r. cleverdon 8. marketing mix world tourism organization manila, 20 – 22 march 2006

R. Cleverdon

8. Marketing Mix

World Tourism Organization Manila, 20 – 22 March 2006

R. Cleverdon

SESSION COVERAGESESSION COVERAGE•Marketing mix – implementing the marketing strategy

•Market vs. destination approach

•PRODUCT:

•Cluster development

•Public:private partnerships in product development

•PROMOTION

•Promotional basket

•AIDA - awareness, interest, demand, action

•Personal & Non-personal communications

•Marketing’s role in responsible tourism

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

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SESSION COVERAGESESSION COVERAGE

•PRICING

•Perception & reality in value-for-money Market vs. destination approach

•PLACE

•Role of intermediaries

•Role of destination marketing organisations (DMOs)

•Role & impact of electronic technology


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MARKETING MIXMARKETING MIX

Marketing mix – four Ps - product, promotion, price, place

Analogy – driving a car – all components used in unison to be effective

Production > Consumer orientation – four Ps to four Cs:

Product > customer value

Promotion > communications

Price > cost

Place > convenience


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PRODUCTPRODUCT

Two approaches to strategic product planning:

Market approach

“What do we have that can be developed to appeal to tourists?”

Destination approach

“What are we prepared to develop that tourists might be interested in?”

Normal approach something between these extremes


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PRODUCTPRODUCT

Tourism is developed for the benefit of the people of the destination

The goal is to develop the right package of product offerings for the most attractive market segments – in terms of rewards for the destination.

Once the product mix & target markets/segments have been determined, then follow the destination positioning & branding, promotion, pricing and distribution to achieve the maximum benefits from the selected product:market mix


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TOURIST AREA LIFE CYCLETOURIST AREA LIFE CYCLEDestinations have tourist area life cycles – TALC – similar to product life cycles

Emergent>Growth>Stagnation>Decline

Time period of TALC depends on the product and marketing initiatives of the destination. Appropriate action when the TALC approaches the stagnation period can extend the growth phase.

Such actions can be product-based, market/segment-related, promotional or changed methods of distribution i.e. the marketing mix


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CLUSTER DEVELOPMENTCLUSTER DEVELOPMENTKey approach to product development – clusters

Grouping of attractions & facilities in a location, or

Grouping of like attractions in a broader destination eg golf courses

Clusters:

1. Provide economies of scale & scope to justify promoting the destination, and

2. Serve as the magnet to “draw” visitors to the area.

Critical advantage: allow members to cooperate & compete


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PUBLIC:PRIVATE PARTNERSHIP (PPP)PUBLIC:PRIVATE PARTNERSHIP (PPP)

Tourism is a private sector activity

BUT

Requires public sector guidance & direction

WHY?

1. Tourism takes place where other people live so impacts their living environment

2. Tourism has major infrastructure, education & training, regulatory & organisational needs

3. A destination identity has to be developed & communicated to the market


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PUBLIC-PRIVATE PARTNERSHIP (PPP)PUBLIC-PRIVATE PARTNERSHIP (PPP)PPP most suitable for:

* improving a destination’s attractiveness (A)

* marketing (M)

* productivity (P)

* management of its tourism system (M)

PPP recognises:

* increasing difficulty of differentiating destinations

* high cost of “reaching” the marketplace

Pooling resources gives good value-for-money and consistency of message


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PUBLIC-PRIVATE PARTNERSHIP (PPP)PUBLIC-PRIVATE PARTNERSHIP (PPP)Critical success factors (WTO 2000):

* balanced structure with clear roles

* shared leadership between public & private sectors with common goals, realistic expectations & benefits for all

parties

* flexible approach and genuine spirit of partnership

* understanding that tourism must be sustainable

* commitment to combination of long term strategic vision & shorter term goals and measurable initiatives

* periodic evaluation of each partner’s inputs

* good communication: partners & stakeholders


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PUBLIC-PRIVATE PARTNERSHIP (PPP)PUBLIC-PRIVATE PARTNERSHIP (PPP)

Key to successful PPP is to understand the motives & methods of the private sector – particularly of the foreign operators with which the destination does business – and to enlist the cooperation and commitment of the private sector:

- in pursuing practices that are mutually beneficial to both operator & destination – short term priorities – and

- in the realisation of strategies determined by the destination – a longer term goal


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PROMOTIONPROMOTIONPurchase cycle:

Pre-transactional>transactional>post-transactional

Expectations>experiences>memories

Communications campaign planning built around the AIDA model

Awareness

Interest

Demand

Action


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COMMUNICATIONS OBJECTIVESCOMMUNICATIONS OBJECTIVES

Three categories:

Informing – creating awareness

Persuading – generating interest>desire and on to purchase

Re-inforcing – building support/loyalty


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COMMUNICATIONS OBJECTIVESCOMMUNICATIONS OBJECTIVES

Which are these?

