Background of The Tourism Industry - Essay Example

? International Marketing Plan for Tourism Industry AFFILIATION: Table of Contents Table of Contents 2 Introduction 3 Background of the study 3 Problem Statement 4 Objectives of the Study 4 Scope of the Study 5 Limitations of the Study 5 Literature Review 6 Research Methodology 11 Development of research approach 12 Underlying Philosophy of Research 13 Research Approach 13 Data Collection 14 Sample Size and Technique for sample selection 14 Data Analysis 14 Reliability and Validity of data 15 Discussion and Interpretation 15 Conclusion and Recommendations 17 Traditional and Online channels to reach customers 17 Online Marketing Tools 18 Implementation and Control 19 References 21 Introduction The businesses have now become global these days and they are now rendering services in multiple countries; as s result there is intense competition among the companies and the customers are give a wide range of options to choose from (Kapferer, 2008). The international businesses are important for many countries as it helps in giving a boost to their economies and these businesses create an attractive and competitive environment (Bennett and Blythe, 2002). The international businesses play an important role in the international trade and the increasing number of international businesses create globalized environment that need more effective analytical tools (Bowman, 2007). Hence, international businesses need to take various factors into account when designing strategies for international marketing. In recent times, the social networks have changed the ways the organizations are doing business activities. According to Molina et al. (2010), social media is the online community in which people from different backgrounds and objectives come together on one platform to share the interests and activities. Similarly, Mansfield et al. (2005) in their research indicated that the travel and tourism industry is growing by leaps and bounds and the industry is expected to produce exceptional results in the long-run. The tourism industry is the main revenue earner in countries such as UK, USA, Canada, Malaysia, UAE, Saudi Arabia and other European countries (Gretzel, 2008; Gursoy and McCleary, 2004; Srikaya and Woodside, 2005). Background of the study The tourism industry has been growing at an exceptional rate and it is expected that it will continue to expand more in the future. The most important aspect that the tourists consider when deciding about their travel destinations are the information gathering process. The tourists use variety of sources to gather sufficient information. As Gursoy and McCleary (2004) have stated that tourist information is the most valuable concept and the two vital aspects that are given utmost consideration are the image that the tourists have about the destination and the selection mechanism that the tourists to make their final destination choice. According to Chitango (2011), people are relying more on social media to make selection about their travel destinations and they are using these social networking mediums as a source of information gathering mechanism. It has been stated by Santos (2011) that the tourism industry will have to rely on the social media advertisements in the future so that they can attract the customers. The travellers are now shifting from traditional advertisement mediums such as advertisements, newspaper ads, billboards and others to YouTube, Facebook, Twitter and other online blogs to make their travel destinations choices (El-Goharay, 2010). The primary purpose of the paper is to help the travel and tourism industry develop an understanding about the changing marketing trends in terms of social media and what needs to be done to respond to the customer’s needs and demands. The paper will develop the strategies that the industry can implement to attract the tourists to their countries and make it their final destination choice. Problem Statement The researchers wanted to understand impact of social media on the travel and tourism industry alongwith the strategies that need to be developed by the industry players to respond to the changing needs of the customers. The primary issue that needs to be addressed by the travel and tourism industry is to understand the mechanism of competing in the globally changing environment. Objectives of the Study The main objective of the paper is to understand the growing role of social media in the travel and tourism industry and guide the organizations in the sector about the ways that can be used to attract the tourists in their countries. The other objectives of the study are: 1. To understand the evolution of social media in travel industry. 2. To evaluate the impact of destination image on the travellers’ final destination choice. 3. To analyze the changing trends in the future tourism industry. 4. To determine the role of social media in the travel and tourism industry. Scope of the Study The scope of the study is limited only to the market of USA and UK. The information is gathered solely from the secondary sources such as journals, articles and books. The researchers will try to gather in-depth information from the research papers and present applicable and realistic strategies for the organizations working in the particular industry. The study primarily revolves around the development made by the social media and its impact on the global trends of the tourism industry. Limitations of the Study The major limitations we faced were shortage of time, cost, confidential information, permission from organization to conduct the survey, access to paid literature and other paid researches being done related to our topic available online. Our research was limited to