MARKETING MIX IN WITH SPECIAL REFERENCE TO PRODUCT, PRICE, PROMOTION AND PLACE

Marketing Mix is one of the key concepts in modern marketing. The phrase first used by Neil H. Broaden. The concept tend its genesis in the classic work of James Culliton on the management marketing cost. Philip Kotler has defined the Marketing Mix as The set marketing tools the firm uses to pursue its marketing objectives in the target market. Borden suggested 12 Marketing Mix variables, in the context of manufacturers. The most popular 4Ps framework is suggested by MaCarthy which are product ,price, place and promotion. Since the Marketing Mix tools originated from the study of the manufacturers i.e. the orgnisation edngaged inproduction and marketing of goods,it is more oriented to deal with goods marketing situation.However servicces characteristics are radically different from goods marketing and so are the challenges in their marketing.The concept of Marketing Mix are eqally relevant in the case of tourism products as it is in the case other services and goods.Any tourism product has top be developed ,its price has to be determined , the priduct has to made accessible to the target market and at the same time it has to be promoted also in the target market. Each of these aspect needs careful planning to match the customers expectations. Besides these 4Ps in a service industry like tourism , another fifth (People, process and Physical evidence)is also much relevance.Each sector tourism industry has its own requirements in terms of designing the product.At the same time in the tourism marketing mix one must also take note of the attitudes and aspirations of the host populations.

Marketing Mix

Product

Price Fifth P

Promotion

Place (Distribution)

Target Market

There are several challenges in case of tourism products because of its different features like intangibility, perishability, inseparability,

heterogeneous and seasonally. Service manager or tour operator faces challenges of tourism products are consistency in quality , managing customers , missing inventory intangibility of offer and absence of patent protection necessitate still that are not possessed by goods manager.The activities in tourism marketing are different I ,and do not fall in the conventional Marketing Mix classification, though many marketing connects and tools used by goods marketer hold good in services with some change in focus and importance. Therefore conventional marketing mix needs to be modified and broadened so keeping in mind these challenges fifth is prescribed which is consists of people, process and physical evidence these are essential to meet the challenge posed by intangibility, service provider, customer interaction and customer involvement in service consumption and production.

PRODUCT IN TOURISM INDUSTRY INTRODUCTION

Product is one of the five basic elements of Marketing Mix in Tourism Industry unlike goods industry. A marketing manager is to devise products to meet the needs and interests of the customers. Specific attention should be given to the customers expectations, capability to pay and how the product is perceived by customer. Now question is what is a product? OBJECTIVES Define Product. Explain the various stages involved in product development. Identify the factors that influence product formulation in tourism, and Understand the importance of the product positioning.

DEFINATION Anything that can be offered in a market for use , consumption by the consumers as per the market requirement is called product.For example a beach resort provides sun, sea ,relaxation and entertainment.Hence a beach resort is a tourism product.According to Philip Kotler A product is anything that can be offered in the market for attention ,acquisition, use or consumption that might satisfy a want or need. He has mentioned five product levels that marketer should in to consideration for development of any product.

Level 1 Core benefit

: this is the fundamental service or benefit being bought by the customer.

Level 2 Generic product

: When the marketer converts the core benefit into a basic version of the product it is termed as generic product.

Level 3 Expected product : The customers generally expect a set of attributes and conditions while making a

purchase and if the marketer meets the expectations it is termed as expected product. Level 4 Augmented product: When a product is developed with such additional services or benefits which make it distinctive from other products it is termed as an augmented product. Level 5 Potential product : This indicates the possible evolution if the augmented product. This where organisations search for new ideas and at same time make their product unique or different. To explain these levels through the example of a service product. Food is a core benefit which is being bought by customer. A restaurent converts food with its brand nameThere is in a reataurent good food, service,staff and kitchen are the generic

benefits .Cleanliness

timely service ,polite and courteous behaviour,menu availability and music are expected benefits.Sparking floors, smiling employees courtesy welcome note and music of choice are augmented product and restaurent manager by adding extra dish with some food could make it different product. Potential product which is beyond the usual like managers words of thanks. By using these five levels a marketer can make a product different product From the competition it helps to gain more customers and lead to brand loyalty.Besides these certain factors associated with a product these include: Basic design, i.e the size or say the quantity and level of services. Presentation ,i.e.the environment and atmosphere in which the service is being provided. Quality, i.e. the standard of service to be offered and maintained something very important in tourism. Range, i.e. what all is to be included in the product or covered in the service. Brand, i.e. association of a name, which is well known or associated, with high levels of customer satisfacton. Image, i. E. a reputation earned by the product. Warranties, i.e. an assurance of a particular level and quality of service. Consumer protection, i.e. assurance of damages claim in the environment conservation

Eco friendly, i.e. care for ecology and enviornment.

In travel and tourism product may defined as a package of a various components. These components are: Destination attractions . Destination facilities and services. Accessibility of the destination. Experiences at the destination. Attitudes of locale or host population. Price to the consumer.

To understand the product from the standpoint of the tourist, Medlick and middleton have observed that as far s the tourist product is concerned the products

covers the complete experience from the time he leaves to the time he returns to it. Let it explain it further. Suppose a family plans to visit Manali. In this particular case various services needed by the said family like transport, accommodation, facilities and services at the destination. A tour operator can package all these services or family can approach to different functionaries for particular services. So what is important to analyse all the possible requirements of a tourist during the course of a visit to a destination. In the case cited, the entire experience right from leaving Delhi to coming back home is the product. Middelton has noted that researching targeted customers perceptions of product benefits and utilities, and designing or adopting to match their expectations, lies if course at the heart

of

marketing

theory.

Segmenting

the

target

market

and

then

understandings customers preferences and motivations, which constantly change, is the to product formulation.

DEVELOPING A PRODUCT
Products are developed primarily to satisfy the customers needs. While developing a product a marketer must go through a process. Fist step in the development of a product is to collect information about the market requirement. It can be done through market research. Business analysis is second step, this is to be used to eliminate poor ideas which occurred while going through the process of market research. Business analysis is a process of estimating future sales and profit of a new product. Besides this economic aspect, other aspects of the product i.e. promotion, distribution and image must not be ignored. A kind of test run of the product is done before launching the because chances of failures always remain in any product. Final stage in the development of a product is commercialization, which refers to full-scale production and distribution of a product it must be remembered that designing a product is base on which all other aspects of Marketing Mix will be constructed.

PRODUCT MIX
It Here Is also necessary to be familiar with the concept of Product Mix. Philip Kotler has mentioned that Product Mix is a set of all products within a product mix that a particular organisation makes available to customers. He has further defined Product line and Product item. Product line is a group of products within a product mix that are closely related, either because they function in a similar manner, are made available to the same consumers, or marketed through the same type outlets. Product item is a distinct unit with a product line that is distinguishable by size, appearance, price or some other attribute. An organizations Product Mix can be explained in terms of its length, width and depth. Figure 2 will illustrates product mix.

