TOURISM MARKETING

By

(NANCY)

Enrolment No: (BTS)

Submitted to

INDIRA GANDHI NATIONAL OPEN UNIVERSITY

Signature of the Candidate

Name:
Institutional Address:
Damodar College (0801), Study Centre, Margao
 INDEX
SR.NO. TITLE PAGE. NO.
1 INTRODUCTION
2 DEFINITION OF TOURISM
MARKETING
3 FEATURES OF TOURISM
MARKETING
4 TOUR MARKET SEGMENTATION
5 TOUR MARKETING MIX
6 ANALYSIS OF TOURISM
7 CORE CONCEPTS IN MARKETING
8 MARKETING MANAGEMENT
PHILOSOPHIES
9 ECONOMIC IMPORTANCE OF
MARKETING
10 TOURISM DEMAND: MODELING
& FORCASTING AND
POSITIONING
11 MARKETING ENVIRONMENT
12 CONSUMER BUYING BEHAVIOUR
13 COMPETITIVE MARKETING
STRATEGY
14 CUSTOMER SATISFACTION AND
RETENTION
15 PRODUCT AND PRODUCT
STRATEGIES
Travel and tourism marketing is the systematic and
coordinated execution of business policies by the both private
or public and public sector tourism organizations operating at
the local, regional, national, or international level to achieve
the optimal satisfaction of the needs of identifiable tourist
groups, and in doing so to achieve an appropriate return.
Travel agencies in the pre-deregulation, pre-liberalization, and
pre-globalization era were often contented to take whatever
business that come along this way and sold them on a straight
commission basis without bothering about the extensive
marketing.
Moreover, their scope of the operation was small and was not
much complex, sophisticated and competitive. But today the
travel companies are becoming larger, more sophisticated and
more automated in management. Similarly, the
clients/tourists are also becoming more trained, experienced,
erudite and demanding higher equality services and packages.
Therefore, in this volatile travel business environment,
marketing knowledge and skill are more necessary ingredients
than the product knowledge and enthusiasm, for a travel
agency’s long-term survival and growth. Thus, this has led to
the use of tourism marketing which is recent phenomena.
 HISTORY OF TOURISM MARKETING
The ‘marketing concept’ is not very old. The development of
the marketing concept, in fact, is the outcome of political,
technological, social, economic and business pressures.
However, the importance of marketing within travel and
tourism industry has been the level of economic and business
growth throughout the 20th century, which has led to the
improvement in living standards, an enlargement of the
population. These changes have also led to the construction of
infrastructure, accommodation, transport, and other
recreational facilities. Within a very short period, travel and
tourism have become one of the most important and leading
industry in the world.
Modern tourism marketing has evolved as a business reaction
to change in the socio-Economic environment, with the most
successful tourism companies or tourism bodies have
demonstrated a keen sense of providing the right of
organizational structure and products offer for the
visitors/tourists.

Interestingly, the tourism companies have recognized the

significance of key factors such as needs, wants, and
satisfaction in the planning and designing of the tourism
product. In the tourism industry, every tourist wants to be
treated as a special client and any organization catering to this
attitude of the tourist will naturally be head of the other
competitions.

Tourism marketing is a social and managerial process by which

consumers obtained what they need and want through
creating and exchanging product services and value with
other. It is the management process responsible for the
identification, anticipating, assessing and satisfying the
customer’s client’s requirements profitable.
The modern marketing concept is not limited only to the
identification and satisfaction of customers. It is a
comprehensive process which encompasses research and
analysis of society’s as well as consumer’s needs, asserts the
company’s resources and marketplace and delivers the
products/services to those whose experience provides a set of
satisfactions which are preferable to those of the competitors.
Tourism marketing is the application of marketing concepts in
the travel and tourism industry. It could be complex due to the
product being an amalgam of many different industries such
as accommodation and transportation.
It is the organized, combined efforts of the national tourist
bodies and the businesses in the tourism sector of an
international, national or local area to achieve growth in
tourism by maximizing the satisfaction of tourists. In doing so,
the tourist bodies and businesses expect to receive profit.
Tour package as a specialized product creates a number of
significant considerations which need to be fully analyzed. The
management of tour package cannot be divorced from the
management of service and quality. Thus, the marketing of the
tour package if different from other products because the tour
package is a service product where instead of selling physical
goods an intangible experience is sold.
An understanding of the complexity of the tourism product
concept is an essential pre-requisite for effective tour package
marketing in this context. The specific features of tourism
marketing are:
• The demand for tour package is highly elastic and
seasonal in nature.
• Tour package is a combination of various services
ingredient.
• Designing, developing and marketing of tour package a
number of intermediaries are involved. Bed experience at
one level can spoil the entire image of the package as well
as tour operator.
• A tourist does not only by the tour package in advance
because it is consumed and felt at the same time at a
particular destination.
The tourism industry provides for a combination of different
products and activities, which ranges from small taxi
operator to the largest airline or hotel chain. The concept of
change and survival are as important to the tour operators as
they have to deal with both various vendors in the tourism
market. It would, therefore, become imperative to
understand what is tour marketing planning especially for the
long-term survival of ant tour/company.
A tour marketing planning is a structured guide for carrying
out marketing operations. It provides a common structure
and focuses on all the company’s management activities.
The- purposes of a marketing plan includes:
• It provides a clear direction for marketing operations.
• It coordinates the resources of the organization in order
to eliminate confusion and misunderstanding and
achieving cooperation.
• Identifying different market segments.
• Setting target/goals.
• Identifying the organization’s strengths and weaknesses.
• Corporate mission and goals,
• External and internal audit.
• Business situation and analysis.
• Creating the objectives.
• Providing an effective marketing mix strategy.
• Monitoring the plan.
 Ways in which customers can be grouped are:
1) Location of residence—instate, out of state, local;
2) Demographics- age, income, family status, education;
3) Equipment ownership/use—RV’s, sailboats, canoes,
tents, now mobiles;
4) Important product attributes—price, quality, quantity;
and
5) Lifestyle attributes—activities, interest, opinions

