Assignment 4

INSTRUCTION:

Each student is required to form groups of 4 people in a group. Each group required to answer the set of past questions. Each group assigned with one set of questions. (Please refer Table 1.1). Your answer must be specific and accurate. Mark will be deducted for any late submission.

Table 1.1:

GROUP & SET OF QUESTION (SEMESTER)
1 JANUARY 2010
2 JULY 2009
3 JANUARY 2009
4 JULY 2008
5 JANUARY 2008
6 JULY 2007
7 JANUARI 2007

Your mark will be evaluated based on the following criteria:
a. Accuracy -50%
b. Text presentation (Spelling, paragraph, margin, template, header & footer, etc.) – 20%
c. Table of content – 10%
d. Reference – 10%
e. Tidiness – 10%

Please submit on your assignment on ( 1st October 2010 – Friday): Week 13

Assignment 3

ARAHAN TUGASAN: PELAJAR DIKEHENDAKI MENYEDIAKAN SATU LAPORAN PERANCANGAN PEMASARAN BERKAITAN SEBUAH AGENSI/ SYARIKAT YANG BERKAITAN DENGAN INDUSTRI PELANCONGAN BAGI JANGKAMASA SATU TAHUN TERTENTU.


FORMAT LAPORAN ADALAH SEPERTI DI BAWAH:

1. ISI KANDUNGAN
2. RINGKASAN EKSEKUTIF
3. PENGENALAN SYARIKAT / SYARIKAT
3.1 Latar Belakang
3.2 Carta Organisasi
3.3 Produk / servis
4. ANALISA SITUASI PEMASARAN SEMASA, ANCAMAN DAN PELUANG ANALISIS SWOT
5. OBJEKTIF PERANCANGAN PEMASARAN
6. STRATEGI PEMASARAN
7. PROGRAM TINDAKAN
8. BELANJAWAN
9. KAWALAN & PENILAIAN
10. CARTA GANTT
11. LAMPIRAN
12. BIBLIOGRAFI

FORMAT TUGASAN:
• Bertaip, binding
• Font- Arial, bermuka surat, justify
• Saiz tulisan : tajuk- 12, isi 11
• Line spacing – 1.5 lines


SERAHAN TUGASAN ADALAH SELEWAT-LEWATNYA PADA 1 Oktober 2010(M13) JAM 5.00 P.M.

TOURISM MARKET

TOPIC 4 : TOURISM MARKET

INTRODUCTION

This topic examines consumers’ purchasing behaviour. This can be defined as the behaviour of individuals or groups who purchase products and services for their personal consumption. What exactly influences consumers’ ways of buying? To answer this, you will be led to identify factors affecting consumer behaviour. These are cultural, social, personal and psychological factors. Marketers would definitely try their very best to study how consumers react to their marketing activities.
A model of consumer behaviour can then be served as a guide for marketers to figure out what stimulates consumers’ buying behaviour. It does not matter whether we are impulse buyers or take a long time to think before buying, we are in fact influenced by our own buying decisions. The following section will discuss more on the model of consumer behaviour, factors influencing consumers’ buying trends and consumers’ unique ways of buying decision.

4.1 DEFINITION OF CONSUMER MARKET and CONSUMER BUYING BEHAVIOUR
a) Consumer Market

All the individuals and households who buy or acquire goods and services for personal consumption.

b) Consumer Buying Behaviour

The buying behavior of final consumer – individuals and households who buy goods and services for personal consumption


4.2 MODEL OF CONSUMER BEHAVIOUR
Based on the model of consumer behaviour as shown in Figure 4.1, the marketer can identify the “marketing mix” and “other environmental forces” affecting the buyer’s “black box,” thus resulting in consumers’ responses in choosing and buying the products. The marketing mix consists of product, price, promotion and distribution.
The environmental forces are economy, technology, politics and culture. All these marketing and environmental forces are easily exposed to the buyers’ “black box.” At this point, the marketer should pay more attention to find out how consumers’ own characteristics or buying decision-making can influence their ultimate responses in selecting the product, brand, specific seller, time of purchase and amount spent on products/services.

As the decision-making process is in the buyers’ mind, it is not easy for marketers to determine how buyers’ characteristics can affect their expectations in response to making purchase decisions. This leads us to find out the factors influencing consumer buying behaviour.


4.3 FACTORS INFLUENCING CONSUMER BEHAVIOUR
There are four main factors that can influence consumer behaviour. These are cultural aspects, psychology, personal characteristics and social influences. We will then look into how each of these factors can affect buyers’ behaviour.

4.3.1 Cultural Factors
The cultural factor can be divided into culture, sub-culture and social class. The marketer must know how each of these cultural factors influences customer behaviour.
a. Culture
Culture can be defined as an individual’s ways of living in a society. It includes the basic practice of good values, perceptions, needs and behaviour learned from institutions such as family, workplace, schools and churches. Ideally, every group in a society must have its own cultural backgrounds.

However, we have seen certain influences of culture spread around the world. The marketer must understand the society’s cultural movement in order to identify new products or services. For example, there is a rise in health consciousness among people who are more concerned about having a healthy diet. They may prefer to consume more organic foods than processed food such as fastfood.

b. Sub-culture
A sub-culture involves a group of individuals who share similar values. Each culture has a smaller sub-culture. Sub-culture can be identified through nationality, ethnic group and religion. Every racial group in Malaysia has its own sub-culture. It is important for the marketer to be aware of sub-culture groups’ likes and behaviour.

c. Social Class
Social class is referring to a group of society who share similar values, interests and behaviours. Social class can be determined by looking at various combinations of factors such as income level, types of occupation, education and wealth. Marketers are keen on social class to recognise some similar consumers’ characteristics within a given social class.