Product mix of a Package Tour

Length
TRAVEL ACCOMODATION SIGHT SEEING ENTERTAINMENT

Air (2 Journeys) Taxi (4 Journeys) Width Luxury Coach (6 Journeys)

Hotel (10 rooms)

Monuments (4) Museum (1) Zoo (1)

Musical Evening(1) Theme Dinners (2)

( ) Indicate Depth The product mix in terms of its length consists of four product lines for the package tour. Each product line has a width i.e. the sightseeings includes visits to monuments, or museum and zoo. Each product item has depth i.e. 4 monuments are to be visited. The organization, keeping in view the customers need volume of business may be cut down to 2 monuments or the numbers of theme dinners can be increased to three. DEVISING PRODUCT IN TOURISM Product in tourism is certainly different from consumers goods like soap, drinks etc. In tourism it is basically the services like transport, accommodation, facilities at destination, etc. that one can package as a product along with attractions. Because of this specific nature of tourism it is essential to understand the factors that a formulation of product in tourism. Identification of market segment and its requirements is the first step in devising the product Suppose one wants to start tour operator business and there are already a lot of tour operators in market .But through market analysis one reach a conclusions that there is a market for adventure tours. Accordingly one plans to offer packages in adventure tourism. Quality and service to be offered to the customers play a decisive role in the success of a product Quality involves a kind of assurance on the standard of product. Particularly in tourism sector it is important to create a reputation for the good quality of the product and service offered. It provides a better credibility of your company in the market. In tourism

where the perception of risk is a very high among tourists, a company assures higher quality service it is bound to be successful. In the formulation of a product it is necessary to consider that customers buy products for the benefits they deliver. It is therefore important to add certain features in your product, which will to differentiate it from competitors. However, in providing special facilities or advantages business norms and ethics to be maintained. Another important aspect is matching the supply to demand. So far as demand is concerned the marketing manager should gather information about customers needs, behavior and perceptions in order to define target segments to identify the strength and weakness of existing products. So far supply is concerned the marketing managers task involves analyzing product components and identifying the range of existing and potential products which would be improved or developed.profitably to meet customers needs. Ideally there should be combination of products which are well established in the market and new products as per demand of the prevailing market. Michael M Contemn has mentioned three types of orientation for product design in tourism. 1) Product Orientation: This lay stress on the products and services of tourism supply rather taking into account the tourists requirements. The success of this approach can be if the demand exceeds supply or in a monopoly situation. 2) Market Orientation: This approach emphasis on the requirement of the target market segments. However, this approach ignores the local population and local natural resources, customs and culture etc. and

runs the risk of not only alienating the host population but generating anti tourism feelings. 3) Societal Orientation: This in fact is an approach which balances the market oriented approach with the interests of the host population and attempts to minimize the negative impacts on the society, environment, culture, etc. Societal Orientation is a must in tourism. Generally tourism organizations ignore it while designing and marketing their products. This appears to be beneficial but in fact the benefits will be always short lived. There are certain factors that need attention, while designing or packaging tourism products. Carrying capacity of the destination, Safety and security, Hygienic conditions, Attitude of host population, Government rules and regulations, Environment preservation and conservation, Linkages with local bodies and host population.

In fact all these aspects have a bearing on the experience for the tourists and help in doing away weak link with the product line. The challenge before the tourism marketer is to transform routine into a unique experience and this needs creativity as well as imagination.

Seasonally besides other features is a important feature which needs proper handling in relation to marketing and designing the product. The highly elastic tourism is to a large extent linked with seasonally aspect. Both the tourist generating markets as well as destinations have seasonal limitations. There are peak seasons and lean seasons, which are measured in terms of the demand and supply situation. An analysis tourists arrival at any destinations would demonstrate monthly fluctuations. For example there may be more rush in summer at any hill station in comparison to winter. Such analysis is extremely useful from the point of view as it helps in deciding the marketing mix. For example, products can be designed, rejuvenated, or dropped as per the seasonal requirements. Similarly, separate price may be charged for lean seasons along with a different promotion policy. So by careful planning or devising marketer can meet the challenge of seasonality of tourism product. PRODUCT POSITIONING Tourism destinations or tourism products and services have an image or perception in the customers mind, which is built over the years. For example many countries or destinations have been struggling hard to improve their image in the tourist generating markets inspire of having good tourism products like India that has different destinations to visit but because of poverty, infrastructure constrains like transport network and accommodation facilities. Before we discuss further it must be noted here that an understanding of market segments or designing products for the targeted segment alone is not enough. There are many offering similar products, which satisfy tourists needs. Under these circumstances it is the uniqueness and quality of your products that determine the image and

identity. Hence we ought to be familiarize with the concepts of differentiations and positioning. According to Kotler Differentiation is the act of designing a set of meaningful differences to distinguish the companys offer from competitors offers. Positioning is the act of designing the companys offer and image so that it occupies distinct and valued place in the target customer minds. In tourism it is not just company but the country or the destinations, which too has to adopt differentiation and positioning in the international as well as domestic markets. One has to take decision regarding how many

differences to promote in comparison to ones competitors. However, these decisions should be taken after keeping in view the various products in the market, their attributes and image etc. however, product should not be under positioned or over positioned Similarly there should be no confused or doubtful positioning. Once a positioning has been devised, it has to be effectively communicated also in the target market. PRODUCT LIFE CYCLE Product life cycle displays the distinct stages in relation to the history of the product. An organisation has to identify the stage in which the product or is going to be. Such an exercise helps in identifying the opportunities and problems for undertaking marketing decisions. Every product has a life cycle with distinct stages

1) Introduction or launch: This stage indicates a span of slow sales, as the product is new in the market. In this stage profits are virtually non- existent or very low. 2) Growth: This the stage when the product starts getting accepted in the market, sales go up, a product image is built and consequently profits go up. 3) Maturity: At this stage the product gets accepted by most of the targeted potential customers. Sales and profits go up till they reach a saturation point. Competition increases, market became stagnant and profits stabilize or may even decline. 4) Decline: In this stage, sales go down, profits go down and it is time for the organization to take hard decisions either to repackage or drop the product. In fact, an organization should take initiate such actions at the saturation point stage itself and not wait for the declining stage. Figure - 3 Sales & Profits

Sales

Profits

Launch

Growth

Maturity

Decline

This conceptual model of product life cycle is applicable in the case of tourism products. Take for example a new hill resort. It will take certainly some time for it to become a known destination. During this period few tourists will visit it. As it becomes more known the number of visitors will

increase and a stage will come when most of the tourists know about it and have paid a visit. Some among these will pay a repeat visit whereas others will look for another destination. This could be because of many reasons like after having become a popular destination it is crowded like any other mass tourist destination has lost its calm and its tranquility. However stages of life cycle vary product to product. Some may reaches at maturity stages much faster, some may take longer time And decline fast. So a tourism marketer must observe the product life cycle so that product could be dropped or rejuvenated, alter it, improve it as new product.

PRICING STRATEGIES
INTRODUCTION Price is much a tool of marketing as promotion, and plays a critical role in the marketing mix. The price of a product or service should be seen not only as the outcome of market forces. Price which conveys something to the customer about the nature of the product or service by managing it in combination with product quality and the promotional message, sales can be activated or market share can be increased at the expense of competitors. Pricing for tourism product should take into account the complexity created by seasonally of demand the and the inherent perishibilityof the product. There are several components of pricing like pricing objectives, price settings and factors which influence pricing. OBJECTIVES Understand the factors affecting demand for products at different prices, Understand how pricing can be used as a tool to achieve marketing objectives, Explain how costs affect price and the significance of marginal costing in travel and tourism marketing, Recognize travel, Determine key pricing policy. that price is only one factor influencing the demand for

UNDERSTANDING VALUE Value is a key concept of price, which one gets after having paid for product. The term value is one that is rather loosely used. Every customer wants value in a product. Research by Zethimal found that what constitutes value - even in a single product category- appears to be highly personal and idiosyncratic. In one of her exploratory researches, she found four broad expressions of value: 1) Value is low price, 2) Value is whatever I want in a product, 3) Value is the quality I get for the price I pay for it, 4) Value is what I get for what I give. Value is defined on the basis of fourth category The of all perceived benefits (gross value) minus the sum of all the perceived costs. The greater the positive difference between perceived benefits and perceived costs, the greater the net value. If the perceived costs of using the tourism services are less than the perceived benefits its then services will possess negative net value and customer wont purchase it. When customer evaluate competing service, they are basically comparing net values. However perception are highly inaccurate, because customers may be making These comparisons based upon very imperfect information. Further perceptions of costs and value vary widely from one customer to another and even from one situation to another.

UNDERSTANDING COSTS As the concept of net value assessment by a customer depends upon the costs he or she may have to bear, it is important to understand the associated with a service like tourism. There are several important costs that a potential tourist may incur in order to avail the pleasure of tourism. These may be1) Monetary Cost: which involves the actual rupee value spent on getting benefit of tourism. This is often referred to as price paid and expressed in Rupee term. 2) Time: Time is valuable commodity for most people, one which always has a fixed upper limit for each individual. In addition spending time for tourism involves an opportunity cost i.e. cost of the value lost had the time spent in tourism been spent in alternative gainful activities. 3) Physical Efforts:To a quite a lot people, physical effort entailed in getting out of their established life patterns to travel and be weary, is a substantial cost. 4) Sensory Costs:Travelling in addition to pleasure associated has discomforts owing to noise and pollution ,unpleasant tastes, excessive climatic vagaries, uncomfortable modes of travel, in transit delays smells and sometime unappealing environment . Sometimes past

experience with some of these sensory costs may actively act as an inhibitor of purchase or significantly lower the net of the package to the customer.