• After segments have been identified, the business or

community must select the “target markets,” those
 segments which offer them the greatest opportunity.
When determining target markets, consideration should
be given to:
1) Existing and future sales potential of each segment;
2) The amount and strength of competition for each
segment;
3) The ability to offer a marketing mix which will be
successful in attracting each segment;
4) The cost of servicing each segment; and
5) Each segment’s contribution to accomplishing
overall business/community objectives.
• It is often wiser to target smaller segments that are
presently not being served, or served inadequately, than
to go after larger segments for which there is a great deal
of competition.
Undifferentiated marketing

One product Entire market

Differentiated marketing

Segment 1

company Segment 2

Segment 3
 The main purpose of tour market segmentation in
tourism marketing are:
- Segment the tourist generating markets.
- Identify the network of intermediaries.
- Identify the nature of demand for one’s product.
- Identify the prospective tourists.
An effective market strategy will determine exactly what
the target market will be and to attempt to reach only
those markets. The target market is that segment of a
total potential market to which the tourist attraction
would be the most saleable.

Target markets are defined geographically,

demographically and so forth market segmentation
must be employed in the marketing program to both the
long-term strategies. Every tourism attraction can appeal
to a multitude of market segments, and the market
segment can overlap a great deal. The tour manager must
look at market segments and determines which one offer
the promising potential for his/her services.
Tour market segment further categories into the following
types:
1.Geographic segment: This segment is based on the idea
that customer needs differ according to geographic
regions
 2.Demographic segment: under this segmentation, the
tourism market is divided into various groups, keeping in
view the demographic variables such as age, income, sex,
family size, occupation, education, religion etc.
3.behavioral segment: in this segmentation, prospective
tourists are segmented on the basis of their knowledge,
attitude, use or response to the tour product. Under this
segmentation, the marketing strategies of a four-
company include:
• User status
• Usage rate
• Loyalty status
• Buyer readiness stages
• Attitude
4.Psychographic segmentation: under this, the tourists
are divided into different group on the basis of their social
status, lifestyles, and personality characteristics. For
example, upper class, upper middle, lower classes,
product preferences, adventure sports, etc.
5.Price segmentation: price ranges often come in handy
in segmenting the tourist markets, such as:
• Those who want to take a lower priced vacation.
• Those who may take a moderately vacation.
Price ranges communicate to the tourists the quality
expectation of a product along with the producer’s
image. While determining the price of a tour package a
 tour planner must understand the paying capacity of the
tourist.

TOUR MARKETING MIX

In the competitive tourism marketplace, a tour operator
can be successful if it’s complete marketing mix offer
matches what the tourist wants. It is planned and
coordinated by marketers so that the input can be
contributed in such a way that the company will be able
to maximize demand and satisfaction of the tourists.

The concept of the tour marketing mix is equally relevant

in the case of tourism products as it is in the case of other
services and goods. Tour marketing manager must
constantly search for the right marketing mix, the right
combination of elements that will produce a profit. The
marketing mix is composed of every factor that
influences marketing efforts such as:
• Time
• Brands Pricing- in the ratio of quality and value
• Product features
• Image
• Channels of distribution- both international and national
• Advertising
• Selling techniques
• Public relation
 The fundamental starting point for the creation of a
successful tour marketing mix to ensure that the target
market is clearly defined. The target market is the focus
of all marketing mix activities. Generally, the marketing
mix constitutes four P’s. these four P’s are following as:
- Product
- Price
- Promotion
- Place

However, besides these four P ’s in the tourism industry-

People, process, physical evidence, productivity and quality
is also of most relevance.

1. Product
- Accommodation
- Attraction
- Transportation
- Recreation
- Shopping
- Restaurant

2. Pricing
 - cost
- Demand
- Competition
- Duration
- Mode of transport
- Peak/non-peak season
- destination

3. promotion
- Different states highlighting about their features.
E.g.
- Kerala- ‘God’s own country’ highlighting about
backwaters, ayurveda, elephants, houseboats, beaches
etc.
- ‘Incredible India’ and ‘Atithi devo bhava’ are taglines of
Indian tourism
- ‘Our guest is blessed’ and ‘our visitor is god’
- Amir khan as brand ambassador for ‘Atithi devo bhava’
for Indian tourism.
- Use of websites to sell tourism.
- Brochures, pamphlets, ads in newspapers.
- E.g., raj, kesari and Thomas cook.

4.place
- The ‘destination’ is the important aspect in place.
- Travel agents, tour operators etc. are distribution points.
- Proper infrastructure, transport and communication.

5.people
- Role of people is very important in any service.
- In tourism, people involved are travel agents, guides,
airline crew members, receptionist in hotel etc.
- Contacts with people may be high, medium, low.
- Examples:
1.IN CASE OF AIRLINES:
- The passenger will have high or medium contact with the
air-Hostess, ground staff where as low or no contact with
the pilot.
2. IN CASE OF RAILWAYS:
- The passenger will have high or medium contact with
travel agents or ticket issue but low or no contact with
the loco pilot.

6.process
- Travel agents should provide best deals to customers
after understanding their requirements.
- Guides should have in-depth knowledge about the
locations, monuments, forts, history etc.
- Employees should deliver what the company promises to
the customer.
- Physical appearance of guides also matters a lot.

