chapter ten
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Chapter Ten. Understanding Tourism Markets. Importance of Travel and Tourism. United Nations World Tourism Organization (UNWTO) defines tourism as the activities of people traveling to and from places outside their usual environment for not more than one consecutive year - PowerPoint PPT PresentationTRANSCRIPT
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Importance of Travel and Tourism United Nations World Tourism
Organization (UNWTO) defines tourism as the activities of people traveling to and from places outside their usual environment for not more than one consecutive year
Affects the economy of every country, city and community in the world
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Importance of Travel and Tourism Tangible and intangible components are
all interrelated and sensitive to environmental trends including:
The tourist The tourist-generating region Transportation systems Tourist destinations Hospitality services The tourism industry
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Importance of Travel and Tourism The multiplier effect
The impact the tourist dollar has on a destination’s economy in that wage earners working in hospitality and tourism also spend earnings in the local community
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Exhibit 10-1; The Multiplier Effect
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Importance of Travel and Tourism Growth since World War II and 1960 Fastest growing destinations have been
Asia, the Pacific and Middle East Competition among destinations is fierce Travelers wants and needs constantly
change Tourism is susceptible to changes in the
macro environment
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Local Residents’ Attitudes Towards Tourism Success and sustainability of tourism
depends on the attitudes of local residents towards tourism
Hospitality of local residents is important Will support tourism when the expected
benefits exceed the costs Residents of depressed economies are
likely to support tourism for its perceived benefits
Ultimately there must be a fit between what the market wants and the destination offers
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
National Tourism Organizations (NTOs) Governments promote their
countries with NTOs via: Publicity campaigns Research Plans for destinations
US is the only major country without a federally funded NTO
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
National Tourism Organizations (NTOs) Traditionally NTOs marketing goals
have been to create and communicate overall appealing destinations images and messages to the target market
Today marketing programs are more collaborative with the private sector
NTOs are focused mainly on marketing the county as a whole
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
National Tourism Organizations (NTOs) NTOs also facilitate:
Collecting analyzing and decimating market research data
Establishing a representation in the markets of origin
Participating in trade shows Organizing and coordinating familiarization
trips Supporting the private sector in the
production and distribution of literature
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
How Hotels and Tourist Destinations Work Together
A critical issue for the hotel is how to maintain it’s identity and not get lost in the promotion of the destination
Interview with Leanne Pletcher of the Hilton Waikoloa on Hawaii
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Destination Marketing Strategy Before strategy must come an
assessment of opportunities and threats Examine the major forces in the macro
environment Identify factors that that are likely to
influence the business and future business Should include a brief review of major forces
like market acceptance, social perceptions, and consumer trends
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Five Forces Model
Risk of Entry byPotential Competitors
Bargaining PowerOf Buyers
Rivalry AmongEstablished Firms
Threat ofSubstitute Products
Bargaining Power ofSuppliers
EcologicalEnvironment
EconomicEnvironment
PoliticalEnvironment
SocioculturalEnvironment
RegulatoryEnvironment
TechnologicalEnvironment
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Forces in the Macro Environment Economic
environment International
tourism is largely dependent on the economic conditions in areas where the prospective visitors live
Technological environment Technology has
helped foster the rapid growth of travel and tourism in the last 20 years
Advent of computer technology has assisted the travel industry
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Forces in the Macro Environment Political/Legal Environment
Government interest largely due to the economic significance of tourism
Restrictions or changes in international travel policy can greatly affect tourism
September 11, 2001 Air transportation increasing international flights in
the 1980’s In 2004 the Chinese government expanded its list
of approved countries its residents are able to visit
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Forces in the Macro Environment Ecological
environment Impact of travel on a
destination’s ecology has brought the issue to the forefront for both travelers and host communities
Measures such as limiting tour operators or increasing visitors’ fees may help
Sociocultural environment
Involves the beliefs, values, attitudes, opinions, and lifestyles
Demographic shifts of age in the population
Shrinking population due to lower fertility rates
Rising education levels Increasing economic role
of women
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Forces In the Macro Environment There is rivalry among destinations Must have sound understanding of the
market to compete Destinations are mutually dependent in
that competitive moves will be addressed also by competitors in the same market
Identifying competition is crucial as it provides a basis for competitive analysis
Context and situation influence a traveler’s consideration set
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Segmenting the Tourist Market
Destinations cannot be everything to every traveler
Identify groups Travelers who have common interests and
share common values Travelers that may be interested in the
kinds of attractions, services and facilities that the destination offers
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Segmenting the Tourist Market Understand the destinations
capabilities and resources and use them to attract tourist segments
Services the destination offers What customers make purchases and
why Meeting customer needs Core competencies
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Segmenting the Tourist Market How to describe markets:
Demographics The travelers’ wants and preferences and the
frequency of their purchases which are associated with demographic characteristics
Psychographics Describes psychographic information, such as
lifestyle or personality attributes, which is usually subjective
Behavior Categorize based on knowledge, attitude, use,
motivation, or response to an attraction, facility, or service
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Communicating with the Tourist Market Importance of image promotion
Every communication related to a destination helps the potential tourist form and image
Negative images can also have a profound effect on tourism
Countries spend millions of dollars to create positive images
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Communicating with the Tourist Market Choosing a destination: College
student traveling to Cancun as an example
Image, actual travel, recollection Experiences live up to expectations
satisfaction Decision to return Word-of-mouth
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Travelers’ Information Search Behavior Part of the decision making process Understanding can aid marketers to
develop effective communication Consumers prior knowledge:
Expertise Familiarity
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Expertise As familiarity increases, so does expertise Product related experiences influence expertise
Advertising exposure Interactions with sales people Purchase Product usage Exposure to brand name
Need understanding of consumer’s external information source utilization
Travelers’ involvement is likely to have a positive effect
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Familiarity Familiarity has been determined to
be an important factor in consumer decision making
Gained from ongoing information search
Guidebooks or books Advertising and newspaper write-ups TV and radio advertisements
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Familiarity Learning is likely to influence
consumers’ decisions Intentional
Learning through active cognitive processing of information
Likely to increase traveler’s expertise and familiarity
Incidental Learning that occurs unintentionally Likely to increase only a traveler’s familiarity
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Familiarity Importance of perceived cost
Make external searches inexpensive and time efficient
Clearly identify the unique selling points of the destination to differentiate the destination and make it easier for potential travelers to understand
Word of mouth communication