5) Psychic Costs:these are sometimes attached to the use of a service. These could be unfavorable perceptions, insecurities about certain destinations or simply a fear of taking uncertain. Consumers, in order to determine the net value they are getting out of tourism, trade off the benefits against the costs associated with the package. The above description of costs in addition to the price undermines the fact that a reasonable price may be viewed too high if the other cost associated with a given tourism product is high and renders the net value and a negative gain. Pricing theorists try to explain the concept of cost and value by saying that as all costs need to be recovered, an organisations cost of rendering of

services becomes the floor below which prices can not be set as it would be non viable. Price of the product could be determined by the pereptions of the customer and competition in the market. COST : THE INTERNAL INFLUENCE ON PRICES Let us in this section try to understand how cost affects prices. Gross profit for a travel agent is the difference between the prices he pays for the travel services plus his administrative costs and the price he charges the customer. The costs of a tour operator would include what he has to pay the airlines, hotels surface and local transport and other organisations providing the services that he included in the package. In addition, he has the costs of having his own organisation say rants,

water,and elatricity and salaries of the employees and the marketing costs like advertising. These costs in accounting terminology called overhead costs as they need to be incurred evev if the tour operator is not able to sell anything.

1) The costs borne by tourism marketer can be understood better by classifying them into variables costs fixed costs. Variables costs are that vary directly with quantity of services produced and sold, while fixed costs do not vary with level of production is taking place or not. The total cost of a given service to any organisation is a sum of fixed and variable costs attributable to that service.Athe concept of break even point is simple way of understanding that how costs affect the setting up of prices. Break even point is that point in the sales of a product or service where the total revenue received from sales exactly equals the given service i.e. a situation of zero profit or loss. Accountants also use a term contribution, which is equal to selling price minus variable costs. In case sometimes it is not possible to attract customers to cover full cost it is necessary to reduce cost of tour or tourism product which make some contribution towards on going fixed price. A good example in this tactics is provided by off-season by tourist resorts. Hill resorts during off-season offer prices that are actually below full costs, but these prices attract such people would otherwise would not have bought the service at all, at the same time make a positive contribution to the fixed costs of running these resorts during off season. PRICES AND DEMAND In addition to the above mentioned concepts of costs there are two more concepts that we need to understand before getting down the exercise of price setting. These concepts are related to individual demand and elasticity of demand in relation to tourism. 1. Individual Demand and the tourism product: when a customer buys a tourism product, or any product, his decision partly affected by the price

of the product. Price enables customer to make a judgement about quality of the product and allows comparison with other competitors product. In order to be able to generate demand for tourism, price must be perceived to be to be neither too low (so that it could denotes questionable quality) nor too high (so that it is viewed as being unaffordable). Pricing is actually a tool in attracting the type of customer one wants to attract for a given tourism product. You may therefore, define the kind of demand you will face by fixing up a certain level of price. 2. Elasticity of Demand: a change in price alone brings about a change in the level of aggregate demand is called price elasticity of demand. For example if a tour operator Reduce the price of package tour which leads to increasing number of customer after increasing the price if customers number falls down then it is called elasticity of demand. PRICING OBJECTIVES Pricing is ultimately only a tool to achieve marketing objectives. Prices may be set to generate the maximum revenue or the profit to gain the largest share of a given tourism market. Once the organisations select their pricing objectives it is relatively clear to them to determine the actual figure on which they would like to sell their products. Pricing objectives followed by tourism sector can be divided in to four categories:

REVENUE OR COST ORIENTED PRICING OBJECTIVES The revenue oriented pricing objectives is related to make largest possible surplus, minimse costs so as to maximise returns or earn a specific target level of profits. Under this objective the tourism firm would try to follow pricing strategies that give it the maximum revenue or a certain specific return on the investment made by it. A hotel offering holiday package for example may decide to earn a 20% return on investment that it has to be made to produce those packages and thereby sets a price which would enable its return. OPERATIONS ORIENTED PRICING OBJECTIVES Tourism as an industry has seasonal or fluctuating demand. On the other hand tourism, because it is a service, represents a situation of perishibility of service an offer. An empty hotel room represents an unveiled services which will perish forever if it is not availed.in order to combat the twin aspects of perishbility and fluctuation of demand levels tourism marketer, often turn to operations oriented pricing objectives for hotel rooms DEMAND ORIENTED PRICING OBJECTIVES This objective is depending on consumers willingness to pay. Demand Oriented Pricing tries to discover through marketing research, what market is not likely to pay for the type tourism package in question. The service provider would like to charge the price, which is closest to what the market would bear. As the markets are made up of a variety of consumers, each group with a differential capacity to pay, the tourism marketer can actually use differential pricing to reach different consumer segments., specially if it is possible to create a differentiated product for each segment. Take for

example Ocean liner offering cruises. All the customers are not charged the same rate, simply because all of them, apart from the basic service of the cruise, do not avail the same services. There may be deluxe and super deluxe, first class and economy class cabins, which would be accordingly priced creating differential prices for all the classes. Differential pricing, thus, is used to enhance the total returns to the organisation than what would have resulted if a simple price followed. It is also used to cope the fluctuations and seasonality of demand because, on account of perishibility, the tourism product can not be inventoried and in periods of lower demand than capacity , the available service perishes forever. COMPETITION ORIENTED PRICING OBJECTIVES Tourism organisations sometimes base their own pricing decisions not on their own analysis of costs and value relevant to a given pricing situation but on what competition is charging, if they believe pricing is major determinant of consumer choice. This situation is visible in airline sector, travel agency as well as the tour operators business. In case competitions oriented pricing, generally some organisations

assume the role of price leadership, where in the event of change in the cost structure for the industry, one of these organisations may raise their prices and the others follow suit. This is also referred to follow the leader pricing.

PRICE SETTING IN PRACTICE The concepts of value, cost, demand and competition in the context of pricing have been discussed. Now in this section, how tourism organisations in practice make their pricing decisions, will be discussed 1. Markup Pricing This the most elementary pricing method and involves adding up a

standard markup to the cost of the service. The total cost of offering the swervice is estimated and standard is added to this cost to arrive at the selling price. For example: Variable cost Fixed cost =Rs. 3,500 per customer =Rs. 50,000

Expected customers =50 This unit costs would be given by Unit cost =variable cost +fixed cost No.of customers Unit cost =3,500 + 50,000 50 =4,500

Now, assume that the tour operator wants to earn 20% markup on his sales. The prices to be charged by is given:

Markup price

=unit cost 1- desired return on sales =4,500 =Rs. 5,625/1- 0.2

the tour operator would charge Rs. 5,625 per person and would make a profit of Rs.1125 or 20%. The size of the markup tends to vary n the different segment of the service providers. The higher the degree of competition, the greater is the tendency to keep lower markups to attract more consumers. 2. Target rate of return pricing This is another revenue overhead pricing technique, examples of which are found in the accommodation sector. The marketer tries to set a price which will yield a certain target rate of return on the investment made by the organisation.theh return price is determined by this formula: Unit cost + desired return x invested capital Unit sales Again in this case, marketer assuming that the customers will be willing to buy at a price that gives him a percentage of return fixes the marketer by him. 3. Perceived value pricing In this market oriented technique of pricing marketer try to understand the value of his product ii the eyes of the consumers. In fact products like safari tours, adventure tours, hotels executives etc. are planned with specific = price

