Unit 5 Marketing in Travel and Tourism Assignment

Programme	Diploma in Travel and Tourism
Unit Number and Title	Unit 5 Marketing in Travel and Tourism
QFC Level	Level 4
Unit Code	R/601/1744

Introduction

Travel and tourism is one of the most competitive industry spread across globe today. Like any other industry, travel and tourism industry is also dependent on effective implementation of marketing principles. The market environment in which a travel and tourism business operates has several parameters impacting it. Thus in such situation it becomes essential for a business to focus on its marketing strategy in such a way that the business functions to achieve the business objective successfully (Middleton & Clarke, 2012).Focus of this task is to understand concept of marketing at strategic level, and gradually understanding various functional and operational aspects of the marketing as a process. Through various case studies this unit will attempt to understand various underlying concepts of marketing related to the travel and tourism business.

Task 1

P1.1 Discuss the core concepts of marketing for the travel and tourism sector

Marketing can be defined as a process which helps a business organisation to anticipate and identify the requirements of its targeted customer base, and then taking effective measure to meet those customer requirements (Cook &Marqua, 2010). Thus as an Assistant Marketing Manager it is firstly important to understand the customer requirement that what exactly is the demand of the target customer of Thompson Holidays. This will ensure that as an organisation Thompson Holidays identifies its target customers and anticipates their needs such as desire for having a holiday package which is economical yet comprehensive in nature, or need such as visiting exotic locations with all the planning and itinerary being done by the tour operator itself. In order to anticipate the customer requirement marketing research plays a crucial role, this market research can be conducted on the existing as well as potential market. Thus classification of customers based on their socio-economic status, lifestyle, family, and gender etc. can be one of the criteria for the market research. For example target customers for 6 Days- Cultural package to visit Denmark, Amsterdam, Lisbon and Porto will be for middle aged individuals, age group of 45-60 years is the one which will be the relevant target group for this cultural package. Thus market research can be conducted through following methods:

• Surveys
• Observations
• Questionnaires

Once the customer is classified, it can be then identified as a ‘segment’ hence as a travel and tourism business, it is essential that requirement of each segment is met by the organisation. This brings market segmentation in the picture (Stearman, 2010). For example for domestic tourism following can be the segments which Thompson Holidays can target:

• General business tourism
• Holidays and family vacations
• Long Holidays
• Activity Holidays
• Group Holidays

Thus 6-day package can be slotted in the segment for group holidays as well as long holidays. Once a market segment is identified, next concept of marketing which is important is related to marketing mix. This is the way in which a business organisation satisfies the current and potential demand from customers. Thus 4 major aspects of marketing mix are:

• Product or services offered by the organisation
• Price strategy implemented by the organisation
• Promotion strategy implemented by the organisation
• Place or distribution methodology used by the organisation.

Thus as an Assistant Marketing Manager, it is important that all the major Ps of the marketing mix are addressed while offering 6-day cultural package tour to the probable customers of Thomson Holidays.

P1.2 Assess the impact of the marketing environment on individual travel and tourism businesses and tourist destinations

Marketing environment can be defined as those factors that might have direct or indirect impact on the capability of a travel and tourism business to conduct its business. It can also be defined as a force on which the business might not have a direct control, however these force might shape the way decisions related to business are taken in order to satisfy the customer need. Thus there are two types of environment such as:
Internal Environment: These are the forces/factors within Thompson Holidays which will have impact on the marketing operation of the business. Thus entities such as employees, stakeholders etc. are part of the internal environment (Moutinho, 2011). For Thompson Holidays, its internal environment is relatively stable. For example its employees are satisfied, and it is achieving year on year growth of 3-4% hence keeping its investors satisfied as well.
External Environment: These are the forces which are not within the boundary of the organisation. There are two types of external environment:

• Macro Environment: These are the broad or wider forces which shapes the character of business opportunities and threats. These factors can be analysed through PESTLE analysis which has factors such as:
  • Political
  • Economic
  • Social and cultural forces
  • Natural Forces
  • Technological Forces
  • Demographic Forces

In case of Thompson Holidays, it needs to focus on political as well as natural forces in case if need to make its 6-day cultural tour package a success. For example with multiple cities included as a part of the tour package, it is essential that there are no legal hassles for the customers who are part of the tour package.

