
 Political relationships between home country and those countries with whom you do a lot of
business
 The support available from government agencies and bodies for industry training or
initiatives.
Economic considerations
The economic environment in which the business operates – addressing matters such as:
 The local economic environment as well as the economic state of other countries from which
the business draws its customers
 Inflation
 Interest rates
 Exchange rates
 Levels of employment and unemployment
 Availability of local skilled competent staff
 Amount of discretionary income customers have
 Community thoughts on the state or future of the economy.
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Social considerations
Analysis of social considerations should include:
 Statistics and trends in relation to demographic characteristics of markets – such as: Are
customers getting older or younger?
 What is the ratio of males to females? Is this changing?
 What image does the industry have in the eyes of society?
Is it a positive image? Is it tarnished for some reason and if
so how or why?
 Projected responses of local and other communities if the
business pursues various options - such as entering into a
relationship with a certain organisation, entering into a new
market, erecting a new building
 The status of the business in the eyes of the community as a ‘corporate citizen’
 Mobility of people and their ability to travel to and from the venue.

Technological considerations
Analysis of technological considerations should include:
 Does the current technology being used by the business remain effective and efficient?
 Is there new technology in the marketplace which can be used to improve business
performance, save time or money?
 Provide better facilities for customers and perhaps give the
venue a USP or meet identified customer demand or to
meet competition?
 Does legislation require use of nominated technology?
When?
 What is the cost of new or required technology and what are supply options?
 Dangers or problems inherent in adopting new technology or integrating it into existing
systems or processes.
Legal considerations
Analysis of legal considerations should include the laws and regulations the business must
comply with as well as any new laws being proposed and how these may impact the business.
You may consider the following:
 Industry-specific laws
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 Contract law
 Fair trading legislation
 Consumer protection
 Employment legislation
 Environmental protection laws
 Wage rates
 Trends in outcomes
 Penalties for non-compliance
 Application and registration requirements, complexity, costs and timelines.

Environmental considerations
Analysis of environmental considerations should include:
 Sustainability issues
 Use of power and water
 Rubbish disposal
 Pollution – traffic, noise, air, water
 The impact of the venue on local communities.

Prepare Market Report

Once you have completed a review of the business and market environment, and conducted a
SWOT Analysis to determine the possible strengths, weaknesses, opportunities and threats, it is
important that information is compiled into a concise report.
The most commonly used form of documenting market information is in the form of a 'Market
Report'.
A Market Report should consist of:
 An Industry Profile
 Your Product or Service
 Competition
 Environmental Information and Trends.
Industry Profile
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It is useful to write a short outline of the current status of the industry in which you will be
involved. This will focus your planning on current and future demand), what types and styles of
organisations are successful, what is about to be the “next big
thing”.
Factors affecting demand are:
 The nature of buyers – what kinds of people are purchasing
your goods or services?
 Market size – how many potential consumers are there in the
area you intend to service?
 Demand patterns – is it increasing or decreasing for your product or service?
Specific statistics for your goods or services can be found from the government agencies,
industry associations, media, business publications and internet research.
Your Product or Service
Think about the products or services that your business will provide. What are their unique
features that will attract customers? Will you offer a wide range of complementary products, or
do you intend to specialise in a particular range? Tour Operator A decide to focus entirely on
ecotourism adventures for the under 40’s, whilst Tour Operator B offers a full range of travel and
tour options to all consumers. Both organisations have advantages and disadvantages.
Operator A
 Will be tapping into a specialised, niche market
 They have a unique product
 Can be at risk if demand falls or costs increase dramatically.
Operator B
 Product available for greater number of consumers, therefore
greater turnover possible
 May require more business resources – premises, staffing, and finance – to cover the range.
If you intend to provide more than one product, you would need to draw up a sales mix table
such as the one below.

Singapore Travel Agency - Sales mix projection (column and row headings only)

Sales Stream Year 1 Year 2 Year 3

Airfare Bookings

Packages

Transportation

Shop items

Travel Insurance
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Total Sales

Competition
It is important to identify the main competitors to your business. In your Business Plan, list all
major competitors showing details re their
 Name
 Address
 Number of staff
 Strengths and weaknesses.

