Tutorial 1 Marketing and Its Application To Tourism: Defined and Explained

Tutorial 1
Marketing and its Application to Tourism:

Defined and Explained
Visit London Module 1 – Marketing Explained
Getting the most out of the Tutorial
This tutorial, in electronic format, has been designed to help you to learn and
then apply different aspects of marketing that could be useful to you in your
tourism work for the Borough. It aims to build upon marketing activities that
you have already undertaken and to highlight a range of tips and techniques
that you can apply to the communication and marketing of your tourism offer.
The tutorial contains background information on each of the marketing topics

being reviewed. The material is comprised of applied examples and cases
taken from the tourism industry; supported further with academic definitions,
models and concepts.
After each topic area, ‘Review Points’ are given which enable you to draw
insights from the material you have just read, overlaid with your own practical
experience. Such information encourages you to reflect on what you already
know and the additional information you might find helpful in order to fully
understand the marketing disciplines.
The tutorial finally concludes with a series of recommended reading extracts

which will support your further development. In addition, you will find
hypertext links that enable you to navigate directly to important ‘third-party’
sites for further practical and/or academic information.
In managing your time with this e-learning tutorial, we recommend the

following approach:
1. First, read all of the tutorial material – it is important to put all the
material in context at the outset, as each section of the tutorial builds
upon the previous content.
2. Whilst reading through the tutorial, we recommend that you study the
‘Review Points’ and begin to consider how you might take this
information back into the Borough. At this first reading stage we do not
suggest that you complete this thought process – rather, just begin to
note down the key points that you may need to follow-up on.
As an approximate guide, to undertake stages 1 and 2 we would suggest you

allow around two hours. The case study should take a further 30 minutes to
read and consider its implications for your role at the Borough.
September 2005 2
…continued
Making use of the recommended core text reference
Each tutorial recommends a key textbook that can be read alongside the
electronic tutorial. We particularly recommend that those new to the topic area
should have access to the textbook and should read the extra material at your
leisure to further develop your learning and education. The text will help with
your understanding and appreciation of marketing theory, and its implications
for underpinning, ‘what I do’, in my daily marketing role.
The generic marketing text we recommend that can be read alongside this
tutorial is:
Marketing: Concepts and Strategies

Dibb, S., Simkin, L., Pride, W. and Ferrell, O.
2001
Houghton Mifflin
ISBN – 0395962447
September 2005 3
Contents
1. Introducing Tourism Marketing:

1.1 Tourism Demand
1.2 Tourism Supply
1.3 Links between Supply and Demand and the role of Marketing
2. Background to Marketing:
2.1 Marketing and the Exchange Process
2.2 Applying the Marketing Philosophy
2.3 The Principles of Marketing
3. Characteristics of Tourism Marketing:

3.1 Marketing Response to these Differing Characteristics
4. Understanding Patterns of Demand
5. Motivators and Buyer Behaviour:

5.1 Internal Processes
5.2 Travel Motivations
6. Introduction to Segmentation
7. Formulating the Offer:

7.1 Components of the Tourism Product
8. Applying Marketing in the Borough:

8.1 Promotional Strategy
8.2 Facilitation Strategy
9. Planning Campaigns
10. Case Study: Marketing Canada
11. Conclusion and Summary
12. Extending Knowledge
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Background
This tutorial is designed to introduce participants to the purpose of marketing

activity in their local Boroughs, with particular emphasis on the role it can play
in supporting the tourism offer. It will explore the concepts, tools and language
used in marketing, and how the tools can be used to identify and exploit
opportunities within London’s Boroughs.
Objectives
In this tutorial you will:
• Consider the background to marketing
• Consider the relationship between marketing and business strategy
• Review the process and components of marketing
• Look at the nature of perception and the influences on it.
By the end of the tutorial you will:
• Understand the role of marketing and its application to tourism
• Appreciate the components of marketing
• Understand the process of marketing and planning
• Be able to apply the principles of a marketing-oriented approach.
Study Guide:
This unit will re-acquaint you with the broad area of marketing and examine its
role within the context of applying strategy to the marketing mix. The material
has been designed to be straightforward and easy to use, and provides the
foundation for your study of the subsequent tutorials.
We would expect you to take around 2 hours to work through this tutorial and
suggested activities. It is recommended that you allow a further 30 minutes to
consider the case study at the end of the session.
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1. Introducing Tourism Marketing
Within the tourism market there are many submarkets, segments and
products designed and provided by a wide range of organisations. Since we
define tourism as a market, it is best understood in terms of demand and
supply. Our role in tourism marketing is to understand the linking mechanism
between the offer and visitors’ needs – i.e. our visitors exercise preferences
and choice, and exchange money/time in return for the supply of particular
travel experiences or products.
Even though in our daily roles we may not be selling a product, rather a
destination experience, marketing is vital to ensure we provide the appropriate
experience that will meet the needs and expectations of our visitors.
1.1 Tourism Demand
Who should we be focusing attention on? The key question to ask ourselves
is which customers do we want to attract to our destination. We will consider
later the area of segmentation and which customer characteristics are
interesting to us, but for the moment we have two demand markets:
• The international visitor (in-bound tourism)

• The resident visitor (domestic tourism)
In most cases we are probably focusing our marketing activities on domestic

tourism – as on our own, we don’t have the resources to communicate our
offer in the international arena. However, this is where Visit London plays a
vital role in promoting our Borough/ destination to the wider international
marketplace. We should be working closely with Visit London to understand
how best to exploit the opportunities presented by international visitors with
tailored campaigns for our key tourist offers.
If we conclude that domestic tourism is where we can best direct our

marketing activity to bring supply and demand together, we have two further
markets to understand:
• Staying visitors
• Same-day visitors
In supporting the exchange transaction that we reviewed above in relation to

staying visitors, one must work with the supply channels – particularly the
accommodation sector so that we communicate to visitors the strengths of the
sleeping opportunities that are available. With same-day visitors, we should
ensure a positive relationship with the attractions sector – so that all major
events and offers are communicated appropriately.
The same-day visitor market also holds good potential for London’s Boroughs.
Research conducted since 2000 shows that there at least as many domestic
day visits for leisure purposes within a country as there are tourist days or
nights spent away from home for all purposes. For example in the UK in 2002,
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an estimated 110 million domestic tourism visits for all purposes generated
443 million nights away from home. An additional 630 million same-day visits
for leisure purposes were made, where the characteristics were defined as
over 2 hour travel duration and a minimum distance of 30 miles. With a
population of over 56 million people in the UK, this is equivalent to over 10
visitor days per person for leisure purposes over a year.
Therefore, we know there are great tourism opportunities on the demand side
of the equation – the challenge for us as marketers is use the marketing tools
and techniques to bring this demand in line with our destination offer.
1.2 Tourism Supply
When we discuss supply in relation to tourism, we generally refer to five key

industry sectors:
1. Accommodation sector – hotels, motels, B & B, apartments, etc

