Marketing-001

Objectives

  • Upon completing Chapter 1, students should be able to:

    • Define tourism marketing and its functions.

    • Differentiate tourism products from consumer products.

    • Explain marketing as a management process.

    • Discuss the evolution of marketing and the integrated marketing approach.

Introduction to Marketing

  • Marketing has become crucial in business due to increased competition for market share.

  • Evolution of marketing:

    • Simple trade > Production orientation > Sales orientation.

    • Emphasis on building relationships with customers, especially with the rise of relationship and social media marketing.

  • The tourism industry:

    • Second to information technology and telecommunications, pivotal in job creation and economic strengthening.

    • Contributes 10.3% to the global GDP and creates 1 out of 10 jobs.

    • Increased from 25 million international tourists in 1950 to 1.4 billion in 2018.

    • Projected 1.8 billion international travelers by 2030.

Impact of Tourism in the Philippines

  • Despite setbacks, like Boracay's closure, the industry diversified its offerings, breaking records for foreign arrivals.

  • Tourism contributed 12.7% to the GDP (P2.2 trillion), creating 5.4 million jobs.

  • DOT's goal was 12 million foreign tourists with 6.5 million jobs by 2020, impacted by COVID-19.

  • Forecast for 6.2 million international travelers by 2024.

Characteristics of Tourism Products

  • Unique Characteristics (Intangible, Inseparable, Variable, Perishable, Seasonal, Substitutable):

    • Intangible: Cannot be touched or sampled pre-purchase. Rely on reviews and photos.

    • Inseparable: Experiences require physical presence. Consumers must be part of the experience at tourism locations.

    • Variable: Experiences can differ based on circumstances (time of day, service level, etc.).

    • Perishable: Services not consumed today cannot be sold later (e.g., empty hotel rooms).

    • Seasonal: Demand fluctuates based on seasonal behavioral patterns.

    • Substitutable: High competition leads to easy substitution between options.

Tourism as a High Involvement Product

  • Definition: High involvement means extensive thought prior to purchase; often expensive or complex.

  • Consumers often compare offerings before making a decision.

  • Marketing plays an essential role in high involvement purchases, clarifying benefits and reducing purchase risks.

Marketing Defined

  • Marketing is no longer just selling but a comprehensive activity involving all employees to ensure customer satisfaction.

  • Philip Kotler's Definitions:

    • Marketing as the process of creating value for customers and building relationships.

    • It involves understanding customer needs through exchanges of products and value.

  • Tourism products are generally wants, making them harder to sell during downturns.

Marketing as a Management Process

  • Marketing should involve the entire organization due to simultaneous provision and consumption of products:

    1. Marketing Information System: Gathers and analyzes customer and competitor info.

    2. Marketing Planning: Analyzes the market environment and objectives.

    3. Planning Tactical Campaigns: Implements realistic marketing strategies.

    4. Marketing Operations: Coordinates stakeholders and fine-tunes campaigns.

    5. Monitoring and Control: Evaluates performance and customer feedback.

Core Marketing Functions

  • Key functions include:

    • Marketing Information Management: Collecting customer insights.

    • Financing: Ensuring resource availability.

    • Pricing: Establishing competitive pricing levels.

    • Promotion: Strategies to introduce and sell products.

    • Product/Service Management: Continuous development to meet customer needs.

    • Distribution: Effective delivery of services.

    • Selling: Closing sales and encouraging repeat purchases.

Marketing Mix

  • Kotler (2010) emphasizes the importance of:

    • Product: What is offered to meet needs.

    • Price: Value assigned to the product.

    • Place: Distribution channels to reach consumers.

    • Promotion: Raising awareness and encouraging purchases.

  • Additional Ps (People, Packaging, Programming) will be discussed later.

Integrated Marketing Communications Approach

  • IMC maximizes communication impact and maintains consistent branding.

  • Growth Factors:

    • Increased technology use diminishing effectiveness of traditional advertising.

    • Shift in retail power dynamics affecting promotional strategies.

    • Enhanced database marketing allowing personalized campaigns.

Conclusion

  • IMC enables businesses to reach target markets effectively within budget, fostering competition among diverse players in the tourism industry.