imc lecture 2

IC 364 Integrated Marketing Communication ��for Tourism��

Lecture 2: Basic Marketing for Tourism Part I: Marketing Mix for Tourism, Organisational Strategy & Segmentation,

Targeting and Positioning

By Paradee Yasothornsrikul, PhD.

Scope Part I: Tourism Marketing: From Organisation Side 1.  Market vs. Marketing 2.  Special Characteristics of Services marketing 3.  Tourism and Hospitality Marketing- Marketing Orientation

- Marketing Strategy: Segmentation, Targeting and Positioning - The Marketing Mix for Tourism & Cross-Cultural Marketing

Part II: Tourism Marketing: Tourist Behaviour 1.  Human Behaviour & Maslow’s Hierarchy of Needs 2.  Consumer Behaviour & Factor Influencing Decision Making Process

What is a market?

“A Market: Originally, a market was a meeting place where people could buy and sell produce, and of course this type of market still exists today.

A modern concept of the market is based on groups of people who have similar needs and wants, and companies that aim to satisfy the consumers’ needs and wants better than their competitors. Interestingly, not everyone wants the same bundle of benefits, and this creates sub-markets, or market segments, within the overall market. Needs can range from the basic requirements for survival - food, shelter, safety - to much more complex social needs, such as belonging and recognition. Wants are how different people choose to satisfy their needs, and are shaped by culture and personality.

In hospitality markets, luxury, mid-market and budget market segments represent different bundles of benefits sought by different groups of customers. Needs and wants create demand and market demand in hospitality can be broadly described under four keys headings: 1. Business travel demand includes all those journeys business people make to meet customers and suppliers and attend conferences, exhibitions and seminars. 2. Leisure travel demand includes journeys where people travel away from home for amusement, entertainment or relaxation e.g. holidays, weekend breaks or a day trip. 3. Domestic travel demand includes all the travel generated within a country by people living in that country. 4. International travel demand includes all the journeys generated to a country from people living in other countries.

What is marketing???

Marketing is primarily a business philosophy that puts the customer first. The primary goal of hospitality business should be to create and retain satisfied customers. Consequently, the centre of an organisation’s decision making process is to satisfy customers’ needs and wants.

Kotler (2000) claimed that the definitions of marketing centred on the exchange/transaction process. In order to satisfy people’s needs and wants, products and services are exchanged in mutually rewarding transactions generally, but not exclusively, using the monetary system. Kotlet suggested that this exchange process is known as transaction marketing that is a core concept in marketing and is a ‘value -creating process which leaves both parties better off than before the exchange took place.

In other words, marketing is a management process aimed at delivering customer satisfaction.

Marketing activities are based on five key principles: 1. identifying customers’ needs and wants; 2. Satisfying customers needs and wants; 3. Finding new markets for the organisation’s products or services; 4. Influencing customers’ busying attitudes; and 5. Getting the products and services into the right markets.

Definition of Marketing

The philosophy of marketing

Principles of Marketing

The marketing concept ✦  Marketing is the business philosophy that places the customer at the centre of

a hospitality organisation’s purpose;

✦  There is an exchange activity between hospitality organisations and their customers, which should be mutually rewarding;

✦  The central purpose of marketing is to manage demand;

✦  Marketing is a management process that focuses on planning for the future success of the organisation; and

✦  There are a set of marketing tools which marketers utilise in understanding customer needs and wants, and in developing appropriate products and services to satisfy customers.

In other words, companies that place the customer at the centre of their thinking are said to have adopted marketing concept.

The Role of Marketing Management in Tourism and Hospitality

✦  Understand the drivers of demand;

✦  Understand consumers and customers;

✦  Increase the volume of transactions;

✦  Increase the value of transactions;

✦  Increase both the volume and the value of transaction; and

✦  Shift demand from periods where there is too much demand.

Marketers aim to:

Special Characteristics of Services marketing

✦  Seasonality and demand fluctuation - refers to the fluctuations and demand in any given period e.g. seasons of the year, months of the year, times of the week and times of the day.

✦  Intangibility - the challenge for marketers is how to encourage customers to choose the offers without raising customer expectations too high, and then failing to deliver customer satisfaction.

✦  Perishability - the key marketing principle is to ensure that the price at peak demand times is set to deliver the maximum return to the company, providing it is compatible with customer satisfaction. In low season periods, the aim is to generate additional sales by developing attractive promotions.

