2007 international tour operator management part ii
TRANSCRIPT
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2007
International Tour Operator Management
Part II
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Market Research and customer behaviour
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Forecasting models in tourism• Forecasting is very necessary in tourism
– Rational decision cannot be taken with forecast about trends– Risk of management mistakes is high in tourism because
• Tourism services cannot be stored • Service consumption is part of production, happening at same time• Customer satisfaction depends to a large part on external factors• For many areas high investment costs (infrastructure, hotels)
• Different criteria for measuring tourism– Number of visitors/guests, number of tourists (UNWTO)– Number of visitor groups– Number of overnight stays – Level of expenditure per person per day– Value added share of tourism (WTTC)– Market share
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Forecasting methods in tourism
• Difficulties– New industry, lack of long-term timelines and historic data– Standardisation of tourism statistics just beginning internationally (Satellite
accounts), not existing for domestic tourism – Demand volatile, easily influenced by external factors and events– Under-academication of tourism industry, „Rule of thumb“– Lack of methodical knowledge in tourism industry
• Forms of forecasting– Qualitative und quantitative Forecasting methods– Short / long term methods– Examples: Survey, Scenarios, Delphi
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Market research and analysis• Market research
– Systematic process of acquiring, processing and analysing quantitative and qualitative data to assist the decision making process.
• Different forms of market research– Facts, Images, perceptions, motivations– Analysis of situation at given moment or ongoing market scan to
understand developments and trends of market
• Major tasks of market research – Definition of (sub-)markets– Analysis of (sub-)markets– Demand research– Competition research
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Market research forms• Primary research – Field research
– Own research (company or Institute)• Surveys• Observation• Experiment• Reporting
• Secundary research – Desk research– Internal sources– External sources
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German tourism market research institutes I• B.A.T. Freizeit-Forschungsinstitut GmbH, Hamburg • Consultant Aviation & Tourism, Stelle• Creatours Destination, Freizeit, Tourismus, Dresden• Dallmeier & Partner, Korschenbroich • Deutscher Reisemonitor – DRM, c/o IPK International GmbH,
München• Deutsches Touristik-Institut eV, DTI, Stockdorf/München• dwif – Consulting GmbH, Berlin/München• dwif – Deutsches Wirtschaftswissenschaftliche Institut für
Fremdenverkehr eV an der Universität München, München • Europäisches Tourismus Institut – ETI, Trier• Europäischer Reisemonitor c/o European Travel Intelligence
Center, Luxemburg • FT – Freizeit und Touristik GmbH, Grafschaft
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• FUR Forschungsgemeinschaft Urlaub und Reisen eV, Kiel• Inspektour GmbH, Heide • Ipsos GmbH, Mölln• ITF Research GmbH, Bremerhaven • Mobility & Touristcope, (DB, LH, T.O., Autoindustrie), Frankfurt• Project M Marketing Research GmbH, Lüneburg• Reppel + Partner GmbH, Karslruhe-Durlach• Studiengemeinschaft für Tourismus SfT, Ammerland/Bayern • TourismusKompetenz, München• Ulysses – Web-Tourismus, München• World-Travel Monitor Ltd. Malta, c/o IPK International GmbH,
München
German tourism market research institutes II
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Tourism Fairs in Germany and abroadFair Visitors Exhibitors
2004 2005 2004 2005
ITB Berlin 141.139 142.351 10.023 10.409
CBR München 139.000 130.000 1.143 1.237
CMT Stuttgart 190.476 176.930 1.400 1.400
Messe Essen 110.600 103.200 858 751
Reisen Hamburg 103.000 100.000 1.060 1.086
Freizeit+Garten Nürnberg
178.746 143.249 702 624
WTM London 2006: 46.945 2006: 5.602
CITM Shanghai 2006: 3.100
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Examples of Market research methods– Surveys: oral, written, by telephone, online
• Structured/unstructured, standardised• Open/half open/closed surveys
– Experiment• Test markets
– Observation• Customer behaviour• Frequencies, Spatial movement analysis, test purchases
• Trend analysis – Extrapolation of past developments into the future: dangerous
(„Predictions are dangerous, especially if they concern the future“ – Nils Bohrs) especially for fast developing activity like tourism
– Example: Predictions of situation 2007 made in 1987 (cold war), or 1997 (no internet, no budget airlines)
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Customer behaviour• Influences
• Cultural– Cultural background– Subculture– Social background
• Social– Peer groups– Family– Role and Status– Perception of tourism
• Personal– Age, current biographical
situation– Job– Economic situation– Lifestyle– Self-perception– Motivation– Values – Travel Biography
• Increasing segmentation• number of milieus
increasing• disappearance of clear
social roles in post-modern society
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Market segmentation• http://www.sinus-sociovision.de/
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Analysis of customer behaviour
• Seven questions, seven answers
Who is the market? Customers
What is the product? Product (physical/intentional)
Why is it bought? Purchase objectives
Who influences the purchasing process?
