The Characteristics of an Effective Marketing Mix For Tour Operators free essay sample

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Price The Effective Pricing Techniques. 4 ? ? ? ? ? Promotion. Setting-up an Effective Promotion. Marketing Approaches to Attract New Clients (Survey) Trade Shows as an Effective Marketing Tool Examples from the Industry: ITB-Berlin and WTM-London. Trend of Online Selling of Packaged Travels: US Statistics. 5 ? People. Example from the Industry: TUI plc. 6 Packaging: Definition and Overview. 7 Physical Evidence: Definition and Overview. CONCULSION ? Steps to Make an Effective Marketing Mix. ? Summary of Effective Marketing Mix Characteristics. INTRODUCTION This essay attempts to identify the characteristics of effective marketing mix for tour operators by pointing several characteristics from the industry practice and through reviewing the literature of tourism marketing. Tracking market trends through governmental statistics and tourism industry reports seems to provide guidance for effective marketing practices that may result on increased number of customers thus allows better profit opportunities. Marketing mix is the business plan and practice on product, price, promotion, and place. The way of managing these four elements determine the marketing method used by organisations. Companies are supposed to select the right distribution channels in order to communicate the target customers, at the same time, it is essential to set the product or service price which suite its quality (Hooley, G. , Piercy, N. , Nicoulaud, B. 2008, 50). In inverse of tangible products, services have five characteristics which seem to make its marketing more complicated, intangibility, perishability, heterogeneity, inseparability and lack of ownership (Ferrell Hartline 2005). Inseparability means that consumption of the service happens at the time of delivering it. An example of such a characteristic is the service of providing a meal in a restaurant; this service is consumed at the time of providing it (Abell, 1978). Such an adjective should highlight the importance of service delivery. Services need to be delivered in the right place, at right moment and in right method (Berry, 1995). Additionally, such inseparability may explain the need of relationship marketing (buyerseller interaction) as stated by Aijo (1996). Pure service is intangible because it is not possible to see or touch it. This means that services are an effort, not objects. Due to intangibly, it seems to be difficult for travellers to evaluate a holiday before consuming it (Berry, 1980). However, some researchers like (Cowell, 1984) suggest that customers may get tangible evidence from purchased services like picture taken during holiday. The high degree of possibility of difference in performance of services is defined as heterogeneity. The characteristic requires more emphasize on consistency in quality levels of services as buyers would prefer to know the quality standards of services when they purchase them. However, the production of a service depends on both of the supplier skills and consumer expectations (Reichheld and Sasser, 1990). Perishability is the management of supply and demand as products gets spoiled if not consumed in particular time. It is the same case with services, for example, in case a vacant room in a hotel is not used for any reason in a particular night or a tour guide service which was not demanded although facilities and staff are available. Thus, perishability characteristic requires effective administration of part-time staff and suitable pricing for peak and off-peak period. As stated by Johnson (1995), multi skilled staff is those who prepared to perform different tasks. Such employees will have the ability to contribute in supply and demand management for their organisation field. The fourth characteristic of services is the lack of ownership. The purchase of a service does not result in ownership conversely of goods purchases. The Characteristics of an Effective Marketing Mix for Tour Operators Lumsdon (1997 p. 25) argues that the satisfactory transaction between suppliers and their customers is what organisation may establish in order to make profit and/or community gain. Tourism marketing is managerial process which aims basically to satisfy current and potential tourists better than competitors in the market (ibid). However, it seems to be that an effective marketing mix for tour operators should be harmonised and reflect the brand A Characteristic of effective marketing adopted by the company. The business strategy should mix for tour operators support the marketing mix and suit management practices and decisions. An example, tour operators may need to (Business strategy is select the best choices of distribution channels to linked with marketing communicate their current or potential customers, at the same time, the product package should meet the tourists mix) expectations from both price and quality sides. The First Marketing Mix: Product The first element of marketing mix is the Product. According to Kotler Armstrong (2010, 76), products are divided to two main types. The can be tangible product or a kind of service that is intangible. The appearance, colour or the usage method are important elements of the product. These elements make the essential differentiation needed to distinguish it among competitor’s offers. However, the product includes the collection of offered goods and services, their quality, warranty and after sales service (Lawton Weaver 2005). The product of tour operators mainly are a kind of intangible services. An example to tour operator’s product is TUI range of tourism and travel packages. TUI Travel plc is one of the largest tourism companies in the world. The main office of TUI is based in United Kingdom and listed on the London Stock Exchange (tuitravelplc. com). TUI is the