7.physical evidence

Physical evidence refers to everything your customers

see when interacting with your business. This includes:

• The physical environment where you provide the

product or service
• The layout or interior design
• Your packaging
• Your branding
Physical evidence can also refer to your staff and
how they dress and act
Consider how your store’s layout, fixtures and
signage can build your brand and increase your
sales.
8.productivity and quality
- It involves positioning the process, the overall
destination, the intangibles etc.
- It also involves positioning of tourism as national priority.

ANALYSIS OF TOURISM

• Strengths
- Vast geography with forests, deserts, mountains &
beaches.
- Varied culture.
- Many historical monuments.
- Knowledge of English by majority of local people.
- Efficient transport facilities.
• OPPORTUNITIES
- Increased privatization.
- Medical tourism.
- Go-green initiative.
- World-class hotels and airports.
• WEAKNESS
- Lack of adequate infrastructure.
- Safety and security of foreign tourists.
- Misconception about India by foreigners.
 - Lack of maintenance of monuments, forts etc.
- Many languages and dialects.
• THREATS
- Terrorism.
- Tensions with Pakistan.
- Better promotion by other countries.
- Economic slowdown.

POLITICAL FACTOR ECONOMIC FACTORS

• Religious intolerance. • More disposable income with

• Relation with neighboring people.
countries. • Low-cost airlines: more air-
• lack of international travelers.
representation. • Tourism contributing
• Hotel industry getting substantially to India’s GDP.
government incentives.
SOCIAL & CULTURAL FACTORS TECHNOLOGICAL FACTORS
• Many festivals throughout the • Poor facilities at airports and
year. stations.
• Exhibitions, trade fairs etc. • Growth of E-tourism.
• People becoming careful with • Introduction of cruise ships.
foreign tourists after incidents • New land bridges.
in goa and Kerala. • Space tourism.
 CORE CONCEPTS IN MARKETING
- NEEDs
- State of felt deprivation including physical,
social, and individual needs.

- Wants
- Needs become wants when they are directed to
specific objects that might satisfy the needs.

- Needs and wants fulfilled through a MARKETING

OFFER:
- Some combination of products, services,
information, or experiences offered to a market to
satisfy a need or want.
- Market
- The marketplace is physical, as when one goes for
shopping in a store.
- Marketplace is digital, as when one goes shopping
on the internet.
- Meta market is described as a cluster of
complementary products and services that are
closely related in the minds of consumers but are
spread across a diverse set of industries.

- Target market & segmentation

- Differences in needs, behavior, demographics are
used to identify segments.
- The segment served by the firm is called the target
market.
- The market offering is customized to the needs of
the target market.

ASPECTS OF MARKETING CONCEPTS

- Creation of demand: marketing tries to create
demand through various means. The producers first
ascertain what the customers want and then
produce goods according to the needs of the
customers. There is a systematic effort to sell goods
and services according to the needs of the
customers.
 - Customer orientation: Marketing involves
undertaking a range of business activities directed at
the creation of customer satisfying products and
services.
- Integrated Marketing: The customer orientation
alone is not enough on the part of

Marketing Management
Philosophies

• The Production Concept

- The production concept holds that customers will favor
products that are available and highly affordable and that
management should therefore focus on improving
production and distribution efficiency.
- The production concept is useful when:
1) Demand for a product exceeds the supply.
2) The product’s cost is too high and improved
productivity is needed to bring it down.

a) The risk with this concept is in focusing too narrowly on

company operations. Do not ignore the desires of the
market.

• THE PRODUCT CONCEPT

b) The product concept states that consumers will favor
products that offer the most quality, performance, and
 features, and that the organization should therefore
devote its energy to making continuous product
improvements.

1) Some manufacturers mistakenly believe that if they

“build a better mousetrap” consumers will beat a path to
their door just for their product.
2) The product concept can also lead to “marketing myopia”
the failure to see the challenges being presented by other
products.

• SELLING CONCEPT
c) Many organizations follow the selling concept. The selling
concept is the idea that consumers will not buy enough
of the organization’s products unless the organization
undertakes a large-scale selling and promotion effort.
• This concept is typically practiced with unsought
goods (those that buyers do not normally think
of buying).
• To be successful with this concept, the
organization must be good at tracking down the
interested buyer.
• Industries that use this concept usually have over
capacity. Their aim is to sell what they make
rather than make what will sell in the market.
• There are not only high risks with this approach
but low satisfaction by customers.
d) Many companies claim to adopt the marketing concept
but really do not unless they commit to market-focused
and customer-driven philosophies.

• THE SOCIAL MARKETING CONCEPT

e) The societal marketing concept holds that the
organization should determine the needs, wants, and
interests of target markets. It should then deliver the
desired satisfactions more effectively and efficiently than
competitors in a way that maintains or improves the
consumer’s and the society’s well-being.

1) The societal marketing concept is the newest of the

marketing philosophies.
2) It questions whether the pure marketing concept is
adequate given the wide variety of societal problems and
ills.
3) According to the societal marketing concept, the pure
marketing concept overlooks possible conflicts between
short-run consumer wants and long-run consumer
welfare.
4) The societal concept calls upon marketers to balance
three considerations in setting their marketing policies:
- Company profits.
- Customer wants.
- Society’s interests.
5) It has become good business to consider and think of
society’s interests when the organization makes
marketing decisions.

ECONOMIC IMPORTANCE OF
MARKETING

• GENERATION OF REVENUE
- Profit generation and marketing is the only source to
meet its expenses and earn profits.
- Survival and growth of the business enterprise depends
on the effectiveness and efficiency of marketing.

• CUSTOMER SATISFACTION
- Marketing helps to identify and satisfy the needs and
wants of consumers.
- Customer satisfaction has an important role in marketing
without a business can’t be successful.

