CHAPTER 1 - MARKETING

MARKETING

has evolved from simple trade, to

production orientation, to sales orientation.

MARKETING

has become a buzzword in the world of business when the competition to gain market share began among businesses. ________ has evolved from simple trade, to production orientation, to sales orientation. When businesses realized that production was increasing, they began competing for recognition within the market. The customer has become king and building relationships with them has become the heart of any successful business enterprise. With the rise of relationship marketing and social media marketing, the rules of the game have changed.

TOURISM

is one of the leading industries of the fortune. Next to information technology and telecommunications, tourism contributes largely to the generation of jobs and the strengthening of economies. Much attention has been given to how tourism can continually grow. Just like any other business, marketing plays an integral role in its continuing growth.

TOURISM

has become one of the world’s largest and fastest-growing industries. Many

new destinations are emerging apart from traditional favorites-Europe and North America.

economic gains

These new destinations are hopeful for the _________ ______ that tourism can bring, which include an increase in trade, infrastructure, and job generation. In figures, tourism contributes 10.3% to the Global Domestic Product (GDP), provides one out of 10 jobs, and generates exports amounting to $1.7 trillion (WTTC 2019). Despite a few setbacks, tourism has displayed uninterrupted growth from 25 million international tourists in 1950 to 1.4 billion in 2018. It was projected that a total of 1.8 billion visitors will be traveling internationally by 2030 (UNWTO 2019). The success of any business in the travel and hospitality industry is highly dependent on its marketing efforts.

TOURISM

In the Philippines, despite the six-month closure of Boracay, the country’s flagship destination, the industry was able to diversify and offer other destinations to cater to a wider array of tourists. Moreover, it was able to break its 2018 record for foreign visitor arrivals of 7.1 million. ___________ has contributed 12.7% to the country’s GDP (P2.2 trillion). Locally, it has created 5.4 million jobs. Visitor exports contributed 10.7% to total exports and generated P599.2 billion (PSA 2019).

2019, DOMESTIC TOURISM, TOURISM PROMOTIONS BOARD,

As of ____, the tourism industry’s contribution to the country’s GDP has surpassed the Department of Tourism (DOT) 10% GDP contribution target for 2022 under the National Tourism Development Plan (NTDP) 2016-2022; however the Philippines still aims to have 12 million foreign tourists and create 6.5 million jobs by 2020 (DOT 2016). The Covid-19 pandemic was an understandable setback for the NTDP’s goal of 9.2 million foreign visitors in 2020 (Oxford Business Group 2021). In the first seven months of 2020, tourist arrivals dropped by 73%, from 4.9 million to 1.3 million.

“The year 2021 will be about local tourism, claims Bernadette Romulo Puyat (Tabios 2020), rooting for ________ ________ as a way to recover while across borders travel restrictions are still being implemented. The DOT will be reviewing its NTDP targets, as the revenue generated from tourism sharply declined and as the ban on inbound international travel remains. However, it was forecasted that international travel would bounce back in the medium term with an estimate of 6.2 million in 2024. Because of this, the ________ ________ __________ of the Philippines is compelled to creatively explore ways to keep the connection with tourists, developing strategic marketing programs for the medium and long terms, aiming to align with the national tourism product development thrusts.

TOURIST EXPERIENCE.

Marketing for tourism covers several levels, from the tourism destination as the product itself, down to the specific tourism products and services that a tourist should avail of to complete the __________ ____________. These products include transportation (airline, cruise ship, bus, etc.), accommodation (hotel, inn, apartelles, bed and breakfast), food and beverage (restaurants, catering, bars), attractions (amusement parks, museums, zoos, marine sanctuaries, etc.) amenities, and souvenir shops among others. What is tourism actually selling then? Tourism is not a single product. It is a combination of products and services which results in a holistic experience for the traveler.

TOURISM PRODUCT

Unlike consumer products that can be availed off the shelf, tourism products have

unique characteristics that make their marketing and promotions quite challenging. The _________ _________ is intangible, inseparable, variable, perishable, seasonal, and substitutable.