This knowledge will assist you in formulating competitive strategies to lure their customers to
your business! What is your competitive advantage?
Environmental Information and Trends
An analysis of the general business environment gives you information about current conditions
within your industry. It is equally important to identify favourable and unfavourable changes and
trends. They indicate possible opportunities and threats to your business.
Considerations include:
 Is the economy currently in a boom or recession cycle and where is it heading in the
immediate future?
 What is the general confidence level amongst business
persons and families?
 Demographic factors in the area, and projected growth –
include population characteristics such as age, gender,
occupation, home ownership, education levels, attitudes
 Cultural trends and changes regarding life styles
 Technological changes impacting on business and family
life.
In addition to researching statistical information from published quantitative sources e.g.,
statistical generation organisations, it is worthwhile gathering information from direct sources
e.g., direct observation, personal surveys.
Direct observation includes a personal examination of the environment. Personal surveys are
another valuable research tool. It is important to ask open-ended questions that allow people to
give their own opinions. Framing your questions needs to be given careful thought. Make sure
your questions aren’t skewed specifically to confirm your own opinions. From their answers, you
should gain an understanding about their needs as a consumer, their preferences and dislikes,
what they would like to have available in their local area. Responses to carefully framed
questions should assist you in making informed decisions for marketing your business and its
products.
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Tourism Marketing: The Business Direction

Introduction
Tourism involves all activities that take people away from their usual place of residence for any
reason. Common reasons include holidays, recreation, business, visiting and experiencing new
cultures and to visit family and friends.
Any business that is utilised during any part of travel is associated with the tourism industry.
The tourism industry is one of the largest industries in the world and
for many countries is its major economy and employer. Tourism has
become a very significant global activity and as disposable income
and the ease of travel continues to prosper, so will the tourism
industry.
Industry knowledge is a vital pre-requisite for effective performance
within the industry.
This manual will explore how and where to gather information regarding different aspects of the
tourism industry and how to incorporate this market knowledge to improve your offering for
customers.

Importance of marketing in tourism industry

Marketing is a pivotal activity that needs to be performed by any tourism organisation. In fact no
business, regardless of industry, size or purpose will succeed without careful consideration to its
marketing strategy.
This manual will focus on how marketing should be planned and coordinated to further build
business success.

Marketing
In the past many companies developed an ‘offering’, made up of various products and services,
which they thought the customer might like and then tried to ‘sell’ it to them.
In many cases these ‘offerings’ were internally focused and were designed to ensure sufficient
profits for an organisation.
Marketing is different in that it aims to understand the customer
before creating an offering to sell them.
For any business to succeed, it must be customer focused and
try to:
 Understand what the customer wants
 Develop an offering to meet these needs
 Identify the best way to make people aware of the offering
 Motivate people to partake of the offering.
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As it can be seen above it is important to note that marketing is a logical step before selling.
Before we look at the activities associated with marketing in a hospitality or tourism environment
it is important to understand:
 The concept of marketing
 Key marketing components
 Tourism marketing.

Concept of marketing
Marketing involves ascertaining what a customer’s needs and wants are through interacting and
working with the customer and providing them with a quality product/service that offers them
value and satisfaction.
Most marketing activities are directed toward developing relationships and customer retention.
In the past, marketing and selling activities may have been seen as short-term activities
designed to make a sale, with little attention paid to the return business of that customer.
Therefore, even though selling and advertising are the very visible aspects of marketing, they
are only part of a larger marketing mix. The components of this marketing mix will be discussed
later in this manual.

