Marketing Mix

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

SESSION COVERAGE
Marketing mix implementing the marketing strategy Market vs. destination approach PRODUCT: Cluster development Public:private partnerships in product development PROMOTION Promotional basket AIDA - awareness, interest, demand, action Personal & Non-personal communications Marketings role in responsible tourism
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

SESSION COVERAGE
PRICING Perception & reality in value-for-money Market vs. destination approach PLACE Role of intermediaries Role of destination marketing organisations (DMOs)

Role & impact of electronic technology

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

MARKETING MIX
Marketing mix four Ps - product, promotion, price, place
Analogy driving a car all components used in unison to be effective Production > Consumer orientation four Ps to four Cs: Product > customer value Promotion > communications Price > cost Place > convenience
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PRODUCT
Two approaches to strategic product planning:
Market approach What do we have that can be developed to appeal to tourists?

Destination approach
What are we prepared to develop that tourists might be interested in? Normal approach something between these extremes

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PRODUCT
Tourism is developed for the benefit of the people of the destination The goal is to develop the right package of product offerings for the most attractive market segments in terms of rewards for the destination. Once the product mix & target markets/segments have been determined, then follow the destination positioning & branding, promotion, pricing and distribution to achieve the maximum benefits from the selected product:market mix
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

TOURIST AREA LIFE CYCLE

Destinations have tourist area life cycles TALC similar to product life cycles Emergent>Growth>Stagnation>Decline Time period of TALC depends on the product and marketing initiatives of the destination. Appropriate action when the TALC approaches the stagnation period can extend the growth phase. Such actions can be product-based, market/segment-related, promotional or changed methods of distribution i.e. the marketing mix
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

CLUSTER DEVELOPMENT
Key approach to product development clusters Grouping of attractions & facilities in a location, or Grouping of like attractions in a broader destination eg golf courses Clusters: 1. Provide economies of scale & scope to justify promoting the destination, and

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

Critical advantage: allow members to cooperate & compete
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PUBLIC:PRIVATE PARTNERSHIP (PPP)

Tourism is a private sector activity
BUT Requires public sector guidance & direction WHY?

1. Tourism takes place where other people live so impacts their living environment
2. Tourism has major infrastructure, education & training, regulatory & organisational needs

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

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PUBLIC-PRIVATE PARTNERSHIP (PPP)

PPP most suitable for: * improving a destinations attractiveness (A) * marketing (M) * productivity (P) * management of its tourism system (M) PPP recognises: * increasing difficulty of differentiating destinations * high cost of reaching the marketplace Pooling resources gives good value-for-money and consistency of message
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PUBLIC-PRIVATE PARTNERSHIP (PPP)

Critical success factors (WTO 2000): * balanced structure with clear roles * shared leadership between public & private sectors with common goals, realistic expectations & benefits for all parties * flexible approach and genuine spirit of partnership * understanding that tourism must be sustainable * commitment to combination of long term strategic vision & shorter term goals and measurable initiatives * periodic evaluation of each partners inputs * good communication: partners & stakeholders
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PUBLIC-PRIVATE PARTNERSHIP (PPP)

Key to successful PPP is to understand the motives & methods of the private sector particularly of the foreign operators with which the destination does business and to enlist the cooperation and commitment of the private sector: - in pursuing practices that are mutually beneficial to both operator & destination short term priorities and - in the realisation of strategies determined by the destination a longer term goal

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PROMOTION
Purchase cycle: Pre-transactional>transactional>post-transactional Expectations>experiences>memories Communications campaign planning built around the AIDA model

Awareness Interest

Demand
Action
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

COMMUNICATIONS OBJECTIVES
Three categories:
Informing creating awareness Persuading generating interest>desire and on to purchase Re-inforcing building support/loyalty

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

COMMUNICATIONS OBJECTIVES
Which are these? DISCOVER EAST TIMOR ERITREA: THREE SEASONS IN TWO HOURS INCREDIBLE INDIA SMILE YOURE IN THE CANARIES VISIT BRITAIN SO WHERE THE BLOODY HELL ARE YOU? WOW! PHILIPPINES

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

STIMULUS-RESPONSE MODEL
Five stages: Stimulus input product offering Communications channels paid & non-paid Buyer characteristics & decision process filter all communications & other influences to determine needs/wants/goals Motivation Response purchase choice

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

MARKETING COMMUNICATIONS
Personal: - telephone/email - website - trade fairs & exhibitions - familiarisation visit Non-personal - advertising - public relations/publicity - brochures & other printed material - sponsorship
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

TOURIST OFFICES FACILITATION ROLE

- research data for the private sector - representative offices in marketplace - facilitating participation at overseas trade shows - organising fam trips - preparing & distributing travel trade manuals - joint marketing & promotional schemes with private sector - support for new tourism products - information (& reservations) system - consumer assistance & protection - intermediary between private sector & government
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

THE CASE OF NORTHERN TERRITORIES

- FLOW OF RESEARCH INFORMATION & CLEAR STRATEGY AVAILABLE TO ALL - SHARE OUR STORY STRAP LINE AND SUITE OF MARKETING TOOLS FOR IDENTITY CREATION

- COOPERATIVE ADVERTISING: WITH OPERATORS IN NT, NATIONAL PARTNERS & FOR INTERNATIONAL MARKETS
- FULL WEBSITE www.nttc.com.au

- CLOSE COLLABORATION WITH TOURISM AUSTRALIA

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

MARKETING PARTNERSHIPS
Not easy because of differing objectives & levels of commitment of relevant stakeholders
Difficulty of persuading: - public sector to give up some of its control, and

- private sector to contribute more resources

Most successful example: Maison de la France From start in 1987 now has 1,200 members with an annual budget of over Euros60mn, over half from the private sector Growing role of consumer in forcing public:private partnerships?