4.3.2 Social Factors
A consumer’s behaviour can be affected by social factors such as group, family, role and status.
a. Groups
An individual is a member of small groups. The groups can be formed by office mates, friends and peers. Small groups can influence a person’s behaviour. A groups which has direct impact on an individual is called a membership group. A membership group can comprise family members, neighbours or office mates. There are frequent interactions and closer relationships among members. In contrast, there is another type of membership group which has fewer interactions among members. These are religious groups, professional bodies and trade associations.

An individual’s behaviour is also influenced by other groups of which he is not a member, which are known as reference groups. Reference groups can shape the attitudes and behaviours of a person. For example, a professional golfer like Tiger Woods is the one whom other golfers would like to be associated with because of his special skills, knowledge, personality and other traits that can exert influence on others.

People within reference groups can become an inspirational group to inspire new members to join the group. Examples of inspirational groups are film stars, entertainers, athletes and politicians.

b. Family
Family members can influence buying behaviour. Research findings indicate that husband, wife and children can influence each other in buying decision making. For instance, purchase of family vacation packages can be influenced by children. Such changes may require marketers to coax children instead of parents in purchasing. Another example is fastfood operators like McDonald’s and Kentucky Fried Chicken. They often target their advertisements at children even though the decision makers are the parents.

c. Role and Status
Roles can be considered as expected activities a person needs to perform. Each role portrays a different status. For instance, the roles and status of a person in a group explains his position. Everyone plays a different role according to their expected activities. You play the role of a child to your parents and the role of a brother or sister to your siblings. In school, you play the role of a student.

Each role comes with status that reflects the general pride in a society. People usually choose a certain product that is compatible with their status in society. For example, a manager in a multinational company might wear branded clothes and drive a luxury car to reflect his status.

4.3.3 Personal Factors
In this section, we will look at personal characteristics such as age, occupation, economic situation, lifestyle, personality and self concept. These can influence buying behaviour.
a. Age
Different stages of age can cause different tendencies in purchasing products and services. For instance, children’s preferences are different from adults. Children like sweets and ice cream but this changes when they grow older.

b. Occupation
The type of job held by an individual can impact his buying behaviour. A blue-collar worker normally wears casual and rugged clothes while a white-collar worker prefers conservative clothes.

c. Economic Situation
The choice of products and brands purchased as well as the place to shop are influenced by the economic status of a person. A wealthy person would prefer to buy more luxurious and quality goods compared to a less wealthy person.

d. Lifestyle
Lifestyle is a way of living that can be explained by three distinct dimensions. These are activities, interests and opinions.
o Activities can be hobbies, sports, social events etc;
o Interests can be on food, fashion, recreation etc.; and
o Opinion about themselves, social issues, business and product. A person with a different lifestyle may possess different preferences for activities, interests and opinions.


e. Personality and Self Concept
Personality refers to a person’s characteristics such as confidence, sincerity (e.g. honest and cheerful), sophistication (e.g. modern and charming), social skills, autocratic and aggressiveness. Marketers use personality in studying how consumers make product selection. For example, researches have shown that coffee lovers normally have a higher need to socialise. Therefore, Westernised coffee houses such as Starbucks and San Francisco provide a cosy atmosphere for coffee lovers to relax and chat while enjoying their drink.

Self concept relates to a person’s self identify. It reflects the image a person portrays to others. For example, a person who owns a Harley Davidson motorcycle might wish to portray himself as someone who enjoys freedom.

4.3.4 Psychological Factors
There are four main psychological factors namely motivation, learning, belief and attitude and perception. These four psychological factors play a major role in influencing an individual’s buying decisions as described below.
a. Motivation
In theory, motivation relates closely to needs. If a person has a strong need to gain material recognition, he is motivated to seek satisfaction by owning material things. Human motivation can be explained using the popular Maslow hierarchy of needs.

Maslow’s Theory Of Hierarchy Of Needs


Physiological Needs.
Physiological needs are primary needs for food, shelter, and clothing, which one must have before thinking about higher order needs. Nearly all products and services offered to consumers by hospitality and tourism firms address these needs.

Safety Needs.
These second-level needs include personal security and protection from physical harm. The movement toward greater security and safety within the hotel industry has addressed these needs. Electronic door locks, increased lighting, outside entrances that are locked after dark, and more sophisticated fire detection devices all are designed to meet safety needs.

Social And Belonging Needs.
Once needs at the lower two levels are satisfied, consumers look toward achieving social acceptance by others. From the hospitality and tourism perspective, we cater to consumers who want to join private clubs that offer a variety of social and recreational activities. We also make consumers feel like they belong by making special products and services available for frequent guests. Hotels that target longer-term guests, such as Marriott’s Residence Inns, will often schedule social events for their guests in order to satisfy the social needs of guests who are away from family and friends for an extended period of time.


Esteem Needs.
Once consumers feel accepted, they seek to enhance their self-esteem. Hospitality and tourism companies cater to these individuals by providing a higher level of personal service.
For example, airlines provide first class and business class, in addition to coach. Airlines also provide special lounges and waiting areas for frequent travelers and for individuals who purchase memberships in their “airline clubs.”
Another example is expensive restaurants that offer only the finest food, beverages, and service. They provides a level of products and services that cater to the esteem needs of guests, and they expend a good deal of effort to make guests feel very special and important.


Self-Actualization Needs.
The highest-level needs within Maslow’s hierarchy focus on an individual’s need to reach his or her full potential. For the most part, these needs are often beyond the scope of what hospitality and tourism marketers can expect to fulfill. However, there are examples from within the hospitality and tourism industry regarding the consumer’s attempt to satisfy self-actualization needs.
For example, when guests are attracted to sports programs at five-star resorts focusing on how to play the best golf or tennis possible, they are seeking to reach a state of self-actualization with regard to the sport.


b. Learning
Learning occurs when a person has gone through some changes in life due to experiences. For instance, suppose Ali purchases a product from Company X and experiences a high level of satisfaction using the product. He will want to visit the company again to buy other similar products. On the other hand, if he encounters problems with the product he bought, he will feel unhappy about it and not visit the company in future. So, learning through experience can reinforce a person’s behaviour.


c. Belief and Attitude
Belief is a thought a person holds about something. A person can acquire beliefs through learning. Suppose Siti believes that electrical goods from Japan are of higher quality due to her good experience in using Japanese electrical brands. She will then be keen to buy Japanese electrical products more than other products.