Key marketing components

To understand this definition of marketing and the marketing planning and strategy process that
will follow, it is important that the learner understand some key concepts in this definition.
Knowing all about customer needs is the cornerstone to effective marketing. Knowing how to
develop and promote these ‘offerings’ is essential in ensuring customer satisfaction and
business success.
Following are some of the key components associated with marketing.
Needs
These underlying wishes and expectations and are the things
customers are unable to do without. They may be in a foreign town
and simply cannot do without a bed for the night, a meal or
beverage.
Wants
These refer to the way in which our customer would prefer to
satisfy a specific need.
Wants are needs which are shaped, determined and learned by the society or culture that they
live in. As a culture develops, its people’s wants are expanded as people are exposed to more
and more possibilities of satisfying this want.
A Market
This is the set of all actual and potential buyers of a product.
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Products
These are physical objects, services, persons, places,
organisations and ideas that can be offered to a market or
individual to satisfy a need or want. The distinction between a
product and service is not clear, as there are often elements of
both in each.
Companies need to concentrate not on the physical product
itself, but rather on the benefits that they provide to the
customer.
Customer value
This is the difference between the values the customer gains from owning and using a product
and the costs of obtaining the product. Often customers are not very accurate at assessing
value and use their own perceived value.
Customer satisfaction
This is the extent to which the perceived performance of products or services matches buyer
expectations.
Relationship Marketing
This is the process of creating, maintaining and enhancing strong, value laden relationships with
customers and other stakeholders.

Tourism marketing
Whilst the concept of marketing is important in every industry, these are some unique qualities
of the tourism industry which will impact and influence a marketing approach.
Specific marketing requirements of the tourism industry are:
 Shorter exposure to services
 More emotional and irrational buying appeals
 Greater importance on managing evidence
 Greater emphasis on stature and imagery
 More variety and types of distribution channels
 Dependence on complementary organisations
 Easier copying of services
 More emphasis on off-peak production.

Unique relationships with tourism marketing are:

 Suppliers, carriers and travel trade
 Destination mix concept: attractions and events (draw visitors) facilities infrastructure and
transportation amenities, hospitality resources
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 Visitors and local residents

 Managing the three preceding relationships.

Why marketing is important in tourism:

 It helps guarantee long-term profitability
 It influences how the organisation structures itself
 It gives the organisation an edge over its competitors
 It plans for new products and services development
 Staff are seen by patrons to be part of the service product
 Staff can be trained to encourage the use or sale of products or services available and are
valued for it.

Identify and confirm business orientation

Before we look at conducting research into the internal and external business environments and
then developing marketing strategies to capitalise on any opportunities that are present, it is
essential that we have a sound understanding of the business.
There are a number of aspects that define the orientation of a business. It is important to look at
these business foundations as a first step of developing marketing strategy.

Understand vision, values and mission of the business

The first step of understanding the orientation of the business is to identify what it stands for, the
principles it is guided by, and its purpose.
These are defined in the vision, values and mission of the business.
Vision
An organisation’s vision may include:
 Core ideology which defines what the organisation stands for
and why the organisation exists
 Envisioned future which defines what the organisation aspires to
become
 Service vision.
Values
An organisation’s values describe the core principles that guide an organisation’s work. An
organisation’s values may include:
 Teamwork
 Commitment
 Ownership
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 Recognition
 Service excellence
 Personal development.
Mission statement
This is a written statement expressing an organisation’s purpose. It identifies the business, its
aspirations and its desired culture.
Corporate goals
These are goals set by the board of directors or the
shareholders. They are an organisation’s blueprint stating its’
main objectives for the future. These goals are stated in
general terms and then strategically planned through the
organisation’s hierarchy.
Strategic plans
These plans determine the future direction of an organisation. They are formal long-term plans designed
from the corporate goals and objectives. These plans set the agenda.

Identify general core activities

Each organisation will have different core activities that they must
undertake as part of their business operations.
That said, most travel and tourism core activities include, but are not
limited to:
Getting Information
 Observing, receiving, and otherwise obtaining information from all relevant sources
 Read travel rate schedule
 Receive customer orders
 Obtain travel information for clients.
Selling or influencing others
 Convincing others to buy merchandise/goods or to otherwise change their minds or actions
 Sell products or services
 Sell itinerary tour packages.
Interacting with computers
 Using computers and computer systems - including hardware and software) to program,
write software, set up functions, enter data, or process in formation
 Use computers to enter, access or retrieve data.
Communicating with persons outside organisation
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 Communicating with people outside the organisation, representing the organisation to

customers, the public, government, and other external sources. This information can be
exchanged in person, in writing, or by telephone or e-mail
 Make presentations.
Updating and using relevant knowledge
 Keeping up-to-date technically and applying new knowledge to your job
 Use knowledge of international travel regulations
 Use interpersonal communication techniques
 Use local or regional geographical knowledge to transportation
 Use sales techniques
 Use knowledge of written communication in sales work
 Use telephone communication techniques.
Establishing and maintaining interpersonal relationships
 Developing constructive and cooperative working relationships with others, and maintaining
them over time.
Organising, planning, and prioritising work

