Hospitality and tourism marketing - Essay Example

Contents Introduction 2 2.Motivation and Trends 4 3.Product Portfolio 6 4.Time and Seasonality 7 5.Marketing Strategies and Strategic Issues 8 6.Controls 10 7.E Marketing Techniques 11 8.Conclusion 12 References 14 1. Introduction This paper is a feasibility study carried out for developing tourism products and marketing strategy for these products. The company, Amsterdam Marketing, intends to focus on one of the following products it has to offer in context of hospitality and tourism industry. The products are: a. Culture and Heritage b. Activity Holidays c. Art and Culture d. Gastronomy Tourism e. Luxury Short Breaks f. Health and Wellness Tourism This study looks at viability of product and its marketing strategy with emphasis on establishing problems and their answers. In other words proposed product and its marketing strategy will be put to deliberation in order to assess whether the idea may work or not. Feasibility study is usually carried out in three domains Vis. a. Market b. Technical c. Organizational Structure d. Financial Market feasibility report, as in this paper of hospitality and tourism industry intends to put forward should look into how things work and what problems they face for smooth working of a product and marketing plan. Following aspects are discussed, in brief) as a prelude of this study: a. Customer Analysis: Customer analysis has market segmentation, target market and customer motivation and its determinants. Setting aside the product for a moment let target market of Amsterdam has potential customers as Chinese families with teenagers. Customer analysis involves classification of customer. In this case classification can be dome on the base of following variables: i. Customers belong to large or medium home cities ii. Interest in diversity of cultures iii. Age group and Social Strata of the Customer iv. Business Owners and Professionals Analysis of tourists from china has seen substantial growth i.e. of 148.7% for the period 2008 to 2014 (Amsterdam, 2014). This change calls for launching of specified products according to customer needs. To launch products for this section of customers, which are of prime importance for this feasibility study analysis on family motivation is carried out. This analysis will be shared as the study progresses. b. Product Portfolio: The product Portfolio is discussed in upcoming section however a brief of product is given in this section as a precursor to discussion later. i. Core products, in our case relate to art, culture and heritage. To a trip for the target customers should aim knowledge of art and culture, enhance understanding of whole family and should customize parent-child tours ii. Supporting products make difference in a competitive environment. Here improving enjoyment of family, relaxation and their access to information will make difference. This difference will help in grabbing more share in the target market Tourism product portfolio has following dynamics. There are quality issues, relative uniqueness, themes and potential target audience. The product gets support from these elements. In order to comprehend this relatively new field of Hospitality and Tourism Marketing, one needs to refer to rudimentary aspects of Marketing (Dolnicar, 2008). Rationale for the above mentioned product portfolio has buying decision behind it. It deals with assessment on target customers in context of their aspirations (stimuli). It includes income, safety, visa, psychological goals and offer that are floated in core and supplementary offers. Availability of information about the offer is second step where by customer tends to check alternatives. Here information must be apt and attractive. This is because of the fact that stimuli might have been catered by the core and supplementary products but necessary conveyance of information is also important. Decision once taken will lead to post purchase analysis which will be very important so far as suggestion/ feedback is concerned. Satisfaction leads to regular customer-ship. A study on rating by Chinese tourists stated that Shopping, Entertainment and Participatory activities bagged highest rating whereas tourism experts marked Dining/Eating out, Participatory activities and entertainments as the most favorite activities. 