2. Attractions sector – Parks, museums, galleries, activities, etc
3. Transport sector – airlines, railways, coaches, etc
4. Travel organisers’ sector – tour operators, travel agents, etc
5. Destination organisation sector – national/regional/local tourist offices
The top 2 industry sectors in the list are the prime reasons why people might
visit our destination – they see benefit in visiting a particular attraction in our
offer or be drawn-in by the combination of the accommodation offer and the
destination.
As we mentioned earlier, this understanding of what is on offer and how we

ensure that we present the offer in the best way to the marketplace is the key
function of our role.
We must act as the link (exchange) between the supply and demand parties
and use our network to ensure that we target and attract the right visitors.
In undertaking this role, we need to understand that tourism is an intangible

service. This is one of the fundamental differences between marketing tourism
and marketing consumer goods, and will be discussed in more detail later.
Industry sectors 3 and 4 on the above list are the means by which the demand
(visitors) can access the destination. Transport brings people to the attraction/
experience; and travel organisers package tourism products that enable
tourists to visit the destinations both efficiently and cost-effectively.
Here, our role as Tourism Officers takes on two dimensions; first, we need to
work with the transport sector to ensure that our destinations are accessible to
visitors; and secondly, we need to support the operators by communicating to
them what the Borough/Destination has to offer.
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1.3 Links between Supply and Demand and the Role of Marketing
The ability for a destination to be successful lies in the hands of the marketer
working with the supplier to put together the best mix offer (correct products,
priced effectively and promoted accordingly).
In order to support such a process, the possession of a detailed knowledge of

customers’ characteristics and buying behaviour is central to our activities.
Knowledge of the customer and all that it implies for management decisions is
generally known as consumer orientation, a concept we will discuss later.
Review Points:
What is my relationship with the supply sectors?
How could I work more closely with supply?
Do I presently see myself as the link between supply & demand? If not, why?
What do I know of my demand – profiles, customer types, etc?
Do I feel that the present supply fits with the characteristics of the demand? If
not, what are the missing supply characteristics that could support/deliver
more visitors?
2. Background to Marketing
Following our review of the basics of the tourism marketplace, it is now
important to focus attention on defining and understanding marketing in more
detail, particularly in relation to how marketing differs when applied in the
tourism industry.
As consumers, we are exposed to a vast amount of information on a daily

basis – everything we see is helping us to make decisions about how we
spend our money and the choices we have. Referred to as ‘communication’,
this is just one element the consumer must deal with every day.
In recent years, we have seen an explosion in all forms of visual, audio and
electronic communication. This has resulted in our customers being better
informed - not just about our offers, but also about our competitors’ offers.
This means that visitors’ expectations are always increasing and that we must
put together offers that not only meet, but exceed, these increasing
expectations.
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Marketing communications is only one essential part of the marketing mix –

sometimes described as the ‘Four Ps’. It is important to understand that each
of the elements interacts with the others.
Thus, the nature of the product – and its appeal to the end consumer – will be
influenced by the price that is charged. Similarly, the availability of the
product at specific outlets may influence the consumer’s perception of the
quality of the product. And marketing communications affects all the other
components of the mix.
Name
PRODUCT Packaging
Brand
Costs
PRICE Trade Terms
Elasticities
Retailer
PLACE Agent
Direct Sales
Advertising
PROMOTION Promotion
P.R.
However, in relation to tourism, the mix is somewhat different.
In marketing a destination, two elements are fundamental.
First, we must ensure that we have a series of products to offer the visitor. As
we discussed earlier, such products would include components taken from the
accommodation and attractions sectors. Customers will visit our destinations
based on a series of products/services that support an overall experience, and
as marketers we need to understand the fit between our offer and the
expectations of different customers groups.
Secondly, in tourism marketing, it is vital that we focus on ‘promotion’.

Whereas the role that we can play in product is one of support, influence and
encouragement, with ‘promotion’, we are in control and need to ensure the
development and then communication of the most effective messages to the
demand audience – taking into consideration segmentation differences of our
existing and potential customers.
The P’s of Price and Place are somewhat redundant in the destinations’
marketing role. Why?
It is very difficult for us to control the prices set by the supply channel and,
equally with place, we are offering an experience, and that experience is not
bought from a shelf. The only area of ‘place’ that we could influence is that of
being listed and represented in the agents’/ operators’ portfolios so that when
customers visit such intermediaries for information or to make bookings, we
can touch the potential customer with either agent knowledge (verbal
communication) or printed brochure material.
September 2005 9
2.1 Marketing and the Exchange Process
To simplify marketing in relation to tourism, we are defining marketing as a

process of achieving voluntary exchanges between two parties:
• Visitors who want to appreciate/experience products and services

• Organisations which put together and offer the products and services
In terms of visitors, marketing is concerned with:

• Understanding their needs and desires (why they might visit, their
motivations)
• Which products they choose, when, how often, and if they need to pay,
how much
• How they feel after their visit/experience – expectations vs. reality
In terms of organisations, marketing focuses on:

• What to offer and why
• What is the appropriate charge for the utilisation of the experience
• When and to whom to make the offer available
From this simple introduction it follows that marketing involves a management

decision process for organisations focused on a customer (visitor) decision
process. The two sets of decisions come together in an exchange transaction
– for tourism destinations this means visitors experiencing the product.
The true test of managing this exchange from a Borough marketers’

perspective is that we can influence both the supply and demand sides of this
exchange. On the assumption that customers (on the demand side) have
choices between different destinations, it is easy to see that we need to work
with our local attractions (on the supply side) to ensure that we influence
prospective visitors to choose our destination rather than our competitors’
destinations.
Review Points:
Focus on the different audiences that you interface with; supply
(organisations) and demand (visitors) and think about the role that you play in
understanding/shaping their needs?
It is important to review the different audiences with whom you communicate

and then consider the tailoring of your approach accordingly. For instance,
your target customers need to be educated on the benefits of the
destination/offer – i.e. why should they visit? In addition, you need to work
with the organisations that offer the attractions to ensure they fit with the
demand characteristics of the visitor, as well as the position of the destination.
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2.2 Applying the Marketing Philosophy
We have reviewed the importance of marketing for destinations – particularly

in relation to an outward looking approach, which considers the needs of our
visitors and the effects of a changing environment on our offer.
With this in mind, let’s consider an example of a destination with five hotels.
The hotels are fairly similar, but demand in the Borough only supports three of
the properties profitably.
In such conditions, an inward looking approach which focuses on production

and operational efficiency will not make much impact on demand, especially if
competitors’ products are of a similar standard and price. Similarly, a strong
sales drive with its emphasis on increased promotional expenditure will not
increase demand significantly if competitors quickly follow suit with matching
expenditure. Reducing prices to increase demand will also not succeed if
competitors are able to match and profits are further eroded.
In the strongly competitive market conditions noted above, which are typical of
those faced by many players in the tourism industry, survival and future
success lies in rethinking the whole business from the customer’s standpoint –
in order to secure and sustain an adequate share of the available demand.
This means assessing the different groups of customers in the available

market, identifying their particular interests and preferences, communicating
the information to supply in order to ensure the product/ experience fits the
customers’ expectations as closely as possible to meet these needs better
than competitors. Therefore, the hotels that will survive under such market
conditions will be those that apply a marketing (customer) orientation.
2.3 The Principles of Marketing
Marketing is defined by the CIM (Chartered Institute of Marketing) as, “the

management process responsible for identifying, anticipating and satisfying
consumers, profitably”. Whilst this tutorial is focused on marketing in the
tourism industry, we should understand that tourism marketing is not a
separate discipline but an adaptation of basic principles that have been
developed and practised across consumer products for more than four
decades.
The definition above provides a basis for making three important propositions
which are entirely relevant to tourism marketing:
• Marketing is a management orientation/philosophy

• Marketing comprises three main elements linked within a system of
exchange transactions
• Marketing is concerned with long-term (strategy) and short-term
(tactics)
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The first proposition (orientation/philosophy) was discussed above with the

hotel case. The other two are outlined below.
Marketing is made up of three core elements (below), and these three

elements must come together within a marketing system:
1. The attitudes and decisions of visitors (demand) concerning the

perceived offer of the destination – according to their needs, wants and
desires
2. The attitudes and decisions of organisations (supply) concerning the
position of their offer – in the context of the business environment they
face
3. The way in which the mix is put together and communicated – before,
during and after the visit/experience.
The challenge then for us as marketers is to use judgement in balancing the

conflicting needs of the parties in the exchange process. The better the
balance between the interests of the two parties in the exchange, the smaller
the marketing expenditure that is required.
For example, if a tour operator has accurately designed, priced and set the
capacity of their programme, sales will be achieved at a relatively low
promotional cost. If, however, the price is too high or the capacity excessive
for the available demand, only large promotional expenditure and discounting
will bring supply and demand back into balance.
When considering long and short-term tactics, we need to remember that the
tourism environment is constantly changing, and organisations frequently find
themselves unable to adapt their products quickly enough to changes in
customers’ needs or market circumstances.
In order to compete, we have to stimulate the available demand through the

techniques of sales promotion and advertising. For example, if a rival airline
gains permission to operate a route and reduces its competitors’ seat
occupancy load factor from, say 64% to 54% in the first six months of the new
service, the immediate task for the competitor’s marketing is to regain share
and volume through aggressive sales tactics.
What distinguishes the marketing-led organisation from its competitors is not

the objectives of its short-term tactics, but the speed and the way in which it
exploits its knowledge of its customers to achieve its objectives, whilst at the
same time developing strategies aimed at long-term consumer orientation and
satisfaction.
Review Points:
Do you feel that in your role you follow a marketing orientation – outward
looking and proactive to the changing business environment, and to the
needs, expectations and behaviours of visitors? What initiatives could you
take to become more customer/visitor focused?
September 2005 12
3. Characteristics of Tourism Marketing
We have so far covered the essential concepts of tourism as a market, and of

marketing as an approach to the conduct of effective business. This section
focuses on the special characteristics of the supply side in tourism, and how
this affects the ability for us to market effectively. Through an understanding of
these characteristics, which are common to all the ‘industry’ sub-sectors we
noted earlier, it will help to explain the way in which we make marketing
decisions.
Question:
What would you say are the differences between marketing tourism
destinations and consumer goods?
Answer:
Tourism is a service, and therefore suffers from aspects of perishability (the
product cannot be stored) and intangibility (which results in the customer not
always understanding what they might get).
By contrast, a manufactured (consumer goods) product can be stored or

displayed where customers can check/study/test to see if they like the product
before they actually acquire it.
Perishability is a major concern to us when marketing destinations and

managing visitor attractions. The concern is that if service capacity is not sold
on a particular day, then the revenue is lost and cannot be recovered. Service
production therefore is best understood as a ‘capacity to produce’; not a
quantity of products.
To illustrate this point, let us consider the example of a museum that has a
visitor capacity of, say, 500 visits per hour. This could mean 2,000 visits on a
typical day, when open from 10 am to 6 pm, making allowance for peak and
slack times of the day. If the museum closes 1 day per week (let’s assume on
Sunday) it has a nominal ‘production’ capacity of 313 (days) x 2,000 visitors =
626,000 visits over 12 months. Sounds promising, but in reality such a
museum is unlikely to exceed around 150,000 visits per annum.
If 10,000 visitors want to visit the museum on a particular day they cannot do
so, as the demand is too great for the capacity. Also, a would-be Sunday
visitor is unlikely to be impressed by the fact that they can visit on the
Monday, particularly if they are due at work that day.
Hotel operators with a fixed number of rooms, and transport operators with a
fixed number of seats, face identical problems of matching available demand
to perishable supply. Perishability is a further problem for marketers when we
also factor-in seasonality issues.
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3.1 Marketing Response to these Differing Characteristics
The differences between products (consumer goods) and services (tourism

experiences) highlighted above will strongly influence your attitudes and
decisions as you seek to stimulate visitor demand for attractions in your
Boroughs.
Simply put, the marketing response to intangibility and perishability is to