• EMPLOYMENT GENERATION
- Marketing offers challenging and rewarding jobs to a
large number of persons. It also generates employment
in production by enlarging the scale of distribution and
production.
 • HIGHER STANDARD OF LIVING
- marketing is helpful in improving the standard of living of
people by offering a wide variety of goods and services
with freedom of choices. It has modernized the living
standards of people through the supply of quality
products at reasonable price.

• LARGE SCALE PRODUCTION

- Marketing makes mass selling possible and thereby
facilitates large scale production. Economies of large-
scale production help to reduce the cost of production
per unit.

• ECONOMIC DEVELOPMENT
- Marketing gives a boost to transportation, banking,
insurance, warehousing and other economics activities. It
makes the economy strong and stable by balancing
production with consumption. In fact, marketing is the
kingpin that keeps the economy moving ahead.

• FOREIGN EXCHANGE EARNER

- Marketing helps in exploring foreign markets and in
exporting goods and services. it is through marketing that
a country earns valuable foreign exchange.

• CREATION OF UTTILITIES
- Marketing includes all activities involved in the creation
of place utility, time utility and possession utility. Place
utility is created by making goods available at the places
where they are needed. Time utility is created by making
goods available at the right time. Possession utility is
created when goods are transferred to those who need
them.

• Tourism demand modeling and forecasting are very

important for tourism-related business decision
making
- Stock effect,
- Market response effect
ANALYSIS
• Tourism demand can be measured in terms of
number of tourist visits from an origin country to a
designation country.
• Tourist expenditure by visitors from the origin country
in the designation country.
• Tourist nights spend by visitors in the designation
country.
• The explanatory variables for tourism demand include
origin country income, destination country tourism
prices, substitute destination country tourism prices,
tastes, etc. Empirical studies usually use living costs
for tourists in the destination as the tourism price.
Various demand models can be used to estimate and
forecast tourism demand.
• Modeling tourism demand in a vector autoregressive
(VAR) framework, to forecast the number of holidays
spent by non- residents
Methods that rely on qualitative
assessment
- Unaided judgement
- Prediction market
- Delphi technique
- Game theory
- Judge mental bootstrapping
- Simulated interaction
- Intentions and expectations surveys
- Conjoint analysis

Methods that rely on quantitative

assessment
- Discrete event simulation
- Extrapolation
- Quantitative analogies
- Rule-based forecasting
 - Neural networks
- Data mining
- Casual models
- Segmentation

Managing capacity and Demand

• Capacity constraints • Demand patterns

- Time, labor, equipment - Charting demand
and facilities. patterns predictable
- Optimal versus maximal cycles
use of capacity. - Random demand
fluctuations
- Demand patterns by
market segment.

Positioning
- In marketing, positioning has come to mean the process
by which marketers try to create an image or identity in
the minds of their target market for its product, brand, or
organization.
- Re-positioning involves changing the identity of a
product, relative to the identity of competing products,
in the collective minds of the target market.
- De-positioning involves attempting to change the
identity of competing products, relative to the identity of
your own product, in the collective minds of the target
market.
- The original work on positioning was consumer
marketing oriented, and was not as much focused on the
question relative to competitive products as much as it
was focused on cutting through the ambient “noise” and
establishing a moment of real contact with the intended
recipient.
Primary element of positioning Are:
• Pricing- is your product a luxury item, somewhere in the
middle, or cheap, cheap, cheap.
• Quality- today quality is a much used and abused phrase.
But is your product well produced? What controls are in
place to assure consistency? Do you back your quality
claim with customer-friendly guarantees, warranties, and
return policies?
• Service- do you offer the added value of customer
services and support? Is your product customized and
personalized?
• Packaging- packaging makes a strong statement. Make
sure it’s delivering the message you intend.

Positioning concept
- Functional positions
• Solve problems
• Provide benefits to customers
• Get favorable perception by investors (stock
profile) and lenders

- Symbolic positions
• Self-image enhancement
• Ego identification
• Belongingness and social meaningfulness
• Affective fulfillment

- Experimental positions
 • Provide sensory stimulation
• Provide cognitive stimulation

Product positioning process

- Defining the market in which the product or brand

will compete (who the relevant buyers are”)
- Identifying the attributes (also called dimension)
that define the product ‘space’
- Collecting information from a sample of customers
about their perceptions of each product on the
relevant attributes
- Determine each product’s share of mind
- Determine each product’s current location in the
product space.
- Determine the target market’s preferred
combination of attributes (referred to as an ideal
vector)
- Examine the fit between:
• The position of your product
• The position of ideal vector
- position.

Marketing Environment
A marketing environment encompasses all the internal and
external factors that drive and influence an organization’s
marketing activities.
Marketing managers must stay aware of the marketing
environment to maintain success and tackle any threats or
opportunities that may affect their work.
A marketing environment is vast and diverse, consisting of
controllable and uncontrollable factors. A good grasp of your
marketing environment helps to:

• Identify opportunities:
 Understanding your marketing environment helps you
notice and take advantage of market opportunities
before losing your edge. For example, say your marketing
team sees an uptick in digital buying over in-shop sales.
You may decide to allocate more resources to your online
marketing funnel to drive more sales.
• Identify threats:
Studying your marketing environment alerts you to
potential threats which may affect your marketing
activities. For example, a market leader could diversify
their product portfolio to complete with your
organization. Foreknowledge of this can help you re-
strategize your marketing efforts to maintain and grow
your market share.
• Manage changes:
Paying attention to the marketing environment also helps
manage changes and maintain growth in a dynamic
Economy. Marketing managers can forecast and
determine timely marketing campaign strategies by
monitoring their marketing environment.