DISCOVER EAST TIMOR

ERITREA: THREE SEASONS IN TWO HOURS

INCREDIBLE INDIA

SMILE – YOU’RE IN THE CANARIES

VISIT BRITAIN

SO WHERE THE BLOODY HELL ARE YOU?

WOW! PHILIPPINES


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STIMULUS-RESPONSE MODELSTIMULUS-RESPONSE MODEL

Five stages:

Stimulus input – product offering

Communications channels – paid & non-paid

Buyer characteristics & decision process – filter all communications & other influences to determine needs/wants/goals

Motivation

Response – purchase choice


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MARKETING COMMUNICATIONSMARKETING COMMUNICATIONSPersonal:

- telephone/email

- website

- trade fairs & exhibitions

- familiarisation visit

Non-personal

- advertising

- public relations/publicity

- brochures & other printed material

- sponsorship


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TOURIST OFFICES’ FACILITATION ROLETOURIST OFFICES’ FACILITATION ROLE- research data for the private sector

- representative offices in marketplace

- facilitating participation at overseas trade shows

- organising fam trips

- preparing & distributing travel trade manuals

- joint marketing & promotional schemes with private sector

- support for new tourism products

- information (& reservations) system

- consumer assistance & protection

- intermediary between private sector & government


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THE CASE OF NORTHERN TERRITORIESTHE CASE OF NORTHERN TERRITORIES- FLOW OF RESEARCH INFORMATION & CLEAR

STRATEGY – AVAILABLE TO ALL

- ‘SHARE OUR STORY’ STRAP LINE AND SUITE OF MARKETING TOOLS FOR IDENTITY CREATION

- COOPERATIVE ADVERTISING: WITH OPERATORS IN NT, NATIONAL PARTNERS & FOR INTERNATIONAL

MARKETS

- FULL WEBSITE www.nttc.com.au

- CLOSE COLLABORATION WITH TOURISM AUSTRALIA


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MARKETING PARTNERSHIPSMARKETING PARTNERSHIPS

Not easy because of differing objectives & levels of commitment of relevant stakeholders

Difficulty of persuading:

- public sector to give up some of its control, and

- private sector to contribute more resources

Most successful example: Maison de la France

From start in 1987 now has 1,200 members with an annual budget of over Euros60mn, over half from the private sector

Growing role of consumer in forcing public:private partnerships?


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SUSTAINABLE & RESPONSIBLE MARKETING

SUSTAINABLE & RESPONSIBLE MARKETING

Respond to – and encourage – consumer demand for tourism related to natural & cultural resources of destination

Support operators who meet the development & operating criteria & quality standards laid down

Give marketing & promotional support to developers & operators of sustainable tourism products/services

Provide incentives for developers & operators of sustainable products/services to enable them to sell at prices acceptable to the market – consider the soft core/hard core model of ecotourism

Implement a code of ethics to make ir-responsible marketing unacceptable in the marketplace and among stakeholders


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SUSTAINABLE MOTIVATIONSUSTAINABLE MOTIVATION

Tourism at the forefront in that emotional factors (including perceived value-for-money) play a central role in decision-making

Psychographic research identifying consumers most likely to be sensitive to the sustainable or responsible tourism message so they can be “ring-fenced” for product offerings & marketing communications eg TIA/National Geographic Geotourism survey

Conversion achieved through persuasion & stimulation rather than hectoring or haranguing


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PROMOTING TOURISM INVESTMENTPROMOTING TOURISM INVESTMENT

Tourism development characterised by high capital costs with only a gradual build up of income so profitability only achieved in 3 – 5 years

Role on incentives to encourage appropriate developments

Incentives: specific & regularly reviewed


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PRICINGPRICING

Accelerator or brake

Targets: those who could otherwise not afford to travel to the destination, or who consider standard prices too high

Tactical pricing in tourism:

- seasonality

- inflexibility/rigidity of supply

Need to attract only those who would otherwise not visit and segments that are compatible with existing ones – “other tourists part of destination experience”