Attitude is a person’s tendency to judge something either positively or negatively. One’s belief in certain products can influence the attitude. Refer to the example above. Because of Siti’s belief in the high quality of Japanese electrical goods, she developed a positive attitude towards Japanese goods.


d. Perception
Everyone has his own perceptions towards something. Perception allows us to choose, organise and analyse information that we receive every day. It is through our own perception that we form a meaningful picture in our mind. In fact, we rely on our own perception when buying a product. A person might have different perceptions even though he is exposed to the same information.


4.4 BUYING DECISION PROCESS

In this section, we will look at the process of how consumers make buying decisions. This is illustrated in Figure 4.3. Before you perform a buying activity such as carrying the items you want to buy to the payment counter, you have to decide what to buy first. Making a decision to buy is a process. Consumers have to go through five stages in this process:
a. Recognise a need;
b. Search for relevant information;
c. Evaluate options available
d. Decide on what product to buy; and
e. Consumer behaviour after purchasing the product.

This model provides a basic guide to aid consumers in any buying situation, whether buying simple or complex products.




Figure 4.3: Buying decision process


4.4.1 Recognising the Need
The first stage starts with recognising the need i.e. identifying a problem or finding out a need. A need arises from individual internal urges such as the need to eat and drink. The needs can also be triggered by external urges such as cinema advertisements that make you think of watching a movie.


4.4.2 Information Search

When a consumer feels a strong need for a certain product, he will look for more information on the product such as the price, product specifications and others.

Consumers can find information from various sources. Experience using the product can be the source of information in guiding consumers to purchase a product. Besides experience, consumer can obtain information from trade sources such as advertisements, salesperson and public sources such as printed/electronic media and government agencies. Sometimes, consumers might feel more comfortable seeking products recommendations from personal sources such as family members, friends and neighbours.


4.4.3 Alternative Evaluation
From the information search, consumers will devise a list of product choices in order to make comparisons. Consumers can weigh the pros and cons of a product in the choice set by identifying a set of criteria to evaluate the product attributes such as price, quality, design, size and etc. By evaluating various brands, consumers can make better choices.


4.4.4 Decision to Buy

At this decision-making stage, consumers should decide what is the best product to buy after evaluating every alternative. However, not all purchase intentions will result in a real purchase. There are two reasons that may cause a person to change his mind in buying decision i.e. (i) other people’s attitude and (ii) unexpected situation. If other people who are close to the buyer such as the buyer’s spouse, immediate family or friend do not agree with the purchase, this may result in a lower chance of the buyer buying the product. Unexpected situations are such as a sudden increase in price of the most preferred choice or the preferred product being out of stock. Unforeseen circumstances might adversely affect the buyer’s interest in buying the product.


4.4.5 Behaviour after Buying

The buying process does not end after a consumer buys a product. Consumers engage in what we call “after purchase behaviour.” Therefore, marketers must continuously ensure that buyers are satisfied with the product bought.

Clearly, buyer’s satisfaction level depends on his expectations and the actual product performance. Suppose the buyer’s expectations are higher than the actual product performance, he will not be satisfied with the product purchased. However, if the product performance fulfils the buyer’s expectations, then the buyer is satisfied. What is of interest to the marketer is to ensure the product performance exceeds customer’s expectations so that the overjoyed customer will come back for repeat purchase.

Therefore, marketers learned to be more careful and not over promise their customers. Marketers must be sure that their products are of high quality and able to meet or exceed their customer satisfaction.


4.5 PURCHASING BEHAVIOR

A consumer buying decision usually depends on the type of the purchase made. The decision to purchase a product that is frequently bought is different from the decision that involves expensive and rarely bought products. In relation to that, the consumer will exhibit different purchasing behaviour. The purchasing behaviours include:


4.5.1 Complex Buying Behaviour

Refers to the situation where the consumers have many options. Every option furthermore has its own advantages and disadvantages. The differences among the choice are obvious. Among the criteria that exist in the complex buying behaviour are the higher cost of investment and the searching of more information to assist decision making process. An example is the purchase of house.


4.5.2 Dissonant Buying Behaviour

This refers to purchase that involve products without any obvious advantage or disadvantage. The consumer behaviour also invests a higher cost of investment, rarely purchased products or high-risk purchase. The consumer may find ways to lessen his uncertainty by gathering more information before making the purchase and choosing the product that offers the most guarantee. For example, the purchase of precious stone.


4.5.3 Regular Buying Behaviour

Refers to the situations where the consumer does not search more information before conducting the purchase as the consumer feels that the existing information from the experience of using the product is sufficient. The difference between one product and the other may very small and may not be as important to the consumer. For example, the purchase of daily usage products such as the tooth paste and soap.




4.5.4 Variety Buying Behaviour

Refers to the situation where there are obvious differences between the brands and products but does not require a lot of involvement from the consumer. The consumers may change the brand more often, not because of dissatisfaction but more to seek for varieties in the products, such as the purchasing of different flavours of cakes.


4.6 MARKET SEGMENTATION

What is market segmentation? Market segmentation can be defined as:

“The process of dividing a total market into groups of people with relatively similar product needs, for the purpose of designing a marketing mix that precisely matches the needs of individuals in a segment (Dibb et al., 1994)”

The definition clearly stated that the market can be divided by consumer classification. The identification and profiling of the market segment is deemed worthwhile for the tourism product as it is critical for marketing planning.