Features of a marketing environment

The features of a marketing environment are typically:

- Dynamic: the factors that affect marketing

environments constantly change over time. These
 could be technological advancements, industry
regulations, or even customer tastes.
- Relative: marketing environments are relative and
unique to each organization. A specific product from
your company may sell quicker in the U.S. than in
Europe because of distinctions in the marketing
environment.
- Uncertain: market forces are unpredictable. Even
with constant study, you may face unexpected
threats or opportunities in your marketing
operations. Adept marketers must be able to learn,
pivot, and strategize quickly to achieve their goals.
- Complex: the many internal and external forces in a
marketing environment make it complex, with
various essential moving parts. For example, you
must co-ordinates your team’s ability and resources
with stakeholder expectations, customer
satisfaction, and other ethical and environmental
concerns.

TYPES OF MARKETING ENVIRONMENTS

There are two significant types of marketing

environments:
➢ Internal marketing environments
➢ External marketing environments
You can break down the external marketing environment
further into:
➢ Micro-marketing environment
➢ Macro-marketing environment

a. Internal marketing environment

An internal marketing environment consists of factors
that fall within your control and impact your marketing
operations, including your organization’s strengths,
weaknesses, uniqueness, and competencies.
 Think of essential marketing elements such as your
people and teams, the quality of your product or service,
capital assets and budgets, and company policy. Internal
marketing factors are controllable.

b. External marketing environment

The external marketing environment includes all factors
that do not fall within your organization’s control,
including technological advancements, regulatory
changes, social, economic, and competitive forces.
These factors may be controllable or uncontrollable, but
defining and studying their changes and trends gives your
business and marketing team some power to say the
course. The external marketing environment can be
broadly categorized into micro and macro marketing
environments.

I. Microenvironment in marketing
It is closely linked to your business and directly
affects marketing operations. It includes factors like
customers, suppliers, business partners, vendors,
and even competitors. Microenvironment factors
are controllable to some extent.

II. Macroenvironment in marketing

It is made up of all the factors beyond the control of
your organization. An easy way to remember these
factors is by using the PESTLE acronym, which stands
for:
P: political factors
E: economic factors
S: social and demographic factors
T: technological advancement factors
L: legal and regulatory factors
E: environmental factors

These factors are uncontrollable and can impact

your business and marketing operations to a
significant extent. political changes, for example,
may have a massive effect on how you can market
and conduct your business in certain regions.

Your macro marketing environment is continually

changing. It’s vital to keep a close watch to identify
potential threats or opportunities to your business.
For instance, an unpredictable environmental
change, like the COVID-19 pandemic in 2020, can
significantly change the way we work, market, and
do business globally.

While it’s true that the micromarketing environment

can overwhelm a business and cause it to fall, it can
also lead to growth. A curious perspective and
healthy company culture that empowers employees
and teams to share ideas, collaborate, and take
creative risks will position your business for success.

Examples of a marketing environment

To help you understand the effects of different

marketing environments, let’s look at some
examples
- Internal marketing environment
your internal company culture has an impact on
how your employees behave, which in turn
affects your marketing operations. An
organization that emphasizes teamwork and
collaboration, for example, will have more
engaged employees. This in turn, will help the
organization perform better than competitors
who do not share these values.

- Micro marketing environment

Say your business relies on a network of
suppliers, distributors, and retailers to get your
products to the customer. It’s wise to build good
relationships with these vendors, as any changes
can influence your marketing strategy.

- Macro marketing environment

The shockwaves from the COVID-19 pandemic
are still hitting marketers- first, social distancing
and remote work changed how we market goods
and services. Now, inflation and the rising cost of
living room large over the macro marketing
environment.

Benefits of monitoring your marketing

environment

The marketing environment is continuously

evolving. Your team may bring in new members,
customer tastes and needs change, or, as we saw
in 2020, a worldwide pandemic can turn the
working world upside down.
Monitoring your marketing environments
empowers your business to make strategic
marketing decisions before it’s too late. Other
benefits of tracking your marketing environment
include:

Being more prepared for micro- or macro-

environmental changes- you work from a
place of power when you have data that
positions your business marketing for
success
Gaining useful, qualitative information
about your marketing environment, which
helps develop successful marketing
campaign strategies
 A better understanding of your customer’s
needs, resulting in a more satisfactory
product or service
Having the correct information to create
marketing campaigns that do not cross legal
and regulatory policies
More effective budgeting and allocation of
marketing resources
The ability to recognize potential threats
within your marketing environment and
prepare good marketing strategies in time
The ability to identify and leverage
opportunities before your competitors
Improving any weaknesses in your
organization’s marketing setup, processes,
and operations
Leveraging your unique strengths to build
company reputation and successful
marketing campaigns

What are the challenges of defining a marketing

environment?

we can’t downplay the benefits of defining and monitoring

your marketing environment. Still, there is only so much we
can accurately predict. Even with technological
advancements, predictive software tools, and a keen eye on
the marketing environment, some changes can’t be
forecasted or controlled.
Techniques that work in one marketing environment may not
work in the next. For businesses operating in multiple regions,
this may prove a considerable challenge. The speed of change
in the macro marketing environment may make it seem
unnecessary to monitor and predict the environment.
Business and marketing teams must stay nimble, accept
changes quickly, and leverage their customer service and
satisfaction strengths to maintain business success and a
positive marketing environment.

Consumer buying behavior

“The study of individuals groups, or organizations and the
processes they use to select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy needs and
the impacts that these processes have on the consumer and
society.”