✦  Inseparability - customers have to be present to consume the hospitality product. This means that customer interaction with hospitality staff and other hospitality guests provides a variety of opportunities to influence customer satisfaction positively or negatively.

✦  Variability - hospitality operations suffer from considerable fluctuations in the standards of delivery of the service. Every service performance is a unique event and human interaction cannot be standardised. Consequently, it is impossible for service companies to deliver a totally non-variable experience.

✦  Interdependence - tourists make a variety of travel purchase decisions in one trip and their overall satisfaction with a visit is based upon a complex set of evaluations of different elements include: travel arrangement, accommodation, attractions and facilities of a destination. This means that regardless of the tourism sector they operate in, their size or ownership, have to cooperate in the promotion of their destination. Destination marketing organisations work closely together with local government and tourism authorities to promote demand for tourism in their own particular area.

✦  Supply exceeds demand - the hospitality industry is frequently describe as a fragmented industry with low barriers to entry. Despite record numbers of people travelling for business and leisure purpose, the growth inhospitality capacity has not always been matched by a sufficient growth in demand. When supply exceeds demand, the competitive environment becomes more intense and price competition can affect all firms’ profitability.

✦  High fixed costs - typical hospitality firms have high properly costs and also employ large numbers of staff, many of whom are full-time, permanent employees. Companies, hence, need to generate sales to help make a contribution towards the fixed costs.

Tourism and Hospitality Marketing

Marketing Orientation

Marketing Strategy: Segmentation, Targeting and

Positioning The Marketing Mix

- Product - Pice - Place - Promotional - People - Process - Physical Evidence

Cross-cultural Marketing

Marketing Orientation

Management orientations There are five different competing management philosophies have been identified in free market economies.

Starting point! Focus! Means ! Ends!

Production Orientation!

Innovative, strong,hospitality products"

Satisfying "High demand"

New technology generating mass production at low prices"

Profit through mass sales"

Product Orientation!

Existing hospitality product/service"

Maintain and improve existing product concept"

Minor improvements and adaptations of exiting marketing mix"

Profit dependent upon stable market conditions"

Selling Orientation!

Existing hospitality product/service"

Existing and new facilities" Aggressive selling and promotional tactics"

Profit through sales volume"

Marketing Orientation!

Business and leisure markets" Business and leisure customer needs and wants"

Integrated marketing (including marketing research)"

Profit through customer satisfaction"

Societal-marketing orientation!

Business and leisure markets AND the needs and wants of the community and environment"

Socially concerned hospitality business activities"

Integrated marketing which takes into account the needs and wants of consumers and society"

Profit through enhanced image and customer satisfaction"

Table 2: Marketing orientations Source: Bowie and Buttle, 2004 (Adapted from Kotler, Bowen and Makens, 2003)

Operations or production orientation (mass marketing)

✦  The production orientation is based on conditions of mass production and limited consumer choice.

✦  This leads to an inward-looking focus as management strives to control costs, improve quality and efficiency and increase volume.

✦  This approach, the needs and wants of customers can be forgotten in the interests of organisational efficiency. However, in case of the customers who are satisfied with the low-cost, mass-produced product, then a production orientation is appropriate.

Product or service orientation ✦  Companies adopting a product orientation believe that their customers

can only be satisfied with a particular type of product.

✦  Management concentrates on developing better versions of the existing product, but fails to recognise that customers could be satisfied better by different types of products.

✦  This product management focus is an inward-looking. Whilst a company can prosper with a product orientation, changes in consumer tastes and fashion can quickly undermine a product led company

Selling orientation ✦  The selling orientation was developed in the 1920s, when American

companies developed efficient production systems and needed to generate more sales to maintain profitability.

✦  Companies adopt the selling orientation when their products are competing in market where supply exceeds demand, and growth is low or declining.

✦  This approach is concentrates on selling hte product to potential customers and is not focusing on satisfying customer needs and wants.

✦  Companies with the selling orientation tend to accept every possible sale or booking regardless of its suitability for the business or other customers.

✦  A sales orientation is endemic in the hospitality industry, as many marketing programmes are really only sales promotions aimed at filling bedrooms, bars, and restaurants - regardless of customers’ needs and wants.

Marketing orientation ✦  This is an alternative strategy to the selling orientation, to cope with similar

economic condition.