 Developing specific goals and plans to prioritise, organise, and

accomplish your work.
Communicating with supervisors, peers, or subordinates
 Providing information to supervisors, co-workers, and subordinates by
telephone, in written form, e-mail, or in person.
Documenting information
 Entering, transcribing, recording, storing, or maintaining information in written or
electronic/magnetic form.
Making decisions and solving problems
 Analysing information and evaluating results to choose the best solution and solve
problems.
Interpreting others
 Translating or explaining what information means and how it can be used
 Inform clients of travel restrictions.
Resolving conflicts and negotiating with others
 Handling complaints, settling disputes, and resolving grievances and conflicts, or otherwise
negotiating with others.
Performing administrative activities
 Performing day-to-day administrative tasks such as maintaining information files and
processing paperwork
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 Maintain records, reports, or files

 Fill out business or government forms.
Judging the qualities of things, services or people
 Assessing the value, importance, or quality of things or people.
Processing information
 Compiling, coding, categorising, calculating, tabulating, auditing or verifying information or
data
 Compute financial data.
Thinking creatively
 Developing, designing, or creating new applications, ideas, relationships, systems, or
products, including artistic contributions.
Analysing data or information
 Identifying the underlying principles, reasons, or facts of information by breaking down
information or data into separate parts.
Assisting and caring for others
 Providing personal assistance, medical attention, emotional support, or other personal care
to others such as co-workers or customers.
Coordinating the work activities of others
 Getting members of a group to work together to accomplish tasks.
Scheduling work and activities
 Scheduling events, programs, and activities, as well as the work of others
 Develop travel itinerary
 Make travel reservations.
Monitoring and controlling resources
 Monitoring and controlling resources
 Overseeing the spending of money.
Training and teaching others
 Identifying the educational needs of others
 Developing formal educational or training programs or classes
 Teaching or instructing others.
Developing objectives and strategies
 Establishing long-range objectives
 Specifying the strategies and actions to achieve them.
Identifying objects, actions and events
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 Identifying information by categorising, estimating, recognising differences or similarities and

detecting changes in circumstances or events.
Estimating the quantifiable characteristics of products, events or information
 Estimating sizes, distances, and quantities or determining time, costs, resources or
materials needed to perform a work activity
 Estimate travel rates or expenses.
Provide consultation and advice to others
 Providing guidance and expert advice to
management or other groups on technical,
systems, or process-related topics
 Provide travel suggestions.
Developing and building teams
 Encouraging and building mutual trust, respect, and cooperation among team members.
Coaching and developing other
 Identifying the developmental needs of others and coaching, mentoring, or otherwise helping
others to improve their knowledge or skills.
Evaluating information to determine compliance with standards
 Using relevant information and individual judgment to determine whether events or
processes comply with laws, regulations, or standards.
Monitor processes, materials or surroundings
 Monitoring and reviewing information from materials, events, or the environment, to detect or
assess problems.
Guiding, directing and motivating subordinates
 Providing guidance and direction to subordinates,
including setting performance standards and monitoring
performance.
Staffing organisational units
 Recruiting, interviewing, selecting, hiring, and
promoting employees in an organisation.
Handling and moving objects
 Using hands and arms in handling, installing, positioning, and moving materials, and
manipulating things.

Identify customers
Before you can develop marketing strategies aimed at different customers, you first must
identify and understand who your customers are.
Different types of customers
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Customers may be classified as ‘existing’ or ‘potential’ customers.