‘manage or manipulate demand’. The more we know about our
visitors/customers – their needs and desires, their attitudes and behaviours –
the easier it will be for us to design and implement the marketing efforts
required to stimulate their purchasing decisions.
Tutorial 2 – ‘Researching Customer Insights’ provides detailed frameworks

and an understanding of how to uncover visitor information and we suggest
that you review this tutorial to support your further knowledge and
development.
In addition to having an in-depth understanding of customers’ needs and

expectations, it is also vital also to understand customer purchasing
behaviours. If we know when people visit, by type of customer, etc, then we
can look at managing the inventory more effectively – particularly in relation to
‘daily capacity’.
To illustrate this point, if the task is to organise marketing for a hotel of say,
150 rooms, the first step is to express its total capacity over the year (for
either rooms to be sold or numbers of beds to be sold). Thus, for rooms – 150
rooms x 365 days x 65% (average occupancy in a year) = 32,587 rooms to be
sold. The marketing task then is to break up that total into the estimated
number of bookings to be achieved for day of each week, and by the different
customer groups with which the hotel deals, e.g. business or leisure
customers.
Similar calculations can be carried out for other tourism businesses, e.g.
theme parks, museums, attractions, etc.
Therefore, in order to manage the volume of sales or customer visits in an

orderly way, marketers will need to:
• Monitor the daily flow of available capacity

• Identify opportunities to generate extra or marginal sales or customer
visits, thereby producing additional revenue for very little extra cost.
• Consider when and how to use promotional activities to stimulate
demand during the ‘trough’ periods.
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Review Point:
What is a reasonable ‘daily capacity’ figure for your Borough, and/or
attractions within the Borough? Do you feel you have visitor levels close to
this figure? If not, how might you control the impacts of
perishability/intangibility in the future?
4. Understanding Patterns of Demand
Section 2 of this tutorial identifies the marketing process. It explains that a

marketing orientation is an outward looking set of management attitudes and
behaviours. What is important for us to understand is the process by which we
organise ourselves around a detailed knowledge of existing and prospective
customers – as well as being highly responsive to the external environment
that we face.
The external environment contains a number of elements requiring our careful

attention. Firstly, we must have a continuous, systematic method in place to
help us understand the potential market demand levels.
Often referred to as PEST Analysis (Political, Economic, Social,

Technological), it is our responsibility as tourism marketers to influence
demand to the maximum extent possible and to support the adaptation of the
offer to such information. Marketing is both responsive to what it cannot
control in the wider environment and proactive in adapting offers to ever
changing circumstances.
Some of the determinants of demand such as income per capita, geographic

factors and population changes have long-term implications for marketing in
the Boroughs – as such factors tend to produce fairly stable relationships with
demand.
However, other determinants, such as exchange rates, global terrorism,

regulatory changes and the impact of technology can have a much more
immediate effect on the volume of tourism demand and market patterns and
are often impossible to predict.
As defined above, PEST looks at demand levels in terms of a numerical

analysis, but what is also important to consider is that of the general attitudes
and behaviours of the potential market towards travel and tourism compared
with other offers competing for their interest e.g. consumer goods, house
purchases etc.
Attitudes are not, of course, based simply on facts; they are formed of ideas,
fears, aspirations and beliefs that people hold about their lives. Attitudes to
tourism do not exist in isolation; rather they are sub-sets of a wider view of the
desired quality of life and how to achieve it.
September 2005 15
Attitudes can be stimulated through promotion, changing social attitudes to

enhance awareness, motivation and purchase stimulation. In tourism, people
seek out destinations that deliver a range of benefits – such as cultural,
enjoyment and entertainment.
Review Point:
Which PEST elements might affect visitor demand to your Borough in the next
five years? How might you be able to exploit these external factors to support
a marketing/competitive advantage?
5. Motivations and Buyer Behaviour
The previous section reviewed the elements of PEST that are essentially
external influences on individuals’ demand patterns.
Equally important though is for us to understand how the internal,

psychological processes influence individuals to make choices about
particular destinations, attractions, hotels, etc. We refer to these internal
processes as ‘buyer behaviour’. An understanding of how visitors make their
purchase decisions influences all subsequent decisions in the marketing
process.
5.1 Internal Processes
The internal, psychological influences affecting individuals’ choice are

commonly referred to as ‘motivations’. Motivations are important to marketers
as they provide information directly concerned with the choices buyers make
between competing offers. For example, in terms of destinations, why do
visitors choose our Borough over a competitors’ offer?
To illustrate the important distinction between the external (PEST) demand

influences and these internal processes (motivations), consider the holiday
decisions of a young, professional, un-married person living in New York, with
2 holiday weeks to plan. The external influences are easy to understand – the
choice is wide because disposable income is high, time is available, air travel
is no problem and relatively cheap. In terms of the demand characteristics
discussed earlier this prospective buyer has one of the highest propensities to
travel.
However, what motivating factors will influence the choice, for example,
between an all-inclusive Club-Med holiday in the Caribbean, culture seeking in
Thailand or a sailing holiday in the Mediterranean. What will be the conscious
and unconscious influences on the decision that is made?
No marketing manager has a full or satisfactory answer to all these questions.