In most market, a relatively small number of people constitute the main demand for a product. It is by market segmentation that most tourism organisations define their market, match product to it and promote in media, which will most effectively reach the target consumer group.


4.6.1 Bases of Consumer Market Segmentation

There are several bases for segmenting consumer market. These include demographic, geographic, psychographic, behavioral segmentations and Purpose-of-trip segmentation

a. Demographic Segmentation
Demographic factors refer to variables like age group, gender, income, occupation, education, race, religion and nationality. The demographic factor is one of the most applied bases for segmenting the consumer market. This is because the market consists of different individuals and demographic segmentation permitts the marketer to dissect and group the segments according to similarity in characteristics.

This form of segmentation has been the most popular in tourism and been used by many tourist and hospitality organisation. Some of the variables used in demographic segmentation are:
(i) Age - airlines providing special fares for children and senior citizens;
(ii) Sex - conferences organisers usually plan special programmes for spouses;
(iii) Religion - travel agency promoting special pilgrimage tour to the Holy Land;
(iv) Language - Travel promotional brochures being published in several languages for different market segments;
(v) Race - promoting Malaysia to the Middle East (Arab markets); and
(vi) Nationality - Providing free visa to nationality where their countries reciprocal agreement with Malaysia.

b. Geographic Segmentation
Marketers use geographic segmentation to split the market segments according to country, region, state, province and city. Many companies try to localise their products to geographicals area such as Penang Fried Kuey Teow, Johor Laksa, Ipoh Hor Fun and etc.

Some of the examples of the application of geographical segmentation in the tourism industry are:
(i) Malaysian Airlines developed their routes on the basis of geographical pattern of demand.
(ii) Promoting Malaysia as a warm climate destination for the people in the cooler climates.
(iii) Advertising Malaysia as “Truly Asia” where various Asian cultures can be found in Malaysia.
(iv) The desire of city dwellers to spend their short vacation at resort areas in contrast to their daily environment.
(v) Developing Feringgi Beach area as an enclave for tourist destination.


c. Psychographic Segmentation
Psychographic segmentation divides buyers into different groups based on social class, lifestyle and personality characteristics. People in the same demographic group can have very different psychographic profiles.

i. Social Class
Social classes are relatively permanent and ordered divisions in a society whose members share similar values, interest and behaviors. Marketers are interested in social class because people within a given class tend to exhibit similar behavior, including buying behavior. Social classes show distinct product and brand preferences in such areas as food, travel and leisure activity.

ii. Lifestyle
A lifestyle is a person’s pattern of living as expressed in his or her activities, interest and opinions (table 4-1) lifestyle portrays the “whole person” interacting with his or her environment. Marketers search for relationship between their products and people who are achievement oriented. A study of tourists who purchase all-inclusive travel packages versus those who make travel arrangements independently reveal that lifestyle characteristic varied. All-inclusive travel purchasers were “more socially interactive, solicitous and take their vacation mainly to relax.” Tourist who preferred independent travel arrangements were more self-confident and often sought solitude.


ACTIVITIES INTERESTS OPINIONS
Work Family Themselves
Hobbies Home Social issues
Social events Job Politics
Vacation Community Business
Entertainment Recreation Economics
Club membership Fashion Education
Community Food Products
Shopping Media Future
Sports Achievements Culture


iii. Personality
Each person’s personality influences his or her buying behavior. By personality we mean distinguishing psychological characteristics that lead to relatively consistent and enduring responses to the environment.

Examples of the psychographic segmentation used in the tourism industry are:
(i) Health tourism being targeting for people seeking medical treatment in Malaysia.
(ii) Foreigners being allowed to set up their second home in Malaysia.
(iii) Green vacation promotion for people that are environmentally concerned.
(iv) Promotion of white, sandy beach for extroverts.

This method is beginning to become very popular among the travel marketers.


d. Behavioural Segmentation
Behavioural segmentation refers to the action of dividing the market into several groups according to consumers’ behaviour, attitude, use and response to the products. Marketers use behavioural segmentation to categorise consumers according to:

i. Special Occasions
Consumers are grouped in accordance to special occasions. These occasions can be Valentine Day, Mother’s Day, Father’s Day, Hari Raya Aidilfitri, Deepavali, Chinese New Year and Christmas. Marketers can offer promotions for special occasions e.g. the low-cost carrier Air Asia gives away free tickets to Thailand for couples during Valentine’s Day.

ii. Value Sought
Marketers also understand that different consumers in the market will search for different product values. Therefore, they must build multiple product lines to fulfil consumers’ needs.

For example, Colgate uses this tactic when launching various types of toothpaste products that give different benefits such as protection from tooth decay, special teeth whitening formula and also toothpaste that is normal but economical, which is aimed at price-conscious consumers.

iii. Buyer Status, Consumption Level and Loyalty

This segment consists of:

 Consumer Status
Marketer can also divide buyer groups into different status such as non-buyers, formal buyers or normal buyers. The marketer can create different advertisements for different buyers. For instance, advertisements directed at non-buyers might aim at encouraging them to try a company’s products while Marketer can also divide buyer groups into different status such as non-buyers, formal buyers or normal buyers. The marketer can create different advertisements for different buyers. For instance, advertisements directed at non-buyers might aim at encouraging them to try a company’s products while advertisements for normal buyers may be aimed at increasing frequency of usage.

 Consumption Level
The consumption level can be divided into high usage, medium usage or low usage. Dividing usage level into three categories helps marketers to strategise on how to increase frequency of usage.

 Loyalty
Some buyers are loyal to a company’s products while others like variety and change product brands frequently. By examining the usage pattern, the company can identify the loyal and the less loyal group. For the loyal group, the company can give gifts to them for the purpose of maintaining their loyalty for a long time. As for the less loyal group, the marketer may need to think of some marketing programmes to increase loyalty.