✦  Companies adopting the marketing orientation recognise that customers have considerable choice in the marketplace. Hence, for companies to maintain long-term profitability, they need to understand and serve customers better than their competitors.

✦  To achieve superior business performance companies therefore, need to identify what customer needs and wants are, and to satisfy them better than competitors. This mean that companies need to carry out marketing research and to develop an integrated approach to marketing, to ensure that all marketing activities are coordinated and help to deliver customer satisfaction.

✦  A marketing orientation is an outward-looking management philosophy, which responds to changes in the environment and considers the business from a customer perspective.

The differences between marketing and selling ✦  The sales concept focuses on products and uses selling and promotion

to achieve profit through sales volume. The underlying weakness is that the sales concept does not necessarily satisfy the consumer and may only culminate in short-term, rather than long term, company success.

✦  The marketing concept focuses on customer needs and utilities integrated marketing to achieve profits through customer satisfaction.

Sales concept

Focus Selling/products

Means Promotion

End Profit through sales volume

Marketing concept

Customer needs Integrated marketing to specific segments

Profits through customer satisfaction

Figure 7: The sales and Marketing concepts compared Source: Cooper et al., 2008

Societal marketing orientation ✦  The societal marketing orientation was a response to these

criticisms and recognises that commercial organisations have a wider responsibility than simply looking after customers and staff.

✦  A societal marketing orientation suggests that companies should become proactive in the community, adopting a ‘good neighbour’ policy in their company’s best interest.

http://www.starbucks.com/responsibility

Segmentation, Targeting and Positioning

Most authors writing on the subject of segmentation, targeting and positioning process identify that it is a staged process consisting of three main activities: market segmentation, marketing targeting and market positioning (see figure 7). Within each of the stages is a set of actions.

Figure 8: The segmentation, targeting and positioning process Source: Adapted from Kotlet et al., 2006: 263

Market Segmentation

1. Identify bases for segmenting the market 2. Develop profiles of resulting segments

Market Targeting Market Positioning

3. Develop measures of segment attractiveness 4. Select the target segments

5. Develop positioning for each segment 6. Develop marketing mix for each target segment

Segmentation

Market Segmentation





Initially, marketers tended to view markets as single homogeneous entities. However, recently, one must realise that every population or market is subdivided into segments or subgroups with shared buying characteristics. Segmentation then, has become a very important technique for marketers today. Target market can be divided into segments like this:

Target Market

Age

Gender

Social group

Geographical location

Lifestyle

Ethnicity Figure 9: Market segment Source: Adapted from Oxford GNVQ, 2000

Marketing segmentation is the process of dividing up the total market (all the people the organisation can sell its products or services to) into identifiable, measurable and discrete groups who share some common characteristics or needs and whose attitudes or reactions towards communications messages about products or services might be similar.

Chisnall suggested that market segmentation ‘recognises that people differ in their tastes, needs attitudes, lifestyles, family size and composition, etc...It is a deliberate policy or maximising market demand by directing marketing efforts at significant sub-groups of customers or consumers’ (Chisnall, 1995: 264). Common methods used to segment tourism and hospitality markets are by demographic, behavioural and psychographic approaches (see table 2).

Demographic Behavioural Psychographic

Age Gender Geographic region Stage in the family life cycle Education Race, ethnicity, culture Occupation or social class Sexual orientation

Motivation/purpose of travel Frequency of use/purchase Decision-making processes Benefits sought from the experience Usage Attitudes, perceptions, values, beliefs

Personality Identity Lifestyle (activities, interests, opinions)

Table 3: Bases of Marketing Segmentation Source: Adapted from McCabe, 2009: 148

Demographic

Young Single Person!-Reasonable disposable income -Enjoy pubs, bars, clubs, music, Likely to take short haul package holidays or travel independently, e.g. backpacking

Young Couple!-Higher disposable income"-Enjoy cinema, eating out, more exotic holiday"

Young Couple with baby (full nest 1)!-Enjoy family activities: parks, visitor attractions"-More likely to take self-catering holidays"

Young Couple with Children (full nest 2)!-Falling disposable income"-Spend less money on travel"-Likely to take self-catering or family-orientated package holidays"

Couple with older children (full nest 3)!-Low disposable income"-Likely to take less expensive domestic holidays"