largest tour operator in Europe and operates in operates in more than 180 countries and serves around 30 million travellers in 31 key source markets (tuitravelplc. com). The main products of TUI can be divided in to three sectors, TUI Travel, TUI Hotels Resorts and the cruise ship business. TUI Travel includes tour operating, online sales, high street outlets, airlines and incoming agencies (tui-group. com). Example of Effective Marketing Mix: Thomson (member of TUI Group) All inclusive, Family Holidays, Luxury Holidays, Adult Holidays, Villa Holidays, Weddings, Cruise, Twin Centres and Safaris (thomson. co. uk). PRODUCT A wide range of travel options and holidays which suits different segments and target groups. Different packages tailored differently by considering the geographic and demographic diversity 180 countries and 30 million travellers. The Second Marketing Mix: Place The place seems to be a key element in tourism marketing mix as tourists are travelling to places (destinations) to get or consume the product. The place is where products are founded, the actual market, the potential markets and competitors (Lawton Weaver 2005). However, the place is where the product is available to be sold (Kotler Armstrong 2010, 76). To ensure the availability of product or service, tour operators deal with different intermediaries and cooperate with many agencies and intermediaries. The mutual benefits encourage different organisations corporate temporarily or in long term period (Fyall Garrod, 2004). A good availability of the product may also mean friendly transaction during purchase and pleasant consumption of the product (as an example, safe journey or enjoyable stay in a hotel). Tour operators should consider the right location (place) of hotels, restaurants, attractions and facilities. The new technology brings additional channels of purchasing products. For example, internet may be used effectively as a sales point. It provides the information and the ability for the customer to buy the tourism service online. The features of internet make transactions faster and efficient. The cost seems to be reduced obviously to cut the labour cost and some commissions which may be charged from some intermediaries traditional channels. However, tour operators should not rely on internet as the only distribution channel, but need to sell through different places and various ways to ensure wide market for their business, the thing that may increase the profitability of their operations (Kotler all 1999, 483). Multi-channel selling points to be made available by tour operators for their current and potential customers. Online A Characteristic of effective marketing purchase options are essential as e-commerce seems to be mix for tour operators leading the world of trade in most of fields and industries. Place means more than the availability of product like the friendly environment during the purchase of products and (PLACE) good experience while consuming them. As it is an important element of marketing mix, there are some steps may be put in place in order to satisfy customer and guarantee a good experience for tourists. Tourism marketers focus on providing the best service for tourists when as soon they reach the place (Briggs, 2001). Providing key information about travel times, sites, directions, maps, attractions, supporting facilities, alternative travel routes and travel methods should be taken in consideration by tour operators as a comprehensive effective marketing. The Third Marketing Mix: Price Price is the paid cash for product and services and is an important element of the marketing mix. It is critical to manage pricing carefully as it has a direct influence in customer buying decisions. The situation whether people are sensitive for price changes or not is defined as price elasticity (Kotler Armstrong 2010, 76). According to Lawton Weaver (2005), affordability is a key factor when tourists decide to choose a destination for travel. It is notable to that rivals in any market should consider price competition techniques tactics and strategies such as special offers, promotions and discounts to stay in a competitive market (Kotler Armstrong 2010, 76). However, marketing mix for tour operators should be built on effective pricing techniques which consider operational costs and competition environment. Service prices consider both production cost and the A Characteristic of effective marketing competitive environment. Market prices should be reviewed mix for tour operators and evaluated periodically to suit the seasons, geographic and demographic differences of travellers. (PRICE) The Fourth Marketing Mix: Promotion Promotion is the way organisations seek communication with their target customers. It contains the message which companies wishes to deliver about the product, service or the company’s image itself. Lawton and Weaver (2005) suggest that the main objective of promotion is to raise the demand by delivering good image of a product to possible consumers. Tour operators have the choice of using a range of variety marketing tools to promote their services. These tools may include sales promotions, personal selling, internet marketing, printed advertisements, publicity and merchandising. Also, promotion may be activated through trade shows and public relation campaigns (Kotler Armstrong 2010, 76). Source: Travel Weeklys 2012 Travel Industry Survey – www. travelweekly. com Trade Shows: An Effective Marketing Tool and Networking Channel Example of Effective Promotional Channel: ITB Berlin NORTRMORP Trade Shows ‘The ITB Berlin Convention 2013 has once again proven to be a highlight among attendees at the world’s leading travel trade show ITB Berlin. 21,000 trade visitors attended over 200 presentations, panel discussions and workshops’ (Source: itbkongress. de) (Source: itb-kongress. de) Example of Effective Promotional Channel: WTM London NORTRMORP Five Thousands exhibitors representing 184 countries and regions and more than 800 exhibitors at the WTM. Travel industry deals for more Trade Shows than ? 