But the more we find out about what sort of people choose particular products,
destinations and activities, the more we will be in a better position to formulate
September 2005 16
an appealing product and to communicate its benefits to a target audience of

prospective visitors.
Tutorial 2 – ‘Researching Customer Insights’ will provide you with further

knowledge and information on how best to research your visitors, and to
understand more fully what they require to exceed their expectations.
5.2 Travel Motivations
To attempt to understand our visitors better, we should consider what actually

motivates people to travel, i.e. their reasons for travel. The groupings below
provide a broad structure within which buyer behaviour operates in the
tourism sector.
Physical motives:
• Participation in sport and active recreation such as golf, walking, etc.
• Undertaking activities in pursuit of health, fitness, etc.
• Resting/relaxing – unwinding from everyday life
Cultural/psychological motives:
• Participation in festivals, theatre, music, museums, etc.
• Participation in personal interests – i.e. intellectual or craft-related
activities
• Visiting destinations to enjoy their cultural and/or natural heritage
qualities
Social/interpersonal and ethnic motives:

• Enjoying the company of friends and relatives
• Undertaking social duty occasions – weddings, funerals, etc
• Visiting the place of one’s birth
Entertainment/pleasure motives:
• Watching sport-related activities, etc.
• Visiting theme parks, etc.
• Undertaking leisure shopping
Religious motives:
• Participating in pilgrimages
Review Point:
Consider how you presently market to each of these ‘motivational’
characteristics? What opportunities are there to exploit such visitor needs
through the products and services which your Borough offers?
The groupings of motivations noted above illustrate the wide range of reasons
for people to travel. It is important that we now overlay these motivational
characteristics with the stimulus that causes such motivations. In the tourism
sector, marketers frequently consider aspects of problem solving, and the
September 2005 17
importance that tourism plays in getting people away from their everyday
lives. When considering where to go and what to do, tourists will have three
aspects to consider in relation to how involved they are with the intended
decision. These levels are:
• Routine problem solving – When there is little risk involved in the

purchase decision, people will make decisions quickly and in a routine
and automatic way. In tourism for example, this could be a trip to a
local park – where the need is to escape the normal routine.
• Limited problem solving – Sometimes, when an individual is

considering the purchase of a new or unfamiliar item, they may seek
information to support their decision. The individual will tend to spend
slightly more time before making their selection. In tourism, this could
be the need to pick a particular hotel in a city where they know the
destination but are not sure where to stay.
• Extensive problem solving – People become involved in a more

detailed search for information and the evaluation of alternatives in
those instances where the product category is unfamiliar or where a
purchase is made on an infrequent basis. In tourism for example, this
could be associated with planning an extensive international itinerary
where the traveller has little or no previous experience of the countries
being visited.
An understanding of the consumer’s motivations is therefore a vital ingredient

in the determination of an appropriate marketing campaign. At this point we
should draw up a list of the key motivational criteria that tourists look for when
visiting our destination.
6. Introduction to Segmentation
Section 3 of this tutorial stresses that the role of the marketing manger is to
manage and influence demand. We discussed earlier the realisation that the
more an organisation knows about its customers and prospective customers –
their needs and desires, their attitudes and behaviours – the better we can
design and implement our marketing efforts to stimulate purchasing decisions.
Market segmentation is one such tool that we can use to manage our demand
patterns more effectively, and is defined as, “the process by which
organisations develop their knowledge of current and potential customer
groups and select for particular attention those whose needs and wants they
are best able to supply with their products/services”.
In other words, since it is usually impossible to deal with all customers in the
same way, market segmentation is the practical expression in business of the
theory of consumer orientation.
September 2005 18
It is arguably the most important of all the practical marketing techniques

available to us, and is logically the first step in the process of developing
products to meet customers’ needs.
We divide total markets into component parts in order to deal with them more
effectively and more profitably. Thus, the more that customer needs and
motivations differ, and the greater the level of competition between offers, the
more important segmentation becomes to organisational success.
The case for segmentation increases as markets grow in volume terms and in
the number of sub-groups identified. However, for operational reasons, the
product/service does not always change and is essentially the same for all
customers.
This is the case for many visitor attractions, but there are always different
ways to promote to sub-groups within the market and opportunities to
enhance the basic offer around a segment’s needs. For example, the
promotion of special group facilities for educational visits to museums or the
creation of special information materials for school visitors illustrates this
point.
Based on its importance in the marketing process, we have created a tutorial

that focuses specifically on aspects of Segmentation. We have introduced the
topic in this tutorial to demonstrate its relevance to wider marketing issues and
suggest that you refer to the separate tutorial for more information. This can
be found in Tutorial 3 – ‘Segmentation, Positioning and Communicating the
Offer’.
7. Formulating the Offer
The way in which we put our offer together is the most important response
that marketing managers make to their knowledge of customers’ needs and
interests.
The process of identifying customer segments mentioned above, and in more

detail in Tutorial 3, helps us to understand the key determinants of our offer. A
visit to a tourism destination comprises a mix of several components – either
when customers purchase them together eg as a packaged-holiday
experience or when customers select components of the visit separately
(independent travel).
Before reviewing these dimensions in more detail, it is important to keep in

mind the visitors’ view of what is on offer. Professor Levitt, a well-respected
marketing figure, is famous for his phrase, “people do not buy products, they
buy the expectation of benefits”.
It is the benefits that are the product. With this in mind we need to ensure that
we understand all the ways in which customers can gain satisfaction from
their tourism products.
September 2005 19
7.1 Components of the Tourism Product
In order to ensure that we put the best offer forward to our chosen customer
segments, it is important that we understand the different components of the
tourism product, and how they relate to customers’ motivations.
From the standpoint of a potential customer considering any form of tourist

visit, the product (offer) may be defined as a bundle or package of tangible
and intangible components, based on activity at a destination. The package is
perceived by the tourist as an experience, available at a price.
Generally, there are four main components in putting together the most
effective offer. These are described below:
1. Destination attractions – these are the elements within the destination

that largely determine consumers’ choice. They include natural
attractions (landscape, etc), built attractions (tourism infrastructure,
etc), cultural attractions (history, art, etc) and social attractions (the way
of life, etc)
2. Destination facilities – these are the elements within the destination, or
linked to it, which make it possible for visitors to stay and in other ways
enjoy and participate in the attractions
3. Accessibility of the destination – these are the elements that affect the
cost, speed and convenience with which the traveller may reach the
destination
4. Perception of the destination – for reasons outlined earlier (section 5)
the attitudes and images which customers have towards an offer
strongly influences their buying decisions. A destinations’ image is not
necessarily grounded in experience or facts, but it is a powerful
motivator in tourism. Images and the expectations of travel experiences
are closely linked in prospective customers’ minds.
Review Point:
The formulation of a tourism product requires an understanding of those who