Older couples, children left home (empty nest 1)!-Higher disposable income"-Enjoy eating out, short breaks, overseas travel"

Older couples, chief breadwinner retired (empty nest 2)!-Restricted income"-More likely to take coach tours or package holidays during low season"

Single/widowed person in work (solitary survivor 1)!-Restricted income"-More likely to take coach tours or package holidays during low season"

Retired single person (solitary survivor 2)!-Low income"-Little to spend on travel"-More likely to take coach tours"

Table 4: Segment by Age Source: Adapted from Oxford GNVQ, 2000

Divided by Age

Divided by Gender - Men and women don’t always enjoy the same activities -Traditionally, men and women have different tastes in sytle and decoration and need different facilities -Sometimes people prefer to be in single-sex groups

http://www.smh.com.au/travel/girls-allowed-hotel-offers-manban-floor-20110309-1bnsj.html

Divided by Sexual orientation - Sexual orientation is becoming a key segmentation variable as tourism and hospitality organisations - and destinations - realise that their offers may appeal distinctly to lesbian and gay audiences. Some destinations have a long association for attracting these groups. Lesbian and gay markets have been targeted as a lucrative market segment for toruism as the consumers are often high spenders, frequent users and adventurous.

Divided by ethnicity - Usually it would be considered discriminatory to target a particular market segment by ethnicity. However, travel and tourism organisations sometimes need to consider food, dress, language and religious customs when developing products and services to meet all their customers’ needs.

Divided by Socio-economic variables - These variables include occupation and income, education and social class. - Men and women don’t always enjoy the same activities -Traditionally, men and women have different tastes in style and decoration and need different facilities -Sometimes people prefer to be in single-sex groups

Social grade! Social class! Typical occupation!

A" Upper middle" Higher managerial, administrative and professional (e.g. Judges, surgeons)"

B" Middle" Intermediate managerial and administrative (e.g. lawyers, teachers, doctors)"

C1" Lower middle" Supervisory, clerical, junior management (e.g. bank clerk, estate agent)"

C2" Skilled working" Skilled manual workers (e.g. joiner, welder)"

D" Working" Semi-skilled and unskilled manual workers (e.g. driver, postman, porter)"

E" Those at lowest level of subsistence"

Pensioners, casual workers, students, the unemployed)"

Table 5: Segment by Social class Source: Adapted from Oxford GNVQ, 2000

Divided by geographical location - The geographical area or areas in which its target market lives e.g. a major airline corporation may consider its geographical market segment to consist of all the countries in which it operates flight.

Behavioural

Divided by purpose of travel

Business Traveller" -Less price sensitive"-Likely to stay for one night, or only a few, on each trip"-Stay at establishments that are within a reasonable travel time of their place of work"-Less seasonal as their travel patterns are less dependent upon weather and holiday schedules"

Leisure" -Price sensitive"-Likely to stay longer on each trip"-Less frequent users of hotel accommodation"-Stay at establishments that are close to leisure amenities and tourist attractions"-More seasonal, both in terms of climate and the time of the year"

Visiting friends and relatives (VFR)" -This segment does not generate significant volumes of business for hotels since they tend to stay in the homes of their friends and relatives."-This segment is more important to tourism establishments in the day-visitor leisure and recreation sectors, and to restaurants and bars."

Table 6: Purposes of travelling Source: Bowie and Buttle, 2004

Divided by Attitudes, Perceptions, Values, Beliefs - Attitudes, perceptions, values and beliefs are strongly linked to behaviour (Jobber, 1995). These types of segmentation analyses contribute to an understanding of how particular groups view services in the marketplace. A good example of this is the market for backpacker travel experiences. The backpacker market can be segmented in terms of their perceptions and beliefs about the world around them including attitudes to politics, the organisation of society and attitudes towards other cultures.

Divided by Patterns/Frequency of use - Purchases occasions and usage are also critical aspects of segmentation variables for tourism and hospitality services. Special occasion users have different values to frequent, heavy users of hotel and/or restaurant services.

Divided by Decision-making Processes - Purchase behaviour is another method of categorising markets. Issues covered in terms of decision-making behaviour are in relation to brand loyalty, risk, adoption of new innovations as well as choice criteria and selection variables and so on.

