Marketing Environment

The next step in developing a marketing plan is to assess the impact of environmental factors on present and future markets. Changes in these factors can create marketing opportunities as well as problems. The marketing environment consists of task environment and broad environment. The task environment (which is also known as micro environment or internal environment) includes producers, distributor, dealers and target customers. The broad environment (which is also known as macro environment or external environment) consists of six components: demographic, economic, natural, technological, political- legal and social- cultural environment, which are shown in the following figure :

A. Demographic and Lifestyle Trends : The most important macro economic factor that marketers need to notice is the population, because people will make the market. Marketers should keenly monitor the size and growth of population, age distribution, economic condition, educational levels and regional characteristics etc. Based on our demographic characteristics and life style, our choice for tour varies. For example, kids may prefer to go to Disneyland or water kingdom or Accoland, youth may prefer to go for mountain airing or some adventurous tour, aged people may prefer to go to pilgrimage like Kamakhya, madan kamdev, or other ritual places. An assessment of these trends is important to understand how they will likely affect our business or community. Some of the important trends are as follows : (1) population growth and movement; (2) rural community growth compared to metropolitan areas; (3) number of adult women employed outside the home; (4) the number of households is growing, especially non family and single parent households, but family size is decreasing;

(5) the impact of two wage earner households on real family income; (6) the number of retired persons with the financial ability to travel; (7) better health to an older age; and (8) continued aging of the population (we are becoming a middle aged society). Different types of demographic factors are discussed below :

Age: People often seek different features or benefits depending upon their age. For example, kids will prefer to go to Accoland or Disneyland, teenager will prefer adventure tourism and aged people will prefer pilgrimage tourism. Gender: Much research suggests that men and women process information differently, their choice and preferences were also different. So based on this characteristics also we can do demographic segmentation. Economic Condition: Overall economic conditions can have significant impacts on recreation and tourism markets. Businesses and communities should monitor and assess the likely impact of factors such as unemployment rates, real family income, and rate of inflation, credit availability, terms and interest rates. Consideration should also be given to the prices of complementary products, such as lodging, gasoline and recreation equipment.

Proper implementation of tourism strategy can help in reducing unemployment and improving economic condition of the country. B. Laws and Government Actions : As a complex industry, tourism is significantly affected both positively and negatively by laws and by actions of governmental agencies. For instance, rulings on such things as liability issues or decisions regarding building and health codes may change or possibly prevent the construction of a proposed facility. If a public facility changes the prices of its services, this could affect the service offerings of associated private businesses. These actions may have both positive and negative effects on the marketing efforts of the business and community. To avoid wasting valuable resources it is important that R/T businesses, agencies, and communities continually monitor and evaluate governmental actions. C. Technology : Technological developments are increasing rapidly. New production technologies and materials offer recreation and tourism businesses ways to reduce costs and improve the quality of their products/services. Advances in telecommunications have and will continue to create new promotional opportunities. Technological innovations, in relation to jobs and the home, have resulted in increased leisure time for many people. for example, Caves in Khasi Hills. Mawsmai Cave : The main entry to these cave lies very near to Mawsmai village. The entry consists of a fairly narrow vertical opening. Once inside the cave, one fonds large, amphitheatre-like hall with endless galleys connected to similar halls of varying size and shape. Myriads of stalagmites and

stalactites can be seen all over the caves. The caves are dark inside. Earlier it was difficult for the tourists to see the inner side of the cave. But now, because of the technological advancement, electric lights are available inside the cave and tourists can really enjoy the inside view. D. Competition : Businesses and communities must identify and analyze existing and potential competitors. The objective of the analysis is to determine the strengths and weaknesses of the competitions marketing strategies. The analysis should include the competitions: (1) product/service features and quality; (2) location relative to different geographic markets; (3) promotional themes and messages; (4) prices; and (5) type of customer they are attracting.