provide the product (supply) and those who buy the product (demand).
In terms of demand, the approach requires an understanding of visitors’

needs, behaviours and perceptions, in order to define target segments and to
identify strengths and weaknesses of the product image and offer.
In terms of supply, product formulation requires an analysis of product

components/elements and identification of the range of existing and potential
products that could be improved or developed profitably to meet visitor needs.
Consider whether or not you feel that your Borough’s product offers draw on
insights from both demand and supply?
September 2005 20
All products are multi-dimensional in their nature. At the most basic level,
there are a series of functional features designed to meet the essential
requirements of the target consumers. Sometimes referred to as the ‘core
product’, this consists of the assembly of ingredients, which provide the basic
character of the product. However, what we need to understand is that many
tourism products are now differentiated.
Destinations are looking to create a difference through their perceptual brand

image – sometimes what we refer to as the intangible aspect of the product
which provides additional values to the consumer.
Organisations are investing large sums of money in the development of facets

of the product that are designed to assist the consumer in their identification of
a brand in a crowded marketplace. Logos and design provide the consumer
with the ability to recognise a particular offer and determine whether or not it is
likely to meet their specific needs.
These images are not fixed in time. Powerful marketing communications

activity can serve to alter, amend, or even totally change the perceptual
values of an individual offer. It must be recognised that this is not an easy task
and will often require considerable investment in money, time and
communication.
For example, Spain was for many years perceived to be a mass-holiday

destination. The attitude of visitors today though has changed, as the tourist
messages over the last few years have promoted the culture and experiences
that can be had in the different locations of this vast and diverse country.
8. Applying Marketing in the Borough
It is important that we consider the ways that we can deploy our marketing
skills within the Borough. We have considered the ways in which supply and
demand work and have focused attention on understanding and defining what
motivates individuals to travel. What we now need to consider is how we use
the information we have gathered in order to:
• Promote our offer effectively in the demand markets; and

• Facilitate and assist the component sectors of our tourism supply
market
This will ensure that we have a close match between the Borough’s products
and markets. In so doing, the Borough will be seen to be acting on behalf of
all interests in tourism – in helping to promote the destination as well as the
activities of individual tourism providers.
You will recall that we reviewed in sections 4 and 5 of this tutorial the
importance of understanding the external (PEST) and internal (motivations) of
demand, in relation to determining levels of volume and types of travel by
different customer segments.
September 2005 21
Such information is critical to us, not simply in relation to our role as

influencers, but also to support our understanding and to position us to
respond appropriately to these environmental factors.
We can summarise our roles as that of first understanding the determinants

that will influence our markets, and second, to then work with the opportunities
created by these events.
For example, if a Borough had its marketing budget increased by 400% in a

year in which, say, the level of rail fares in its main markets doubled, the
number of tourist arrivals could fall. By contrast, a reduction in the Borough’s
marketing budget in a year of favourable changes in external factors could still
witness a large increase in the volume of travel. These examples help to put
in context the national and international events over which we have no
marketing control.
So we need to be the influencers of the exchange process between supply

and demand, promoting the Borough to the different target segments we have
selected as being accessible. With this promotional role we have to choose
between two alternative strategies.
One of these is reaching prospective visitors through expenditure on a

promotional mix intended to promote destination awareness and influence
prospective customers’ attitudes. The second is concerned with exercising
influence over the local tourism sector. Each strategy is outlined below:
8.1 Promotional Strategy
A promotional strategy means implementing promotional programmes to

project destination images and key messages to targeted segments of
potential visitors – encouraging a call-to-action; for example, where potential
visitors request further information through to actually visiting the destination
itself.
‘Umbrella campaigns’ can also be deployed as part of the Borough’s
promotional strategy in which the Borough promotes the destination and
aspects of the offer, and at the second level, individual tourism providers can
market their own components of the overall offer.
8.2 Facilitation Strategy
There is another opportunity for the Borough in relation to marketing, which is

the strategy of marketing facilitation – creating marketing bridges between the
Borough and the individual operators in the tourism industry and a bridge
between the first and second levels of destination marketing discussed above.
September 2005 22
The case for marketing facilitation is based on being able to answer positively
the following questions:
1. The Borough possesses a range of tourist areas, products and

segments, some growing and some declining, to which you attach
differing priorities
2. Budgets will, in almost every case, be less than adequate to undertake

all the marketing tasks identified, so that selection of priorities is
required.
If these considerations apply, the most effective marketing role you can
undertake is:
• Establishing promotional priorities for specific markets and segments
• Co-ordinating the elements of tourism products
• Liaising with, and influencing, the tourism industry
• Providing support for new or growth products relevant to policy
• Creating co-operative marketing campaigns, especially for the

hundreds of small businesses that would otherwise be unable to
participate in marketing on a national/international scale.
These processes amount to a facilitation strategy that will require you to

engage in discussions with your local tourism providers and to position you to
bring the Borough and tourism providers together in joint marketing activities.
Review Point:
Which strategy are you presently adopting – promotion or facilitation? How
might you bring the two roles together and ensure an effective exchange
between, ‘what we offer’, and, ‘how we communicate that offer’?
Whatever the main thrust of strategy you decide to follow, be it promotion or

facilitation, the Borough will always have a vital function to perform for the
destination in choosing communication propositions (messages and symbols)
that serve to identify the position of the destination in the minds of prospective
visitors and to differentiate this from all others.
All campaigns should help the destination to identify with unique labels. To be
successful, these labels must:
• Be based on genuine product attributes
• Make sense and be understood readily by customers
September 2005 23
• Involve at least the leading supply players in the local tourism sector
• Be incorporated into wider regional campaigns and promotional efforts

to support integration of the message
• Be communicated through a range of sales-promotion and customer-

servicing techniques designed to reach existing visitors at the
destination as well as prospective visitors in their source markets.
Developing successful images and implementing them effectively requires