Psychographic

Divided by Personality and identity - These types of approaches are useful for tourism and hospitality services because of the inherent link between consumption of these discretionary services as an expression of self-identity or as an expression of individualism or other aspect of personality. Marketing communications based on status and on personality characteristics is prevalent in many tourism and hotel chain marketing strategies. Also, travel in itself becomes an expression about who we are and how we would like to be seen by other people. This is particularly useful in relation to niche market behaviours in travel, such as adventure holidays and sports and activity holidays. But it can also relate to brands, particularly where brands take on a public personality. An example of this is branded restaurants and hotels. The name Ritz in the context of hotels is synonymous with the rich and famous. Consumption of the Ritz as your hotel of choice says something about your personality.

Divided by lifestyle - Lifestyle refers to the values and actions aspired to by people

Individuals Independent people

with their own lifestyle

Succeeders People who have

achieved their ambitions and are in

powerful position

Reformers Well educated people

who value quality. Often buy natural and own-brand products

Aspirers People who value status and money. They like

status symbols such as expensive cars and jewellery. They use credit cards and are interested

in the latest sports and hobbies

Mainstreamers 40% of the population. People who live in a conventional way and are attracted to the

security of branded products

Figure 7: Segment by lifestyle Source: Adapted from Oxford GNVQ, 2000

Target Marketing

Market Segmentation





Tourism & Hospitality Target Markets Target markets are groups of consumers, with similar needs and wants, for whom a marketing programme is specifically developed to satisfy those needs and wants. Hospitality companies target several different market segments at the same time, but each target market should have its own marketing mix programme. Examples of hospitality organisations targeting market segments are: 1. Consumer target markets 2. International markets 3. Restaurant and bar target markets 4. Singles market 5. Organisational markets 6. Corporate travel 7. Corporate meetings 8. Association meetings 9. Conventions, exhibitions and trade fairs 10. Aircrews 11. Tour groups 12. SMERF 13. Intermediaries

Criteria for Assessing Segment Once an organisation has identified a range of possible segments within the market, it begins the targeting process. This consists of developing measures of the attractiveness of the segments and selection of the segments to target. This process is a re-evaluation of the segments and the profiles matched against the core competencies and resources (what the organisation actually offers from the service or the experience) to identify which are the most attractive segments to target. In developing the measures of attractiveness of each segment it is useful to deploy criteria against which the organisation can assess the contribution that each segment of the market could potentially deliver. These criteria can be defined as a series of questions to ask for the segment: - Is it attainable? - Is it measurable? - Is it large enough? - Is it defendable? - Is is sustainable?

Targeting Criteria Middleton and Clarke (2001) suggest five main criteria that must be applied to any segment if it is to be usable or actionable in marketing:

1. Selected segments must be distinctly identifiable by criteria such as purpose of visit, income, location of residence or motivation. In other words, there must be clear boundaries between the segments. 2. The criteria used to distinguish between segments must be measurable via marketing research data. If the segment cannot be measured, it cannot be targeted. 3. The projected revenue exceeds the full cost of designing the marketing mix to achieve it by margins that meet the organisation’s financial objectives. 4. The chosen segments reflect the inseparability of production and consumption for tourism and hospitality services, and measures are put in place to recognise or manage the potential for conflict of interest and potential for complaint. 5. In this context, assessing the extent to which segments contribute either positively or negatively to the environmental mission of the organisation or destination.

Market Positioning

Market Segmentation





The product positioning process consists of making any fine adjustments to the service offering in the light of research conducted in the marketing planning process and then the creation of an ‘image’ of the service which meets the target market values. This position can be made up of the core competencies or the specific value requirements of the target group. Market positioning in this sense relates to the place the service occupies in the minds of the consumers. Because consumers are continually referring back to product evaluations when they come into contact with new messages about products and services, they classify them according to what they already know about these and related, competitor, products. The marketing communications strategy is based up on these positioning statements about the image of the service in relation to target market values and needs.

In the context of tourism destination marketing organisations (DMO), positioning can be based on the physical qualities or attributes of the destination which includes consideration of all the touristic resource types: - Culture and society (e.g. food and drink, pastimes and dress, traditon, work, leisure and social organisation) - Heritage (e.g. built and natural heritage, archaeological or industrial, cultural) - Wildlife (e.g. marine, birdlife, farming, flora and fauna) - Climate (e.g. sunshine, rains, snows) - Landscape and physical attributes (e.g. mountains, lakes, beaches and seasinde, countryside and nature, cityscapes and architecture).