consumer segment in mind, that what the consumers perceived the product and how much they can pay for the product. 4. Value pricing As the competition in tourism sector companies offer value for money to the customer. They offer low prices for a reasonably good quality service. 5. Going rate pricing The organisation bases its prices on the basis of what the competition is charging rather than its own demand and costs. Basically it is competition oriented pricing objectives that have been discussed earlier. 6. Premium pricing In this case the tourism organisation decides to sell its products above the prevailing market prices in order to have the image of high quality or to under the unique nature of its offer. A Company sets pricing according to its reputation no doubt it offers best service to the customers what they pay. 7. Cheap value pricing This pricing practice is adopted to under cut the competition because of highly competitive segment of tourism market. Low or penetrative pricing is usually adopted by a new orgnisation trying to foothold in the market or a competitor rapidly seeking his market share. 8. Psychological pricing Tourism marketer sometimes apply inputs on consumers psychology in addition to the concepts by them in their price strategy. Understanding

this , tourism marketer create high quality product but often price it in a manner where high price differentiates may not be proportionate to the quality differentiate for the product offered. 9. Promotional pricing Under certain circumstances tourism organisations price their product low so that they can promote demand and customers at least buy their product once may go on for repeating buying. There are some promotional pricing likes: I. Restaurants ,tour operators etc. sometimes price one of their products so that the people get exposed the product ranges attracted by the low price of the loss leader they may like to sample the other offers in the companys range of products. II. Special event pricing: Holidays, fairs and sports events sometimes lead tourism marketer to establish special prices keeping the propensity of traveling for these activities take the advantage of these events. III. Contract rebates whiling selling corporate packages or long term travel or tourism packages a tourism firms permits free travel on certain circuits after certain volume of business has been availed. In essence it is offering low prices for a bulk purchase to the company. DISCOUNTING TACTICS IN TOURISM PRICING Owing to a highly competitive nature of the tourism industry, discounting has become a very prevalent in tourism marketing. Discounting is essentially a short-term tactics that it may attract deal prone consumer in a given situation. Discounts and some form of them will always prevail but

constant competitive discounts would mean that overall the whole industry the whole industry discounts: I. Discount for cash payment: In all business transactions which operate on credit, discount is given for early settlement of in voice or different rates may be offered for cash and credit payment, the balance being the cash discount II. Trade discount: These represents discounts given to people employed in the trade itself by airlines to travel agent, by hotels to airline staff, tour operators. Etc. III. Seasonal discount : perishibility of the service product is the main reason for the tourism sector. IV. Distressed stock and similar discounts: practices such as advance and the late saver discounts are common in accommodation industry. Early bookings are beneficial to the tourism marketer as it provides them advance information about bookings. Therefore discounts are given on bookings and late saver discount is a distressed stock discount, where unsold stock needs to be cleared. This is important in tourism industry where product can not be stored. OTHER INFUENCES ON PRICING There are some other factors affecting the pricing decisions over which organisation has little control. The important are: widespread practice of seasonal discount in the is operating at lower returns.the following kinds of

I.

The economic health of a given region: the economics cycles, of inflation, stagnation and depression. These are the factors which affect the demand for tourism and organisation can do little about.

II.

The nature of target market which is a determinant of the kind of travel product the people will buy, the prices at which they will buy, their natural propensity for travel for non business activities, the kind of holidays or destination they will choose.

III.

Level

of

competition

in

the

tourism

market ,

and

the

substitutability of the alternative tourism package available.

PROMOTION STRATEGIES
INTRODUCTION Once the product is designed and developed and priced attractively as per the requirements of the target market. Then next would be promotion a

product must be promoted effectively in target market. Because of the intense competition among the suppliers off tourism products and

services, success of tourism business largely depends on promotion. It should be effective to stimulate and motivate the customers to buy the product. In tourism it is not only the customer but retail agents, suppliers, opinion makers like journalists, travel magazine, politicians and important professional groups that need to be influenced. OBJECTIVES Learn the basic purpose of communication in promotion Understand the major elements of promotional mix, Identify the various types of promotional strategies, Learn how marketer budgets for promotion, and Have an understanding about promotional campaigns.

PROMOTION AS COMMUNICATION There is need to create awareness and to persuade tourists to step out of theirs homes and visit a destination that attracts or interests them. In tourism promotion-mix are as the communication efforts made by a destinations or service organisation to create awareness, arouse interests,

develop desire and persuade tourists to act and take a journey to places of attractions. All segments of tourism industry use it as tool to inform and persuade the customers to purchase the products for example, air lines or road transport organisation inform about the routes, schedules, and fares etc. hence, every destinations / producer of tourism product or service, to use the words of Philip Kotler , is inevitably cast into the role of communicator and promoter. This communication is aimed at not only creating awareness but also about the product /service but also at the use and experience it. Communication has certain tools like. Advertising by printing and broadcast ads brochure and

booklets,electronic media etc. Direct marketing by mailing , tele marketing, tv shopping, etc. Sales promotion by contest lotteries, fairs and trades, exhibits,etc. Public relations and publicity by press kits, seminars, annual reports, lobbying, company magazine etc. Personal selling by sales representatives, sales marketing,

incentives,etc. The objectives of communications are summed in AIDA formula which is: A-attention, I- interest, D- desire and A- action. Any form of communication required to catch the attention of the receiver, then it must lead to arouse interest among the reciever. This interest should be turned into desire for the service or product. Ultimately it should make the customer to buy and experience the product.

An important aspest in promotional communication is building of brand and product awareness. It should try to develop a favourable image of the product in the market. To develop a effective promotion programs, philip kotler has identified certain aspects that has to be accounted step wise : 1) The target markets have to be clearly identified. 2) Communication objectives must be determined. marketer must have clarity as regards to what has to be put in consumers mind to influence them. Objectives should be to create awareness to provide knowledge about the product. Sometimes tourists have knowledge but do not have liking for the product. Hence objectives should be to develop liking of the product among the customers. slogans like visit India. Why not India . India awaits you and this India. etc. 3) An effective message has to be developed for communication. The message has to effective in terms of gaining attention, holding interest, arousing desire and eliciting action (AIDA mode). A communication channel should be selected with care to deliver the message. These may be personal i.e. direct communication with customers which include : Face to face communication Telephonic communication Person to audiences or Direct selling

Besides these aspects kotler has laid stress on managing and the coordinating the total marketing communication and measuring the promotions results. promotion budget and the promotion mix to be another aspects in this regard. ADVERTISING Advertising is acommunication that appears through non personal media to inform and to persuade customers to buy an idea, product, service. Advertising always associated by an identified sponsor. Thus, according to philip kotler advertising is any paid form of non personal presentation and promotion of ideas, goods or services by an identified sponsor. Advertising is done to inform and persuade the customers to try or buy a product or service. Advertising process like any other communication involves, four elements these are: Sender, message, channel, and receiver. I. Sender is the organisation or party which wants to communicate some message related to its product to its customrers.sender is a advertiser and in an advertisment the spokespersonis sender. Spokesperson cam be model or celebrity. II. Message in print media advertisement is copy. It involves head lines and copytext. III. Channel is the media that is used for transmitting the message. The channel of advertising are: Print media newspaper, magazine ,handbills

I.

Broad cast media_ TV, radio cinema

Outdoor media_ hoarding, bill boards, roofpainrings. Trasit media bus/ rail panel sky writing Point of purchase (POP) _ posters, cutouts, diummys, shop signs window display IV. Receiver is target customer who is to be informed or to be persuaded to buy the product/service. Advertisements are classifieds on various basis. Brand advertisement: Advertisement focused on product Corporate advertisement: the company . Social service: advertisement focused on creating social awareness as anti smoking cancer care etc. Advertising manager has to be taken certain decision like objectives of ads , advertising budget, message, media mix means to what to be used . creative strategy what appeal to be used rational appeal or emotional appeal and evaluate technique post testing methods to find ad effectiveness Advertisement is focussed on building image of

PUBLIC RELATIONS
Public Relations (PR) is a broader (Publicity) concept which includes publicity. PR as deliberate, planned and sustained activities of an organisation to develop and maintain god relation with public s of the

organization. Every organization has various internal or external groups which have an actual or potential interest in the organisation. These groups are known as publics. 1) publics of travel agency. Internal : employees, share holders managers etc. External : Airline, tour operators, corporate Clients, Individual customers, destination/ Events managers, Transporters etc. 2) Publics of Airlines Internal: aircrews, Ground Crews Managers Share holders External: Travel Agencies, Tour Operators, Suppliers,(Fuel Food)

Government, Media Corporate Clients etc. The public relations include: 1) Research (R) 2) Action (A)

3) Communication (C) 4) Evaluation (E) This process can understand through a case example 1) Research : A research was conducted among Indian airlines travelers to find out their opinion about its service quality. One of the important findings of the research was related to opinion of travelers regarding empty seats.