that you have detailed consumer research and creative flair in relation to
destinations’ intrinsic visitor attractions.
This is usually a role that only the Borough can fulfil, as well as taking on the
task of communicating the chosen positioning to the local tourism industry.
However, this should not be done in isolation. It should be possible for you to
develop co-operative promotional efforts arising out of the facilitation strategy,
and to draw on the support of the tourism industry in mounting advertising and
publicity campaigns judged necessary to support or enhance the destination’s
image.
9. Planning Marketing Campaigns
This section brings the tutorial to its conclusion and confirms the importance
attached to using the information that we have learnt to define our marketing
campaigns. We have spent time focusing on the demand and supply side of
the business, as well as defining the roles we should be undertaking in the
Borough. The word ‘campaign’ is well suited to the activities that we need to
undertake to promote the Boroughs interests against competitors.
In relation to tourism marketing, ‘campaigns’ describe the co-ordinated

programme of marketing activities within the general field of promotion, that
we will follow to influence and mould customers’ behaviours.
In marketing practice, and in texts, the term is often used to define the
construction of a promotional effort that builds around a single theme or idea
to reach a predetermined goal – delivered through activities of advertising,
sales promotion and public relations.
These three marketing techniques to support the rollout of campaigns are

outlined in detail in Tutorial 3. However, in our role as tourism marketers we
select the use of these techniques relative to the particular targets and market
circumstances that face us, and generally the campaigns that we develop
should focus on answering one of the following two dimensions:
September 2005 24
• Promotional techniques designed to motivate and move prospective

customers towards a point of sale and to provide incentives to
purchase – in other words, to attract attention and convince individuals
to visit the Borough and/or its attractions
• Facilitation of access techniques designed to make it as easy as

possible for motivated people to achieve their intended purchase -
especially at the point of sale; in other words, to support visits to
additional attractions whilst at the destination
This section serves as a bridge between understanding the basis of planning

campaigns, and Tutorial 3, which looks in detail at each of the main
promotional techniques and the ways in which they are implemented
effectively in practice.
10. Case Study – Marketing Canada
This case helps to explain the market-led development of Tourism Canada’s

marketing goals and strategy aimed at targeted market segments in the USA.
The campaign, called ‘Canada; The World Next Door’, ran from 1986 to 1996,
and was instrumental in shifting attitudes and awareness among target groups
in the USA. It also had a major influence in halting a 10-year slide in the
number of American visitors to Canada.
The case explains why a new marketing campaign was needed and places
particular emphasis on the strategic role of bringing the supply and demand
strategies together – in particular in determining which segments to target.
Background
In the first few years of the 80’s, the number of American tourists arriving in
Canada was falling at around 10% per year. At the time, this loss was in sharp
contrast to worldwide tourism growth, and a period when foreign travel by
Americans was growing.
In order to develop a better understanding of the American market – and the

reasons for the fall in visitor numbers – a market research project was
commissioned. The study was based on 9,000 face-to-face interviews (1,000
interviews in each of the nine-census divisions of the US). The study identified
8-pleasure trip types in the American market and indicated that Canada had
good market opportunities in three of them; ‘touring’, ‘outdoor’ and ‘city’. The
study also highlighted Canada’s strengths and weaknesses for each of these
types of tourism.
Any campaign then had to focus on these three key trip-type segments, and to
overcome the negative images of Canada whilst reinforcing the positive
elements.
September 2005 25
Analytical and Strategic Issues
The research and analysis process identified three major segments that had a
high potential for visits to Canada. It illustrated quite clearly the strengths upon
which Canada could build and the real and perceived weaknesses in
Canadian tourism products related to these segments which needed to be
overcome. The three segments were:
• Touring – The one key benefit that differentiated Canada from the US
was the fact that Canada was a foreign country, perceived as offering a
different set of cultural experiences and way of life.
• Outdoor – Canada’s historic image in the US is that of the great
outdoors. The research indicated, however, that Americans were
equally positive about their own areas, which were much closer to
home. However, Canada’s outdoors were seen as more natural and
untouched than those in the United States.
• City – Strengths for Canadian cities over the US counterparts were
features such as; ‘inexpensive’, ‘clean’, ‘un-crowded’, ‘safe’ – and
offering different cultures and way of life.
The strategic issue emerged as one of convincing the three segments that
Canada could offer what they were looking for, and that in many cases the
reality of the product delivery was better than their perception.
Marketing Objectives and Strategy
• Goal – Contribute to an increase in Canada’s tourism export revenue
• Means:
o Raise awareness of Canada as an international destination
o Strengthen its image through the application of a distinct identity
o Assist tourism supply companies through a variety of trade
development programmes and dissemination of market/product
information.
Segments Targeted
Three markets in the US were targeted:
1. Touring – Visitors take trips that have no single focus, consisting of a

mix of individual products and with an average duration of 8 days. The
automobile was identified as the primary mode of transportation.
2. Outdoors – Visitors usually compromise younger American families
with children; travel is mainly by car or recreational vehicle and visits
last 3/4 days.
3. City – Visitors are typically married, middle-aged and above average in
income and educational levels. The trip is an extended weekend, with
an average duration of 3 days.
September 2005 26
Products Involved
From the wide range of product components available in Canada, it was

necessary to bring together these elements into ‘bundles’ that would meet the
needs of the targeted segments, build upon the strengths of Canada and start
to overcome the negative images.
The touring product was designed around a selection of images used for both
television and print that stressed the heritage and the ‘foreign’ feel of the
country. The outdoor product positioned Canada’s wilderness as natural yet
warmly hospitable and open to everybody. The City product was built around
fun and games and nightlife in Canadian cities.
In all three products stress was placed upon the quality and choice of the
tourism ‘infrastructure’, such as accommodation, restaurants and other visitor
facilities.
The promotional campaign developed around four main types of media; TV

advertising, print advertising, co-operative advertising and promotional
materials.
All media messages were based around three themes that related closely to
the targeted segments. The touring segment was developed around a theme
labelled ‘Old World’, the outdoors segment into one called, ‘Wild World’ and
the city into ‘New World’.
At the same time, a winning campaign slogan was needed. The importance of
the foreign atmosphere and of being able to explore cultural differences
relatively close at hand led to the slogan – ‘Canada -The World Next Door’
being adopted.
Results Achieved
The goal of the campaign was to increase Canada’s tourism export revenues
from the United States. At the start of the campaign, visitor numbers were up
by 18%, and then year-on-year, for the next 6/7 years, visitor numbers were
up on average 6% each year. The campaign had certainly met its overall goal
of increasing tourism export revenues. The campaign also helped to raise
awareness of Canada, particularly in the foreign markets, with a focus on
touring and outdoor trips.
September 2005 27
Summary
The ‘World Next Door’ campaign illustrates several key elements that are vital
in the successful marketing of destinations:
• A detailed knowledge of the market is required – this is achieved