Examples of these applications in the tourism industry are:

(i) The frequent flyer programme (Malaysia Airline’s Enrich Programme).
(ii) Seri Malaysia Hotel chains promoting the hotel properties as a budget hotel, where tourist or traveller sought the benefit of “economy”
(iii) Hotels organisation promoting the seminars or meeting facilities.


e. Purpose-of-trip Segmentation
This type of segmentation is widely used in the hospitality and travel industries. The most common technique is to split the travel market into two main groups; the business travel market and the pleasure and personal travel market.

It is generally agreed that the needs and wants of business and pleasure/personal travellers are quite different. For example, business people prefers locations close to their place of business. While on vacation, the same person would seek accommodation near attractions.

Airline companies are known to segment its market by the following criteria:

(i) Purpose of journey - business, holiday, visiting friends and relatives, pilgrimage, convention or conferences, government services.
(ii) Length of journey - long-haul versus short-haul travellers.

Hotel and airlines industries have also segmented their markets in terms of product purchaser and user. Most of the business or corporate travellers are users of the product, but they did not pay the bill. Their employers, on the other hand, are the purchaser or customer who pays the bill.

However, we should bear in mind that most hotels, including other tourism organisations, served or deal to several market segments (known as “multiple segments”); business travellers, group tours, foreign independent travellers, weekend packages, conference delegates, honeymooners and family packages.




f) Price Segmentation
Price segmentation is common and widely practiced. Variation in household incomes creates an opportunity for segmenting some markets along a price dimension. If personal incomes range from low to high, the reasoning goes, then a company should offer some cheap products, some medium-priced ones, and some expensive ones. This type of price segmentation is well illustrated by the range of automotive brands marketed by General Motors historically. Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac varied in price (and status) along a clearly defined spectrum to appeal to successively higher income groups.

4.6.2 Effective Segmentation

There are some conditions in which marketers must ask themselves how to carry out market segmentation effectively. There are numerous ways marketers can use to segment the market. However, marketers must be wise enough to choose the right market segment. Below are some conditions marketers must ask if they want to achieve effective segmentation.


a. Measurable
Can the segment selected be measured in terms of its size and profitability? By answering this question, the marketer will know what marketing program is appropriate to target at this segment.


b. Reachable

Can the different individuals in this segment be reached and served effectively. It is important that the individuals in the segment are reachable if not the marketer will not be able to implement any marketing program to influence the behaviour of this segment.


c. Substantial

Is the targeted segment big enough to make a decent profit? If the segment is too small, it may not be profitable to the company.

d. Distinguishable

Is the market segment distinguishable? This will help the marketer to decide on how to plan the marketing strategy for distinguishable market. For instance, if teenage and adult women respond the same to the sale of cosmetics, then the market should not treat them as separate segment.

e. Actionable

Is there too many small segments identified for the marketing program? If the marketer were to divide the market into too many small segments, it will require more staff to develop different marketing plan for all these segments.


4.6.3 Advantages of Market Segmentation

a) Organizations get to know its customers better.
b) Provides guidelines for resource allocation.
c) It helps focus the strategy of the organization.
d) Designing responsive products to meet the needs of the marketplace.
e) Developing effective and cost-efficient promotional tactics and campaign


4.6.4 Limitation of Market Segmentation

a) More expensive than using a non-segmented approach.
b) Difficult to select the best base for segmenting a market.
c) Difficult to know how finely or broadly to segment.
d) Tendency to appeal to markets that are not vialble.



4.7 MARKET TARGETING
In the previous session, you learn on how the marketers divide the large market into a smaller segment called market segmentation. In this part, you will learn how the marketers select the segment(s) to enter which we called market targeting. You will also study how marketers evaluate the market segment(s) before selecting the right target segment(s) they wanted to cover.

4.7.1 Evaluate the Market Segment
To evaluate the market segment(s), marketers must look into three major factors as describe below.
a. Growth and Size of the Segment
The marketers must begin their effort in gathering information relevant to the recent development of the segment(s) characteristics such as size, growth level and estimated sales revenue. The selected segment(s) must have a reasonable size and potential growth.

b. Competitiveness of the Segment
Besides the size and growth, marketers must also consider other factor such as competitiveness of the segment(s) identified. For example, if the marketers have found out the selected segment(s) controlled by many big players, then they may choose not to enter or perhaps consider other segment(s).

c. Marketer’s Goal
Lastly, a segment that is evaluated must meet the company’s goal. Marketers must ensure that they have sufficient resources in terms of people skills and capital in order to secure the target segment that they wanted. This is important to assure that they can offer the best products and services to the target segment(s) better than their competitors.


4.7.2 Select Target Segment

Upon evaluation of each market segment(s), marketers must continue with the process of deciding which segment to serve and how many. To answer this, they have to look into various target marketing strategies explained here.

a. Non Differentiated Marketing
This non differentiated marketing strategy allows the company to target the large market as a whole (Figure 4.5). An example of company using this strategy is the Coca-cola Company selling only one type of bicarbonate drinks for all markets.

The advantage of this strategy is that it can create a huge potential market buyer through mass distribution. Nevertheless, marketers faced difficulty in creating a product that can satisfy all of these diversified groups. Today, marketers who try to market a standard product to mass markets found their approach is less effective and often lose out to companies which are more focused in terms of satisfying the niche consumer group.




Figure 4.5: Marketing mix for a whole segment

b. Differentiated Marketing
This strategy allows the company to decide on a few segments and create marketing program to cater for each of this different segment as shown in Figure 4.6. For example, Accor Hotel, a French company, operates under 12 trade names and manages several brands and types of hotels. Included in its brands are international luxury hotels (Sofitel), 3 star hotels (Novotel), 2 stars hotel (Ibis), limited-service hotels (Formula One and Motel 6), and extended-stay hotels aimed at the elderly (Hotelia). This segmentation has allowed Accor to become one of the world’s foremost hotel groups.