INTANGIBLE

Tourism products cannot be touched, smelled, tasted, felt, nor heard prior to purchase. They cannot be subjected to prior to scrutiny. One cannot examine nor test them before purchase, unlike consumer products.

Consumers rely on photographs of the place, comments or reviews from those who have visited the place or availed of the services, and promises from the company itself.

WORD OF MOUTH

The beauty of this scene can only be appreciated when one is actually at the destination. Looking at the photograph will never equate to the experience of having one’s hair blown by the wind, feeling the sun’s penetrating heat while basking in it, and hearing the roar of a motorboat. Therefore, _______ __ ________ is a highly effective means of promoting tourist destination.

INSEPARABLE

The tourism product cannot be separated from the consumer. When tourists avail of products and services, they must personally go to where the products are. Since what it is being sold is the experience, the product and the consumer cannot be in two different places; they must be in the same place.

A tourist who avails of airline tickets need to be physically present inside the airplane

to avail of the product. Products cannot be delivered to where the consumer is. It is the consumer who goes to where the product is to avail of the product.

Activities within the destination can only be enjoyed when one is a part of it.

Spectators have a different experience compared to actual participants in the tourist activity.

VARIABLE

The tourism experience is likely to be different depending on when the product is availed, who one is with, and how the service providers deliver the service at the time of consumption. One may have gone to the same restaurant several times and have a different dining experience each time.

This is the primary reason why standardization of operations is crucial in the tourism

industry. Chain and franchise establishments make it a point to standardize the way they provide products and services to address the variability component of the industry.

PERISHABLE

The tourism product is one of the most highly ________ product. ____________, are used in this context, refers to not being able to forward inventory to the next day. It does not refer to food being spoiled and thrown away. Products become ________ when they can no longer be consumed today even when no one consumed them the day before, unlike consumer products such as a pen. If the pen was not sold today, it can still be stored in a warehouse to be available for sale the next day.

PERISHABLE

Airline and restaurant seats, hotel rooms, and function rooms are ________ products. A seat or a room that is not sold today cannot be sold some other day. For instance, a hotel with 100 rooms that was half full yesterday will only again have 100 rooms today. The 50 rooms that were unoccupied the day before cannot be sold the following day; the hotel fails to earn from unsold rooms. A hotel will always have the same number of rooms for sale on any given day.

REVENUE MANAGEMENT

addresses the perishability factor of the tourism product. With

the proper tools for forecasting price and occupancy, yield can be maximized.

SEASONAL

does not only refer to the seasons of the year or the weather conditions. It

also refers to behavioral patterns of the travel market. The _________ ________ of the tourism product hinders it from maximizing its profits all year round. Hence, intensified marketing during the lean season will help increase demand for the product. This is also the reason most tourism products, such as airlines and resorts, have different rates throughout the year. Such differences in rates help manage capacity and yield to maximize profitability.

SUBSTITUTABLE, unique selling proposition

Competition in the tourism industry is intensifying. With new destinations emerging and competing in the global marketplace, one destination can easily be substituted for another destination. When a new restaurant opens, the old favorites are relegated as second choices. It is quite a challenge to establish loyalty among clients since there is a wide range of product offerings to choose from. With the many choices available, the tourism product is highly ________. However, identifying one’s competitive advantage and a _________ ___________ ___________ may help make a tourism product less substitutable.

Marketing plays an important role in the purchase of tourism products. Because of the aforementioned characteristics of the tourism product, a marketing strategy needs to be developed to make the product competitive in a highly commercialized marketplace.

DECISION MAKING

in the purchase of tourism products is considered to be of high involvement. Tourism products of high involvement mean that there is a greater degree of thought or study involved prior to the purchase. Expensive, complex, and unrepeatable are characteristics of high involvement products. Purchase of expensive products is likely to go through a long and detailed process of canvassing and comparing of brands, suppliers, and product features. If the product commands a high price worth more than one’s monthly salary, one will surely make detailed comparisons before finalizing any purchase. Travel products, home appliances, and real estate properties fall under this attribute.

COMPLEX PRODUCT, JARGON

Consumers may find ________ ___________ difficult to purchase. The difficulty may arise from the need to understand the features or details of the product. Travel packages can be considered as complex mainly due to the variety of products and services available and the “_____” (technical words) used in explaining some of these products. The same holds true for highly technical products such as electronic gadgets and computers.