Existing customers are ones you already have.
Potential customers are ones you might try to attract.
Each venue will have:
 Its own specific target markets – a mix of customers it wishes to attract
 Its own interpretation of how each target market is defined
 Its own name or classification for each of its markets
 Its own reasons for defining the markets in the way they have.
Existing customer information
You may have a description of existing customers based on:
 Terminology or classifications used by the venue
 Appropriate demographic characteristics – age, gender, nationality
 Products and services purchased
 Total spend or average spend
 Frequency of visits
 Method of payment
 Booking information
 Number and value of bookings made.
Potential customer information
You may have a description of existing customers based on:
 The potential exists to develop a growing market share
 The potential exists for the venue to experience a reduction in trade
 The possibility exists for the venue to exit one or more markets or market segments
 Projections for increased revenue and profit at given timelines – business ‘volume’
 Cost to enter or exit a market
 Projections for trade in terms of volume of sales
 Anticipated positive and/or negative impact on other
operations of the business
 Alignment with business mission and vision
 Fit with strategic and business plans
 Legal issues to be complied with.
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Common customer segments

Following is a list of specific market segments that may be the focus of tourism and travel
organisations.
Business
Business travellers can comprise:
 FIT (Free Independent Travellers) who arrange their own accommodation
 Member of a corporation in which has a special rate with an organisation
 Conference or event guest within a hotel.

Leisure
This market is travelling for relaxation purposes and may
include:
 FIT (Free Independent Travellers) who arrange their own
accommodation
 Tours / coach groups
 Honeymooners
 Families
 Elderly.

Religious
This market is travelling to participate in a pilgrimage or religious celebration.
Sporting
This market is travelling to participate in sporting events, tours or competitions.
Outbound Tourists
An outbound tourist is where a local tourist goes to a region away from where they reside and
where the business is. This normally means the tourist is either leaving the town, city or country.
This type of tourist would be beneficial to travel agents and transport companies.
Inbound Tourists
An inbound tourist is where a tourist from another location comes into your region. This normally
means the tourist is coming into your area.
This type of tourist would be beneficial to accommodation venues and tourist attractions.
Domestic Tourists
A tourist who travels within a country; they are natives and can easily be promoted to.
International Tourists
A tourist who travels to/from another country; conducting promotional activities can be harder as they
may come from various counties, speak different languages and have different needs.
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Customer analysis
As part of the process of identifying which potential or existing customers in which to build
marketing strategies around, it may be wise to undertake a customer analysis.
This is one of the most important reviews for market oriented organisations. This will include
identifying:
 Who the buyers are
 Who is involved in the purchase decision process
 What they buy
 How complex the decision process is
 Where they buy
 What trends are emerging regarding their buying behaviour
 How customers rank competitors in this market
 Lifestyle, demographic and psychographic profiles of key customers.

Identify current business direction

Naturally, any marketing campaign must be in line with business direction.
The current business direction is often identified in the business plan for an organisation.
Current business direction may be focused on, but not limited to:
 Growth
 Contraction
 New markets
 Re-direction of efforts
 Local business focus.
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Market and Site Analysis

Introduction
Once you have identified the orientation and focus of the business in general, it is now time to
start to collect and analyse information that will be used as the basis of designing a marketing
campaign for future success.
In this section we will identify the concept and benefits of
conducting analysis.
In addition we will focus on the first area of evaluation, being the
review of past marketing activities.
Naturally if we are to prepare marketing strategies for the
future it is important to look at what was successful or
unsuccessful in the past.

What is market analysis?

Market analysis provides us with the information necessary to formulate the marketing plan and
its evaluation.
In general this is done by conducting a thorough analysis of both the internal and external
environments, through a SWOT Analysis.
In Section 1 of this manual, the analysis will focus on the internal business environment,
whereas the external business environment will be the focus of Section 2.
The concept of a SWOT Analysis will also be explained later in the manual.
A market analysis focuses on:
 Understanding ways to research and gather information
 Analysing the current situation and marketing strategies
 Analysing market opportunities
 Researching and selecting target markets
 Designing marketing strategies
 Planning marketing programs
 Implementing, organising and controlling the marketing effort.
Market analysis is a fairly generic term that describes an activity that we are constantly
conducting in order to target the right person with the right product/service at the right time in
context with the workings of the market, our environment and our competition.
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Concept of analysing information

Analyse refers to analysis activities for a specific market and may include consideration of:
 Location
 Product and service mix
 Packaging or presentation
 Quality factors (time, cost, variations)
 Access
 Continuity.