The benefit of this strategy is that it enables marketers to market their products more effectively i.e. marketers can modify the product to satisfy the different segment. Moreover, communication, promotion and advertisement can be adjusted to meet different segments. By offering different products with its separate marketing strategy, companies wish to achieve higher sales in each segment. Additionally, companies offer a variety range of products to accommodate different needs of the segments. The disadvantage is in high cost to implement separate marketing plan.





Figure 4.6: Different marketing mix for different segment
c. Focused Marketing
This strategy is especially appealing to companies with limited resources. Instead of going for a small share of a large market, the firm pursues a large share of one or a few small markets. There are many examples of concentrated marketing. Four seasons Hotels and Rosewood Hotels concentrate on the high-prices hotel room market.

Through concentrated marketing, hospitality companies achieve a strong market position in the segments that they serve, thanks to their greater knowledge of those segments’ needs. The company also enjoys many operative economies. If the segment is well chosen, the company can earn a high rate of return on investment.






Figure 4.7 : Marketing mix for larger market share segment(s)


d. Micro Marketing
This is a unique strategy as it allows customisation of products/services as well as its marketing strategies to cater specific requirements from individuals or segments. Micro marketing can be divided into two categories.

i. Local Marketing
Local marketing refers to marketing activities that has been adjusted to the taste of the local community. Besides modifying the product, marketer can also customise its other marketing mix like price, promotion and distribution method.

Local marketing has its advantages and disadvantages as well. As for the advantage, the local marketing can help marketers to understand the needs and behaviour of local residents and tailor an effective marketing program to serve them. The drawback of this approach is it can weaken the image of the product due to different messages to different localities.

ii. One-to-one Marketing
One-to-one marketing refers to marketing activities that has been modified to satisfy the taste of each unique individual. For example, tailor made package, whereby individual tourist custom-made the package to accomodate his/her requirement.

The advantage of one-to-one marketing is lies on its effectiveness on satisfying individual needs and preferences. However, it is difficult to implement in many industries as it involves high cost compared to its benefits. Nevertheless, modern technology especially with the existence of the internet has enabled the marketer to practice individual customer marketing at lower cost.

4.8 MARKET POSITIONING

After the company has selected one or a few target segment(s) to serve, the next step is to look at how to position its product in those segment(s). A product’s positioning in the market means the way consumers are influenced to perceive the product’s important features against competing product. In other words, the consumers can relate themselves strongly with the product better than competitors’ ones. For example, Mercedes is positioned as luxury and a reliable car.

There are basically four criteria a company can select when identifying its positioning strategy.
• Recognise own product’s competitive edges.
• Select the most appealing edges.
• Choose an overall positioning.
• Communicate the positioning.

4.8.1 Recognise Own Product’s Competitive Edges

First and foremost, a company must recognise its own products features that can offer some differentiation from its competing brands. A company can look into some key differentiators highlighted here as the way to win the consumers heart and soul greater than competitors do by:

• Physical Attribute Differentiation;
• Service Differentiation;
• Personnel Differentiation;
• Location Differentiation; and
• Image Differentiation

a. Physical Attribute Differentiation
Product can be differentiated on its characteristics such as quality, design, performance, durability, reliability and etc. For example, Porsche positioning its product feature as powerful performance sports car.

Restaurants such as Chez Panisse in Berkeley, Lidia’s in Kansas City, and chain Chipotle Mexican grill use natural/organic foods to differentiate themselves. These restaurants have developed a network of farmers to provide fresh products produced to the restaurant’s standards.

Differentiation that excites the consumer and offers something new can lead to excellent public relations opportunities, customer loyalty and greater profits. Unfortunately, many hotels, restaurants and airlines lack physical differentiation.

b. Service Differentiation
Besides product positioning, the company can also look at the services aspect that come along with the product such prompt service, free delivery, free installation, convenience and etc. For example hospitality companies differentiate themselves on service. Sheraton, Shangrila and other hotels provide an in-room check-in service. Red Lobster allows its customers to call from home and put their names on the waiting list, reducing the amount of the time that they have to wait at the restaurant. Some restaurant offer home delivery as a point of differentiation. By providing services that benefit its target market, a company can achieve differentiation.

c. Personnel Differentiation
We know that people are the key asset to an organisation. People differentiation requires the company to recruit the right people and provide training so that they are more customer sensitive, proactive to customers’ needs, personalise care for the customers and etc. Thus, Singapore Airlines enjoys an excellent reputation largely because of the grade of its flight attendants. Herb Kelleher of Southwest Airlines claimed that a competitor could replicate their low-cost system, but would find it more difficult to create the spirit of Southwest’s employees.

d. Location Differentiation
Location can provide a strong competitive advantage. For example, hotels located right off a freeway exit can enjoy advantages in percentage of occupancy over hotels a block away. Hospitality and travel firms should look for benefits created by their location, keeping in mind that this advantage is subject to chance. Factors such as a new highway bypass or criminal activity in a neighborhood can quickly turn an advantage into a problem.

e. I mage Differentiation
Hospitality companies need to work to establish images that differentiate them from competitors, a company or visitor destination image should convey a singular or distinctive message that communicates the product’s major benefits and positioning.


4.8.2 Select the Most Appealing Edge

From a list of competitive advantages identify, the company must decide the most attractive edge on which the positioning strategy will be crafted. Hopefully, this special edge will eventually becomes a unique selling point (USP) on which the company will recognise in the long run.


4.8.3 Choose an Overall Positioning

To select an overall positioning, the company should fully position its brand’s key values which is called brand value proposition. By choosing the right value proposition, it answers the question of why consumer must buy its product and not the competing products.