Marketing Mix for Tourism

Marketing in business travel and tourism

Figure 4: The nature of marketing in business travel and tourism Source: Swarbrooke and Horner, 2001 (p.123)

The marketing mix and business tourism ��(the basic 4Ps)

The product The diversity of business travel and tourism makes it difficult to generalise about the nature of the product. It should be noted that, for business traveller, the hotel bedroom is not simply a place to sleep, it is instead an extension of the office.

Figure 5: Elements of the business tourism product Source: Adapted from Horner and Swarbrooke (1996) in Swarbrookes and Horner, 2001 (p.124)

Price Price is a crucial issue in any market but it is a complex matter in business travel and tourism for the following reasons: 1. There are direct and indirect costs for traveller. Direct costs include: fees for attending conferences or the price of an air ticket. Indirect costs, on the other hand, are the need to apply for a visa when travelling to some destination. 2. Prices for a similar product vary dramatically around the world, even within one country, prices can vary significantly. 3. For many purchasers/users, price is perhaps less important than perceived value for money. Rather, they concern with the relationship between benefits received and price paid. 4. Negotiation is common place, which creates real challenges in terms of revenue planning and yield management. 5. Discounting is also rife based on criteria such as seasonality, volume of business or whether the customer is a regular user of a particular product or service. 6. Some elements of the business tourism product are sold below their market value for various reasons. 7. Destinations usually make no direct charge for entry to the resort, city or region or for use of its facilities such as beaches or parks. 8. Some costs are compulsory, such as travel costs, while others are voluntary, like having a drink at the end of the working day.

Place Place or distribution is concerned with how business travellers or tourists actually purchase the products they need. There are: 1. Customers can buy a whole package such as an incentive travel package or individual elements such as air tickets, venues and accommodation. 2. Customers can purchase products directly or make use of the services of specialist intermediaries. In addition to this, the Internet has played a key role in distributing business travel and tourism products.

Promotion

Figure 6: The methods of promotion in business travel and tourism Source: Swarbrooke and Horner, 2001 (p.129)

The tourism & hospitality marketing mix (7Ps)

Figure 1: The hospitality marketing mix Source: Bowie and Buttle, 2004

Product/service offer: -Accommodation -Food and beverage -Business services -Leisure Location (Place) - location decisions are incorporated with distribution under the heading ‘Place’ in the generic marketing mix. This is because of location is the first and crucial marketing decision for hospitality companies. Location decisions focus on where the hospitality business should build, buy, franchise or rent the site(s) from which it operates. Price: -Setting the tariff or rack rates -Agreeing the level of discounts for key accounts -Pricing all-inclusive packages (conferences, functions and leisure breaks) -Developing special priced promotions to increase sales during low season periods Distribution (Place) - in general, distributions are discussed with location under ‘Place’. Distribution in hospitality, however, concerned with how a company can make it timely and convenient for a potential customer to book hospitality products directly from the hospitality company or through intermediaries.

Marketing communication (Promotion) - originally called ‘Promotion’ and no popularly described as ‘marcom’. Marketing communication covers all the tools that hospitality firms can use to communicate with customers, employees and other stakeholders.

Physical environment - consists of the tangible features of the hospitality offer, the external appearance of the premises and the internal layout.

Process - the processes through which customers buy and consume hospitality products are crucial to marketers include: booking, checking in and checking out, queuing systems and service operations. Marketers need to ensure that the organisation’s service delivery processes are efficient, customer friendly and competitive. People - include both customers and employees.

Cross-cultural Marketing

✦  Cultural is an umbrella word that encompasses a whole set of implicit, widely shared beliefs, traditions, values and expectations that characterise a particular group of people. It identifies the uniqueness of the social units, its values and beliefs (Leavitt and Bahrami, 1988).

✦  The elements of culture such as language, tradition, family structure, society norms, gender role and time orientation impact consumers’ behaviour (Usunier, 2000, Hofstede, 2001).

✦  Cultural change, hence, has significant implications on cross-cultural marketing and makes it imperative to adjust marketing strategies over time.

Cross-cultural marketing International marketing Cross-cultural marketing

-Take one or two different approaches to market a product or service, standardisation or adaptation.