• Micro Environment: These are the factors which are in the immediate environment of the organisation. Thus following can be identified as factors which comprises of the micro environment which might impact Thompson Holidays:
  • Suppliers
  • The market channel
  • Customers
  • Competitors
  • Public

Figure 1: Marketing Environment

Based on the above diagram it can be said, that internal environment consists of factors such as:

• Men
• Money
• Machinery
• Materials
• Market

Thus process of managing these internal factors can be termed as ‘internal marketing’.
Hence it can be said that for Thompson Holidays understanding of marketing environment will help it getting an indication about, where the European travel and tourism industry is heading. It will also enable the organisation to assess the scope of various opportunities which might organisation can encounter. In terms of controllability Thompson Holidays as such has no control over the macro environment. However it can definitely control its internal environment.
These factors of micro and macro environment have not just impact on business but on destinations as well as individual travels as well.
For example, microenvironment factors such as suppliers, customers, competitors etc. have major impact on the tourism destination. If a supplier of tourism services decides to ignore a specific destination and give preference to another destination, then it can impact the inflow of tourists in such destinations. Customers preference keeps on changing in a cyclical manner, which means, that it might happen that one tourist destination might become popular for next 5-10 years, however after than period of time, it popularity might fade away. On individual travel, also these factors have major impact. For example, macro environment factors such as political stability of a tourism destination are a guiding force for tourists to prepare their travel plans. Factors such as political stability might have a vicious affect on not only individual travels, but also the entire industry being supported by a tourism destination.

P1.3 Discuss the factors affecting consumer motivation and demand in the travel and tourism sector

‘Consumer is King’, this phrase might sound cliché, but it remains relevant in each and every industry existing today. Same applies to travel and tourism business as well. Thus when as a business, product of Thompson Holidays such as 6-day cultural tour package needs to be promoted, then it becomes essential to understand about the factors which might impact the motivation and behaviour of the targeted customer. Below diagram highlights various factors such as:

• Socio-Economic influences
• Cultural influences
• Reference group influence
• Family influence

Figure 2: Consumer Decision-Making Framework

Thus various factors of motivation are:
Personal Factors: These factors are also known as psychological factors; hence consumers who might have an ambition to explore cultural aspects of a tourism destination are perfect target customers who can be motivated towards taking up 6-day cultural tour package offered by Thompson Holidays.
Social Factors: At times travel decisions are motivated through social impact. For example group of college students might be motivated to explore the cultural aspects of a tourism destination. Once a tour is completed successfully it might motivate other members of the peer group.
Based on the table below, one can understand that how lifecycle phase of an individual plays major role in motivation towards travel and tourism.

Based on above table, it can be said that for Thompson Holiday’s 6-Day cultural package segments such as ‘Mature couple without children to support’ and ‘Old couple in activity’ are the perfect target segment who can be motivated towards taking up the product offered by the Thompson Holidays.

P1.4 analyse the principles of market segmentation and its uses in marketing planning

Market segmentation is an important aspect of marketing planning. This activity can be defined as a process where probable customers who share similar behaviour and attitude towards a particular product can be identified in a same group. Such kind of groups can be defined as ‘Segments’. Based on the segments, and organisation accordingly offers the product and uses its marketing strategy. Thompson Holidays in order to ensure that its product of 6-day cultural tour package is success should identify its target segment. Thus a segment should be:

• Measurable in terms of size, purchasing power, and characteristics
• It should be substantial enough to be worth targeting.
• Also the segment should be accessible by marketing promotional and distributional channel

Thus Thompson Holidays can create segments on the basis of following criteria:

• Geographic segmentation
• Demographic segmentation
• Lifestyle segmentation
• Geo-Demographic segmentation
• Behavioural segmentation

Currently Thompson Holidays have applied geographic segmentation to market its tourism products. For example, it has showcased tourism destinations on the basis of innovative segments such as beaches, for couples, for all inclusive, and destinations which are based on the seasons. This can be seen from the below image captured from the website of Thompson Holidays.