Stakeholders
How is the purchase organized?
Purchasing process
When does the purchase happen?
Purchase triggers
Where does the purchase happen?
Point of Sale
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Competitor analysis and benchmarking
• Ongoing analysis of competitors behaviour– Direct: Observation of products, offers, marketing activities of
competitors
– Indirect: Intelligence about competitors plans and strategies („Know your enemy better than he knows himself“ – Sun Zi)
• Benchmarking– Learning from the best in the branch (opposite „best practice“ –
can also be from other branches)
– Identifying benchmark competitor for specific task, analysis of own shortcomings, implementation, feedback (TQM)
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Definition of Market for specific product
– Markets are mentally constructed– Markets are dynamic– Customers decide on market structure
• Classical Segmentation– Geographical, demographical and psychographical
• Postmodern Segmentierung – Lifestyle, activities, milieus
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Major trends in customer behaviour• 1. Changing customer profile
• 2. Shifting consumption pattern
• 3. Intensifying competition / continuing consolidation
• 4. Growing segmentation
• 5. Escalating concern for safety / security
• 6. Increasing value orientation
• 7. Increasing influence of the internet
• 8. Several short trips instead of one long holiday, short-time decision
• 9. Less customers loyalty for Tour Operator or destination
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Influences on customers behaviour in tourismDevelopment Observable changes Results for tourism behaviour
Demographical development
• Greying society• more small and single
households
Income and wealth • More high-income people• More wealthy people
Loss of set values • Disappearance of class and strata specific behaviour
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Influences on customers behaviour in tourismDevelopment Observable changes Results for tourism behaviour
Time perception • More free time yet feeling of necessity to save time
• Multitasking
Health and environmental interest
• Interest in healthiness and environmental impact of products
Level of education and travel experience
• Increasing education levels and travel experience
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Tourism motivation• Some classical theories:• Maslow‘s pyramid of needs• Fleeing from bad situation at home• Search for authenticity• Recreation, regeneration• Self-actualization• Contrast to home• Structuring of time after loss of religious time frame• Travelling for health reasons• Travelling for unrestricted enactment of consumption
(sex, alcohol, servility) • Travelling as own goal (the way is the goal: hiking,
cruise)
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Tourists typologies
• Typologies according to– Activities– Preferred surroundings– Spatial behaviour– Level of integration into local community– Forms of information gathering– Opposition to normal life– Frequency of travel– Position in biographical development of travelling– Etc. etc.
– Problem: multioptional behaviour within source markets and within individual tourist increasing, wish for higher intensity
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Tourists and lifestyle typologies - Examples• Opaschowski: Tourists focussing on
– Integration– Prestige– Experience– Culture– Entertainment– Quality– Economy
• Austria 2000 – Euro-Lifestyle– The careful Recreationist– The classical Culture tourist– The demanding Experiencer– The young Enjoyer– The young Family
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Marketing for Tour operators
DiscussionMajor problems:
Brand-adequate Quality: Dependance on external service providers
Increasing transparency of offers from competitors / direct sales
Dependance on destination marketing - Necessitiy of cooperation
…
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Product Management
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Product Management StepsMarket research, analysis, product and marketing planning
Economical and technical planning
Sourcing
Product Management
Publication
PR, Ads, Distribution
Actual trip
After trip/program feedback, controllingCustomer feedback management
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Product Management policies Product Management • Programme policies
• Brand policies
• Product development and adaptation
• Customer Service
Dimensions of Product ManagementStrategic Product Management Long term development
Tactical Product Management Product development and adaption
Operative Product Management Product realization
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Types of packages tours
• Full package tour
• Part package tour
• Individual package tour (moduls)• All Inclusive Tour• Dynamic Packaging • Specific tours (f.i. business, incentive, cruise, pilgrime, event
tour)
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Product development• What is the customer really looking for?
