Marketing to Local and Regional Markets: Tourism Organisations - Research Paper Example

Marketing to Local and Regional Markets: Tourism Organisations Executive Summary The report deals with marketing of tourism in the regional and localmarkets. Marketing is undoubtedly the most important aspect for any organisation as it directly deals with the clients and includes various measures from informing the target group of customers to selling the product or service and post-sale services. The report emphasises the changing role of marketers amidst globalisation and essence of regional and local marketing. It also has discussed the important aspect of market segmentation. The basic of any marketing initiative is appropriate selection of marketing mix. The report has dedicated sections for the purpose which discusses product, price, place and promotion for tourism marketing in these changing times. A concluding section marks the end of this research report. Table of Contents Executive Summary 2 Introduction 4 Tourism and Marketing 5 Market Segmentation 6 Marketing Mix 7 Conclusion 11 References 12 Bibliography 14 Introduction In the present world of today, the only thing that is presumed to be constant is the word ‘change’. Thanks to the massive developments in the field of technology and communication processes along with that of the ever increasing effects of globalisation, the world has really been with in the few clicks of the mouse. With such developments, the terms and the tricks of almost all the businesses are fast changing and the industry of tourism is no exception. The changing scenario has made the world really small and integrated. There is little doubt that the industry of tourism has been one of the greatest beneficiaries because of the effects of globalisation. Globalisation has made it easy to have the access of the international clients through the free flow of information, massive advertisements, online booking and reduced cost of transportation like airfare. Though, globalisation have definitely provided greater exposures for the tourism organisations in lieu of international clients buy yet the role of the local market can never be undermined. Since long, the tourism organisations have been targeting the local and the regional markets to get increased tourists and for the purpose they have been initiating number of measures in terms of marketing. Tourism and Marketing Tourism is one of the most booming industries of the present day. Higher the purchasing power among the people, more they choose to travel and view the wonders of the world. Another factor that has contributed towards the industry is the increasing level of stress (both professional as well as personal) among the citizens. The increased competition has made the jobs as well as businesses very stressing and so holidaying has come up one of the most viable options to the people. Though, in spite of the reasons that have made tourism part and parcel in the life of the people, the impact of marketing can not be overlooked. Proper marketing initiatives can do wonders for the company and also for the over all industry. Marketing shapes the general perception of the people about the product or service that is being marketed. It helps in brand creation and its enhancement. In today’s world, it is extremely necessary that the manufacturers (in case of products) or service providers (in case of service) understand the public-wants and the need of their target group of customers and initiate measures to satisfy such needs. Today, the transaction does not end with meeting of such needs but also the marketers are required to maintain the relationship through various measures like post–sales services (MIT Careers Office, n.d.). The broad industry of tourism is with in the purview of service industry. It is often perceived to be very different from the other forms of service industries because of its compliance to the multi-stakeholders, ethical considerations and responsibilities towards the environment. Also, unlike other service providing companies, it is almost impossible for any particular tourism organisation to promote a place. Rather, it is a cumulative effort of many of the organisations like the tourist spot authorities, transporters, travel agents, accommodation providers and governments that jointly promotes it (Fyall & Garrod, 2005). Therefore, the essence of customisation in the marketing of tourism in local and regional markets is quite crucial. The important aspects of the marketing mix for tourism are the price, product, place and promotion. Market Segmentation Market segmentation is one of the core issues that is to be answered by the marketer at the very outset. The whole of the market can not be targeted at once. Even though if any firm does so, there is little chance of success as tourism specifically falls with in the service industry and the requirement of high level of customisation is increasingly felt in it. Therefore, market segmentation is crucial along with the proper selection of the target group of customers. Market segmentation can take various forms like that of physiographic, psychographic, demographic and other factors. It generally defines the heterogeneity of the market (Department of Marketing, n.d.). The target market can be based on the age and gender which falls under the demographic factors. It can also be segmented on the psychographic factors which include values, attitude and lifestyles of the target group of customers. The ultimate onus lies on the tourism organisations to select the most appropriate segmentation plan to target the desired group of customers so that the companies can earn increased revenue and profit. Marketing Mix Having appropriate marketing mix is extremely crucial for the marketers. Marketing mix generally includes the different factors of marketing that are required to be integrated in appropriate proportion so that the marketing company reap the maximum benefits from it. Therefore, it can be said that the marketing mix comprise of various interrelated components like product, price, place and promotion that are put together in a particular proportion so that the marketer can have the highest possible benefit from the mix (Stanford University, 2008). Product - In the industry of tourism, places are considered as product. To influence the local and regional market, the marketers try to increase the appeal of the places and destinations. The authorities try and build up the infrastructure so that the tourist can enjoy optimally. As it happens in the tourism industry, many of the operators and service providers come together to provide the best of the opportunities for the tourists. The local transporter, the hotel authorities, the food suppliers, the guides and the local authorities, all together make the tourism organisations (Campbell, 2006). Also, the products i.e. the places can be marketed to the local as well as regional marketers in different forms. It can be just sight seeing for a group of friends, where as the tour can be for the purpose of honey-moon for a newly married couple. The tour to a particular place can also take the form of family visit on a vacation or any sort of educational excursion. While marketing to particular region or local markets, it is prudent for the marketer not to bracket