- How consumer think, feel, reason and select between

different alternatives
(e.g., brands, products, and retailers);

- How the consumer is influenced by his or her

environment
(e.g., culture, family, signs, media);
- The behavior of consumers while shopping or making
other marketing decisions;

- Limitations in consumer knowledge or information

processing abilities influence decisions and marketing
outcome;

- How consumers motivation and decision strategies differ

between products that differ in their level of importance
or interest that they entail for the consumer; and

- How marketers can adapt and improve their marketing

campaigns and marketing strategies to more effectively
reach the consumer.

Consumer behavior involves services and ideas as well as

tangible products.
Main application of consumer behavior

- Marketing strategy- i.e., for making better marketing

campaigns
- Social marketing- involves getting ideas across to
consumers rather than selling something.
- Studying consumer behavior- should make us better
consumer.
 Three ways of Analyzing consumer buying
decisions

- Economic models- these models are largely quantitative

and are based on the assumptions of rationality and near
perfect knowledge. The consumer is seen to maximize
their utility. See consumer theory. Game theory can also
be used in some circumstances.
- Psychological models- these models concentrate on
psychological and cognitive processes such as motivation
and need recognition. They are qualitative rather than
quantitative and build on sociological factors like cultural
influences and family influences.
- Consumer behavior models- these are practical models
used by marketers. They typically blend both economic
and psychological models.

General model for consumer behavior

• A general model of the buyer decision process
consists of the following steps:
- Problem recognition;
- Information search
- Evaluation of alternative
- Purchase decision
- Purchase
- Post-purchase
 Behavior/buyer’s remorse
(cognitive dissonance)

• AIUARP MODEL
- Awareness
- Interest
- Understanding
- Attitude
- Purchase
- Repeat purchase

Marketing competitive differentiation

❖ Treacy & Wiersema say that there are primarily three

ways in which a company can build competitive
differentiation.

❖ Operational excellence/ cost leadership

- Provide middle-of-the-market products at the best

price and the least hassle.
- Example: Wal-Mart.

❖ Product leadership

- Provide the best product, period. Continue to

innovate year after year.
 - Example: Intel, Nike.

❖ Customer intimacy

- Provide unique solutions to customers by-virtue of

intimate knowledge of their needs.
- Example: IBM.

❖ Every company that is a leader in its market chooses to

differentiate itself on one and only one of these three
“value disciplines”.
- For example, if a company tries to be the cost leader
as well as the product leader in its market- over
time, it will end up as neither, Wal-Mart doesn’t sell
Armani, Nike doesn’t sell cheap shoes, and IBM sells
neither the cheapest nor the best products.

❖ How durable is your competitive advantage?

❖ If your company chooses to be a product leader, continue

to innovate year after year

- Intel, for example, has sustained product leadership

over a very long period by out-innovating
competitors. Dell, likewise, has held cost leadership
for the better part of the last two decades.
❖ Differentiate or die?

- If your company’s products are not differentiated in

ways that really matter to your customers, your
products may not necessarily die- but they certainly
will be commoditized over time and at best will end
up as also- ran products.
- Identify areas where your products can have strong,
sustainable competitive differentiation and execute
to make that the reality. This is one of the biggest
values you can add to your company.

Competitive marketing strategy

• marketing strategy is a process that can allow

organization to concentrate its limited resources on
the greatest opportunities to increase sales and
achieve a sustainable competitive advantage.
• marketing strategies are developed as multi-year
plans, with a tactical plan detailing specific actions
to be accomplished in the current year.
• Marketing strategies are dynamic and interactive.
They are partially planned and partially unplanned.
• Involves careful scanning of the internal and
external environments, internal environmental
 factors include the marketing mix, plus performance
analysis and strategic constraints.
• External environmental factors include customer
analysis, competitor analysis, target market analysis,
as well as evaluation of any elements of the
technological, economic, cultural or political/legal
environment likely to impact success
• Once a thorough environmental scan is complete, a
strategic plan can be constructed to identify
business alternatives, establishment challenging
goals, determine the optical marketing mix to attain
these goals, and details implementation.
• A final step in developing a marketing strategy is to
create a plan to monitor progress
• Typically there are four types of market dominance
strategies:
- Leader
- Challenger
- Follower
- Niche
• Generic strategy framework (portal 1984)
- Product differentiation (broad)
- Cost leadership (broad)
- Market segmentation (narrow)
• Innovation strategies
- Pioneers
- Close followers
- Late followers
• Growth strategies
- Horizontal integration
- Vertical integration
- Diversification
- Intensification

Product life cycle

• DISCOVERY
- Unspoiled destinations
- Explorers

• LAUNCH
 - Incoming tourists increases
- Host community responds
• STAGNATION
- Host community responds
- Quality of tourist services falls
- Demand levels off
- Environmental degradation
- Reached ‘maturity’
• DECLINE
- Falling profits
- Foreign-owned businesses withdrawing
- Community is left to “pick up the pieces”
CUSTOMER SATISFACTION AND RETENTION

• Customer satisfaction, a term frequently used in

marketing, is a measure of how products and services
supplied by a company meet or surpass customer
expectation.
• Customer satisfaction is defined as “the number of
customers, or percentage of total customers, whose
reported experience with a firm, its products, or its
services (ratings) exceeds specified satisfaction goals”.