1,859 million of will be generated as a result of WTM 2012 (Source: wtmlondon. com). Sales Promotion is a short term campaign which may increase sales through price discounts during temporary period (DelVecchio et al. 2006). Personal selling is a direct face to face approach. It is used by large organsiations which are able to cover additional costs of such individual marketing tool (Ferrell Hartline 2005). According to Boyle (2004), the qualities of company’s communication have a clear result on customer’s perception thus leads to change the degree of demand to their products and services. Unlike the personal selling, publicity is non-personal way of communication. It may be produced as kind of announcement, editorial or news-stories regarding the company’s offers and deals (Belch Belch, 2001). Internet marketing brings additional benefits for both tour operators and travellers. It is obvious that internet allows wider publicity, larger audience, twenty-four hours a day selling time. Online presence results on reducing costs, more effective transactions, easier market research, clearer messages and fewer intermediaries and middle-men (Heung 2003). Tour operators work in a dynamic environment which prices, places, offers and routes are changeable from time to time. Internet marketing allows instant modification in all of this information and facilitates updates on websites with low cost. According to (Tsurumoto 2007, Papatheodorou 2006), Internet marketing have more positive impacts then website promotions and public realtions, it helps companies to extend their business network and enable them for better competition. The figure above shows clearly the increase of online travel business in United States comparing with traditional tour operators. Such a trend makes no choice for tour operators but to cope with the technology changes and use Internet to maximise presence, increase customers and stay as a competitor in the market. The Fifth Marketing Mix: People Tour operators are surrounded by people who are the stakeholders of their business. The tour operator employees (personnel), tourists (customers) and local residents are the three main types identified as ‘people’ who tour operators should consider as an important element of marketing mix. According to Lawton Weaver (2005), the raise of database marketing helped a lot in incorporation the ‘people’ in the marketing mix. Example of Tour Operator Marketing-Mix: TUI Group of companies PEOPLE ? ? ? ? Employees training and development Investments. International Graduate Leadership Programme. Bi-annual talent reviews. Established ‘Centres of Excellence’ which enable best practice sharing across the Group. (Source: Annual Report Accounts – TUI Travel plc) The Sixth Marketing Mix: Packaging Bringing together two or more components of products or services into one single product is called packaging, and this is a common activity of tour operators business. The package product will combine in most cases accommodation, transportation, visits to places or flight tickets in some cases. The Seventh Marketing Mix: Physical evidence The intangibility nature of tourism services encourages tour operators to try some physical evidence which may support or influence buying decision of travellers. Such tangible evidence seems to enhance the confidence of customers when taking a decision for travel. Possible physical evidence can be a sort of business cards, memorial gifts, other accessories or travel brochures. CONCLUSION The characteristics of an effective marketing mix for tour operators are several and each tour operator may find its own strategies that suit their company’s size, goals and situation in the market. An effective Marketing mix for tour operators should be built on continues research and evaluation of services provided, daily practices, staff skills and customer perception, needs and wants. The 7 Ps of marketing mix needs to be put within a marketing plan process which includes Analysis, planning, implementation. In analysis stage, tour operators try to know more about their services, evaluate them, seek feedback and analyse current resources of the company. It is the stage of identifying their position in the market, weaknesses and strengths. The second stage is planning which tour operators may apply SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to identify what the company should do regarding marketing strategy. As tour operators have set the steps of best marketing plan for their business, they may to start the implementation stage and develop their own image, differentiation, marketing strategy and competition plans. A characteristic of an effective marketing mix for tour operators – for example is that business strategy supports the marketing mix. Business objectives is reflected by marketing plans, managerial practices and decisions are built on the marketing mix, and at the end supports the image of the company. It is worthy to mention that an effective marketing mix for a tour operator meets traveller’s needs, wants and expectations in price and quality sides, as the whole work steps made for this main objective. The effective marketing mix for tour operators should consider production costs and the competitive environment. The prices of rivals needs to be followed and company prices are to be reviewed from time to time. It is essential for tour operators to put in mind the demographic and geographic differences, thus, tour packages should be flexible for different ranges of purchase affordability. Trade Shows seems to be an effective promotional tool for tour operators. From the statistics, number of participants and visitors, it adds a great value for tour operator’s business network.