Information may include:

 Current performance data
 Sales and contracts
 Forecasted trends and opportunities
 Available resource commitments and capacity.

Benefits of conducting research

By conducting research it is easier to identify:
 The success of our current marketing efforts
 The changes required to ensure our marketing efforts
remain effective
 Current areas of operational success
 Changes required to ensure competitiveness and to
 A competitive advantage.
By identifying both the strong and weak areas of both the marketing approach and operational
performance, appropriate changes can be made to help improve the customer experience.
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Assess past local marketing activities

Once you have identified your business orientation, it is now time to reflect on past marketing
strategies as a learning tool as to how to progress in the future.
Learning lessons from inside the business is a valuable thing because the experience is specific
to the business and not an irrelevant, generic, industry-based example.
Reviewing previous marketing plans and strategies
Consideration of previous marketing plans in terms of the directions they set, the targets put in
place, the resources allocated and the degree of success achieved are critical elements of this
review.
Activities associated with assess past local marketing activities will include determining:
 What the earlier marketing goals of the business were
 How the business tried to achieve them
 What has worked in the past
 The extent of the success it had in achieving its goals
 What strategies were not successful
 Reasons behind success and failure of previous
marketing strategies
 Identifying the campaigns, promotions and other types of marketing initiatives that have
been used by the business
 Identifying personnel and media involved
 Identifying all cost, both monetary and non-monetary associated with those activities
 Determining how the campaigns, promotions and other
types of marketing initiatives were perceived and
received by the target markets and the general
public
 Quantifying the results of the marketing activities,
including intended and unanticipated outcomes, sales
and monetary results and comparison with
established Key Performance Indicators (KPIs)
 Which strategies can be used in future strategic planning, either in their existing format or
amended.
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Review capabilities and resources of the business

The key aspects of achieving business success are through the use of capabilities and
resources.
Whilst it is important to review the 'end results', it is important to identify the capabilities and
resources used in providing products and services to clients.
Types of capabilities
Types of capabilities may include:
 Products and or services
 Capacity to produce goods or services
 Equipment capacity
 Skill level of staff, management and owners
 Hours of operation
 Communication capabilities
 Location/position of the agency
 E-business capacity
 Need for specialist assistance in certain areas
 Maintaining a competitive advantage.
Types of resources
The use of resources are important activities in any business, especially is travel and tourism
organisations.
There is a need to make sure the organisation has the resources it needs to achieve its
identified business objectives, while at the same time, ensuring that money is not wasted on
resources that are not necessary or inappropriate to the task.
Resources can encompass:
 Physical resources
 Human resources
 Financial resources
 Intangible resources.
Physical resources
These types of resources are essential in performing basic operational activities.
They include:
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 Equipment
 Raw materials
 Stock
 Technology
 Location.
Human resources
From an operational point of view, given that we are a ‘services industry’ the importance of staff
in delivering this service component is of upmost importance.
Human resources include:
 Physical number of staff
 Staff expertise
 Skills
 Knowledge.

These will be influenced by:

 Recruitment
 Probation periods
 Remuneration
 Incentive schemes
 Work environment
 Training and development
 Your leadership style.

Types of other human resources required for service operations may include:
 Customer databases
 Outsourced third party service providers
 Service team members, which may include cross functional teams
 Other stakeholders which may be involved in an organisation’s service
 Value chain.

Financial resources
Whilst this is often not determined on an operational level, it is still important to recognise the
importance of this type of resource. In many cases budgets will have the greatest impact on
terms of financial resources available for operational managers.
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Types of financial resources include:

 Cash
 Stock
 Equity
 Loans.

Intangible resources
Whilst these are not ‘seen’ they are certainly important in the service industry.
These resources include:
 Reputation
 Good will
 Image and brand.

Factors affecting capabilities and resources

There are a number of factors that will need to be considered when determining capabilities and
resourcing needs.
Internal factors
 Directions the business wishes to take
 Target markets
 Nature and type of customers
 Service levels and standards
 Services and products provided
 Equipment used
 The existing reputation and image of the business
 Budget
 Style of service
 Existing resources
 Volume of customers
 Promises made.
External factors
 The external business environment
 Customer expectations
 Emerging trends
 Changes in legislation and technology
 Availability of resources.
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Product and Services Identification

Introduction
An organisation cannot be all things to all people. Each
organisation will need to select appropriate products and
services in which to meet the needs of their customers.
As seen in the last section, each organisation will have limited
resources and therefore it must carefully review and decide
which products and services will produce the greatest positive
impact for customers and the profitability of the organisation.
This section will focus on identifying different products and services.