few research papers due to limited resources. The research methods used were feasible as per our budgetary constraints. Availability of pure study of the subject was another constraint as the researchers constitutes of inexperienced people which may affect the study. Legal constraints such as the approval from the higher authorities and external factors affected the study. Lack of availability of authentic prior research studies in the country. Unwillingness of respondents to answer our questions. Literature Review The latest media is termed as social media and it has revolutionized the way business activities are being conducted. Social media is also termed as digital media by Santos (2011) and Ved (2012) and it refers to the number of avenues that it provides to the travellers for on demand access to the content anytime and from anywhere. The tourism industry has grown by leaps and bounds and it is expected to show more exponential growth in the future. The travellers have become very selective when deciding about their final destinations and there are many factors that the customers take into account when making their final destination selection. According to Chandra and Menezes (2003) and Molina et al. (2010), the tourism industry is affected by the social media as the travellers are looking for detailed information from these sources. Some travellers are so concerned about their travelling plan that they start the preparation months in advance and they have certain image about their final destinations (Santos, 2011). Jana (2012) and Ved (2012) have done extensive researches about the impact of social media on tourism industry and they have found that social networking sites are the major influencers in their final destination selection. The countries that are willing to boost their travel and tourism industry will have to focus on building a brand name and need to create global perspective for increasing the tourist base (Dumitrescu and Vinerean, 2010). The studies of Santos (2011) and Ved (2012) revealed that customers are highly influenced by the reviews that are given on the social networking sites and are relying on these mediums for information about travel and tours rather than on the brochures and ads in the newspapers that are given by the travel agencies. Hence, it is expected by the travel and tourism industry that they will have to incorporate social media in their budget to reach their potential customers (Chitango, 2011). Since the travellers do extensive market research, it has become mandatory for the travelling companies to differentiate themselves from their competitors and that is why they are trying to identify the needs and demands of the customers (Chandra and Menezes, 2003). Molina et al. (2010) have emphasized the importance of understanding the consumers’ behaviour about their purchasing and consumption habits and their perceptions and attitudes about various market offers. In future, the travel and tourism industry will be affected by the social media a lot (Mansfield et al., 2005). Internet has revolutionized the way organizations do business these days and it has eased ample activities of the business. Now, every business can do every activity with few clicks and they just need to remain well-informed about the technological advancements that are happening these days. The organizations must design their business objectives and strategies in a way that they take advantage of amenities provided by Internet (Smith and Chaffey, 2005). Likewise, Internet has opened diverse range of avenues for businesses to conduct their activities and the best opportunity given to companies is of International marketing (Rossi et al., 2007). Hence, the strategy of reaching customers and enhancing the customer loyalty starts with a strong marketing plan. The brands whether old or new ones, all need to design an effective marketing plan both for local and international for reaching the customers so that the company’s expansion plan is successful and the business can earn revenues as well (Krishnamurthy and Singh, 2005). International marketing is the latest marketing strategy for all organizations these days and it offers ample advantages to the companies as it allows easy and direct access to the customers, makes tracking easier, saves a lot of time and cost and most importantly marketing efforts can be measured with utmost ease. The travel and tourism industry needs to understand the demands of using various online mediums to reach their customers and promote their countries as global brands (Ved, 2012). Santos (2011) stated that in order to get recognition as a global brand, the companies need to do promotional activities outside the box and one of them is the usage of social media. The success of this medium can be assessed solely by the help of surveys and market researches. Hence, international marketing can be defined as the means of getting the company’s product or service or brand to the entire world in a glimpse via the use of effective electronic mediums such as Internet and World Wide Web (El-Gohary et al., 2008 and Grimes, 2010). For decades, researchers have used Internet Marketing, E-marketing, E-commerce and E-business interchangeably; however, there are differences between each terminology which can be expressed by the figure developed by El-Gohary (2010) as follows: In today’s market, it is vital for companies to do more than telling a story of innovative technology; they need to take advantage of technological advancements and attract customer flow to develop a good market share. Hence, companies need to develop effective marketing plans and strategies that have quantifiable goals and provide measurable impact to monitor the successful implementation of e-marketing