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

SUSTAINABLE & RESPONSIBLE MARKETING

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

Support operators who meet the development & operating criteria & quality standards laid down
Give marketing & promotional support to developers & operators of sustainable tourism products/services

Provide incentives for developers & operators of sustainable products/services to enable them to sell at prices acceptable to the market consider the soft core/hard core model of ecotourism
Implement a code of ethics to make ir-responsible marketing unacceptable in the marketplace and among stakeholders
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

SUSTAINABLE MOTIVATION
Tourism at the forefront in that emotional factors (including perceived value-for-money) play a central role in decision-making Psychographic research identifying consumers most likely to be sensitive to the sustainable or responsible tourism message so they can be ring-fenced for product offerings & marketing communications eg TIA/National Geographic Geotourism survey Conversion achieved through persuasion & stimulation rather than hectoring or haranguing
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PROMOTING TOURISM INVESTMENT

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

Role on incentives to encourage appropriate developments

Incentives: specific & regularly reviewed

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PRICING
Accelerator or brake Targets: those who could otherwise not afford to travel to the destination, or who consider standard prices too high Tactical pricing in tourism: - seasonality - inflexibility/rigidity of supply

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

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PLACE - DISTRIBUTION
Especially vital in travel & tourism: - growing size of businesses - several units within a group owned or strategic alliances - growth of long haul travel weak consumer knowledge - reaching & attracting first time customers - providing convenience for repeat customers - growing competition where excess destination capacity - need to sell capacity ahead of production for cash flow - need to maximise promotion & tactical pricing through modern distribution channels yield management
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PLACE - DISTRIBUTION
Five main choices: 1. Principal>Customer (on producers premises) Producer=Retailer 2. Principal>Customer (in customers home) - reservation system 3. Principal>Owned retail outlet>Customer (on retailers premises) vertically integrated 4. Principal>Independent retail outlet>Customer (on retailers premises) agent commission system 5. Principal>Tour operator>Independent retail outlet>Customer (on retailers premises) bulk sale to tour operator TOUR OPERATOR HYBRID WHOLESALER/PRINCIPAL
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

PLACE - DISTRIBUTION
Reservations systems accessed through electronic technology can be developed by principals, tour operators or travel agents so these five systems can still apply BUT the balance of power can be manipulated in favour of the destination principal through easier direct communication with prospective customers Need for high quality & well-connected destination websites that enable searches from initial enquiry through to direct booking to be done through a single web hit with appropriate links

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

DESTINATION PLAYERS IN DISTRIBUTION

1. Tourist office nothing to sell! 2. Facilities/attractions remote from main marketplace 3. National airline but half traffic comes on foreign carriers 4. Source market tour operators key providers bur foreign-owned with little commitment to specific destinations 5. Source market travel agents major influence but all owned in source countries little concern which destination chosen

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

DESTINATION MARKET REPRESENTATION

1. No representation 2. Individual public relations(PR)/information officer 3. PR company appointed

4. Marketing representation company (MRC) appointed

5. Both PR & Marketing Representation companies appointed 6. Destination marketing organisation (DMO) appointed combining PR & MR functions

7. Own office established

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

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

ELECTRONIC TECHNOLOGY
Electronic reservations systems now dominant One-in-five Britons buy their holidays on-line and a far higher proportion carry out web research Advantages - destination parent website a vital entry point for interested tourists to research attractions and whats on offer through themed linked pages to activities, places within the destination, accommodation etc Linked access to individual suppliers websites enable tourist to make bookings

R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

ELECTRONIC TECHNOLOGY
Problem still exists for small destination supplier How do I identify my prospective customer? Or, rather, how does my prospective customer identify my operation? Needle in a haystack - luck if he/she continues the web search down through the pages as small producers not on initial pages .travel domain now established www.tralliance.info

Enable a better match between buyers & sellers through more precise results to would-be travellers on-line enquiry
Role in relationship/ one-to-one marketing
R. Cleverdon

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

TRAVEL DIRECTORY
Information retrieval from an integrated, classified data set Directory controlled vocabulary of 1,800 travel/tourism terms

.travel Directory process

Where do you want to go? DESTINATION What do you want to do? What is your lifestyle? ACTIVITIES LIFESTYLE

How do you want to get there? TRANSPORTATION How would you like to stay? ACCOMMODATION What services do you need?
R. Cleverdon

TRAVEL SERVICES

THE MARKETING MIX: PRODUCT, PROMOTION, PRICE, PLACE

LOCAL LEVEL ACTION

1. Money from the centre is tight 2. Need for tightly focussed niche marketing on a highly targeted basis 3. Counterbalance to the international tourism distribution systems push for standardisation in destination tourism products 4. Exploiting growing consumer trends Local level action: only way the differentiation vital for long term survival as distinct & distinctive destinations can be achieved

R. Cleverdon

Time out !!

R. Cleverdon