ACTIVITY

1. Visit any nearby tourist place and study the market environment there.

Service marketing of airline, hotel and resort

The most striking aspect of service is that, they are essentially intangible. American Marketing Association has defined service as activities, benefits, or satisfaction that are offered for sale, or provided in connection with the sale of goods. There are many forces which contributed for the growth of service sector. The older explanation attributes services growth to factors like the increasing levels of income, activity and demographic shifts. The new explanation for the growth of services is national and international specialization. The travel and tourism industry has been through exceptional upheaval and change. The travel business is now emerging as a more streamlined, efficient and focused industry. Passenger bookings have rebounded in both leisure travel and business travel. Many of the biggest, most successful firms are becoming extremely global in nature. Some of the new low cost airline industry is also emerging in the market, like Kingfisher Airline, Spice Jet, Indigo, Air Deccan etc. On the hotel side, massive management firms, development companies and real estate investment trusts are gaining in scale and influence, while occupancy levels and room prices are rising. New hotels are being built at a rapid clip, and luxury hotels are enjoying high occupancy rates. In Assam luxurious three star and four star hotels are being built up in different places. Some of the famous hotels in Guwahati are- Brahmaputra Ashok, Rajmahal, Taj Group of hotels. Hotel Ambarish etc. The booking of travel online is perhaps the most successful niche of all of the worlds e-commerce efforts. Consumers use the Internet to become better informed and to seek bargains. Online sites like Expedia, Priceline and Orbitz steer millions of consumers toward specific airlines and hotels in a manner that lowers prices and improves satisfaction among consumers.

CHECK YOUR PROGRESS

1. State true or false for the following statements (i) Task environment is external environment. (T/F) (ii)Political environment is external environment. (T/F) (iii) Services are tangible in character. (T/F)

Airline Service

Growth of tourism market to a large extent depends on the service of air transport system. An airline provides air transport services for passengers or freight, generally with a recognized operating certificate or license. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit. Airlines vary from a single airplane carrying mail or cargo, through full-service international airlines operating many hundreds of airplanes. Airline services can be categorized as being intercontinental, intra-continental, or domestic and may be operated as scheduled services or charters. The mission of an Airline Company is generally the dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride and company spirit. They want to provide safe and secure services to their customers. Many countries have national airlines that the government owns and operates. Fully private airlines are subject to a great deal of government regulation for economic, political, and safety concerns. For instance, the government often intervenes to halt airline labour actions in order to protect the free flow of people, communications, and goods between different regions without compromising safety. An airlines overall strategic plan should study the total market and then segment it into those sections which it feels potentially the most profitable to enter. To get this section, they need to spend heavy amount on advertising. Although many countries continue to operate state-owned airlines, many large airlines today are privately owned and are therefore governed by microeconomic principles in order to maximize shareholder profit. a. Ticket revenue : Airlines assign prices to their services in an attempt to maximize profitability. The pricing of airline tickets has become increasingly complicated over the years and is now largely determined by computerized yield management systems. Most airlines use differentiated pricing, a form of price discrimination, in order to sell air services at varying prices simultaneously to different segments. Factors influencing the price include the days remaining until departure, the booked load factor, the forecast of total demand by price point, competitive pricing in force, and variations by day of week of departure and by time of day. Carriers often accomplish this by dividing each cabin of the aircraft (first, business and economy) into a number of travel classes for pricing purposes. The intense nature of airfare pricing has led to the term fare war to describe efforts by airlines to undercut other airlines on competitive routes. Through computers, new airfares can be published quickly and efficiently to the airlines sales channels. For this purpose the airlines use the Airline Tariff Publishing Company (ATPCO), who distribute latest fares for more than 500 airlines to Computer Reservation Systems across the world.