4.8.4 Communicate the Positioning

Communication can be done by utilising the marketing mix activities especially on the integrated marketing communication (IMC) tools to effectively convey the brand positioning strategy messages to the target market. The frequent adaptation of IMC to match the changing consumers’ needs and competitors’ strategies can help the company to deliver its desired positioning strategy.

In conclusion, building a strong product positioning strategy requires the company to also to implement it successfully. Company which is able to build its desired brand positioning must constantly check its position status time to time to keep pace with the changing consumers’ needs and competitors’ strategies.

INTRODUCTION TO TOURISM MARKETING MANAGEMENT

WHAT IS MARKETING MANAGEMENT?

Marketing management is the practical application of marketing techniques. It is the analysis, planning, implementation, and control of programs designed to create, build, and maintain mutually beneficial exchanges with target markets. The marketing manager has the task of influencing the level, timing, and composition of demand in way that will achieve organizational objectives.

(en.wikipedia.org/wiki/Marketing_management )

Marketing management is analysing market opportunities, researching and selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort.

(Les Lumsdon, 1999:30)

Marketing Management is the process of analyzing, planning, implementing, coordination and controlling programs involving the conception, pricing, promotion and distribution of products, services, and ideas designed to create and maintain beneficial exchanges with target markets for the purpose of achieving organizational objectives.

(Kotler, 1983:623-6)

Marketing Management is the analysis, planning, implementation and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

(Kotler, P.; Bowen, B.;Makens, J.; 1998)

WHAT IS SERVICE?
Any activity or benefit that party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a phsyical product.
(Kotler 1994: Swarbrooke, J. & Horner, S.; 1996)


BASIS MARKETING CONCEPT :
1. Requirement
2. Desirement
3. Demand
4. Product
5. Value
6. Satisfaction
7. Quality
8. Exchange
9. Transaction
10. Communication
11. Market


IS THE CHARACTERISTICS OF SERVICES ANY DIFFERENT TO THE PHYSICAL PRODUCTS?
Information scientists are often providing services (eg advice, or searches), rather than physically distinct products. Marketing a service is more difficult than marketing a tangible product.

They identify the following as being characteristic of services:

1. Intangibility

• Unlike products, services are mainly intangible by nature.
• Services are difficult to measure, pre-test or demonstrate.
• It is impossible for the consumer to touch, smell, feel or hear the service offering in the same way as they can test a product.
• It is difficult for clients to tell in advance what they will be getting.
• Promotion includes the management of evidence of a product through images, words, facts and figure, etc.
• Tourism marketers tend to ‘tangibilize’ the tourism offering in brochures and videos-visual displays of the real thing.

2. Perishability

• A service ‘dies’ if not consumed within a given time.
• Unused capacity cannot be stored for future use.
• For example, spare seats on one aeroplane cannot be transferred to the next flight, and query-free times at the reference desk cannot be saved up until there is a busy period.
• Hence rapid demand shifts, typically through last minute price-cutting, are necessary to reduce the lost revenue accruing from unused capacity.
• The management task emphasizes managing demand and capacity to a degree of fine tuning.
• For example: airlines offer standby fares to those willing to fill unexpected empty seats at short notice.

3. Heterogeneity (or variability)

• Services involve people, and people are all different.
• There is a strong possibility that the same enquiry would be answered slightly differently by different people (or even by the same person at different times).
• It is difficult for service marketers to standardize service provision given the close contact between staff and consumers.
• It is important to minimize the differences in performance (through training, standard-setting and quality assurance).
• Tourism marketers design processes to minimize differences in services encounters and provision between different outlets or between different shifts at a hotel for example.
• Provision of uniforms and of similar physical surroundings illustrates evidence of standardization.
  

4. Inseparability

• Services are produced and consumed simultaneously in interactions between the customer and service provider with no delay between the two.
• The services provision and consumption occur at the same time and both provider and consumer interact in the process of delivery. (E.g. during an online search, or a legal consultation).
• This obviously is why standardization of service is as difficult as consumer involvement is high.
• Marketer attempt to devise delivery systems which ease interaction and invest in campaigns to educate staff and consumers as to how to get the best from the interaction.
• For example: training in hotels emphasizes how staff can manage the interaction.

5. Temporary ownership

• The consumer does not take title of goods as in product marketing.
• The customer only owns a service temporarily such as in renting a holiday cottage, buying an aircraft seat, paying for time in a museum.
• They bring back memories and feelings from a holiday.

The marketer emphasizes pictorial reference and souvenirs to reinforce image of holiday experience.


MANAGEMENT STRATEGIES FOR SERVICES BUSINESS:

1) Tangibilizing the service product.

• Promotional material, employees’ appearance, and the service firms’ physical environment all help tangibilize service.
  

a) Trade dress

• Trade dress is the distinctive nature of a hospitality industry’s total visual image and overall appearance.
• To compete effectively, an entrepreneur, operator, or owner must design an effective trade dress while taking care not to imitate too closely that of a competitor.

b) Employee uniform and costumes

• Uniforms and costumes are common to the hospitality industry.
• These have a legitimate and useful role in differentiating one hospitality firm from another and for instilling pride in the employees.

c) Physical surroundings

• Physical surroundings should be designed to reinforce the product’s position in the customer’s mind. A firm’s communications should also reinforce their positioning.

d) ‘Greening’ of the hospitality industry

• The use of outside natural landscaping and inside use of light and plants have become a widely used and popular method of creating differentiation and tangibilizing the product.

2) Employees as part of the product

• In the hospitality industry, employees are a critical part of the product and marketing mix. The human resource and marketing department must work closely together.
• The manager must hire friendly and capable employees and formulate policies that support positive relations between employees and guests.
• Even minor details related to personnel policy can have a significant effect on the product’s quality.
• For example: ABZ fast food restaurant had a policy that all employees must be off the clock by 10:30 p.m. .To implement the policy, employees had to shut down the restaurant starting at 9:30 p.m., even though it advertised that it was open until 10:15 p.m.
• In the hospitality organization, there are two customers, the paying customers and the employees. The task of marketing to employees involves the effective training and motivation of customer-contact employees and supporting service personnel is called internal marketing.