plan (Petrovic, 2009). According to Carmen et al. (2004), the conceptual framework of International marketing is: Since the countries are competing against each other to increase the number of tourists and travellers that come to their countries, they need to strengthen their images online as well (Ved, 2012). The researches conducted by Molina et al. (2010), Santos (2011) and Ved (2011) concluded that the main source of information gathering by the travellers was done on the social networking sites and more than 40% of the travellers used Facebook, Twitter, LinkedIn and other social networking sites to make their final destinations selection. Hence, in today’s ever changing dynamic environment, it has become important for the organizations to ensure that they are present on all those sites from where the travellers are gathering information (Chandra and Menezes, 2003). The studies of Molina et al. (2010) regarding the tourism industry showed that there are five steps that the travellers go through when making final destination selection which are as follows: 1. Need identification – Visit purpose or holiday leave 2. Sources for gathering information – By self or advice from someone. 3. Alternative options 4. Evaluation of choices 5. Assessment of the holiday or visit experience The studies of Chandra and Menezes (2003), Jana (2012) Molina et al. (2010) and Ved (2012) concluded that Facebook, Twitter, Flickr, YouTube and Google are the main sources from where the travellers gather information about their destinations. Regarding the destinations, the tourists are concerned about the amenities in the area, the hotel assessment, the restaurants in the area and the destinations to be visited. However, Dumitrescu and Vinerean (2010) stated that the travel and tourism companies need to keep a proper balance between digital mediums of communication and traditional ones. The research of Chitongo (2011) can be incorporated in the following figure which is a clear representation of the impact of social media on travel and tourism industry: Currently, there are still some travellers who rely on traditional mediums such as brochures and advertisements for gathering information about their travel destinations. Therefore, the travel and tourism industry needs to ensure that they are able to provide reliable and quick information to their customers via proper channels so that they have access to important information that they are looking for via both traditional and latest communication mediums (Chandra and Menezes, 2003). Research Methodology The nature of the research is both qualitative and quantitative as the topic is vast and there are no concrete definitions available for the concepts that are being studied i.e. social media and international marketing for global organizations. Since the human factors are being studied, it is important that after gathering sufficient theoretical knowledge, the respondent’s opinions are analyzed as well. The secondary sources of information are compiled mainly from the research journals and articles alongwith the books available on many online stores. The variables for the study are deduced after careful evaluation of all factors. The variables have been defined in detail so that an understanding about the purpose of research can be easily developed. Development of research approach Since international marketing and social media are vague terminologies, they cannot be described precisely. For many years, the researchers are trying to develop good concepts for these terminologies but they have not succeeded uptill now. However, they have developed numerous variables to study each concept separately and then determined the variables relevant to their case. Therefore, in order to develop variables for the particular thesis, many research papers were studied and a lot of time and effort will be dedicated to design right research strategy. According to Curtis et al. (2010), the most appropriate research strategy to understand the impact of social media on designing the international marketing plan for any organization by understanding the role that social media is playing in today’s dynamic travel and tourism industry. Therefore, it is important to first describe the adoption and usage of the social media tools by the organizations. The research of Curtis et al. (2010) was designed using UTAUT method which studies the relationship of organizational adoption of social media and various factors. The researchers designed a survey in which the social media adoption by the organization was studied in relation to effort expectancy, voluntary usage of media, self-efficacy, social influence, performance expectancy and anxiety. The same research pattern was also followed by Venkatesh et al. (2003). The questions were the statements and the participants had to show their level of agreement on a five point Likert Scale. The participants in Johnson and Kaye’s (2004) were the users of travel packages of various well-reputed travel and tourism agencies. Underlying Philosophy of Research The main aim of the paper is to identify the growing role of social media in the marketing activities of travel and tourism companies especially for international marketing purpose. Most of the travellers usually use Facebook, Twitter, LinkedIn, YouTube and Flickr to gather sufficient and reliable information about their destinations. The researchers have always argued that there is no perfect research approach that can be used to understand the role of social media in destination selection. Therefore, the author of the paper will make sure that the research strategy developed for the paper is near to the perfect approach by taking account of all types of researches. Research Approach The research approach will be deducive and it is selected to make sure that top down approach is followed. Before, the research process is started, it is important that the researchers have an understanding about the variables of research. The questions are designed incorporating these variables so that the concepts of social media and international marketing can be studied in detail. The variables of the report are as follows: 1. Effort expectancy: The extent to which the travellers have to use social networking sites for making decision about their travel and tour plan. 2. Voluntary usage of social media: The degree to which social media is important for gathering and providing relevant information to the travellers online for global businesses. 