Identify products and services offered

Products
A product is anything that can be offered to a market that might satisfy a want or need.
This can include:
 Tourism products and services
 Packages
 Merchandise.
Services
A service is any activity or benefit that one party can offer to the other which is essentially
intangible and does not result in the ownership of anything.
Its production may or may not be tied to the product.
This can include:
 Booking services
 Foreign exchange services
 Insurance.
Types of travel and tourism products and services
Commonly purchased products and services include:
 Tours
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 Attractions
 Activities
 Entertainment
 Events
 Accommodation
 Amenities and services.
 Airlines
 Car hire
 Cruises
 Transfers
 Rail.

Identify under-performing products and services

It is vital that any underperforming products and services currently being provided in your travel
and tourism organisation are identified in a timely manner.
Not only is it important that you identify problem areas or areas for improvement, but you also
understand the reasoning behind the problems or substandard performance.
By understanding underlying reasons, strategies for change can be more accurately be created.
Types of underperformance
Given that the travel and tourism industry is focused on the provision of services, as opposed to
products, it is essential to look at the underperformance of staff, give that they are the provider
of services to clients.
Before we explore the reasons for staff underperformance, it is a good idea to identify common
types of underperformance.
Underperformance in service oriented industries may include:
 Staff absences
 Professional incompetence
 Service failure
 Customer complaints
 Customer attrition
 Failure to meet targets, including:
 Productivity
 Sales
 Customer contact
 Service quotas.
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Module Name: THE INTERNAL BUSINESS ENVIRONMENT

Comparing products and services on offer to those offered by local

competitors
Changes in the competitive environment
As competitors introduce new services and facilities, the nature of our
industry is we are often forced to respond and match their offerings or
introduce something else in opposition to it. The key here is we have
to know what the competitors are doing. We have to monitor their
advertising, visit their premises and talk to our suppliers about what
the opposition is doing.
We then have to take some action to exploit an opportunity or mitigate any potential negative
impacts – whichever way we go, we have to realise ‘knowledge is power’ only if we act on it.
Knowledge on its own is next to useless
As part of this analysis, it may also be prudent and instructive to undertake a similar analysis of
your competitors so that you have a better understanding of the total opposition ranged against
you, and the marketplace in general.
Identifying the competition
It is important to identify the main competitors to your business including their:
 Name
 Address
 Number of staff
 Strengths and weaknesses.
This knowledge will assist you in formulating competitive strategies to lure
their customers to your business. What is your competitive advantage?
Analysing the competition
When analysing the competition, it is useful to gather evidence of the following:
 Who are they, and where are they located
 Facilities available
 Location and distribution area that they have established
 Target markets they appear to have set
 How well they present to potential customers
 Territory
 Customer accounts
 Product and service mix
 An objective assessment of the quality of their product/service – Are they providing good
quality, costs, variations, reliable service, acceptable trading hours, and value-for-money?
 Their promotional mix – what they do in terms of advertising, when and how
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: THE INTERNAL BUSINESS ENVIRONMENT

 Packaging or presentation
 Their pricing structure – Do they give discounts, trade-ins, and a wholesale and retail
structure?
 Access
 Continuity
 Volume
 Trading terms
 Service standards that are being delivered
 Their level of customer service – What do they provide? Are their staff good at selling and
service?
 Degree of alignment between the promises being made and actual service delivery
 Customer satisfaction.
 The market share that the competition is enjoying
 The significance of their market share of the market in the local area.
Methods to analyse the competition
Ways to achieve this are to:
 Visit the opposition and look around
 Make a booking with them
 Make an enquiry – in person or by phone
 Check out their internet site
 Read the advertising materials they have made available in the
marketplace.
Developing a competitive advantage
The intent of conducting research is to help determine what competitive
advantages you have over your competitors so that you can exploit them.
This research helps you to identify your USPs (Unique Selling Points) in
either product, service or both.
A USP is something your organisation offers that no-one else does. This
makes it unique. The marketing approach says that this USP should be
highlighted in all of your advertising so that customers get to know that they
can only get this particular service, produce, facility, advice, etc. at your store
and nowhere else. The intention is that this USP will act as a motivator for
customers to buy from you.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: THE INTERNAL BUSINESS ENVIRONMENT