-The marketing manager of the company that adopt this approach will focus on ‘standardisation’. Otherwise, the product and service must be modified for each market with considerations of the host country’s cultural influences

-Focus on the use of knowledge and information for the purpose of customising products/services and strategies according to national and ethnic cultural characteristics. -Cross-cultural marketing utilise the product/service adaptation approach for cross-national borders market, domestic-ethnic markets, or both. -It focus on the differences between ethnic minority groups within the host nations’ majority.

Table 1: International marketing and cross cultural marketing Source: Adapted from Buhalis and Costa, 2006

Cross-cultural marketing mix In cross-cultural marketing, the marketing mix consists of a set of tools or strategies designed to meet customers’ expected values in a manner that is congruent with their culture.

These strategies must match the customers’ cultural preferences and expectations. The marketing mix designers have to understand not only the cultural characteristics of their intended customers but also the differences and similarities between the intended customers and the product/service provider. It is essential to remember that cultures are dynamic and change over time, the marketing mix should periodically reviewed and modified to meet new challenges.

Product and service strategy

✦  In cross-cultural context, elements of product/service strategy include the decisions on product/service physical attributes such as the size, shape and colours of the guest room, the service attributes.

✦  Product/service must adapt to local preferences and ways of using the product and must meet the national and local legal requirement

Pricing ✦  Pricing products and services is a

complex process. The perceived value determines the price the consumer is willing to pay.

✦  A cross-cultural product/service price strategy should not be just based on what the market can bear but also include other factors such as GDP per capita, taxation levels, available discretionary income and the standard of living.

✦  C r o s s - c u l t u r a l c o n s u m e r s ’ attitudes toward price negotiations are important factors in cross-cultural price strategies.

Promotion ✦  Marketing across cultures faces many

communication barriers such as cultural barriers and source effects.

✦  Using the language that the target consumers understand is vital in communication.

✦  In terms of advertising, the forms, styles and frequencies of advertising are important for effective cross-cultural advertising.

✦  Personal selling processes will vary from culture to culture.

✦  Public and public relations - most hospitality and travel companies engage in sponsorships of goodwill activities in communities and host countries.

Distribution strategy

✦  Many companies such as hotels or airlines use their central reservation systems to facilitate sales directly to customers.

✦  Customers may use toll-free telephone numbers to make reservation or access the company’s website through the Internet.

Further reading ✦  Bowie, D. and Buttle, F. (2004). Hospitality Marketing: An Introduction.

Oxford: Elsevier.

✦  Buhalis, D. and Costa, C. (2006). Tourism Management Dynamics: Trends, Management and Tools. Oxford: Elsvier

✦  Cooper, C., Fletcher, J. Fyall, A. Gilber, D. and Wanhill, S. (2008). Tourism: Principles and Practice. Essex: prentice Hall

✦  McCABE, S. (2009). Marketing Communications in Tourism and Hospitality: Concepts, Strategies and Cases. Oxford: Butterworth Heinemann

✦  Middleton, V., Fyall, A., Morgan, M. and Ranchhod, A. (2009). Marketing in Travel and Tourism. Oxford: Butterworth Heinemann.

✦  Oxford GNVQ (2000). Advance Travel and Tourism. Oxford: Oxford University Press.

✦  Swarbrooke, J. and Horner, S. (2001). Business Travel and Tourism. Oxford: Butterworth-Heinemann

✦  h t t p : / / w w w . s m h . c o m . a u / t r a v e l / g i r l s - a l l o w e d - h o t e l - o f f e r s - m a n b a n -floor-20110309-1bnsj.html

✦  http://www.thestar.com/travel/article/980617--danish-hotel-features-a-women-s-only-floorRT

✦  http://www.usatoday.com/money/biztravel/2005-11-07-female-guests-usat_x.htm ✦  http://www.millenniumhotelnyc.com/premier-hotel/women-friendly-hotel-rooms.php ✦  http://thenextwomen.com/2008/08/12/women-only-floors-are-back ✦  http://www.club18-30.co.uk/

✦  http://travel.saga.co.uk/holidays.aspx ✦  http://www.starbucks.com/

✦  http://bcove.me/ys1m6uwp ✦  http://bcove.me/5irolly0 ✦  http://www.starbucks.com/responsibility ✦  http://www.youtube.com/watch?v=CwywFjsTujo ✦  http://www.youtube.com/watch?v=3da4X0Buvno