2. Motivation and Trends In Amsterdam Market, the customers will be gauged on certain determinants. These factors will allow us to formulate marketing strategy that will address customer needs attached to them. The determinants are: a. Circumstances: Include income of the customer class, commitments, their health issues etc. b. Knowledge: Includes comparative prices available to customers for same product, attractions that may be suitable for the target customers c. Experience: Includes offers for products, their range, and services that are given by competitors d. Attitudes and Perception: Includes destination awareness and options for particular culture (destination characteristics) A brief analysis of trends in hospitality and tourism industry is given below. It is important to mention here that following trends are showing their strong presence in European tourism and hospitality market. With reference to target market in Amsterdam and product discussed above, these trends are cardinal for a marketing strategy: a. Cultural (sight-seeing, experiencing new cultures) b. Physical (relaxation, sex, health, suntan) c. Emotional (nostalgia, adventure, escapism, fantasy, romance, spiritual fulfillment) d. Personal (visiting friends and relatives, satisfaction- physical, moral, psychological, increasing social circle) e. Developmental (knowledge, emotional, psychological, skills) f. Status (spending opportunity, ostentation, exclusivity, fashion) Keeping in view our discussed case, in personal determinants, circumstances lead motivation; it is intimately related to health, income or commitment. Also Knowledge of destination, pricing, availability of package/ product is of same importance. Attitude and perceptions shape tourist’s ideas. They plan and shun ideas for investing time and money in travelling. Motivation in Hospitality and Tourism Marketing industry is customer satisfaction. This satisfaction leads to gains in multiple dimensions. Expected service has three main ingredients which are communication, personal needs and customer experience. Trends in Hospitality and Tourism Marketing industry are based on the requirements put from the customers. Services are aimed to make guests more and more self-sufficient. Use of information technology has revolutionized the hospitality and tourism marketing. Hoteling industry has become more up-board and accessible. Expectation of international visitors has been increased during past 5 years (Karppinen, 2011). The growth rate of international visitors in the US has increased by 4%. These ingredients suggest that following trend are important in order to achieve better service quality. a. Access b. Communication c. Competence d. Reliability e. Credibility f. Securities g. Responsiveness h. Knowing the customer and i. Tangibles These determinants of service quality lead to measurement of perceived and expected service. Markets are divided into groups because of following variables; Occasions, Status, Usage Rate, Benefits, Loyalty, Attitude and Readiness (Kotler, Bowen and Makens, 2006). Another important trend in Hospitality and Tourism Marketing is reputation management. It is important because it continues to dominate hotel industry. Traveler’s ability to access communication networks are important and have seen a growth during recent years. They are able to access a number of service providers (Gittins, 2014). Social media has made these proposals a clear possibility. They have put forward providers with location and facilities in detail in interactive way. 3. Product Portfolio Core product has visits to museums while taking specific routes for sightseeing activity in a commuter facility. Amsterdam has over 60 museums which have highest tourists’ density. This is the reason the product has museum visits at prime position. Second is the Diamond-Tour which is a knowledgeable experience into one of the world’s most expensive markets. Multicultural festivals, Music and Food which is being offered will help tourists to experience multiculturalism, which, currently is one of the biggest social change happening to Europe. Supporting products are canal bus daily ticket and bicycle riding. These products will help in making tourists know relaxing and sight-seeing environment of bicycle friendly capital of the world. A brief on Consumer Price Index of three major cities of Europe and Capital of China reveals a basic fact. This fact suggests that Beijing is cheapest among them. Inflation is low and CPI is well below 40% to that of London. Cost of living index of London is 100.45, while in Paris and Amsterdam its 81 and 76.62 respectively. Beijing has CPI of 52.91 well below its competitors. For that matter, Amsterdam should be priority for tourists from China. As discussed in introduction the number of tourists from China saw 146% growth since 2008. As compared to London which is Amsterdam’s competitor Brand Awareness and their respective cultures are of main focus for the Tourists. The hospitality industry of Amsterdam has an edge of lower cost of living and can provide for relaxation and intimation with nature. The cycling capital of the world is far ahead in this regard. As compared to Paris which also has famous canal for tour, it is important to work on dissemination of information among potential tourists that there are better communication abilities in Amsterdam. In addition to this the lower cost of living in Amsterdam makes her a better choice. 