Marketing Information Systems

Introduction
Each organisation will have an information management system
that is used to record and manage information relating to all
aspects of the organisation.
This also includes the management of marketing information that
is collected and used to determine marketing strategies for the
future.

Role of marketing information system

Whilst having marketing information itself is essential for any tourism operator, in many cases
most information required by marketing personnel to accurate devise future marketing strategies
staff will be kept in appropriate 'information systems' that can be accessed by relevant
personnel when required.
These information systems may be in the form of hard copy documents and statistics through to
electronic files stored in tourism and travel related software systems.
The different methods of compiling and storing business and marketing information and
statistics will differ depending on the types and volumes of information to be collected and used
for marketing purposes.
Regardless of the system used, the role of having information
systems primarily includes:
 Providing a readily accessible and current database of
information that marketing staff can use when developing
marketing strategies
 Optimising the potential for staff to make accurate
judgements relating to future marketing needs.

Components of marketing information system

In essence, a marketing information system will relate to:
 Marketing intelligence
 Market research data and information
 Marketing decisions support
 Identification of personnel involved
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: THE INTERNAL BUSINESS ENVIRONMENT

The Expanded Marketing Mix

Introduction
The marketing mix is a critical aspect of any marketing initiative as it focuses on all aspects of
how an organisation focuses its efforts towards ensuring:
 Business success
 Customer satisfaction.

Components of the marketing mix

The original 4P’s
The original four “P’s” in a marketing mix were:
Products
This is the development of offerings focused towards the customer needs and wants.
These are the goods and services that are offered to the target market by the company
including a focus on:
 Range of products and services
 Unique points of different
 Variety
 Quality
 Design
 Features
 Brand name, awareness and loyalty
 Packaging
 Sizes or variations in offering
 Add-ons
 Warranties.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: THE INTERNAL BUSINESS ENVIRONMENT

Price
In summary, this is how much it will cost the customer.
This refers to the amount of money that customers, suppliers or intermediaries have to pay to
buy the product and should also include consideration of:
 Yield management
 Perceived value
 Elasticity of demand
 Competing prices
 Discounts
 Payment options.

Placement
This focuses on the convenience for customers in accessing the offering.
Naturally the role of placement in a hospitality or tourism environment is different to other
industries in that customers often need to come to a specific location to experience the offering.
This involves how the company gets information or the actual
product to the final consumer, including decisions regarding:
 Awareness of options
 Access to information
 Total Quality Management
 Demand chain management.

Promotion
In summary this is the way a customer is made aware of an offering.
This covers the firm’s communication activities to its target customers by way of:
 Advertising
 Promotion
 Personal selling
 Sales promotion
 Direct marketing
 Synchronous marketing
 Public relations
 Publicity.
SUSTAINABLE TOURISM DESTINATION MARKETING
Module Name: THE INTERNAL BUSINESS ENVIRONMENT

The 3 new P’s

Today, with the advent of services marketing, some different variables that are also key factors
in the marketing process have come to light. These are people,
processes and physical evidence.
People
This refers to the people who are involved in service delivery. This
is particularly important where services predominate and there is a
high level of intangibility. Here, the building of customer
relationships over time is critical.
Processes
These are important where the customer is involved in the
consumption process. This is highlighted in the hospitality industry
where, if the customer is treated poorly or receives poor service,
they are likely to migrate to a competitor no matter what facilities or
products are offered, as the customer will perceive this process as
poor value for money.
It is important to note that technology is also important in relation to
conversion operations and service delivery.
Physical evidence
This will be analysed by the customer in order to assess the value of a service. In hospitality
and tourism, physical evidence is important (i.e. ensuring that hygiene practices in an
establishment are maintained, and that staff are well presented, courteous and friendly).