– Example „Space“ tourism– Generic product– Expected product– Extended product– Potential product
• Product includes– Competence to offer product solutions– Bundle of services necessary– Service claims and promises– Risk taking– Package price– Preparation, Standardisation, Quality control
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Product adaptation
• What are different source market customers really looking for?
– Product adaptation according to customers expectations and behaviour– Different stories for same product for different customers– Spatial differentation for different customer groups at destination
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Parts of product
– Technical • Material, Construction
– Aesthetic • Form, Colour, Design, Packaging
– Symbolic• Brand, Image
– Main features• Aim/Goal of product purchase
– Additional features • Information, Customer service
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Dynamic Packaging • Definition
– Choosing, packaging and booking for different moduls of a package tour in realtime with a package price
• Dynamic Packaging disappears in mass market– With increase of package tourists standardised pre-packed tours
with standard length and programme easiert to organise and to sell
• Dynamic Packaging reappears in post-industrial consumer market– Wish for multi-purpose, multi-dimensional travel. Increase in travel
experience by customers, IT advantages
• Dynamic Packaging changes T.O. business– Need to have stand-alone components ready in realtime– Muddling of border travel agency – tour operator
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Pricing
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Price in the product life cycle
Premium Pricing
Skimming
Discount Pricing
Cost plus Pricing
Time
Price
Penetration
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Price limits
Price variation of offer
Upper price limit Too expensive, outside of price
acceptance
Price acceptance
Acceptable increase
Optimum price limit
Planned Budget
Lower price limit
Acceptable decrease
Too cheap, outside of price acceptance
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Distribution
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Distribution• Ways of distribution
– Direct distribution– indirect distribution
• Forms of sales organisations – Own / others: broker, consolidators, traders – Within the industry (cooperation, franchise, travel agencies) /
outside the industry (retail, department stores, gas station)
• Instruments of distribution– Agency agreement, commission, direct/indirect sales support,
training of staff
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Direct and indirect Distribution
DIRECT• Lower costs• Better customer relation• Higher brand awareness• Less reliance on distribution partners • But: conflict with travel agencies and other distribution
partners – (examples German Railway, Colorline)
INDIRECT• Own channels (travel agencies, media groups, franchise)• Other channels (general, selective or exclusive)
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Travel agencies as distribution channel for tour operators
• „Ein Reisebüro/Reisevermittler ist im Verhältnis zum Reiseveranstalter Handelsvertreter im Sinne der §§ 84 ff HGB und für den Kunden / Reisenden auf der Basis eines entgeltlichen (Provision) Geschäftsbesorgungsvertrages § 675 BGB mit Werkvertragscharakter §§ 631 ff BGB tätig.“
• Vertragsgegenstand zwischen Reisebüro und Kunde ist die– Vermittlung einer einzelnen Reiseleistung eines fremden
Leistungsträgers oder– Vermittlung einer Pauschalreise eines fremden Reiseveranstalters.
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Function of the travel agency• Tour operators point of view:
– Matchmaking between customer and T.O. – Commission is only paid if business is generated, part of variable cost
structure– Provision of comprehensive distribution network without onw investment– Known POS – Often good location (1A) (physical / internet)– Existence of loyal regular customers, good experiences of customers with
travel agency crossing over to recommended T.O. product
• Customers point of view:– Easy to reach, personal service– Physical information (catalogues)– Consultation, answers to „silly“ questions– Face-to-face communication, also for complaints– Filters out unsuitable, unrealiable offers
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Communication policy
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Communication policy
• Goal: Positively Influencing
– Own staff– Potential customers– Actual customers– Public opinion– Politicians, institutions
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Advertisement – above the line
• Openly influencing public opinion to
– Keep customers– Get new customers– Produce positive environment for own products– Directly adress customers
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Sales support
• Supporting distribution channels:– Monetary activities:
Commission on sales (basic, special, volume-based, target-based)Incentives for individual sellersRefinancing of PR/advertisement activitiesPayment of credit card costs etc.