4. Time and Seasonality One of the important aspects of Amsterdam Hospitality and Tourism Market is the planning and execution of the marketing campaign. Certain variable like timescale and seasonality can affect campaigns. Tourism industry has seasons which have huge or very lukewarm response from tourists due to severity of weather. As discussed in section one, the part of world near equator are likely to see less influx during summers. Plus there is a monsoon season in the region that doesn’t allow tourist to visit coastal areas due to torrential rains and huge water catchments. Similarly during winters in Eastern Europe there is likely to be fewer visitors due to tough weather conditions. Also, even if there is an influx, it is likely to be short lived because of less endurance of weather conditions (Pitzer, 2008). Marketing campaigns are therefore set keeping in view the destination and target audience. This fact maneuvers the marketing campaigns. Some campaigns are likely to be shifted only to working days with packages targeting holidays. Types of variation are; daily, weekly, seasonal, cyclical and unpredictable variations (Redman, 2013). The situations of over-supply or under-demand are catered through proper planning beforehand. However advertising campaigns are done only after assessing capacity and delivery parameters as discussed in previous sections. In hospitality industry, strategies which are competitive can be listed as below (Robothman, 2012): a. Creating value for tourists/guests difficult to be imitated (Competitor’s Challenge) b. Sustain Value for guests c. Creating unique positioning strategy d. Offerings and special facilitations 5. Marketing Strategies and Strategic Issues Marketing activities have two important aspects, vis. Manpower and cost. If we list down list of those marketing activities which are low cast and consume less manpower then white papers, webcasts, ad hoc campaigns and public relations are few of the simplest of techniques however most expensive and resource starved campaigns are live events, print and electronic media advertising, industrial research and direct mailing. Marketing activities like live events, PR, white papers and ad hoc campaigns are very effective. E-marketing which is one of a new technique requires advance systems and their operators. Thus on the base of different activities marketing activities can be sub divided into three main categories: a. Relationship Marketing b. Online Marketing c. Traditional Marketing For online marketing there are certain search engine optimization companies which help in achieving high level of public interaction over the internet (Brinker, 2014). This technique is discussed in next section. As discussed after customer classification in the case of Amsterdam marketing, overview of strategic choices is necessary. A list of options/ choices will help in understanding issues related to them. Relationship building, product development strategies and importance of customer engagement is cardinal to strategic management of product and marketing program. There are following option so far as direct involving and engagement of customers is concerned. One is online techniques, the other is matching value proposition, third is CRM and database management, last but not the least is development of loyalty schemes. In Hospitality and Tourism Marketing, a number of marketing strategies are being employed in order to grab a bigger share. Global tourism industry, today, is more relying on social media than on any other media (Swanson, 2014). This is because of the fact that electronic media has inherent capacity to share more information, while social media allows an interactive information session with a potential tourist. Marketing, today, is therefore with a purpose. There are two types of marketing one called inbound and the other is known as outbound (Lake, 2015). Inbound marketing involves drawing customers drawn towards electronic media portals or channels whereas outbound are paid online advertisements and direct mailing methods (DeMers, 2013). Although, both these types of marketing can follow each other, yet there exists dependency in between both of them. As discussed in previous sections, customer classification criterions were discussed in previous parts. Variables of that classification before floating of marketing plan are important. 