UNREPEATABLE NATURE

of travel makes it a “once-in-a-lifetime” purchase. With the novelty-seeking behavior of most tourists and the high cost of travel, travel purchases may not be repeated or may be infrequent. Hence, more careful scrutiny is exercised prior to purchase. Aside from the travel products, special events such as weddings and debuts fall under this characteristics.

Unlike low involvement products, which are inexpensive, simple, and familiar, more detailed scrutiny of alternatives, longer time for deliberation, and high expectations for satisfaction happen when consumers avail of tourism products and services that are of high involvement.

HIGH INVOLVEMENT PRODUCTS

Marketing plays a vital role in the purchase of ____ __________ __________. It leads consumers to think about the product and its features as well as to assure them its quality. Since tourism products and services are high involvement products, customers also demand a high level of satisfaction.

1.1 High Involvement Products versus Low Involvement Products,

1.2 High Involvement Low Involvement

1.3 Expensive Inexpensive

1.4 Complex Simple

1.5 Unrepeatable Familiar

TOURISM MARKETING

In the past, marketing was associated with only advertising and selling. However,

these two activities are now part of a more complex set of strategic activities that comprise marketing. There has been a misconception that marketing is a task that is performed solely by account managers and marketing officers. A highly successful establishment makes marketing a concern not only of guest contact positions but of every employee of the establishment. CUSTOMER SATISFACTION is at the center of marketing.

marketing

It is easy to persuade a customer to make the initial purchase but making the customer return for more is dependent on his/her satisfaction from his/her initial experience. Hence, ________ becomes not just the concern of the marketing officer but the concern of everyone in the company to ensure that the customer’s needs are met; he/she leaves the establishment happy, satisfied, and willing to come back; and better yet, that he/she will be willing to tell others how extremely satisfied he/she is with the quality of the product or service the establishment provided.

marketing,

Philip Kotler et al. (2017) define _________ as “the process by which the companies create value for customers and build strong relationships in order to capture value from the customers in return.” In the earlier definition, Kotler (2002) defines ___________ as a social process where individuals and groups obtain what they need and want through creating and exchanging products and value with others.

When a product is a need (necessity), it is easy to sell since customers do not have any choice but to buy it.

Marketing a want, however, it is challenging. A want is something one can live without. Unlike a need, which is a necessity, a want is a luxury wherein its purchase can be denied, deferred, or delayed. Tourism products fall into the want category: therefore, making it more challenging to convince consumers to make a purchase, especially during an economic downturn or recession.

marketing

art and science of “finding, retaining, and growing profitable customers.” This definition paves the way for concepts such as customer-centered marketing and relationship marketing, which have become emerging trends in the study of marketing. Finding, retaining, and growing profitable customers involve strategic planning to ensure customer satisfaction and building customer

loyalty. Repeat visits and referrals are the ultimate goals of ensuring that customers become extremely satisfied with one’s products and services. Gone are the days when establishments are happy with a one-time sale. Nowadays, establishments need to establish loyal customers who will speak higly of their products and services. Research shows that it is more expensive to create new customers than it is to retain the old ones. Finally, growing the business with regular customers will contribute greatly to one’s bottom line. Building strong relationships with one’s regular customers can be done through consistently superior customer service.

marketing

The American Marketing Association (2013) approved a new definition: __________ is

the activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, an society at large.

tourism and hospitality marketing

used to be defined in generic terms with all the

other products. However, with tourism and hospitality becoming a vast industry, it can no

longer be taught using generic marketing concepts.

tourism and hospitality marketing

because of its unique characteristics of intangibility, inseparability, variability, perishability,

seasonability, and substitutability, is distinct in how it is applied. The marketing of tourism

products such as destinations and attractions and hospitality products such as food and

accommodations has become extremely complex. In summary, tourism marketing can be

defined as a management process where destinations, product and services are designed,

promoted, and distributed to meet the needs and wants of prospective tourists.