3) Managing perceived risk

• Customer who buy hospitality products experience some anxiety because they cannot experience the product beforehand.
• A sales person must reduce client fear and gain the client’s confidence.
• The high risk that people perceive when purchasing hospitality products increases loyalty to companies that have provided them with a consistent product in the past.
• For example: Crown Plaza attracted their competitor’s loyal customers by using the following tactic: Guests were billed at the regular room rate.
• However, they were free to pay less if they felt the accommodations and service were not worth price. The promotion was highly successful , attracting a number of new guests, almost all of whom paid the full rate.
  

4) Managing capacity and demand

• Since services are perishable managing capacity and demand is a key function of hospitality marketing.
• First, service must adjust their operating systems to enable the business to operate at maximum capacity.
• Second, they must remember that their goal is to create satisfied customer.
• Research has shown that customer complaints increase when service firms operate above 80% of their capacity.
  

5) Managing consistency

• Consistency means that customers will receive he expected product without unwanted surprises.
• In the hotel industry, this means that wake-up call requested for 7:00 a.m. will occurred as planned and the coffee ordered for 3:00 p.m. meeting break will be ready and waiting.
• Consistency seems like a logical and simple task to accomplish, but in reality it is elusive. Today’s customers are knowledgeable and have come to expect and demand consistency.
  

FIVE UNIQUE APPROACHES IN HOSPITALITY AND TRAVEL MARKETING

1. Use of the more than 4 Ps

• There are 4Ps more in hospitality and travel industry ; People, Packaging, and Programming, Partnership.
• People in hospitality and travel is a people industry. It is a business of people (staff) providing services to people (customers), who share these services with other people (other customers).
• Packaging and Programming are two related techniques and significant for two reasons;
  (1) They are very customer oriented concepts.They satisfy a variety of customer needs, including the desire or convenience found in all-inclusive packages.
  (2) They help business cope with the problems of matching demand with supply or reducing unsold inventory.
• Partnership is cooperative marketing efforts among complementary hospitality and travel organizations.
  

2. Greater significance of word-of-mouth information

• The opprtunities for customers to sample services prior to purchasing them are limited in hospitality and travel industry.
• The rule is, “you have to buy to try.”
• This places a premium on word-of-mouth advertising . (information about a service experience passed from past o potential customers).
• Providing a consistent quality of service and associated facilities is a key ingredient in getting good word-of-mouth.
• Consistency of evidence ensures that customers leave with a consistent impression of an organization’s quality standards.
  

3. More use of emotional appeals in promoton

• Because of the intangible nature of services, customers tend to make more use of emotional appeals when they buy.
• This means that is often more effective to emphasize these appeals in promotional campaigns.
• In order to make resort, vacation package, or attraction appeal to customers, it must be given a distinctive personality.
• Companies must be given personalities with which cutomers can associate. For example your resort becomes the “Friendly resorts” and so on.
  
  

4. Greater difficulties with new-concept testing

• Services can be copied more easily than products.
• This makes it essential for hospitality and travel organizations to be ever-alert for newand innovative customer services.
• Leading corporations aware of this and are constantly test marketing new concepts. With the increasing dynamics of Malaysian society, it is unwise to stand still in our business.
  
  

5. Increased importance of relationships with complementary organizations

• There are three unique relationships among organizations in our industry that have a significant impact on the marketing of hospitality and tavel services.
• The three unique relationship is:
  i) The relationship between suppliers, carriers, the travel trade, and destination marketing organization.
  ii) The destination mix concepts relation concept with five components: attraction and events, facilities, infrastructure, transportation, and hospitality resources.
  iii) Visitor and residents both intermingle and share the same services and facilities.
  
  

EIGHT (8) SPECIFIC CHARACTERISTICS DIFFERENCES AFFECTING THE MARKETING OF HOSPITALITY AND TRAVEL SERVICES THAT NOT FOUND IN OTHER SERVICES.

1. Shorter exposure to services
2. More emotional buying appeals
3. Greater importance on managing evidence
4. Greater emphasis on stature and imagery
5. More variety and types of distribution channels
6. More dependence on complementary organizations
7. Easier copying of services
8. More emphasis on off-peak promotion



MARKETING CATEGORIES:

a) Traditional Marketing

• More focus on product exchange between exchange of goods.

b) Non Traditional Marketing Categories


1. Marketing Of Service

2. Marketing Of Place

3. Marketing Of People/ Person

4. Marketing Of Ideas

5. Marketing Of Organization



WHAT ARE THE MAJOR RECENT DEVELOPMENTS AFFECTING MARKETING MANAGEMENT? (Issues / Challenges In Marketing)

1. Non Profit-Oriented Marketing

2. Globalization

3. Development of Information Tecnology

4. Changes In The Global Economy

5. Demand For Social Responsibility

6. The New Marketing Lanscape

THE FUTURE OF MARKETING

• Rapid changes make yesterday’s techniques out-of-date
• All company departments are becoming involved in satisfying customers
• A focus on internal as well as external marketing


ISSUES TO DISCUSS

1. Many marketing activities contain both products and services. Provide an example.
2. The unique characteristics of services (intangibility, perishability , inseparability, and variability) have a major impact on how one prices, promotes, and distributes those services. First define the terms and then give an example for a movie theatre and an airline of the impact of these three "Ps".

POSITIONING APPROACH

Positioning is about how you differentiate your product or service in the mind of your prospect. Enjoy power point of Positioning Approach


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MARKETING PLAN

A marketing plan is a "road map" for you to use as you go about selling your business to potential clients. A marketing plan allows you to be organized, efficient, and effective in the process of attracting guests. It also allows you to evaluate your efforts in a quantitative way.

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