b. Operating costs : Full-service airlines have a high level of fixed and operating costs in order to establish and maintain air services: labor, fuel, airplanes, engines, spares and parts, IT services and networks, airport equipment, airport handling services, sales distribution, catering, training, aviation insurance and other costs. Thus all but a small percentage of the income from ticket sales is paid out to a wide variety of external providers or internal cost centers. Ticket prices include a number of fees, taxes, and surcharges they have little or no control over, and these are passed through to various providers. Airlines are also responsible for enforcing government regulations. If airlines carry passengers without proper documentation on an international flight, they are responsible for returning them back to the originating country. c. Assets and financing : Airline financing is quite complex, since airlines are highly leveraged operations. Not only must they purchase (or lease) new airliner bodies and engines regularly, they must make major long-term fleet decisions with the goal of meeting the demands of their markets while producing a fleet that is relatively economical to operate and maintain. d. Airline personnel : The various types of airline personnel include :

Flight crews, responsible for the operation of the aircraft. Flight crew members include : Pilots Flight attendants in-flight security personnel on some airlines Ground Crew, who is responsible for operations at airports. Reservations agents, usually at facilities outside the airport.

Airlines follow a corporate structure where each broad area of operations (such as maintenance, flight operations, and passenger service) is supervised by a vice president. Larger airlines often

appoint vice presidents to oversee each of the airlines hubs as well. Airlines employ lawyers to deal with regulatory procedures and other administrative tasks. e. Industry Trends : The pattern of ownership has gone from government owned or supported to independent, for-profit public companies. This occurs as regulators permit greater freedom and non-government ownership, in steps that are usually decades apart. This pattern is not seen for all airlines in all regions . As in many mature industries, consolidation is a trend. Airline groupings may consist of limited bilateral partnerships, long-term, multi-faceted alliances between carriers, equity arrangements, mergers, or takeovers. Since governments often restrict ownership and merger between companies in different countries, most consolidation takes place within a country.

CHECK YOUR PROGRESS

1. Write down the service characteristics of tourism. 2. Write down the factors which influences tourism marketing environment.

Hotel and Resort Service

The marketing function in a hotel involves identifying, anticipating and satisfying customer needs and desires in order to achieve the overall objectives of the business. The primary hotel products are accommodation, restaurant, bars and conference hall etc. In order to get good business from hotels, the hotel management should have proper planning and strategies. Hotel and resorts are generally seasonal establishments. Though hotels are occupied for different purposes, resorts are mainly occupied during vacations. Their primary function is catering for holidaymaker, the tourist, the traveler etc. Generally a resort property includes a conference room, a restaurant, lounge and entertainment rooms and some recreational facilities. Resort hotels are located at resort places such as islands, exotic locations, hill stations, beaches and health resorts and spas.

LET US SUM UP

In this unit, we have discussed about tourism marketing. The aim of marketing is to know and understand the customer and provide them product or service that fits their requirements and should be profitable for the company also. In any marketing process, we need to target our customer, then based on their requirements marketers should serve them. Tourism marketing is complex in nature. Tourism product consists of both physical product as well as services. Services are intangible in nature. Tourism product has got special features. It varies depending on marketing environment, like demographic, social, legal, technological factors etc. At the end of this unit we have discussed about service marketing of Airlines, hotel and resort etc.

FURTHER READING

1. Marketing Management, Phillip Kotler, Tenth Edition. 2. Marketing Management, 2. Web site: www.google.co.in

ANSWERS TO CHECK YOUR PROGRESS

1.

Check YOUR PROGRESS 1 Q.1. (i) False, (ii) True, (iii) False

2.

Check YOUR PROGRESS 2 Q. 1. Services are intangible and inseparable Q. 2. External and internal factor.

POSSIBLE QUESTIONS

1. Explain the tourism marketing environment. 2 .Explain Service marketing of Airlines. 3. Explain service marketing of hotel and Resort. About Us | Career | Feedback | Sitemap | KKHSOU Faculty | Alumni Registration | Telephone Directory | Staff Corner | Grievances Redressal | Tender Notices I