Figure 3: Segmentation of the destinations on the basis of geography and behavior
Based on above identified segments Thompson Holidays can accordingly fine tune its marketing strategy, so that it targets the appropriate segments which loosing much time on the converting a probable lead to a customer of the 6-day cultural package.
Moreover, segmentation criteria for Thompson Holidays is as follows:

• Geographic segmentation: In this type of segmentation, Thompson Holidays can divide its market into different geographical divisions, such as country level, regional level, city level etc. Considering the fact that Thompson Holidays is global organisation, it can then accordingly offer its tourism based products and services to its customer on the basis of geographic segmentation.
• Demographic segmentation: this type of segmentation can be achieved by the organisation by dividing its customer base on the variables such as age, gender, family size, income group etc. Hence, customer in segment of family customers, can be targeted for tourism destination where there is activities to do for all the age groups.
• Psychographic segmentation: This type of segment will help Thompson Holidays to divide its customer on the basis of social class, lifestyle, different economy level.
• Behavioural segmentation: Thompson Holidays can segment its potential customer segment based on behavioural pattern as well. For example, knowledge, attitude, uses etc. Hence, there might be a target segment, which would like to visit a shopping based tourism destination, hence for such customers, specific products can be offered.

Task 2

P2.1- Analyse the importance of strategic marketing planning for a selected travel and tourism business or tourist destination

Following are the factors which highlight the importance of strategic marketing planning Thompson Holiday’s tour business:
A strategic marketing planning will enable Thomson Holidays to refine its value proposition. This will enable the business to identify that what exactly is the purpose which Thompson Holidays wants to achieve (Witt &Moutinho, 1994). Another important aspect which strategic marketing planning helps in identifying is that how different is the company from other travel and tourism based business such as Thomas Cook etc. It can be said that through strategic marketing plan company can clearly and meaningfully refine its unique value proposition. For example Thompson Holiday’s unique value proposition is its capability to offer economical tour package as compared to its competitors.
A strategic marketing plan will enable Thompson Holidays to identify its target customer’s pain point or requirements. Today more than 80% of internet based e-commerce activity is based on travel and tourism related transaction. This indicates that consumer these days is focused on getting travel and tourism related information and services at convenient of internet. Hence Strategic Marketing plan of Thompson Holidays will highlight this requirement based on which it can ramp-up its online operations, so that it can cater to rapidly rising customer base which relies completely on online travel portals for their holiday requirements.
A strategic marketing plan enables an organisation to save crucial money. Thompson Holidays has allocated more than 20% of its total operating budget on marketing. Marketing results into significant operational cost for the organisation. Strategic marketing plan will ensure that Thompson Holidays allocates its resource wisely which will result into cost saving and higher efficiency across the organisation.
A Strategic marketing plan will enable Thompson Holidays to identify various opportunities. Strategic marketing plan will enable the organisation to look through the day to day clutter and chaos, and identify various new opportunities which travel and tourism sector might offer to the company.

P2.2- Discuss the relevance of marketing research and market information to managers in the travel and tourism sector

Marketing research can be defined as an activity which is conducted either by an organisation itself, or by an external agency for gaining more information about the market. There are various aspects which a typical market research of travel and tourism sector can reveal for Thompson Holidays such as:
Market size of travel and tourism industry in Europe and other parts of world

• Various issues faced by sector
• Probable opportunity for the company in near future
• Demographics based information which can be targeted by the company
• Spending power of the identified customer segment
• Possible marketing strategy which an organisation needs to implement
• General brand and image of the company in the market and among the customers

Marketing research provides detailed insights about the sector, which in general scenario might remain hidden from the company (Seaton & Bennett, 1996).Through various qualitative and quantitative measures, organisations like Thompson Holidays can get a detailed insight about the market, and accordingly take their future decisions.
As a manager, information based on the market research is one of the most important tools based on which various critical decisions can be taken. Marketing information gives a manager a broad as well as detailed overview of the segment based on which informed decisions can be taken. In a competitive market environment, a wrong or right decision taken by the managers can create major impact on the revenue earned by the organisation that is why it is essential for the managers to rely on the detailed market insights before taking any critical decisions related to business. Today it is important for any tour operator to have a global presence, especially in a situation where world for tourists has shrunk considerable. For example organisations like SOTC or Thomas Cook has presence at global level especially in rapidly growing economies like Asian countries. In such situation Thompson Holidays as a tour operator cannot restrict itself geographically. It needs to expand further and move beyond its home turf of United Kingdom.