through a well-designed and well-executed research study
• Research results must be integral to the objectives and to the creative
strategy developed
• Knowing the segments and aligning the tourism supply to such
characteristics is vital in ensuring a fit between visitor demand and their
expectations and perceptions.
11. Conclusion
Over the last twenty years we have seen the development of a series of
models that introduce emotional elements into the subject of marketing.
These draw heavily on the work conducted in the fields of human psychology
and consumer behaviour.
Although these models suffer from limitations, what they have in common is
the view that marketing is not a linear process in which the consumer passes
sequentially from one stage to the next. Rather, marketing is more
complicated, recognising that the consumer may enter the need for the
product/service at different stages of the offers’ life. To put this into context,
marketing should be seen as being part of a business philosophy.
As we have seen, consumers hold a series of beliefs, attitudes and

behaviours, some of which may relate to the brand and their purchasing
decisions. Although most of these attitudes will be formed by external factors,
some are the direct result of the impact of a communications message. In
some instances, the communication and marketing campaign will reinforce
existing beliefs; in others, it will modify them - perhaps by presenting a
potential solution to a problem that the consumer previously felt could not be
resolved.
As tourism marketers, it is important to recognise that attitudes are not easy to

change. Most consumers adopt fairly consistent behavioural patterns that can
only be changed over time. The challenge for the marketer then is to be able
to change perceptions – and to introduce marketing and communications
campaigns that support such a proposition effectively.
September 2005 28
Summary
In this tutorial we have:
Begun the process of understanding the nature of marketing
Begun an examination of some of the important constructs of supply and

demand behaviours which have an important bearing on the development of
both marketing and marketing communication strategies
Looked at consumers’ motivations and their different needs depending on the

nature of their intended visit to a destination
Seen how strategies can be adopted to provide the organisation with the
ability to direct its messages, not to potential customers as a whole, but rather
to separate segments of the market whose needs may differ and to whom a
more targeted proposition can be made.
12. Extending Knowledge
To gain a fuller grasp of the marketing concepts contained in this tutorial, it is

recommended that you refer to the following sources:
Book References:
• General Marketing
o Marketing Management:
Kotler, P. (2005), Prentice Hall; ISBN 0131457578
• Tourism Marketing
o Hospitality Marketing; An Introduction:
Bowie, D. and Buttle, F. (2004), Butterworth; ISBN 0750652454
• Destination Marketing
o Destination Branding:
Morgan, N. (2004), Butterworth; ISBN 0750659696
September 2005 29
Web Sites:
• Chartered Institute of Marketing – www.cim.co.uk (information

resource for marketing professionals: articles, papers, services, news)
• American Marketing Association – www.marketingpower.com
(dedicated to serving the educational and professional needs of
marketing executives)
• Shape the Agenda – www.shapetheagenda.com (new marketing ideas
and solutions from around the world)
• Marketing Article and Resource Library –
www.marketingsource.com/articles (articles Library containing links to
hundreds of articles on both traditional and Internet marketing
strategies and techniques).
September 2005 30

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Tutorial 1

Marketing and its Application to Tourism:

Getting the most out of the Tutorial

The tutorial contains background information on each of the marketing topics

The tutorial finally concludes with a series of recommended reading extracts

In managing your time with this e-learning tutorial, we recommend the

As an approximate guide, to undertake stages 1 and 2 we would suggest you

Making use of the recommended core text reference

Marketing: Concepts and Strategies

1. Introducing Tourism Marketing:

3. Characteristics of Tourism Marketing:

4. Understanding Patterns of Demand

5. Motivators and Buyer Behaviour:

7. Formulating the Offer:

8. Applying Marketing in the Borough:

10. Case Study: Marketing Canada

11. Conclusion and Summary

12. Extending Knowledge

This tutorial is designed to introduce participants to the purpose of marketing

In this tutorial you will:

• Consider the background to marketing

• Consider the relationship between marketing and business strategy

• Review the process and components of marketing

• Look at the nature of perception and the influences on it.

By the end of the tutorial you will:

• Understand the role of marketing and its application to tourism

• Appreciate the components of marketing

• Understand the process of marketing and planning

• Be able to apply the principles of a marketing-oriented approach.

1. Introducing Tourism Marketing

1.1 Tourism Demand

• The international visitor (in-bound tourism)

In most cases we are probably focusing our marketing activities on domestic

If we conclude that domestic tourism is where we can best direct our

In supporting the exchange transaction that we reviewed above in relation to

1.2 Tourism Supply

When we discuss supply in relation to tourism, we generally refer to five key

1. Accommodation sector – hotels, motels, B & B, apartments, etc

As we mentioned earlier, this understanding of what is on offer and how we

In undertaking this role, we need to understand that tourism is an intangible

In order to support such a process, the possession of a detailed knowledge of

What is my relationship with the supply sectors?

How could I work more closely with supply?

What do I know of my demand – profiles, customer types, etc?

As consumers, we are exposed to a vast amount of information on a daily

Marketing communications is only one essential part of the marketing mix –

However, in relation to tourism, the mix is somewhat different.

In marketing a destination, two elements are fundamental.

Secondly, in tourism marketing, it is vital that we focus on ‘promotion’.

2.1 Marketing and the Exchange Process

To simplify marketing in relation to tourism, we are defining marketing as a

• Visitors who want to appreciate/experience products and services

In terms of visitors, marketing is concerned with:

In terms of organisations, marketing focuses on:

From this simple introduction it follows that marketing involves a management

The true test of managing this exchange from a Borough marketers’

It is important to review the different audiences with whom you communicate

2.2 Applying the Marketing Philosophy

We have reviewed the importance of marketing for destinations – particularly

In such conditions, an inward looking approach which focuses on production

This means assessing the different groups of customers in the available

2.3 The Principles of Marketing