MARKETING THE INDUSTRY SEGMENTS

4.01 Explain the use of the marketing mix and

promotional mix in the travel, tourism, and recreation

industry.

Marketing: The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

Marketing mix: The combination of the four basic marketing strategies; also known as the 4 P’s of marketing

•Product

•Place

•Price

•Promotion

Packaging: Combining related and complementary services into a single-price offering

*As one of the product considerations, packaging serves an important role in every area of the hospitality and tourism industry.

Package Considerations

•Include a core attraction or “demand generator”

•Provide value to the customer

•Provide consistent quality among all the elements

•Plan well

•Cover all the details

•Make a profit

Benefits of packages for the customer•“User friendly”

Meet specific customer needs

Create benefits that might be unavailable or overlooked when making individual arrangements

•Greater convenience

•Affordability

•Ability to budget for trip

•Consistent quality of services free from surprises

•Satisfaction for those seeking special interest excursions

Travel Packages

•Fly-drive

•Family vacation

•Fly-rail

•Lodging and meal

•Entertainment packages

Corporate Participants in the Packaging Process

•Lodging providers

•Restaurants

•Car rental agencies

•Travel agents

•Airlines

•Buses

•Attractions

Benefits of Packaging to Businesses

•Increased customer volumes, thus more prosperity

•Increased business during off-peak periods

•Improved focus on meeting the needs of specific target markets

•Attraction of new target markets

•More accurate forecasting

•Improved efficiency

•Complementary services

•Repeat customers

•Increased length of stay and capital spent

•Increased customer satisfaction

Promotional mix: The combination of advertising, sales promotion, personal selling, merchandising, public relations, and publicity used by hospitality and travel businesses for a particular time period

•Inform

•Persuade

•Remind

Advertising: Any PAID form of NONPERSONAL communication through different media by an identified sponsor•Newspapers

•Magazines

•Radio

•Television

•Outdoor advertising

•Direct mail

•Interactive media

Factors to consider when choosing the appropriate advertising media

•Target market

•Costs

•Reach

•Frequency

•Waste

•Lead time

•Clutter

•Total advertising budget

Factors to consider when choosing the appropriate advertising media

•Reach: The number of potential customers exposed to an advertisement at least once

•Frequency: The number of times potential customers are exposed to a given advertisement

•Waste: The number of customers exposed to an advertisement who are not part of the company’s target market

•Lead time: The period of time between the design of an advertisement and its actual appearance in the selected medium

Advantages of Advertising

•Low cost per contact

•Reaches customers where salespeople cannot go

•Allows for creative production

•The message may be repeated several times

                                                            

Disadvantages of Advertising

•Cannot close a sale

•Messages can be ignored

•High waste factor

•Does not provide quick feedback

Cooperative advertising: A partnership between two or more companies to share the cost of an an advertisement

•Allows businesses to share the cost of an advertisement

•Reduces control over the message

•Increases lead-time for planning the ad

Personal selling: Promotion that involves direct contact between a salesperson and a customer

•Outside the place of business (field calls/outside sales)

•On the phone

•Inside the place of business

Advantages of Personal Selling•Ability to close sales

•Capability of holding customer’s attention

•Allows two-way communication

•Provides direct feedback

•Focuses on individual needs

•Develops relationships

•Makes immediate action possible

Disadvantages of Personal Selling

•High cost per contact

•Customer defensiveness or resistance

Sales promotion: Approaches other than advertising, personal selling, public relations, and publicity that provide customers with a short-term inducement to make an immediate purchase

•Coupons

•Samples

•Games

Advantages of Sales Promotion

•Ability to generate immediate sales

•Can be circulated to a large group of people

•Provides quick feedback because of the time limit associated with the incentive

•Flexible timing

Disadvantages of Sales Promotion

•Benefits limited by the constraints of the time frame

•Does not build long-term loyalty for the company

Recognition programs: A sales promotion technique that rewards customers as an incentive or inducement intended to ensure their loyalty and to generate repeat business •Frequent-flyer

programs

•Frequent-guest programs

Merchandising: Point-of-purchase advertising that includes all of the materials used in the business to encourage sales

•Posters

•Tent cards

•Displays

•Demonstrations

•Menus

Advantages and Disadvantages of

Merchandising

•Advantages and disadvantages similar to sales promotion

•Promotes impulse purchases

•Supports advertising campaigns

Public relations: All of the activities that an organization uses to develop or sustain positive relationships with individuals or other companies

•Company newsletters

•Press releases

•Media kits

•Feature stories

•Ceremonies

Publicity: A specific kind of public relations that involves communicating positive and newsworthy information about a business through the media at no cost to the business

Advantages of Publicity

•No cost

•Considered reliable by customers since the company does not pay for or control the message

•Implied approval and support

•Respected and seen as having stature coming from national television and other media sources

•Helps maintain a public presence

Disadvantages of Publicity

•Difficult to generate with any regularity

•Lacks company control over the message

•May also include negative influences