Customer grievances Customer property

CUSTOMER
Customer focus Timely supply
satisfaction

Customer feedback Special requirement of customer

• Customer satisfaction in 7 steps
- Encourage face to face dealings
- Respond to messages promptly & keep your clients
informed
- Be friendly and approachable
- Have a clearly- defined customer service policy
- Attention to detail (also known as ‘the little
niceties’)
- Anticipate your client’s needs & go out of your way
to help them out
- Honor your promises.
 Customer retention

Customer retention refers to the ability of a

company or product to retain its customers over
some specified period. High customer retention
means customers of the product or business tend to
return to, continue to buy or in some other way not
defect to another product or business, or to non-use
entirely. Selling organizations generally attempt to
reduce customer defections. Customer retention
starts with the first contact an organization has with
a customer and continues throughout the entire
lifetime of a relationship and successful retention
efforts take this entire lifecycle into account. A
company’s ability to attract and retain new
customers is related not only to its product or
services, but also to the way it services its existing
customers, the value the customers actually
perceive as a result of utilizing the solutions, and the
reputation it creates within and across the
marketplace.

Successful customer retention involves more than

giving the customer what they expect. Generating
loyal advocates of the brand might mean exceeding
customer expectations.
Creating customer loyalty ‘puts customer value
rather than maximizing profits and shareholder
 value at the center of business strategy’. The key
differentiation in a competitive environment is often
the delivery of a consistently high standard of
customer service. Furthermore, in the emerging
world of customer success, retention is a major
objective.

Strategies in internal & external

marketing

• Internal factor, these involved (5M’s)

- Management
 - Manpower
- Machine
- Material and
- Money.
• External factors, these include
▪ Macro factors
▪ Micro factors

• Macro factors are the one that affect the

organization indirectly, these are (pestle)
- Political
- Environment
- Social-Cultural
- Technological And
- Ecological
- Legal

• While micro factors are those which affect the

organization directly it involves
- Customers
- Competitors
- Suppliers and
- Public.

Interactive and relationship marketing

▪ Interacting marketing refers to the evolving trend in

marketing whereby marketing has moved from a
transaction-based effort to a conversation.
▪ “The ability to address an individual and the ability to
gather and remember the response of that individual”
leading to “the ability to address the individual once
more in a way that takes into account his or her unique
response” (Deighton 1996).

▪ Interactive marketing is not synonymous with online

marketing, although interactive marketing processes are
facilitated by internet technology.

▪ Relationship marketing was first defined as a form of

marketing developed from direct response marketing
campaigns which emphasizes customer retention and
satisfaction, rather than a dominant focus on sales
transactions.

▪ It recognizes the long-term value of customer

relationships and extends communication beyond
intrusive advertising and sales promotional messages.

▪ Relationship marketing extends to include inbound

marketing efforts, (a combination of search optimization
and strategic content), PR, social media and application
development.

▪ Relationship marketing is a broadly recognized, widely-

implemented strategy for managing and nurturing a
company’s interactions with clients and sales prospects.
 PRODUCT & PRODUCT STRATEGY

• The product is defined as a “thing produced by labor or

effort” or the “result of an act or a process”.
• Tangible and intangible
• Tourism product-multi faceted
- Product design
- Product quality
- Product features
- Product branding

A PRODUCT MARKETING STRATEGY

- Decide on new revenue growth and profits
- Decide on new product development.
 - Decide on price
- Decide on sales force, distribution, service.
- Decide on customer psychological factors, not
features and benefits.
- Decide on product promotion.

• PRODUCT LINE

- A company/organization creates a group of

products, which has in common most of their main
characteristics.
- A good way for a company to try to expand its
business is by adding to its existing product line. This
is because people are more likely to purchase
products from brands with which they are already
familiar.

• PRODUCT MIX

- Product mix- an organization creates many products

- The product mix is everything organization sells.

Branding and rebranding

▪ Increase a product’s perceived value

▪ Increase brand franchise and brand equity.
▪ Started at Procter & Gamble
▪ A good brand name should:
- Be protected (or at least protectable) under
trademark law.
- Be easy to pronounce.
- Be easy to remember.
- Be easy to recognize.
- Be easy to know.
- Be easy to translate into all languages in the markets
where the brand will be used.
- Attract attention.
- Suggest product benefits or suggest usage (note the
tradeoff with strong trademark protection.)
- Suggest the company or product image.
- Distinguish the product’s positioning relative to the
competition.
- Be attractive.
- Stand out among a group of other brands.

▪ Functions of brand
- (For consumer) identification of source of product,
- Assignment of responsibility to product maker,
- Risk reducer.
- Search cost reducer,
- Symbolic device,
- Signal of quality,
- Speak personality,
- Deliver its value qualitatively and quantitatively,
- Live up to consumer expectation.
 - It speaks itself looks are more important.

▪ (For manufacturers)
- Means of identification to simplify handling and
tracing,
- Means of legally protecting unique features,
- Signal of quality level to satisfied customers,
- Means of endowing products with unique
associations,
- Source of competitive advantage,
- Source of financial returns.

PACKING

▪ Defined as the wrapping material around a consumer

item that serves to contain, identify, describe, protect,
display, promote, and otherwise make the product
marketable and keep it clean.

▪ Packaging is the outer wrapping of a product.

▪ It is the intended purpose of the packaging to make a

product readily sellable as well as to protect it against
damage and prevent it from deterioration while storing.
▪ Further-more the packaging is often the most relevant
element of a trademark and conduces to advertising or
communication.

▪ Functional requirements
- Protection and preservation
- Containment
- Communication
▪ Types of packaging
- Transport packing
- Consumer packing.

PRICING
 PRICING STRATEGIES

• Premium pricing
- used where a substantial competitive advantage
exists.
- Such high prices are charge for luxuries such as
Cunard Cruises, Savoy Hotel rooms, and Concorde
flights

• Penetration pricing
- set artificially low in order to gain market share.
- once this is achieved, the price is increased.

• Economy pricing
- No frills low price
- Cost of marketing and manufacture are kept at a
minimum.
- Supermarkets often have economy brands for soups
etc.