P2.3 – Assess the influence of marketing on society

Marketing as an activity is not only important for the organisation, but it also has major impact on the society as well. Target customers of the organisation are part of the society itself; hence various promotional and marketing campaigns has direct or indirect influence on the society. There are various levels at which marketing influences the society such as:
Psychological influence: Marketing activities include various activities such as sustained promotional campaign for a specific product or service. When such marketing campaigns are carried over a long duration, then there is psychological impact on the target customer base. There is brand awareness created in the mind of customer, and indirectly marketing shapes the buying behaviour of the organisation. For example Thompson Holidays has realised the tourism market for honeymoon couples who are now willing to explore new destinations across world rather than popular honeymoon destination. That is why it has launched its exotic honeymoon tourism destination apart from its standard Top 10 destinations for couples. Such strategy has a psychological impact on the customer as he gets influences by the fact that tour operator is making specific effort to fulfil the customer requirement.
Impact on purchasing power: Marketing has major influence on the purchasing power of the potential buyer as well. Target marketing campaigns at times indirectly forces the customer to buy the product or services. For example 6-Day cultural tour package is not an essential activity for the targeted customer base, however with focused marketing, purchasing decision of the customer can be influenced.
Possible negative impact: At times poor designed marketing campaign can result into negative impact on the society. That is why it is essential for the organisation to carefully plan their marketing strategy, so that positive information is conveyed about the brand.

Task 3

P3.1 Discuss issues in the product, price and place elements of the marketing mix

Marketing mix is one of the most important tool used frequently by the marketers. It enables the organisation in determining its product or brand’s offer. It is often associated with four Ps i.e. Product, Price, Promotion and Place.

Product

Gatwick Airport is London’s second-largest international airport and second busiest in United Kingdom in terms of passenger traffic. Gatwick Airport witnessed more than 35 million passing through the airport. Unlike other international airport Gatwick Airport has not restricted itself to just being an airport, it has expanded its services to various other areas such as parking, hotels, car hire, booking a trip. In other words it can be said that Gatewick Airport has projected itself as a comprehensive travel partner of a traveller where he can meet all the traveller requirement at one place itself.

Price

Like various other international airports, Gatwick Airport can set out specific charges which it can levy on the airlines and aircrafts using the facilities offered by the airport. Various charges which the airport can levy are as follows:

• Landing charge is decided on the basis of the size of aircraft. For example aircraft more than 200 metric tons can be charged 10 GBP/Ton. Thus for a large aircraft, airport can earn a revenue of 2,000 GBP to land at the airport.
• Small aircrafts can be charged economically like 45 GBP per aircraft.
• Airlines can be charged by the airport for using the parking bay of the airport. For example for first two hours the parking fee will be free, however post two hours airlines will be charged for 250 GBP for each 24 hours.
• Gatwick Airport can certain fraction of security cost on the airlines operating from the airport. For example a cost of 1.15 GBP per passenger can be charged for each departing passenger from the airport.

Place

Gatwick International Airport is situated north of the centre of Crawley, West Sussex and South of Central London. Thus in terms of location, Gatwick International airport is located in a strategic location where it can is easily accessible by passengers using the airport. Car parking offered at the airport can be prices rationally for as little as 2 GBP per day. Regular bus services can be arranged from various important tube stations, which will offer non-stop services between the origin and the airport. Gatwick Airport is located 203 ft. above sea level which ensures that weather around the airport remains pleasant and hence airport can remain open round the year.

Promotion

Just like any other travel and tourism organisation, Gatwick International Airport can use innovative promotional techniques to position itself as one of the most popular airport in United Kingdom. Thus these promotional techniques can be used in collaboration with the airlines operating from the airport. Initially airport authority will be focused on marketing products and services that are available at the airport, whereas airlines will be focused on marketing the flights which will be available from the airport. It can difference promotional techniques such as:

• Advertising
• Public Relations
• Personal Selling
• Displays and Trade Fairs
• Sales Promotion
• Internet website
• Press Releases

Distribution

Distribution over a period of time has also become an important part of the marketing mix. It defines the strategy through which a product or service is provided to the end customer. Distribution of the services plays an important role in the success of the organisation. In this regard, Gatwick Airport provides all the services to its end user through the airport premise itself. For example, within airport terminal an incoming traveller can hire the cab from various cab services situated within the airport itself.