They felt that even though there are empty seats airlines doesnt offer seats. 3) Action.: the opinion was developed because of misunderstanding about operation of an airline particularly related to flight requirement .The total load an aircraft can take depends upon various conditions like type of aircraft , length of runway, air density, temperature, etc. there, at times because of these factors load to be carried by aircraft each to be limited. This makes it compulsory to keep some seats vacant to reduce loads. Lack of these technical information made people to believe that: Indian airlines designed campaign to make public aware about this Critical information. Even every issue of SWAGAT- flight magazine of IA carrying the message why seats are may be empty. Evaluation: a research was conducted to find out the opinion of travelers. It proved that opinion of people has become favorable and their perception has changed. PERSONAL SELLING Personal selling is one of to one group presentation of service or product for the purpose of making sales. Travel agents /tour opeeeerator may explain clients about various destinations packages, choices, of hotels

cost, etc. personal selling becomes an art in this service industry as what is sold is a dream or a future performance. There are three Cs for personal selling: Know your Customers need/ desire, Know your Company and its services, and

know your Competitors. It vary important for tourism professional to understand the

needs/wants and limitations of their customers who are not may be able to verbalise their needs. They should have complete knowledge about the destination and other facilities available. this becomes more important for outbound tourists. The clients have to be told the visa , passport, health, currency, regulations, Social and legal practices etc. finally, the sales force should know what are the services and offerings. For example , an air line sales executive should know what are the services and costs of these services that are being offered by its competitors. To make personal selling be effective. SALES PROMOTION Sales promotion is short term incentive provided by any organisation to customers so as to make them decide in favour of the organisation. stress given in sales promotion is for a short term and on incentives. One night free stay for three days bookings, children under 12 no charges or a free ticket on every ten seats sold are the examples of sales promotion

scheme. There are three types of sales promotion : Customer sales promotion (Incentives are offered to customers) Trade promotion (Incentives are offered to middleman)

Sales promotion (Incentives are offered to sales people)

Some examples of sales promotion in travel and tourism industry are: Frequent Flyers Programs of Airlines.

Incentive scheme for group travel by Airlines. Welcome group hotel and Indian Airlines have jointly started a scheme We fly your spouse to you for week end for business executives.

Incentive tours to Singspore/Hongkong

to travel agents and tour

operators for achieving a given targeted business, etc. FAMILARIZATION TOURS Familiarization tours and fam trips are organised are aimed at acquainting, intimating, informing, and providing first hand experience of the products or services to the opinion makers and business providers. It is an effort by which opinion makers are to make their opinion about the merits/ demerits strength /weakness of the product and accordingly inform or influence the prospective buyers .The purpose of fam trip may vary according to: The aims of the organisations /destination, say the market segment an organisation wants to target, and The stage of the product life cycle a product /destination is in . for example launch or rejuvenated stage. Some of these purposes are: Destination promotion and image building. Today every country /destination is making efforts to make larger share in the tourist generating market in a highly competitive market destination promotion it becomes a difficult task particularly for long haul destinations because we know services are intangibles. Therefore image building is compulsory practices in tourism industry as far as tourism product is

concerned. the task of destination promotion and of image building is performed in the international markets by the national tourism oragnisation (N.T.O.)in the domestic markets by state tourism oragnisations. Fam trips are regular methods applied for destination promotipon and image building as the image built through the promotional effort is to be maintained, strengthened, and enhanced. For this purpose Fam trips are oragnised at regular intervals. Introducing new products. all new tourism products howsoever attractive and strong they might be, need to be itroduced / promoted at the time to the right intermediaries at the right place.for examlple palace on the wheels. Brochure advertisement may not yield desired result until and unless the royal grandeur is promised made to experienceby the opinion makers. Try ot imagine the pubilicity the product will get if a reputed travel masgazine editor publishes a write of his /her own experience of the journey. Damage control Fam trips arre extremely useful for a destination /or country to deal effectively with a negative image situation.in many countries tourists arrivals suddenly drop because of crisis like health hazard, security, etc. and in such crisis the government and the industry join hands to deal with the crisis. For example, Kargil War in India, has damage the India s image as tourist destination for security reasons in such case opinion makers could be invited to asses the situation because India is a big country any of such crisis can not effect every part of Indias security. Another example , during

the 94 plague scare in India , opinion makers were invited from 30 countries to assess the situation of the country. Apsrty from india foreign carriers like Lufthansa, malaysian air and Air France offered free passagfes to India to select opinion makers so that they can give correct picture about India in their respective countries. Among the opinion makers were specialists in their respective field like 3 doctors from the world Pasteur Institute. TRADE FAIRS AND FESTIVALS. Most of the countries are promoting special events to attract tourists organising event oriented fem tours is a method to publicize these events. Trade Fairs are therefore means by which the practitioners of a particular sector can meet at a rallying point and watch the functioning of their peers, leaders in the sector and their competitors, regulate such a vast and definitional woolly product like tourism and encourage and develop entrepreneurial freedom. Travel Marts is a place where the producers, sellers, and buyers (mostly intermediaries) of tourism products and services meet to face to face to transact business. It also show case the tourism product of a country or a region while also focussing on the concerns of the different sectors of the industry, like: The issue of tariffs, clearances for investment and tax incentives, etc. A trade fair or a travel mart is the combined effort of the seller, the buyer and the state to ensure that tourism prospers and realise the benefits that are possible.

A trade Fair or a travel mart also becomes possible when travel agents and tour operators begin to form trade and professional associations, which then can be lobby for the particular demands of the sector concerned. The major focus of the trade fair and travel mart is to give and seek informations to promote tourism both and from the region, country or a group of destinations. Thus such events attract not only the professionals but the public at large. These events are professionally planned and orgnised taking into account the infrastructure, operations, and business transactions. During face to face interaction various transactions take place. For example: Tours are sold, Commissions are decided, Volume of business is discussed, Producer know the intermediaries requirements, Producers meet new buyer, and getting to know exercises are conducted to be followed up, etc. Some important tourism fairs are the World Travel Market, London, the Salon Mondrai de Tourisme, Paris ,The International Tourism Bourse, Berlin, FITUR,MADRID AND Chicago these fairs are open to the p[professionals and the public in the main generator as well as receptor countries. India has recently started SATTE to focus on the products of South Asian region. At the 1996 Fair India, Sri Lanka and Nepal committed themselves to a joint marketing and promotion of the south Asian tourism product. They stressed the needs to foster a positive image for a region

plagued by separatist and terrorist movements and talked of the needs for time to bound intra regional movements of tourists. The buyers seller meet brought in tour operators from 40 countries to meet sellers from the region. Understanding the competitors products regarding their strength and weakness is also one of the purposes of these trade fairs. PROMOTIONAL BUDGET At the time of developing a workable strategy for the promotion of a product, due consideration should be given to budgeting. Whatever the amount an oragnisation can afford for promotional campaign by careful budgeting and selection of appropriate messages, media and schedule, one can effectively transmit the desired message. The objective and task method. Under this method, the budget is based on an estimate of the amount to accomplish established objectives. Consider a promotional budget for travel agency .the task to accomplish may costs like this: Advertising through television Rs. 2,00.000/Rs. 1,50,000/-

Advertisement in newspapers and magazines Publicity Sales promotion Total Percent of sales approach.