– Non-monetary activities:Product informationTrainingsdiscounted travelsdecoration materialsHotline etc.
• Supporting direct distribution:– Catalogues, discounts, loyalty bonusses etc.
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Public Relations work - below the line• Indirectly or Covertly influencing public opinion by
– Press releases– Events– Sponsoring– Customers forum– House magazines – Website– Participation in fairs etc.– Product placement– Guerilla marketing– Covert websites support– Cross selling etc.
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Quality Management
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Quality management
• Quality ≠ Expensive
• Quality: Hardware, Surroundings, Software
• Quality: Ongoing process
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TQM – Total Quality Management
• Customer point of view: How important is the service offered and how was the quality of the service perceived?
• Producers point of view: How good was the quality management?
• TQM as a never-ending upward spiral (Kaizen)
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Ecology management • Based on: • Laws and regulations• Customer demand• Staff demand
• In Germany: • DeHoGa Eco Criteria• Government subsidies from
– European Recovery Program (ERP) – Deutsche Ausgleichsbank (DtA) – Kreditanstalt für Wiederaufbau (KfW)– Bundesländer Subsidies
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Ecology management• Labels:
• Many Ecology labels worldwide on different levels
• Example Bavaria: http://www.stmugv.bayern.de/umwelt/wirtschaft/siegel/index.htm
• Other examples:• Blaue Flagge, Grüner Koffer• Top label in Germany: Viabono
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• Wöhler, K., Schertler, W., (1993): Touristisches Umweltmanagement, Limburgerhof.
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Abbrevations• AG Aktiengesellschaft• AGB Allgemeine Geschäftsbedingungen• AGBG Allgemeine Geschäftsbedingungen Gesetz • BCG Boston Consulting Group • BGB Bürgerliche Gesetzbuch• BAT British American Tobacco • BSP Billing and Settlement Plan • BTM Business Travel Management • CA Canada/USA• CSI Customer Satisfaction Index • CRS Computer Reservation System • DB Deutsche Bahn • DCR Differenz zwischen Business Class und dem
Rechnungsbetrag• DER Deutsches Reisebüro
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• DMC Destination Management Company• DMO Destination Marketing Organisation• ETIX Electronic Ticket • FTI Frosch Touristik International • FuE Forschung und Entwicklung • GDS Global Distribution System• GF Geschäftführer• GfK Gesellschaft für Konsumforschung• GSA/GV General Sales Agent/General-Vertretung • HGB Handelsgesetzbuch • HLX Hapag Lloyd Express• InfV Informations-Verordnung
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• IPK Institut für Planungs-Kybernetik • ITS Internationaler Touristik Service• KfW Kreditanstalt für Wiederaufbau • LCA/LBA Low-Cost-Airlines/Low-Budget-Airlines• LCC Lufthansa City-Center/Low Cost Carrier• LG Landgericht • LTI Luft Transport und Immobilien • LTS Luft Transport und Service• LTU Luft Transport Unternehmen (Luft Transport
Union)• LVG Luftverkehrsgesellschaft• MIS Management- oder Marketing-Informations-
System • NSA Norwegische Schifffahrts-Agentur • NUR Neckermann & Touristik • NVAG Neckermann-Versand AG• PangVO Preis-Angaben-Verordnung
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• RB Reisebüro• RM Reisemittler, Revenue Management• R/N Room/Night• T.O. Reiseveranstalter• RV Reiseveranstaltung• RZ Risiko-Zuschlag • TC Thomas Cook• TN Teilnehmer • TQ3 Total Quality 3• TQM Total Quality Management • TUC TUI Urlaubs Center • PAF Pay-as-you-fly• PD Preisdifferenzierung • PM Product-Manager • POS Point of Sale
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• PR Public Relation • PTA Prepaid Ticket Advice (Rufpassage)• QM Qualitätsmanagement• TUI Touristik Union International• TVG Touristische Vertriebs-Gesellschaft• UWG Unlauterer Wettbewerbsgesetz • VF Verkaufsförderung • WKZ Werbekosten-Zuschüsse• YM Yield Management (Revenue Management)• 3BZ Dreibettzimmer• 4BZ Vierbettzimmer