1st the majority of tourists are large or medium city dwellers, second is that the customers takes interest in ethnically and culturally diverse environments. Third is that age group in the above given scenario is44-55 middle to upper class and last is that mostly are professionals. These statistics will help in finding the category of the visitors. And in such a way marketing plan will be sorted out. A comparative analysis of Amsterdam and London was carried out in Part A. It was revealed that a strong competition exists between history and culture, brand awareness, lower cost of living and relaxation chances in both the cities. Similarly Amsterdam and Paris had competition in architecture and culture, canal tourism, biking system and communication skills abilities. While choosing a marketing strategy, it is important to position the Hospitality and Tourism package. This is done by identification of a set of possible advantages over other competitors. As seen in hoteling industry proper positioning is very important for customer attraction, otherwise the competitive advantage flattens to ground. Next step is the communication of competitive edges through a proper stream of media (Phillips, 2005). As discussed earlier that outbound marketing is gaining currency these days, establishing connection through email is good option. However, strategies regarding marketing will be listed in addition to this discussion (Lake, 2014). Thus marketing is not limited to branding, and in the above mentioned case one could see that e-marketing has more importance and ease of access. Website development, telemarketing, travel and trade marketing, media, public relations and social media access are few of the marketing ventures and tools for marketing strategy (Middleton, 1994). 6. Controls Evaluation and control is very important while implementing a marketing action plan. The Amsterdam market and marketing mix is needed to be handled. The objectives and implementations has marketing action plan in between. Few of the present challenges in the implementation of Hospitality and Tourism Marketing techniques are controlling the audience, reducing dependency on certain variations (daily, weekly, seasonality etc.), managing a solid information database for the products and services in Hospitality and Tourism industry. In order to seek solution to these problems, it is important to have controls. These controls are inherent to marketing strategies. They are (Owen, 2014): a. Profit and Efficiency b. Strategic Controls and c. Operational Controls The controls are implemented through a proper plan, the type of control suggest its own methodology of implementation. Here variables like seasonality, variations like holidays and other things are taken into consideration before developing controls. Analysis of critical tactics employed for the implementation of famous Porter’s generic strategy can be discussed here. Main aspects are differentiation strategy, cost leadership strategy, focus and cost strategy. They address problems like developing brand identification, extensive training of market personal, utilization of advertisements and forecasting of new growth prospects. Issues tagged as danger points can be bad relations to competitors and risks involving ventures. 7. E Marketing Techniques Internet has changed information sharing methods. It is more impactful and has an importance in today’s media. There has been a shift from inbound to outbound marketing during last 5 years. This is because the fact that interaction and interactivity has become more easy. More over publishing over the internet has a special ease and inherent pervasiveness. Trending is transferred across the globe in a very little time (Gravia, 2013). Plus there is no bar in accessibility of data and information so far as customer satisfaction is concerned. New and advance techniques are being used to achieve customer satisfaction so far as information of their destination and target services is concerned. A survey suggests that E Marketing techniques will grab a major share in Hospitality and Tourism Marketing. Rationale for E-Marketing techniques is discussed below: a. Content Marketing Bigger Than Ever b. More Diversity in Social Media Marketing c. Mobile Friendly Contents d. Search Engine Optimization and Social Signals e. Ad retargeting effectiveness f. Image Centric Content g. Less will be more (Notable trend to shift consumer preference) A number of techniques that are currently employed in E-Marketing are given below. However it can be seen in the list that all techniques