lumsdon 1997

According to _____ _________ Since the provision and consumption of tourism products and services usually occur

simultaneously, the marketing orientation should involve the entire organization. The

marketing management process involves the following key processes

marketing information system

With the advent of technology, the provision for this enables the organization to compile an updated set of information about the customers, competitors, and the organization’s capability and effectiveness.

marketing planning

This involves an analysis of the marketing environment in relation

to the potentials of one’s business. It also involves the setting up of objectives and an

evaluation of the milestones that the company has reached. The creation of marketing

strategies will help increase business by obtaining the best fit between the company’s

resources and its target market position.

planning tactical campaigns

This step ensures that practical and realistic tactical

campaigns are conducted in support of the comprehensive marketing strategy.

marketing operations

. This process involves the challenging part of implementing the

planned strategic and tactical campaigns by coordinating with all stakeholders, finetuning

the marketing mix as they unfold, and ensuring that activities are conducted as planned.

monitoring and control

This involves the ongoing process of evaluating sales data and

financial performance versus marketing activities conducted. It also includes the

handling of customer feedback and complaints (if any) and coordination with what the

staff has to say about the marketing campaigns. Finally, it includes being aware of

what the competitors are doing.

marketing information management

– entails gathering information about customers to

better serve their needs and improve decision-making.

financing

– involves planning to ensure that resources are available to maintain and

improve the business.

pricing

ensures that the value and cost of goods and services offered to customers will

be at the level that the customers are willing to pay.

promotion

prepares the various promotional strategies that will enable the products to

be introduced and sold to the customers.

product/service management

involves designing, developing, maintaining,

improving, and acquiring products and services to meet the needs of the customers.

distribution

involves bringing the products and services to the customers in the best

way possible.

selling

is the ultimate measure of marketing success. Strategies on following up the

sale, closing the sale, and making a repeat sale are crucial tasks of marketing.

kotler 2010

says that marketing facilitates the exchange process and the development of

relationships by carefully examining the needs and wants of consumers, developing a product

or service that satisfies these needs, offering it at a certain price, making it available through

a particular place or channel of distribution, developing a program of promotion to create

awareness and interest.

product or service

is what the company is offering to satisfy a cunsomer’s wants

or need.

price

is the value that the seller puts on the product or service. This includes the

cost of the product and the profit the seller wishes to make. is also the amount a

customer has to pay in exchange for the product or service.

place

is the means by which

the product or service reaches the consumer.

promotion

is the strategic plan by which

consumers are informed about the product or service and its value. also

encourage customers to purchase the product or service.

marketing mix

A well-planned and executed

_________ ____will enable marketers to move their products or services successfully to the

consumers. In Morison (2019), there are several other Ps to represent relevant functions of

tourism marketing such as People, Packaging, and Programming. For brevity, we shall

discuss the four basic Ps throughout the book.

INTEGRATED MARKETING COMMUNICATION (IMC)

approach was born from the need of businesses to enhance

the promotion of their products.It is the process of using all forms of

promotion to achieve maximum communications impact while maintaining a consistent image for the products or services.

____ means combining different promotional tools and channels so they work together to reach the target market effectively.

_______ grew because technology changed consumer behavior, traditional media became more fragmented, businesses needed better use of limited budgets, customer databases became more useful, retailers gained power, and digital tools made it possible to combine different promotional methods to reach the right target market effectively.

tourism

_________ is one of the world’s leading industries.

economic gains

The Philippines substantial ________ ___________from tourism, which the government wants to gets further maximize.

tourism

is not a single product; it is a combination of products and services tha results in a holistic experience for a traveler.

unique characteristics

Tourism products and services have _______ ___________: intangible, inseparable,

variable, perishable, seasonal, and substitutable.

high involvement product

is a _________ ______ __________ because it is expensive, complex, and has an

unrepeatable nature.

marketing functions

The seven core _________ ___________ are marketing information management, financing, pricing, promotion, product/service management, distribution, and selling.

marketing management process

involves information systems, planning tactical

campaigns, operations, and monitoring and control.

integrated marketing communications (imc)

approach is the process of using

different forms of promotions (not just advertising) to achieve maximum impact while

maintaining a consistent image for the product or service.