3. Social influence: The degree to which the friends’ list impact the decision of travelling destination. 4. Self-efficacy: The degree to which the travel businesses and prospective travellers and tourists trust social networking sites and blogs for making their travelling plans. Data Collection Online surveys and secondary sources of information are the two main sources of data collection. Since time and resources were the main constraints, the most convenient and easy ways of collection and analyzing relevant information were these two mediums. Questionnaire was based on the pre-determinant variables that were derived from the literature review and which formed the basis of our research. The questionnaire was a combination of structured and unstructured questions as well as rating scale. Sample Size and Technique for sample selection Since the researchers have limited contacts, the sample size will comprise of about 100 participants. The participants are selected on the basis of Judgmental sampling. Since the researches were approaching selective people, the accessibility to the concerned participants will be limited. Therefore, by the help of judgmental sampling, representative sample was formed for effective and accurate results for the research. Data Analysis According to Mitran (2010), there are four effective analysis tools for social media research papers. The researchers can either use any one of the tools or use a combination of two or more tools. The four tools identified by Mitran (2010) are Social Media Engagement (SME) Tool, Social Media Specialized (SMS) Tool, Social Media Monitoring (SMM) Tool and Social Media Relationship Management (SMRM) Tool. SME tool is most suitable for those researches that want to judge the impact of social media communication websites on the lives of people that how they interact with their friends and what are the activities that are involved with. SMM tool is referred to as listening to the users of social media as it just keeps tracks of the user’s usage and comments about the products, brands and services alongwith the competitor’s updates. SMRM tool is used by the researchers who want to monitor the activities of the users on social media websites such as Facebook and Twitter; with the help of this toll the complete picture of the user is developed regarding his usage of social media tools. Finally, the best tool is SMS tool which incorporates the usage of SMM and SME tools as well; the tools are designed in a way so that the analysis of one specific component of the social media program can be effectively done. After analyzing the implications and usage of all the aforementioned tools, it is proposed that the research will mainly use SMS tool so that in-depth information about the social media activities of the user (prospective tourist) can be gathered and analyzed. Reliability and Validity of data In order to ensure that the data collected is reliable and accurate, the researchers will personally get involved in data collection methods. Since the researchers will be approaching the respondents themselves, the chances of collecting accurate information was high and the credibility of the data was positive as well. The online survey is easy and can be conducted quickly; hence, this mechanism was used for data collection. Discussion and Interpretation The studies of Chandra and Menezes (2003), Jana (2012), Santos (2011) and Ved (2012) showed that the latest marketing trend is of social media and it is impacting the travel and tourism industry drastically. The travel agencies need to make sure that they have strong presence online as well so that the customers rely on them to gather sufficient information about their final destinations’ decision. According to Chittango (2011), the new media is definitely digital media and the travellers will now look for more information on the social networking sites for their travelling and tourism decisions. The online survey and analysis made by the researchers showed that the marketing strategies of the travel and tourism organizations will need to be more proactive so that they can respond quickly to the changing needs and demands of the travellers (Molina et al., 2010). Now-a-days, it has been found that the travellers rely more on word of mouth as compared to other channels of communication. Therefore, social media is definitely giving a boost to the travel and tourism industries worldwide (Ved, 2012). The research revealed that 75% of the travellers trusted the recommendations that were given by the customers online as compared to only 18% who relied on the advertisements in the newspapers and TVCs. Some online travellers also showed that they read travel blogs which were about 52%; while 60% said that they visited travel-related websites and also read the articles and reviews of the travellers. However, more than 95% of the readers thought that the reviews were more accurate. Among all the social networking sites, the respondents said that Facebook had the greatest