P3.2- Assess the importance of service sector mix elements to the travel sector

Marketing mix as discussed in above section is an important tool in the hand of marketer through which they ensure that the product or service gets a proper customer in the market. However important to understand is that there are subtle differences when it comes to product marketing mix and service marketing mix (Dolnicar& Ring, 2014). This can be understood on the basis of diagram below.

Figure 4: Elements of Services Marketing Mix

Based on the above diagram it can be clearly observed that Services Marketing Mix comprises of following additional elements:

• People: For example, in context of Gatwick Airport, people aspect of the extended marketing mix can be understood by the fact, that passengers using the airport, judge the quality of customer service based on quality of interact or help which is provided to the passengers. Hence, if a flight inquiry counter executive answers the query of a passenger rudely, then it might impact the branding of the organisation.
• Process: In context of Gatwick airport, process of element of extended marketing mix has a crucial role to play. For example, if the baggage claim counter takes too much time, after the arrival of the flight, then it can setup a bad example in front of the customers using the airport. Hence, such processes which might impact or influence customer behaviour should be controlled tightly, and monitored closely.
• Physical Evidence: In context of Gatwick Airport, this element of physical evidence will have significant impact on the extended marketing mix. For example, if the work culture of the airport is not positive, then it might impact employee’s behaviour, which eventually will impact the quality of services provided to the end customer.

Thus Service marketing mix has immense importance to the travel sector. For example service marketing mix focuses on people as an important entity. Service industry is completely based on the quality of services offered to the end customer (Li, 2014). Similarly travel sector is also dependent on the quality of services which it offers to a traveller. Process is another critical aspect which can be used in travel industry. Processes such as consumer complain handling is an essential component for the travel industry. Till the point of time a travel based business does not establishes processes to help its customer, it cannot succeed in the market. That is why it is essential to focus on establishing the process element from the service marketing mix. Hence entity such as London Gatwick Airport can surely use these elements in order to ensure that its quality of services offered to the end customer is of high quality.

P3.3 Apply the concept of the total tourism product to an individual tourism business – London Gatwick airport

Tourism as such is considered as single industry, however it comprises of various other industries such as hotels, airlines, travel agencies etc. With each of these individual businesses providing unique services helps the entire tourism industry to present a total tourism product. However these individual tourism products can be offered through London Gatwick Airport as well. For example London Gatwick Airport can project itself as a one-stop business organisation, where visitors can receive all the tourism related services. For example it can collaborate with various hotels, travel agencies, local tour guides to establish their kiosks on the airport. This will enable both incoming as well outgoing customers to seek the desired services if required. Thus Gatwick Airport has potential to become an integrated travel and tourism service provider. It can be said that the total tourist product comprises a combination of all the elements, which a tourist consumes during his/her trip. Total tourism products are designed in such a way that it fulfils:

• Primary tourist need, which in case of Gatewick Airport is the flying options from various airlines which fly from the airport.
• Secondary or derived tourist’s needs are the one which arise from the decision to make a tourist trip. For example a tourist coming out from Gatewick Airport will need cab service, which he can book from the airport itself.

A total tourism product mainly comprises of all the elements, which a tourists uses or consumes during his trip. Concept of total tourism product can be understood on the basis of tangible as well as intangible components, which is generally based on the activity of the destination. Hence, when a tourist uses these services or products, then it creates a unique experience of that tourist. That is why it is important, that these factors should be focused upon carefully, as mentioned in above section.

Task 4

P4.1 Assess the integrated nature and role of the promotional mix

The way a product or service is promoted decides the fate of it. There is a delicate balance between promoting a product sensible and over promoting. That is why it is essential for an organisation such as Sheraton Hotel to understand the importance of promotional mix, which can be used in it’s after summer promotional sales.
Unlike past, promotional strategy has undergone tremendous makeover. Rather than going for a single mode of promotion, today there are numerous and equally divers mediums present for promotion of a product or services. Also there are several reasons responsible for changing the way today’s marketing communication is perceived. Today integrated marketing communications strategy has changed the landscape of the promotional mix.