are in one sense or the other attached to everyday internet usage. And the above mentioned objectives are being effectively achieved through them. The list is: a. Web promotion plans on website tags b. Search Engine Rankings c. Email Marketing and Internet user database d. Affiliating and associate programs interconnectivity e. Responsive alerts and social media rooms f. Articles and story publishing g. Blogs for public interaction h. Chat clients and other interaction sessions i. Contests and giveaways j. Press releases Importance of internet/ online marketing has seen some problems which are being addressed through outbound marketing techniques. One problem is pressure on marketeering professionals in wake of traffic that reaches the advertisement portal. Second is that subscription may be high but very less pay or come to experience the deal. The resources that are spent on the internet have a low cost; this fact makes online/ e-marketing an option. Otherwise potential customers are not willing to share their contact information due to flow of just traffic to their internet portal. 8. Conclusion In brief stepwise flow of marketing process is also discussed here it involves market segmentation, market targeting and positioning. It involves Marketing Segmentation, Targeting and Positioning. It is relevant to mention that mass marketing and segment marketing has a different which is based on a product to all consumers and multiple products to more segments. This makes segment marketing very specialized so far as it’s planning and implementation is concerned. High specialized nature of Segment Marketing suggests that heterogeneous markets have smaller segments and their services and products can be reached more efficiently and effectively in order to match their unique demands. A number of ways are suggested by marketing professionals. They are: a. Geographic Segmentation (Potential Customers, Location based, Old Markets) b. Psychographic Segmentation (Customer Priorities, Opinions, Attitudes, Interest) c. Demographic Segmentation (Gender, Ethnicity, Education Level, Household, Family Size and Situation, Age) d. Socio-Cultural Segmentation (Involving Religion, Social Strata, Lifestyle) e. Product Related Segmentation (Quality of Service, Amount of Service used and Company Loyalty) In the end Key Performance Indicators are directly related propotional to Customer Satisfaction in Hospitality and Tourism Industry. In Amsterdam market Guest Surveys regarding Quality of Service, Customer profiling, and participation in grading Schemes. Also the need of defining customer satisfaction levels and customer retention rate are other customer relationship management KPIs (Berry, 2013). Financial Key performance indicators involve Net operating profit, meeting financial targets, cash flows, adhering to budget or sales achieved. Internal Business has its own KPIs like productivity, process improvements, teamwork, cross sector comparison. Thus it can be ascertained that Hospitality and Tourism Marketing has its own dynamics. It not only needs prudent planning but also needs specialized marketing techniques. References Amsterdam, G. (2014). Tourism sector in Amsterdam continues to grow. Bureau Onderzoek en Statistiek. Berry, C. (2013). Key Performance Indicators (KPIs) - explained. [online] Smartkpis.com. Available at: http://www.smartkpis.com/key-performance-indicator-KPI [Accessed 4 May 2015]. Brinker, S. (2014). RISE OF THE MARKETING TECHNOLOGIST [INBOUND 2014]. [online] Slideshare.net. Available at: http://www.slideshare.net/HubSpot/cmo08-brinker [Accessed 4 May 2015]. DeMers, J. (2013). The Top 7 Online Marketing Trends That Will Dominate 2014. [online] Forbes. Available at: http://www.forbes.com/sites/jaysondemers/2013/09/17/the-top-7-online-marketing-trends-that-will-dominate-2014/2/ [Accessed 4 May 2015]. Dolnicar, S. (2008). Market Segmentation in Tourism Industry. University of Wollongong (Faculty of Commerce). [online] Available at: http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1597&context=commpapers [Accessed 4 May 2015]. Gittins, S. (2014). 6 Skills and Characteristics you Need to Work in the Hospitality Industry - RAM Training Services. [online] RAM Training Services. Available at: http://www.ramtrainingservices.com.au/blog/6-skills-and-characteristics-you-need-to-work-in-the-hospitality-industry/ [Accessed 4 May 2015]. Gravia, B. (2013). The Hospitality And Tourism Marketing Strategies Marketing Essay. [online] Uniassignment.com. Available at: http://www.uniassignment.com/essay-samples/marketing/the-hospitality-and-tourism-marketing-strategies-marketing-essay.php [Accessed 4 May 2015]. Gurigros, M. (2015). Hotel Sample Marketing Plan - Controls - Mplans. [online] Mplans.com. Available at: http://www.mplans.com/hotel_marketing_plan/controls_fc.php [Accessed 4 May 2015]. Haku, K. (2011). Hospitality Industry in HongKong. [online] Available at: http://www.edb.gov.hk/attachment/en/curriculum-development/kla/pshe/nss-curriculum/tourism-and-hospitality-studies/Hospitality_English_21_June.pdf [Accessed 4 May 2015]. Hospitality, 3. (2015). 