• Price skimming
- Charge a high price because you have a substantial
competitive advantage
- However, the advantage is not sustainable
- High price tends to attracts new competitors into
the market, and the price inevitably falls due to
increased supply.
 APPROACHES

• Psychological pricing
- To respond on an emotional, rather than rational
basis.

• Product line pricing

- Where there is a range of product or services the
pricing reflects the benefits of parts of the range.

• Optional product pricing

- optional ‘extras’ increase the overall price of the
product or service.

• Captive product pricing

- Companies will charge a premium price where the
consumer is captured.

• Product bundle pricing

- Combine several products in the same package. This
also serves to move old stock.

• Promotional pricing
- BOGOF (buy one get one free)

• Geographical pricing
• Value pricing
 - External factors such as recession or increased
competition.

Distribution channels

▪ Physical distribution (or place) is one of the four

elements of the marketing mix
- Defined as a chain of intermediaries, each passing
the product down the chain to the next
organization, before it finally reaches the consumer
or end-user.

▪ Channels
- Distributor, who sells to retailers,
- Retailer (also called dealer or reseller), who sells to
end customers
- Advertisements typically used for consumption
goods

▪ Channels decisions
- Channel strategy
- Gravity & gravity
- Push and pull strategy
- Product (or services)
- Cost
- Consumer location

▪ Types of marketing channel

 - Intensive distribution
Where the majority of resellers stock the ‘product’
- Selective distribution
this is the normal pattern, ‘suitable’ resellers stock
the product.
- Exclusive distribution
Only specially selected resellers or authorized
dealers, are allowed to sell the ‘product’.

▪ Channel motivation
▪ Monitoring and managing channels.

Marketing of tourism services

Airlines

The first marketing model, called PESTE – political,

economic, social, technological and environmental
Airline business and marketing strategies- strategic
families (from cost leadership to differentiation)
Product analyses in airline marketing- The product of an
airline is split up in several parts: fleet and schedules,
customer service, controlling product quality and even
the air freight product
no life cycle concept, daily basis
 pricing and revenue management- triangle of marketing,
sales, and pricing & revenue management
distributing the product- Global distribution systems
(such as Galileo, Sabre and Amadeus)
brands management in airline marketing
relationship marketing- maintaining and strengthening
relationships with existing customers, not just about
frequent flyer program, but also about promises in
advertisements and about the warm welcome that the
existing heavy user, main customer, wants.
Airline selling, advertising and promotional policies-
provides and analyses selling and sales management,
good airline advertising and media relations.

Hotels

▪ Budget
▪ Social media
▪ The trust cost
▪ The hotel sales office
▪ How to use social media for meetings
▪ GDS hotel bookings
▪ Priceline
▪ Hotel panel
▪ Successful hotel sales plan
▪ A revenue driven checklist for function space
management.
 Travel agency marketing
▪ Travel agencies don’t need large marketing budgets- just
determination, a creative mind and willingness to work
outside normal hours
- Hold an open evening
- Make your agency look inviting
- Be community-spirited
- Use the local press
- Form partnerships
- Motivate your staff

▪ Tips to travel agents

- “mine” data base
- Increase your sales training and prospecting skills
- Be in the know
- Be a member of a travel consortium
- Have a working marketing plan
- Today is the first day of your business
- Customized client promotions
- Be creative
- Use PR as a tool to get the positive word out about
travel.

Marketing skills for tourism

CREATIVITY
- Make something out of nothing
- Create the branding, create the positioning, find the
niche
- Develop the words, the visuals, the images that
make a brand
- The brochure, the website, the positioning
statement
- Keeping fresh and current so that I can think of new
ways of approaching
- Industry partnerships and a new sponsorship
program
- Innovative product development
- 5 stage process
➢ Saturation
➢ Preparation
➢ Incubation
➢ Illumination
➢ Verification

COMMUNICATION
- Learn three languages- mother tongue, national
& international
- Polite speech, good body language
- Good personality
- Courtesy calls
- Letters
- Fax
- Email messages
- Must allow visitor to speak
- If language is a barier then show standard
pictures or symbols
- Neat maintenance of travel documents
- Advertisement in target customer’s language.

SELF MOTIVATION
- Self -motivated to work and deliver concrete
results
- Motivation and moral are closely related
- If morale is high motivation will be high to give
sterling performance
- Motivation factors are- backgrounds,
education, family status, economic condition
- Person to person treatment would develop the
organization

TEAM BUILDING
- socio-cultural norms, if the team changes the
norms and values effect is immediate and ever
lasting
- tasks are completed faster than an individual
does- Rome was not built in a day, Rome was
not built by neither
- team work leads to synergy
 - team work gives status recognition, reverence
to all
- single person cannot deliver results on his own
- groups become teams
- common working approach, performance goals
- hard work, discipline, dedication to purpose,
willingness to adopt new technologies
• thank a colleague
• compliment a colleague
• invite a colleague

personality development

▪ an individual’s personality is an aggregate

conglomeration of decisions we’ve made throughout our
lives (Bradshaw)
▪ there are inherent natural, genetic, and environmental
factors that contribute to the development of our
personality
▪ “Personality also colors our values, beliefs, and
expectations. Hereditary factors that contribute to
personality development do so as a result of interactions
with the particular social environment in which people
live.”
▪ Freud believed that two basic drives- sex and aggression-
motivate all our thoughts and behaviors
▪ Freud conceived the mind as only having a fixed amount
pf psychic energy. The outcome of the interaction
between the id, ego and the superego, determines our
adult personality
▪ The id allows us to get our basic need met
▪ The ego’s job is to meet the needs of the id
▪ Superego inhibits the biological instincts of the id
(resulting in high level of guilt).