Rs. 1,00,000/Rs.1,00,000/Rs.5, 50,000/-

In this approach, the amount to be spent for promotion is fixed as a standard percentage of sales. Thus if a hotel desire to spend 5% of sales revenue on promotion and it expects to sell 100crore, it will allocate 5crore for promotion. The competitive comparison method. Under this method, amount is fixed based on what competitors spend. The fixed sum per unit method. A specific amount is fixed for the promotional purpose. These are some of the approaches to decide promotion budget. However, by having proper market information about your product and reading carefully, one can device ones own method of fixing the budget for promotion. KEY ASPECTS OF PROMOTIONAL CAMPAIGNS In this section, we will explain how to develop promotional campaign. Promotional campaigns include services or activities to achieve the desired objectives. Different products need different approaches to convey the messages. Because services products are intangible they need effective promotion and designing to establishing a highly competitive market or may require entirely different promotion campaign. The four major approaches to develop a promotional campaign. These are: 1) Image building: under this approach, emphasis is to given to communicate an image and generate customer preferences for a particular brand or company.

2) Product differentiation: in this approach marketer should emphasis on those aspects of the product or brand that set it apart from its competitors. 3) Positioning:: a positioning approach promotes a brand in relation to

other competitive brands in the market. 4) Direct response campaign: it expects a direct measurable response from the market. Personal selling activity falls in this category.

DISTRIBUTION STRATEGIES
INTRODUCTION Along with product, price, promotion and price, distribution (place) is a major component in the Marketing Mix,. Tourism product has certain special characteristics and because its perishable nature, it requires channels to the customer. Distribution systems provides by which tourism supplier gains access to the potential customers of the product OBJECTIVES the definitions of distributions channels about the strategy and distributions channels about the role of intermediaries in tourism industry, and how to select an effective channel of distribution.

DEFINATION Distribution of product or service is a mix of processes and organisations which make the product or services available to the end user. It is the flow of goods / services from the producer to consumer. Chris Cooperetal listed certain aspects of tourism distribution: there is no actual product wehich is being distributed. There are only clues given through persuasive communication about the product. The distribution method, method of selling and the environment within which the purchase is made becomes part of the tourism experience.

 Travel agents dominate the distribution system by making thir own decisions regarding what to display and recommend to the customers, and producers play the key role in persuasive communication as far as the distribution channelsand delivery to the customers is concerned. There are different types of distribution needs. For example in museums and monuments no prior bookings are required but queuing is used as an allocation methods for the aavailable supply. On the other hand, in the case of trains or airlines etc. ,because excess demand or to ensure that one gets a seat, bookings are done in advance. The advance distribution process can be from 2 hours to 2 years or even more. Intermediaries or middlemen commonly termed as the channel of distribution. Buclin has defined it as a set of institutions which performs all the activities (function) utilised to move a product a product and its title from production to consumption. over the years The producers of services felt the need to overcome the problem of making their services available to accessible to the target to the markets. Victor TC Middleton has pointed that inability in travel and tourism to create physical stocks of products, adds to rather than reduces the importance of distribution system. In marketing practice, creating and manipulating access for consumers is one of the principal ways to manage demand for highly perishable products. Hence, in relation to travel and tourism Middleton provides a definition according to which: a distribution channel is any organised and serviced system , created or utilised to provide

convenient points of sales and /or access to consumers, away from the location of production and consumption and paid for out of marketing budgets.

Further elaborating on this definition he stressed that: Channels are carefully planned and serviced by the products and not leftto chance Each channel, once organised and serviced becomes a pipeline for the flow of sales to the target market. We are aware that the tourism products are is rented out, consumed or experienced and there is no transfer of ownership. Intangibility, inseparability and perishibility of services make it an all together different task of designing distribution strategies for services. We will find the

following differentiation between distribution of goods and that of services useful . Goods distribution Physical movements of goods Services distribution No physical movements of goods

Ownership is transferred to channel members Ownership remains with suppliers of Services Profit through resell Commission through sales Services suppliers provides closer to the market.

Product manufacturing unit is also moved services closer to market. DISTRIBUTION STRATEGY

A marketing manager has two options for distribution of the services product. Directly reaching customer and reaching customer through the

middlemen. Indirect arketing would be a good strategy if the following conditions exist: Numbers of buyers is large, Frequency of purchase is high, Volume purchase is small. Market is decentralised , Financial position of manufacturer is not strong, When manufacturer would like to share risk, When business is to be expanded. The indirect marketing strategy involves use of intermediaries. They help in making the product available to consumer through the process of sharing risk and providing financial and information support. The case for using middlemen would rest on their support efficiency in the performance of the basic marketing tasks and functions. Marketing intermediaries, trough their experiences specialisation contacts and scale offer the producing organisation more then it can usually achieve on its own.

Direct marketing involves directly contacting the customers. DISTRIBUTION CHANNELS Distribution channels are different types and an organisation may adopt any one type a combination of or all the types of the distribution channels. All this depends on the type of services being provided by the organisation. In this section various levels of channels will be discussed:

1) Single level channel : here service is directly distributed to the consumers. For examples Airlines directly booking the tickets for the customers or hotels directly books rooms for the customers. 2) One level channel: it implies a single where only type or category of middlemen is used. For example Airlines uses travel agents/ ticketing agentsfor bookinngs for air travel. There is only one intermediary between the service supplier and the service user: The following diagram gives the various options for using one level channel: Travel Agent
SERVICE SUPPLIERS

Ticketing Agent Tour operator Corporate Travel Department

SERVICE USERS

iii) Two level channel: in this case the distribution of services is through two intermediaries. For example, in the airlines, General Sales Agent (GSA) and travel agents form two levels of distribution channel. iv) Multi level channels :Many time more than two categories of intermediaries are simultaneously used in service industry and this is particularly the case in tourism and travel industry. For example, the wholesale tour planner sells their services to travel agents and tour operators. INTERMEDIARIES IN TRAVEL AND TOURISM INDUSTRY Intermediaries basically play a very important role in travel and tourism industry. They are the resources for the organisastion . They provide

important services in terms of financial support, information, and promotion. Information, promotion, selling, financing, and risk taking are the main functions of the intermediaries or channel members. Intermediaries increase the selling capacity of the organisation by

providing selling services at places close to the customers, increases the geographical coverage of the market. different intermediaries can be sold to outbound tour market segment through tour operators. For example, tour operators can sell the services of the carriers to the outbound tourist market, individual travelers through travel agent. The middleman also helps in minimising the cost of incidental services for procuring the core service. The various typesof intermediaries in tourism industry as follows. a) Travel agents are one of the most important intermediaries in travel and tourism industry. As per the findings, travel agents accounts account for 75% of domestic air travel and 90% of international air travel, 95% of international tour packages, 80% of international hotel booking and of domestic tour booking. These travel agents are middlemen of carriers, hoteliers, tour wholesalers etc. they get commission around 10% of service cost no charges are levied on the customers. b) Tour wholesaler: tour wholesaler is the organisation which plans, prepares, markets , and administers vacation and travel packages. These packages are usually a combination of the services of various suppliers like carriers, hotels guides etc. c) Tour operator is a person or organisation which operates packages prepared by tour wholesalers. Sometimes tour operators themselves

provide ground services like local transport, guides etc.

d) Corporate travel managers these are in house travel departments of large corporations. Corporate travel department provides various benefits to the organisation. Reduces business cost, Enhanced services are provide, Increased purchasing power through bulk buying, and Maintains the level of quality.

e) Incentive Travel Planner often , potential travelers become confirmed ones, If they are offered some concessions. For examples in govt. or Pvt. Institutions offer leave travel commission (LTC) to make travel the employees. For these kind of traveler there are special kind of Incentive Travel Planners like I.T.D.C. in India. f) Consortium: many organisations distribute their services by interacting with other orgs. consortium is the practice of offering similar service by a group of suppliers. For example the preferred Hotel World Wide is an org. with a group of more than 100 hotels. The hotels booking can be done in any of others hotel from any individuals. g) Franchising: it is a hybrid form of enterpreneurship. A parent company customarily grants an individual or a company the right or privilege to do a business by using its name and by following a set of pattern of operation over a certain period of time, in a specified space.

SELECTION OF CHANNELS AND INTERMEDIARIES Channel decision involves long term commitment and cost for the principal suppliers In this regard the time and cost are highest as compared to any other marketing decision. Thus level of channels selection and selection of intermediaries are a very critical to the success of an enterprise. The following factors play important role in these decisions: Intensity of distribution desired, Access to end user, Prevailing distribution practices, Revenue : Cost Analysis, Time horizon required for development of channel, Degree of control desired, Availability of channel participants, Choosing the best intermediary, Capability of channel participant, Geographical coverage desired, Market standing of the channel participant, and Financial status of the channel participant, etc.