3rd World Research Summit on Tourism and Hospitality - Tourism Management - Elsevier. [online] Elsevier. Available at: http://www.journals.elsevier.com/tourism-management/conferences/3rd-world-research-summit-on-tourism-and-hospitality/ [Accessed 4 May 2015]. Jaume, C. (2013). Characteristics of the Hospitality Industry | Winhotel. [online] Winhotelsolution.com. Available at: http://www.winhotelsolution.com/blog/hotel-news/characteristics-hospitality-industry/ [Accessed 4 May 2015]. Karppinen, M. (2011). STRATEGIC MARKETING PLAN FOR A HOTEL. [online] Available at: http://www.theseus.fi/bitstream/handle/10024/34519/karppinen_maarit.pdf [Accessed 4 May 2015]. Kotler, P., Bowen, J. and Makens, J. (2006). Marketing for hospitality and tourism. Upper Saddle River, NJ: Pearson Prentice Hall. Kotler, P., Bowen, J. and Makens, J. (2006). Marketing for hospitality and tourism. Upper Saddle River, NJ: Pearson Prentice Hall. Lake, L. (2014). The 10 Best Online Marketing Strategies. [online] About.com Money. Available at: http://marketing.about.com/od/internetmarketingstrategy/a/internettips.htm [Accessed 4 May 2015]. Lake, L. (2015). Internet Marketing Strategy: Why is it Important?. [online] About.com Money. Available at: http://marketing.about.com/cs/internetstrategy/a/aanetmarketinga.htm [Accessed 4 May 2015]. Lunn, M. (2011). Segmenting and Targeting your Market. Cornell University School of Hotel Administration. [online] Available at: http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1238&context=articles [Accessed 4 May 2015]. Middleton, V. (1994). Marketing in travel and tourism. Oxford: Butterworth-Heinemann. Owen, G. (2014). Effective marketing Strategies for The Hospital Industry. [online] Available at: http://www.b2bmarketing.net/blog/posts/2014/10/20/effective-marketing-strategies-hospitality-industry [Accessed 4 May 2015]. Petrovic, S. (2015). Market Segmentation in the Hospitality Industry. Cranfield University. [online] Available at: http://195.130.87.21:8080/dspace/bitstream/123456789/672/1/Actioning%20market%20segmentation%20in%20the%20hospitality%20industry.pdf [Accessed 4 May 2015]. Phillips, P. (2005). Performance Measurement Systems in Tourism, Hospitality, and Leisure Small Medium-Sized Enterprises: A Balanced Scorecard Perspective. Journal of Travel Research, [online] 44(2), pp.201-211. Available at: http://www.sme-egypt.org/Documents/Others/Performance%20Measurement%20Systems%20in%20Tourism,%20Hospitality,%20and%20Leisure%20Small%20Medium-Sized%20Enterprises.pdf [Accessed 4 May 2015]. Pitzer, D. (2008). Competitive marketing strategies of selected hotels: an exploratory study. [online] Available at: http://www.unisa.ac.za/contents/faculties/service_dept/docs/SABVI122chap1.pdf. Profitablehospitality.com, (2006). Key Performance Indicators for Restaurants, Cafes, Catering, Clubs & Hotels. [online] Available at: http://www.profitablehospitality.com/public/88.cfm [Accessed 4 May 2015]. Rauch, R. (2014). Top 10 Hospitality Industry Trends in 2015. - Monday, 8th December 2014 at 4Hoteliers. [online] 4hoteliers.com. Available at: http://www.4hoteliers.com/features/article/8736 [Accessed 4 May 2015]. Redman, B. (2013). Three Types of Marketing Activities That People Use Every Day. [online] Small Business - Chron.com. Available at: http://smallbusiness.chron.com/three-types-marketing-activities-people-use-day-30746.html [Accessed 4 May 2015]. Robotham, M. (2012). Product Marketing – the missing discipline…. [online] Mark Robothams Blog. Available at: https://succinctstories.wordpress.com/2012/05/17/product-marketing-the-missing-discipline/ [Accessed 4 May 2015]. Rouch, R. (2013). Hospitality Net - Top 10 Hospitality Industry Trends in 2014 | By Robert Rauch, CHA. [online] Hospitality Net. Available at: http://www.hospitalitynet.org/news/4063217.html [Accessed 4 May 2015]. Sandeen, P. (2014). 3 Email Marketing Strategies and How to Make Them Work. [online] Peter Sandeen. Available at: http://www.petersandeen.com/email-marketing-strategies/ [Accessed 4 May 2015]. Swanson, G. (2015). Internet Marketing Strategies. [online] University of San Francisco Online. Available at: http://www.usanfranonline.com/resources/internet-marketing/internet-marketing-strategies/#.VUfgIfmqqko [Accessed 4 May 2015]. Read More