Figure 5:  Integrated Marketing Communications

Thus for promotion of after summer promotional sale, various components of integrated marketing communication will be applied. These elements will be focused on delivering consistent, clear and compelling brand message as conveyed by the Sheraton Hotel. Thus following elements will be part of the integrated marketing communication:
Advertising: Various mediums such as internet, corporate website, events etc. will be used to promote the after summer promotional sale offered by the hotel. The advertising campaigns will be based on the target customers who will be cultural and upper middle class travellers and business tourists. Hence on site display on locations such airports etc. will be done in order to ensure that the target customers are reached through advertising campaigns. Sheraton hotel in fact launched a multimillion dollar advertising campaign in 2011. As part of its campaign it had various programs such as one promoted below:

Personal Selling: Concept of personal selling will focus on individual customers and their interest. Based on the data gathered from the market research stage, accordingly customer will be targeted by the sales team of the Sheraton hotel. Face to face marketing pitch will be done, so as to convert high net worth (HNF) prospective leads into customers of the hotel. Sheraton has always focused on the concept of personal selling and it reflects from its advertising campaigns as well. As evident from below advertisement where it personally refers its potential customer to visit the hotel

Public Relations: Through public relations department of the hotel, it will be ensured that from time to time various reports and news related to the hotel is circulated to the targeted public. This will help in creation of brand awareness among the general public, and will also inform public about the after summer promotional sale.
Sales Promotion: Through various sales medium sales team of Sheraton Hotel should focus on acquiring new customers. For example identified segment of customer such as upper middle class travellers and business tourists are considered to be internet savvy. Hence such customers will be sent promotional e-mails and website based advertisements in order to gain their attention towards the proposed promotional sale. In order to boost the business from time to time Sheraton hotel resorts to sales promotion where it comes up with innovative offers on its property. Below image displays one of the offer on the Sheraton hotel property.

Direct Marketing: In this there will not be much possibility for direct marketing. Hence indirect marketing channels will be used to promote the after summer promotional sales. Sheraton hotel has its dedicated web portal. Hence if a customer wants to directly do a booking with Sheraton hotel then he can reserve the room directly from the portal itself rather than going through an agent.
Promotional mix today has become highly integrated in nature. Unlike past, today the promotional strategy cannot be implemented in isolation (Chen, 2014). That is why it will be important for the Sheraton Hotel to ensure that it focuses on its integrated marketing communications approach to capture maximum possible customer for its promotional campaign.

P4.2 Plan and justify an integrated promotional campaign for the Sheraton hotel.

Today when business environment has become highly competitive in nature, it has become important for organisations such as Sheraton Hotel to find numerous ways and methods through which it can grow its business, strengthen its brand and increase awareness about the brand. Implementation of integrated promotional campaign is a great way through which organisations can achieve and acquire larger customer base.
Following will be various activities which will be focused during the integrated promotional campaign for the Sheraton hotel:

• Search Engine optimization of the corporate website, so that every time a probable visitor searches for terms such as ‘hotels in UK’ lands up on Sheraton’s promotional campaign and corporate website.
• Monitor customer feedback on various social media platform.
• Increased engagement with customers through both offline as well as online channels
• Blog about the promotional campaign

Following will be few aspects which will be required to taken care off:

• Integrate social media with organization’s promotional campaign, with contradictory brand message.
• Making assumptions about consumer behaviour related to hotel accommodation

Thus following trends needs to be included in the promotional campaign for the Sheraton hotel:

• Tracking of customer experiences, based on which further decisions can be taken
• Localization of services: This can be done by offering further discount to patrons of the hotel who are from any other city within UK itself.

As a part of the promotion campaign, establishing an effective customer feedback mechanism will be equally important. Customer feedback availing services offered by Sheraton will enable the hotel to understand the quality of services it offers from customer’s perspective.
It is important to an integrated marketing communication approach because it will give a better control on the entire promotional activity. Rather than focusing on segregated activities, it will be better to focus and control the entire unified and integrated promotional strategy.  This approach will also help the business to effectively measure the results and outcome from the promotional strategy implemented.

Conclusion

It can be said, that marketing in travel and tourism sector is an essential activity. In absence of proper and well planned marketing strategy it will be hard for business organisations to succeed in a highly competitive environment. Hence it has become essential for travel and tourism business organisations these days to ensure that they have an effective marketing strategy through which there brand and other services can be positioned in the market.

References

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