Level of channels, selection of channel members etc. can give results only when smooth and professional relation with intermediates are developed and maintained. There is strong interdependency between say airlines and its intermediaries like GSA ticketing agents etc .. the roles and responsibilities should be clear and specific. This Should properly spelt out in order to avoid any chances of conflict among the organisation and its intermediaries. For example the percentage of commissions or royalties mode of payment, credit time etc. are decide at the initial stage it self. It is also advisable to have contracts agreements signed in this regard. The decision to use middle man involves the organisation in a number of further decisions. The first is the problem of choosing the best middleman from the large number who are available.. but might find that a desired distributor id not willing to accept the assignment. Or the distributor might handle the product only if given exclusive distribution. Or the distributor might handle the product only if it receives better financial terms than are being offered the organisation must follow this up by carefully establishing the terms and responsibilities of the distributors. This is called the trade relations mix and consists of price policies, conditions of sale, territorial rights and specific service to be perform by each party Philip Kotler

THE FIFTH P : PEOPLE, PROCESS AND PHYSICAL EVIDENCE

INTRODUCTION The increased attention to the application of marketing in the services sector has brought in to question what the key components or elements of a marketing mix for services, are or what they should be. If the elements chosen for a service are not comprehensive, then there could occur a gap between the market requirement and the firms marketing offer. This makes it appropriate to reconsider the traditional marketing mix of the 4Ps in the context of marketing service. The traditional mix has been right from a mush longer list of 12 variables designed by the Harvard School of Business of time, the concept had gain acceptance and the mix adopted to capture the market. There has always been a consistent debate on the marketing mix, and particularly in the context of services. As the 4Ps model restrictive in application to the service industry, the need for including 5 th P is being increasingly recognised. People, processes and physical evidence (5 th P) are those elements which demand special emphasize in service marketing. This is some times considered as the separate marketing mix by it self. OBJECTIVES Understand why a 5th p is necessary in tourism marketing, Appreciate the importance of people process and physical evidence as sub elements of the 5th P,

 Understand and appreciate the relation of this P with customer satisfaction, and Design strategies to make the best use of the 5P in tourism and its marketing WHY DO WE NEED 5TH P?

In tourism marketing, the main objective is to motivate more and more people to visit different places there by enhancing the image of location/destination and also to increase the revenues. In tourism marketing, the product is intangible and it covers a vide range of facilities to the tourists. The 4 Ps are very important in tourism marketing but are not adequate. For example, there are other factors, which affect the marketing strategies like the statutory requirements to be met by the foreign nationals before entering the country, the behavioral requirements of the employees etc. .All of which can be used effectively used in tourism marketing by effective planning all these factors need to be considered separately by paying adequate attention to each of these aspects and so can be covered under separate element of the marketing mix which may be termed as 5th P. The importance of people, process and physical

evidence and their marketing implications can be studied separately under this element termed 5th P. It becomes all the important in tourism

marketing to place special emphasis on it as it will help in increasing the perceived value of the product by it self. As tourism is involved in the offering of services, which lead to satisfaction of an individual need for

visual delight, grandeur and exotic senses, there should be greater stress on the 5th P TOURISM INDUSTRY AND PEOPLE When we talk of people here, we refer all those who are directly and indirectly employed in tourism service of the organisation and who play and important role in achieving the objectives set by the firm. People play very important role in tourism marketing. This is because customers associated people providing services as apart of the product itself. The airhostesses in Airlines and tourist guides at a historic place etc. are people who actually provide the service. They perform the following functions: Building and maintaining a favorable image, Providing solutions when problem arises, Providing special help in case of need, and Maintaing harmonious relationship PEOPLE AS AN ELEMENT OF MARKETING MIX A few years ago, if people were spoken of as an element of marketing mix, it would have been considered blunder. But in recent times, there has been growing awareness of the role of people in achieving the marketing objectives and the importance of paying adequate attention to this aspect is being realized. The quality of service provided can not be standardised as there is always a human element and it depends on the state of the individual at that

particular moment of providing the service. This makes it difficult to control the service activities. Hence, this aspect demands serious attention to ensure a satisfied customer. By viewing people as a separate element of marketing mix, required attention can be directed to maximise their efficiency. Steps can be taken to train people to meet the specific need of their job, motivated to have customer orientation, and reward them to make the desired contribution. ROLES PEOPLE PLAY The employees have to perform roles depending on the nature of job performed, their position in the organisation hierarchy and the amount contacts of they have with the ultimate customers. In tourism marketing, the extent to the employees some in contact with the customers determines the amount of attention that needs to be directed to them. i) People in maximum contact with tourists: They are those employees who are directly involved in tourism marketing. They include the receptionists in tourism office, tourist guides, etc. These people come in contact with a variety of potential customers who desire information and the advice on much tourism related issue. It is essential to them well versed to related destination. The package tours organised by govt. and other agencies., the probable estimates of money of money and time required for each trip, and any other information that a tourist might be interested in should be available with him. These should well trained and motivated to serve the tourists on a day to day basis in a pleasant and responsive manner. They should be enthusiastic and friendly, with an understanding of the needs of the

different people and should have the capabilities of advising them accordingly without underplaying or overplaying the importance of any particular location based on their personal bias. ii) People in Medium Contact with Tourists: These are people who play an important role in designing, developing, and implementing different marketing programs depending on the needs of customers. These people have to conduct research, collect information, prepare brochures and other material for promotion and their main responsibility is to b ring the tourism marketers upto date on the latest trends. Remember that most of the buying decision of customers are taken on basis of brochures. However, many principal suppliers are now promoting their products through video films and slides,etc. iii) People in Minimum Contact with Tourists all the people who are involved in planning and development activities may not come in to contact with ultimate customers. They design attractive schemes and plan strategies for tourism- tourism development at various levels. Coordinating the different activities of the org., internal marketing, liaison with outside agencies, etc. form the basic responsibilities at this level. Continuous feedback about the different prograes and the activities is to be taken from the people who are in direct contact with the customers so as the changes desired by the public from time to time.

PROCESS IN THE TOURISM INDUSTRY Process denotes the way in which the particular action is carried out. Tourism marketer should take care all of all the procedures, schedules, mechanisms, and routines which are practiced when the tour is on. It is at the process level that the tourists requirements are actually met. Some of these processes are statutory in nature i.e. they required to be compiled with due to the govt. rules and regulations, while some others are practiced to facilitate easy control of the different activities. For example, Govt. may make it obligatory on the part of every tourist to furnish all full particulars of the person, nature of visit. Etc. before entering to the country. Characteristics of processes Any process can be analysed in terms of its complexity and divergence. Complexity refers to the nature and sequence of the different steps of the process i.e. the variability within a process to suit the different requirements of the customers h) Complexity: the wider variety of services offered by an organisation the more complex it is said to be. Generally these services are provided so as to meet the needs of different segments of the customer population and aim at higher levels of penetration in a market. For example, if a tourism org, is organising a number of package tours everyday to a different price levels to suit needs the both the economy and comfort oriented tourists, and also taking care of their accommodation and refreshment needs it is indulging in complex process. ii) Divergence: divergence refers to the variability of the steps and sequences in a process. Limited divergence means the choice of a customer is restricted but it also means higher control over the quality of

services provided. This may result in reduced costs, uniform service quality and improved service availability. However, as it results in highly standardised service, personal touch, which, which is desired by a number of service consumers, may be absent. A tourist company that caters to almost any need of the customer, including helping foreign exchange transactions, flight bookings, etc. may be said to be highly divergent. Customer Satisfaction Processes should facilitate a service operation but at same time they should not have a negative effect on customer satisfaction. No amount of friendly approach and pleasant attitude on the part of marketing personnel will overcome continued unsatisfactory process performance. It is necessary that the processes be simplified and made customer friendly to ensure a satisfied customer. If a service operation runs smoothly, it may not be remembered by the customer for ever, but if he/she gets dissatisfied with a process, the negative images tends to last longer. At this explains the importance that needs to be attached to the process in the tourism marketing to ensure a satisfied customer. It is difficult to have good image but easy to loose it. It is easy to earn bad image but difficult to loose it. TOURISM INDUSTRY AND PHYSICAL EVIDENCE Physical evidence is very much related to the product and hence is considered by many authors as a sub component of the product element and it has been argued that as advertising and personal selling are