influences and the main influenced people were men. The survey by Ved (2012) indicated that there are more than fifty million active users of Facebook; majority of Facebook users about 60% are residents outside United States; the time spent by people on Facebook is more than 700 billion minutes in a month and on the site, there are about thirty billion content pieces in the form of blog posts, photo albums, stories, new, web links and etc. which are shared monthly by many Facebook users. The second most popular social networking site is Twitter and according to Molina et al. (2010), there are more than six hundred million queries asked by the searchers every day and there are more than one hundred and seventy-five registered users. On the site, more than 97% of topics are posted on the forum and their queries are instantly responded. According to Santos (2011) and our online survey, it is found that more than 60% of the travellers are using smartphones to find the information about travel and even make reservations by 2015. In the next five years, the consumer trend in the travel and tourism industry is expected to change and the holiday bookings will be done using new technologies. In the next five years, the travel and tourism industry is viewing the social media as one of the major opportunities for attracting more tourists and it is expected that it will grown by 40%. Conclusion and Recommendations In order to attract the tourists and travellers worldwide, the travel and tourism industry will have to design the marketing strategy as follows by using the social media: 1. Bring the customers on the website and other social networking sites 2. Serve them well 3. Learn about the customer’s personalities 4. Induce the customers to make repeated purchases Traditional and Online channels to reach customers The industry can implement following techniques for promoting its new computers: 1. Above The Line (ATL) activities – The concerned authorities can do promotions on TV channels such as The Daily Show on Comedy Central, TBS, TNT, VH1 and MTX; magazines and newspapers such as The Economist, Harvard Business Review, Oracle and etc. 2. Below The Line (BTL) activities – The industry can do promotional activities via posters, brochures, billboards and viral marketing. 3. Direct Marketing – It can be done via two ways i.e. online channels which will comprise of SMS, MMS and e-mails and bulk SMS which is the unique message sent to multiple recipients. Online Marketing Tools The travel and tourism industry will implement the following digital marketing tools for attracting the customers to try its new product: 1. Placement of advertisement banners and interactive ads on most popular search engines such as Yahoo and Google; websites news portals which have focus on innovative technology and news. The company will try to get placement on various search engines so that when the travel destinations keyword is typed, the user is given the link to the country’s Tourism website. 2. Tourism Commission of the country can also opt for search marketing in which it will have to pay the search engines for their ads to turn up when the customer is searching for a similar keyword on search engine. 3. Viral Marketing will be done via the chat rooms, e-marketing buzz on travel and tourism stuff and blogs. The company will start its own blog which will create linkage to technology sections of the new organizations such as CNBC, CNN, NBC, ABC, CBS, CNET, Wall Street Journal and many other technology related websites. 4. Email solicitation will be carefully monitored of the potential travellers and tourists. The customers will be asked to give their feedback about their experiences and will be asked to give recommendations as well. 5. Cross promotion will be done with social networking websites such as Facebook, Twitter and LinkedIn alongwith tech carrier services such as Vonage and Skype. These efforts will help to attract the customers and reaching the customers will be easy. 6. Beta Test market will be done via a small on-line community either with or without free Wi-Fi service with difference tech carriers so that the problems, features, price points and various Internet marketing strategies will be discussed as well. Implementation and Control The marketing efforts of the industry will be reviewed monthly as the technological advancements take place on an ongoing basis and new products are introduced quickly as well. The initial source of evaluation for the company will be the difference in the estimated and actual sales of the product. On the website, the customers will be allowed to give their feedback about the product features and the existing customers will be asked to participate in the survey of the travel and tourism services and packages. However, some of the evaluation tools that will be used to measure the performance are as follows: 1. Keep track of the current and potential customers via smartphones and computers by tracking the traffic clicks and exposure to banner ads on the website from cross-linked and redirected links created for promotional purposes of the travel and tourism industry and media channels or websites targeted in the marketing tactics and key browsers or key search engines. 2. Carry out customer satisfaction surveys and gather information from customer reviews on various blogs and review the customer feedback by selecting the users from Beta test market both current and potential ones. 3. The evaluation of direct sales and surveys and e-mails designed for follow-up purpose with products recently purchased will give a proper indication about the customer’s satisfaction level and how successful the product is in view of the customers. 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