his product in to any particular group. Rather he should try to segment the target group of customers and should be able to approach in such way that it makes sense to them. If the product is sea-beach, he can market to the students for excursion activities where as to the newly married couples as honey moon destination emphasising on the wildness of the sea. The sea beach can be approached as the stress removing locations to the families and the group of friends. Price – One of the most important aspects of any marketing initiative is the pricing of the marketed product or service. Price is the value that the touring parties have to forego to take the thrill of the tour. The most important aspect that the marketers of the tourism in the regional and local fields should be aware of is that the tourism is not a necessary and must – to – do activity rather it is a leisure and refreshing initiative. As it happens in case of service industry, the pricing of the tourism industry should be based upon comparable pricing based on the competitors (Holecek, 1987). To tap the local and regional markets, the tourism organisations take the measure of group pricing. They club together many schemes for different classes of the society e.g. luxury, premium, deluxe, budget or economy. The pricing of the different schemes differs as the facilities available are also different under different schemes. Suppose, if under the luxury scheme, the tourist is accommodated at five star hotels, and then it is evident that he might be provided with just an air-conditioned room under the scheme of budget. The pricing of the tours also depend upon the kind of tourists. If it is for the corporate, the pricing would be different than that for families. In today’s competitive market, the pricing also depends on the number of tourists. Higher the members in the group, lesser are the cost per person. Place – The third ‘P’ of the marketing mix is that of the place or distribution. It is another important aspect for regional or local marketing of tourism. The distribution channel of the tourist destinations is ought to be beneficial for the tourists so that they can feel like visiting the spot. The tourism organisations resort to many distribution channels like that of franchisees or retailers. Under the franchisee system, all the information is available from them and also one can make necessary bookings through them. Also, the tourism organisations can employ retailers to cater to the residents. Travel agents generally fall under this category. To have the direct access, the organisation can also set up its own office at any prominent place of the city. Setting up of office is expensive and can be carried only by big tourism organisations. The other prominent methods of distribution include having tie-ups with other organisations, where their counter part have stable network on certain pre – determined ratio of profitability. It is up to the tourism marketers to decide the method of distribution (whether intensive, selective or exclusive) and is based on the organisational objectives along with the geographical reach of the target group of customers among other factors (Brown, n.d.). Promotion – Rightly observed by McDonough and Ackert long back, promotion is extremely crucial for tourism and recreation industry. The prospective customers must be informed about the options available and facilities at such destinations. To market tourism in the regional and local markets, the promotional measures can take the forms of personal selling, advertisements, sales promotions or publicity (McDonough & Ackert, 1987). Advertisements and publicity are generally used to influence large number of prospective clients at once. These are certainly important tools but the more useful would be those tools that have certain degree of customisations which would make the prospective customer feel that it is solely designed for him. As tourism is a leisure activity, personal selling might not be the best promotional tool but sales promotion is definitely so. Tourism organisations are often found to discount their original pricing or provide certain added advantage along with the tour packages to increase the customer base. Another important tool for promoting tourism would be to organise tourism fairs where the tour operators along with the hotel chains, transporters and other related service providers come together to invite the general public through various exciting schemes and packages. Conclusion It has been discussed in the above paragraphs with due importance that tourism is a leisure activity for the customers and is quite different from other fields of service industry. There is no hard and fast requirement for the client to tour any particular area, neither is there any compulsion for him to get associated with any particular tourism organisation. Rather it is the inquisitiveness to view the unseen and the passion to discover the nature that rules with in the mind of the tourists. Today, tourism is also viewed as stress removing measure. Whatever be the reasons, the tourism organisations should understand that customers just want to enjoy their valuable time when on tour. So, the onus lies on the tourism organisations to create value for the customer’s money and also provide best of the opportunities so that the goodwill and the reputation of the organisation is known to other prospective clients through word-of –mouth. The tour operators also should take all possible measures to keep the tour safe and healthy in the trying times of today. The customers are more like guests to the tourism organisations. References Brown, A., No Date. Selection of Distribution Channels. University of Delaware. [Online] Available at: http://www.udel.edu/alex/chapt15.html#type [Accessed 17 November, 2009]. Campbell, S., 2006. Executive Summary. A Strategic Plan for Colorado Heritage Tourism Enhancement. [Pdf] Available at: http://www.colorado.com/ai/FINAL.EXEC.SUM.STANDALONE.03.01.06.pdf [Accessed 17 November, 2006]. Department of Marketing, No Date. Market Segmentation. Marketing Website. [Pdf] Available at: http://marketing.wharton.upenn.edu/ideas/pdf/Green/Monograph/Adventures%20-%20Part%20I%20-%20Chapter%204.pdf [Accessed 17 November, 2009]. Fyall, A. & Garrod, B., 2005. Tourism marketing: a collaborative approach. Channel View Publications. Holecek, D., 1987. Pricing Tourism Products and Services. Michigan State University. [Online] Available at: http://web1.msue.msu.edu/imp/modtd/33740097.html [Accessed 17 November, 2009]. McDonough, M. H. & Ackert, G. A., 1987. Developing a Promotional Strategy. Michigan State University. [Online] Available at: http://web1.msue.msu.edu/imp/modtd/33710086.html [Accessed 17 November, 2009]. MIT Careers Office, No Date. Marketing. Massachusetts Institute of Technology. [Pdf] Available at: http://web.mit.edu/career/www/guide/marketing.pdf [Accessed 17 November, 2009]. Stanford University, 2008. The Marketing Mix. Marketing Strategy. [Online] Available at: http://hci.stanford.edu/courses/agile/handouts/gibbons-marketing%20strategy.html [Accessed 17 November, 2009]. Bibliography Buffalo Niagara Cultural Tourism Initiative, 2005. New Strategy Promotes & Coordinates Cultural Tourism in Region. University at Buffalo. 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