considered as sub elements in promotion, so as it is enough to consider physical element of product Tourism and physical evidence Every customer would like to see, evaluate and compare a product physically before making a decision whether to make a purchase or not. As the services are intangible in nature, it is almost impossible to have first hand experience of the desired service before making the final purchase. How much ever a person tries to judge the quality of service by making inquiries and reading literature, a doubt still remains in mind as to thew exact quality of the service to be expected. This more true of the tourism product because a potential tourists has to estimate the amount of satisfaction he/ she derive by visiting a particular place even before deciding to go, especially, when one can choose from a number of options. Physical evidence which can be easily associated with the by the customer. As tourism product is highly intangible, the place, the dcor, the people and anything else in the tourism office may be related to the experience in store. For example, when tourists visit at Taj Mahal. They not only carry the memories of the Taj Mahal but transportation facilities, accommodation facilities available of package tour, surrounding markets and peoples behavior as one whole experience. All this is a part of the conscious effort on the part of the tourist to make the intangible experience more tangible. TYPE OF PHYSICAL EVIDENCE Physical evidence can be divided in to two types: essential and peripheral.

a) Essential physical evidence: this includes al the basic requirements that are necessary to render the service. A well equipped building with all the necessary tools and information, good furniture, necessary transportation facilities to reach the area where services are provided, etc. are all essential if effective service is to be provided. b) Peripheral Physical Evidence: has a little value of its own. A railway ticket has no value in itself if the traveler misses the train. This signifies that the peripheral physical evidence tries to bring an aspect of tangibility to the product but it actually represents a right to experience the service at the later point of time. It can be understood that physical evidence tries to provide an extent of tangibility to the otherwise intangible nature of the product. SOME Cs Besides the Ps today certain Cs have also been added in services marketing particularly in relation to the tourism products. These are : Commitment: this means that the producer suppliers of service as well the employees must be commuted to tourism and service being provided to the tourists. Cleanliness: this is a must for destinations, hotels, airports, railways stations, and trains along with in the employees who are part of the services. Communication: this must be effective and clear with no gaps whether verbal, written or through telecommunications mode. Certain service situations require quick communication.

 Crisis handling: crisis in providing tourism services is not uncommon and they need careful handling. Creativity: this is the key to success in packaging or designing the tourism product. Customer involvement: a tourist not only consumes the service but also experiences it. Hence, customer involvement and participation in many tourist related services leads to enhancement of tourists enjoyment or satisfaction levels. CASE STUDY OF CLUB MEDITERRANEE SA, FRANCE Case study of club med. will show the effective use of marketing mixs elements. Club Med Founded in 1951. Club med. is a worldwide org. and major player in the global hospitality industry. It ranked third largest hotel chain in the world and thirteen in the world (Hotelier, July 1994). Company has developed in a number of ways since it s creation. However it has maintained its unique selling points such as the all- inclusive nature of the package offered and role of the on- site- staff or GOs (Gentiles organisation) Although it has diversified into new activities, its core business remains operations of its resort complexes. In summer 1995, club med. was offering 80 resorts in 30 countries under its brand name from Australia to Ireland, Florida to Bulgaria.the countries with most club med. resorts are France (10), Italy (7), Morocco (6), Greece (5), Switzerland (4) and Mexico (4). The types of resorts vary and include following:

 Straw hut villages, which are reminder of the origins of the company when its villages were simple affairs, consisting literally of straw huts or very near to a good beach. In the summer of 1995 there were 9 such resorts around the Mediterranean with three being found in Greece. Resorts are in mountain areas, mostly in France and Switzerland. Modern purposes built complexes usually in coastal locations. Club emphases that while its prices are above average, the package is fully inclusive. Clients can buy the inclusive stay without the flights and transfer. Club Med has also developed two resorts in Turkey and Sicily, which are based on a la carte formula, rather than the all-inclusive package. The basic package includes bed and breakfast accommodation. Corrective sport and evening entertainment. Clients are then free to choose and pay for extra such as other meals. The childrens club and excretion. Because they have recognised the need for flexibility in order to suit everyones holiday needs. And also emphasis the atmosphere of their resorts, they describe village ethos. It also stresses the informal relationship between staff and guests. All inclusive prices of the accommodation only, excluding flights, in 1995 range from 27 pound per adult per day at the straw hut village resort at alhoceima in morocco, to 105 pound per adult per day at the luxurious opio complex in the hills of province in France. Prices for a one week all inclusive stay in the high season, including flights for British clients in summer 1995, were as follows (in Pounds sterling) Corfou ipsos Greece 568 Pounds

Waterville Opio Cancun Phuket Bali Moorea Lideman Island

Ireland France Mexico Thailand Indonesia Poyensia Austraslia

761 Pounds 1117 Pounds 1259 pounds 1372 Pounds 1576 Pounds 1684 Pounds 2074 Pounds

In its earl days, club med sold simple resort complexes to people looking for a relaxed, relatively unsophisticated holiday. It has grown and its customer base has widened, the company has sought to attract customers from non-frenceh speaking market such as the U.S.A and Japan. This and its recognition those customers are becoming very selective and concerned with quality, it to develop a number of new products in recent years. Club Med 1 and 2, which are cruise ships, designed with sails to look like olden day sailing ships. They offer the traditional all inclusive Club Med resort product in a cruise setting. In 1995 was cruising in the Mediterranean while other was operating in Polynesia. City club, Vienna which is very unusual for club med . It contains a luxury hotel with a conference complex and leisure and sport facilities. Club med business, which offers all inclusive packages for corporate clients in relation to conferences and incentive travel.

 Winter sun and winter ski holidays. Visits to historic and cultural destination tourism destination around the world. The villas in Mexico, which are small complexes located near to archaeological sites of Mexico. They are designed for those who wish to use Club Med resorts as a base for exploring the archaeological sites. Joint ventures with a Japanese company to help club med gain access to this important market. The brochures produced by Club Med also reflect their growth in new markets and their perception of their customers. Further more most of the brochure are available in English language versions and the company stresses that many of its reservations staff can speak English. Their brochures show the village scene on which they emphasis most and paper quality of the brochure is very good that one cant throw it easily. It includes a cassette which has ten minutes presentation. Club Med quality rating system for their own resorts the Trident system. With each resort being given from 1 4 Tridents. A section emphasizing the environmentally friendly nature of club med resort complexes. Customers usually do not have problem to buy the Club Med.s products because Club has agents in number of countries in which it sells its holidays including the U.K.

Thus we find organisers of Club Med has used all tools of marketing mix carefully as well as effectively to reach the each segment of tourists to meet their needs and match their expectations.

ACKNOWLEDGEMENT I am highly grateful to all those who have made their generous assistance in preparing the project on MARKETING MIX IN TOURISM WITH SPECIAL REFRENCE TO PRODUCT PRICE PROMOTION AND PLACE . I can offer only an inadequate acknowledgement of my appreciation to Mr. Bhatia, Mrs. Kumud Diwan and especially Mr. Jaswant Raghav project. for their co-operation in completion of the

TABLE OF CONTENTS
Marketing mix in Tourism with special reference to Product, Price, Promotion and Place Product in Tourism Industry - Introduction Developing a Product Product Mix Pricing Strategies Promotion Strategies Distribution Strategies The Fifth P: People, Process and Physical evidence

A Project Report On

MARKETING MIX IN TOURISM WITH SPECIAL REFERENCE TO PRODUCT, PRICE, PROMOTION AND PLACE

Submitted by: BIMAL BIKASH SONOWAL

INDIAN INSTITUTE OF TOURISM AND TRAVEL MANAGEMENT NEW DELHI