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PLACE - DISTRIBUTIONPLACE - DISTRIBUTIONEspecially vital in travel & tourism:

- growing size of businesses

- several units within a group – owned or strategic alliances

- growth of long haul travel – weak consumer knowledge

- reaching & attracting first time customers

- providing convenience for repeat customers

- growing competition where excess destination capacity

- need to sell capacity ahead of production for cash flow

- need to maximise promotion & tactical pricing through modern distribution channels – yield management


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PLACE - DISTRIBUTIONPLACE - DISTRIBUTION

Five main choices:

1. Principal>Customer (on producer’s premises) Producer=Retailer

2. Principal>Customer (in customer’s home) - reservation system

3. Principal>Owned retail outlet>Customer (on retailer’s premises) – vertically integrated

4. Principal>Independent retail outlet>Customer (on retailer’s premises) – agent commission system

5. Principal>Tour operator>Independent retail outlet>Customer (on retailer’s premises) – bulk sale to tour operator

TOUR OPERATOR HYBRID – WHOLESALER/PRINCIPAL


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PLACE - DISTRIBUTIONPLACE - DISTRIBUTION

Reservations systems accessed through electronic technology can be developed by principals, tour operators or travel agents so these five systems can still apply

BUT

the balance of power can be manipulated in favour of the destination principal through easier direct communication with prospective customers

Need for high quality & well-connected destination websites that enable searches from initial enquiry through to direct booking to be done through a single web hit with appropriate links


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DESTINATION PLAYERS IN DISTRIBUTION

DESTINATION PLAYERS IN DISTRIBUTION1. Tourist office – nothing to sell!

2. Facilities/attractions – remote from main marketplace

3. National airline but half traffic comes on foreign carriers

4. Source market tour operators – key providers bur foreign-owned with little commitment to specific destinations

5. Source market travel agents – major influence but all owned in source countries – little concern which destination chosen


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DESTINATION MARKET REPRESENTATION

DESTINATION MARKET REPRESENTATION 1. No representation

2. Individual public relations(PR)/information officer

3. PR company appointed

4. Marketing representation company (MRC) appointed

5. Both PR & Marketing Representation companies appointed

6. Destination marketing organisation (DMO) appointed combining PR & MR functions

7. Own office established

ISSUES: communications with prospective travellers; ensuring no conflict of interest; national vs provincial; budgets


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ELECTRONIC TECHNOLOGY ELECTRONIC TECHNOLOGY

Electronic reservations systems now dominant

One-in-five Britons buy their holidays on-line –and a far higher proportion carry out web research

Advantages - destination “parent” website a vital entry point for interested tourists to research attractions and what’s on offer through themed linked pages to “activities”, “places within the destination”, “accommodation” etc

Linked access to individual suppliers’ websites enable tourist to make bookings


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ELECTRONIC TECHNOLOGY ELECTRONIC TECHNOLOGY

Problem still exists for small destination supplier

How do I identify my prospective customer? Or, rather, how does my prospective customer identify my operation?

Needle in a haystack - luck if he/she continues the web search down through the pages as small producers not on initial pages

.travel domain now established www.tralliance.info

Enable a better match between buyers & sellers through more precise results to would-be traveller’s on-line enquiry

Role in relationship/ one-to-one marketing


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TRAVEL DIRECTORYTRAVEL DIRECTORY

Information retrieval from an integrated, classified data set

Directory controlled vocabulary of 1,800 travel/tourism terms

.travel Directory process

Where do you want to go? DESTINATION

What do you want to do? ACTIVITIES

What is your lifestyle? LIFESTYLE

How do you want to get there? TRANSPORTATION

How would you like to stay? ACCOMMODATION

What services do you need? TRAVEL SERVICES


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LOCAL LEVEL ACTION LOCAL LEVEL ACTION

1. Money from the centre is tight

2. Need for tightly focussed niche marketing on a highly targeted basis

3. Counterbalance to the international tourism distribution system’s push for standardisation in destination tourism products

4. Exploiting growing consumer trends

Local level action: only way the differentiation vital for long term survival as distinct & distinctive destinations can be achieved


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Time out !!

r. cleverdon 8. marketing mix world tourism organization manila, 20 – 22 march 2006

Documents

destination approach

cleverdon product tourism

ps product

selected product

place slide

product development

marketing initiatives

strategic product planning