Specialised & Cause Related Marketing (SCM812S) UNIT4 TOURISM MARKETING AN OVERVIEW SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Upon completion of this unit you will be able to: define the concept tourism and tourism marketing discuss of the nature and scope of tourism marketing list and outline the main players in the Namibian tourism industry apply the marketing mix to the tourism industry identify and list the tourism workers and categories of customers in Namibia SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Unit Objectives Every tourism organisation, whether conscious of it or not, conducts marketing activities. A local guesthouse owner, for example, has to make decisions about which services to offer and how to promote the guesthouse. Tourism is deemed to include any activity concerned with the temporary short-term movement of people to destinations outside the places where they normally live and work, and their activities during the stay at these destinations. Whether it is a city, a vacation resort, a theme park, a special event, a transportation provider, or any other business or organisation that relies on tourists for profitability, each one requires a product-specific marketing strategy if it is to beat the competition and win the business of tourists. Tourism marketing is a very important functional area in a tourism business organisation. Tourism marketing is the application of marketing concepts in the travel and tourism industry. Tourism marketing could be complex due to the product being an amalgam of many different industries such as accommodation and transportation. The markets also vary widely, and determining the consumers preferences could be difficult. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Introduction Tourism marketing refers to the organised, combined efforts of the national tourist bodies and/or the businesses in the tourism sector of an international, national or local area to achieve growth in tourism by maximising the satisfaction of tourists. In doing so, the tourist bodies and businesses expect to receive profits. Tourism marketing can be defined as the effective promotional strategies used by tourist destinations to attract visitors. Richard George (2004, p. 23) defines tourism marketing as the process through which a tourism organisation first anticipate consumer needs, then manages and satisfies those needs to achieve sales. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) What is Tourism Marketing? No matter which definition of tourism marketing one prefers or uses, the scope of tourism marketing is unquestionably broad (George, 2004, p. 23). Tourism marketing involves finding out what tourist want (marketing research), developing suitable offerings (product development), telling them what is available (promotion and communication), and providing instructions where they can buy the offering (place), so they in turn receive value (pricing), and the tourism organisation makes money. Also included are diverse subject areas as: product planning and product management, pricing, branding, distribution channels, personal selling and sales management, advertising, promotions and marketing communication, packaging, display, servicing, physical handling, and fact finding (research) and analysis. Areas of consumer behaviour, purchasing, sales management. These can be grouped in what is termed the marketing mix of tourism. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Nature and scope The travel and tourism industry comprise of: International visitors who are residents of countries other than that being visited and travel for tourism purposes. Also known as inbound tourism (simply speaking, inbound tourism is when a non-resident or foreigner visits a given country) International visitors, who are residents of a country visiting other countries and travel for tourism purposes. Also known as outbound tourism (simply speaking when a resident of a given country leaves that country to visit another one) Residents visiting destinations within their own countrys boundaries who travel for tourism purposes. Also known as domestic tourism. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Types/Forms of Tourism 1.Government/Public Sector The Namibian tourism industry is made up of the public sector players as well as private sector players. At the helm of the industry is the Ministry of Environment and Tourism which is responsible for the management and regulation of the tourism industry. Other public sector players in the industry are Namibia Tourism Board (NTB), which is responsible for marketing and regulating of the industry, Namibia Wildlife Resorts, which is responsible for Government parks and reserves and Air Namibia, which is the national carrier. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Major players/Sectors of the tourism industry in Namibia 2.0 Private Sector On the private sector side, many organisations exist which are members of the Federation of Namibian Tourism Association (FENATA), which is an organisation that operates as a voluntary association with objectives that includes lobbying government and acting as the voice of the tourism industry. Its members includes Association of Namibian Travel Agents (ANTA), Bed and Breakfast Association (BrandBA) also known as Accommodation Association of Namibia (AAN), Car Rental Association of Namibian (CARAN), Emerging Tourism Enterprises Association (ETEA), Namibian Association of Community (NACSO), First National Bank Namibia, Namibian Association of Community Based Natural Resources Management Support Organisation (NACOBTA), Namibian Association of Protected Desert Areas (NPDA), Namibian Protection Hunters Association (NAPHA), Namibian Academy for Tourism and Hospitality, Namibia Wildlife Resorts, Tour Guides Association of Namibia (TAN), Tour and Safari Association (TASA), Hospitality Association of Namibia (HAN). SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) CONTD 2.1. Transportation Sector: this sector includes airlines, railway services, coach and bus services and car rental companies. These services need to be in place for tourists to connect to their destinations swiftly and conveniently Accommodation Sector: accommodation should be highly accessible and meet the criteria as set out by the Namibia Tourism Board. Included in this sector are: hotels, pensions, guest houses, bed & breakfast establishments, lodges, resorts, rest camps, temporary and as well as permanent tented camps. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd 2.3. Tour Operators and travel agencies: tour operators and travel agencies alike should provide the services needed by clients, both at the destination and in their home countries, when enquiring about a specific tour. E.g.. Trip travel, world travel, safari tours etc. 2.4 Tourism Destination marketing Sector: it is a new area of the tourism industry that enjoys fast growth, for instance established companies specialise in marketing specific world destinations such as the Disneyworld, the Caribbean, African sites and reserves such as Etosha National Park, Victoria Falls and other world heritage parks. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd The Telecommunication sector: Telecom, TN Mobile, MTC Financial sector: Foreign Exchange Bureaus (Thomas Cook, American Express, Western union), and the commercial banks Education Sector: training is provided to those who want to enter the tourism industry: Polytechnic, Unam, Nice etc. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Further supporting sectors of the tourism industry are formed by Tourism is the third biggest economic sector in Namibia and as such, is a key driver in achieving the countrys growth objectives set out in the Namibia Development Plan (NDP4) (GRN, 2012). The direct impact of the industry on GDP is estimated to be about 4 per cent, while direct and indirect contribution is registered around 15.5 per cent. Employment opportunities (direct and indirect) account for about 80,000 jobs (Whos Who Namibia, 2013). Furthermore, the Namibian tourism industry is one of the important foreign exchange earners in the country. Wildlife conservancies, one of the fastest-growing areas of economic development, are particularly important to the rural, generally unemployed, population. They do not just provide employment to the rural people, but also a means of income. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Importance of tourism marketing to the Namibian economy 1.Inflexibility: the tourism industry is highly inflexible in terms of capacity. The number of beds in a hotel or seats on an airplane is fixed so it is not possible to meet sudden increase in demand. Similarly, restaurant tables, hotel beds and airplane seats remain empty and unused in periods of low demand. 2.Fixed Location: the attractions/destinations of the country such as the Etosha National Park, Sossusvlei, Fish River Canyon etc. are fixed locations. These cannot be brought to the visitor, but the visitor has to go where they are located. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Major Characteristics of the Tourism Industry 3.Relatively large capital investment: every modern tourism establishment requires large investment, frequently over a long time scale. Many risks are involved including economic, political, socio-cultural etc. 4. Long Lead time: this means that the efforts put into tourism marketing i.e. informing potential tourist of Namibia, will only show results in the future. 5. High sensitivity to the Political environment and general safety: political instability and general safety strongly affect the tourism industry. For example, Namibias tourism industry has to fight the negative publicity in overseas media about tourists being murdered. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Applying the marketing mix to tourism marketing Source: Mindtool.com (2014) In service marketing such is the case of tourism marketing, the four Ps have been expanded to seven Ps to address the different nature of services. The additional three Ps in tourism are people, process and physical evidence. The seven Ps are outlined below: SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd What is a Tourism Product? When thinking about a tourism product, its important to differentiate between what the customers actually buy (the promise of a product) and the product mainly a service that they receive after the purchase (the actual product) (George, 2004, p. 26). The purchasing decision made by the tourist is based on the promise of the product a promise established by what she or he sees in your promotional material. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Product This is because the tourism product unlike a car or a computer consists of a combination of tangible and intangible items the potential customers buys before acquiring the product. The tourism product includes all the experiences of a tourist from when he leaves his home to when he returns. An areas natural attractions, including climate, history and culture, can be seen as the raw materials of the tourism product. Other aspects that can help achieve tourist satisfaction include amenities such as water, electricity, transport and communication. The tourism product is the sum of all the factors in an area that can result in consumer satisfaction. A tourist or his travel agent combines the different components to get his own tourist product. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd For example, the product Popa Falls Lodge is the combination of tangible goods (e.g. the rooms, the swimming pool, the birds) and intangible experiences (e.g. the service, the activities). Obviously, the product is thousands of miles away and you are not buying the property, therefore the actual product you buy is the promise displayed on the brochure (while the brochure is a promotional channel). SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd Tourism products in Namibia can be grouped as follows: Accommodation/Hospitality: such as hotels, lodges, bread and breakfast, pension; restaurants Destination: natural scenes, historic excellence, artificial beauties, social cultural excellence; Transportation: comprising Infrastructural ( airports, railways, roadways, waterways), and local etc.; Tour operators: travel companies, travel agents, guides; and Shopping: handicrafts, malls, etc. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Examples of Tourism Products in Namibia If you had a tourist facility in the south of Namibia. What different tourist offerings would you provide for both domestic and international tourists and why? SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Reflection Promotion is the activity of telling your market about your product (George, 2004, p. 29). In the example of the Popa Falls lodge, you are using a brochure to tell your customers about a tourism product in the Popa Falls area of Divundu. Marketing communications occur in three ways: external, internal and word-of-mouth. External marketing uses formal communication channels to promote the tourism product to the traveller, boasting of its benefits and making promises. Internal marketing communication occurs when the tourism service provider makes contact with the tourist and delivers the promised benefits. Word-of-mouth communication occurs informally when visitors or employees discuss their experiences of the tourism product to others. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Promotion The promotion mix includes advertising, publicity, sales support and public relations. The purpose of promotion is to make available the information to the user. Advertising and the sales promotion can be effective when supplemented by publicity and personal selling. Radio, TV, newspapers, cinema and printings are some of the important vehicles for traveling of messages. Another important component of the promotion mix is public relation. It helps in projecting the image of an organisation. Public relation and publicity include regular articles and photographs of tour attraction, use of TV and travel journalists to promote editorial comment. Public relation officer plays an important role. S/he should be efficient, active, impressive, intelligent and well-behaved. Good image projection can be made if the PRO manages the affair like a professional. It is said that word of mouth is the best form of publicity. The word of mouth promotion is an important tool in tourism marketing. With more people than ever relying on the Internet for information, and particularly if the attraction wishes to target a younger, more technologically savvy crowd. Web-based advertising is important. Apart from an attraction or destination building its own website and driving traffic to it, attractions should also explore social networking opportunities. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd Placement is synonymous with distribution. It refers to providing the product at a place, which is convenient for consumers to access. In tourism, the product is not distributed to the client, but the clients travel to the product. Thus, unlike physical products, tourism distribution is more related to where you distribute the information about the service (trade shows, resellers, webpages, etc.). In the example of the brochure of the Popa Falls Lodge, the placement may be your office, a trade show in London, Germany or Windhoek or to potential customers houses (by direct mailing). The tourist centres should be located at suitable points. If the tourist spots are natural (such as Etosha National park) there is no question of selection. Infrastructural facilities, transport and communication are important for development of tourist centres. The SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Placement site selected should have natural surroundings, increased accessibility and improved amenities. At the same time it is also important that the ecological balance is not disturbed. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd Price is what the business charges for its tourism product as defined by the interacting forces of supply and demand (George, 2004). Pricing of the tourist product is complex. Geographical location of the destination, seasonality and varying demand affects the pricing decision. At a practical level, tourism enterprises can determine their prices by analysing: the cost of running the business; the willingness to pay by the demand; the prices of the competition; the commission to be provided to resellers. In tourism, two prices are often used: rack rates, which are the prices published in promotional materials without discounts, and net prices (or net rates), which is the rack rate less the commission offered to resellers (tour operators or other intermediaries). The different pricing methods generally used are cost based pricing, demand based pricing and competition based pricing. It may also be advantageous to differentiate rates for low income group people, students, seniors (retired persons), children, off-season, etc. When a tourist proposes to visit a particular place, the total costs of his traveling also include the expenses incurred on transportation, accommodation and communication. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Price For the same tourist facility in the south of Namibia, how will you go about determining the prices of your tourist offerings. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Activity Any person coming into contact with customers can have an impact on overall satisfaction. In tourism, people are particularly important because, in the customers eyes, they are generally inseparable from total service. In tourism, the human component is very important, so the attitude, skills and appearance of all people involved in the travellers experience needs to be first class. Some ways in which people add value to an experience, as part of the marketing mix, are training and service. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) People If tourism business offers services, the processes of the business can offer specific advantages. Processes should do more than just make life easier for the business they must help customers get what they want. For instance, for booking a flight on the internet the process begins with the customer visiting an airlines website. The customer enters details of the flights and books them. The customers ticket/booking references arrive by. The customer catches his flight on time and he arrives refreshed at his destination. The coming together of all the mentioned stages constitutes a marketing process. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Process Physical evidence makes the customers perceive how the services would be like. Unlike a physical product, a service cannot be experienced before it is delivered, which makes it intangible. This, therefore, means that potential customers could perceive greater risk when deciding whether or not to use a service. To reduce the feeling of risk, thus improving the chance for success, it is vital for potential customers to see what a product would be like. This is done by providing physical evidence displayed in photographs (of your facilities, i.e. image gallery on the web home page, etc.) or testimonials (what tourists write about their own previous experience). SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Physical evidence Select a Namibian tourism product and show how you would apply the marketing mix to market your tourism offer. What elements will you look at? SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Class Activity The main employers in the tourist sector in Namibia are tours operators, accommodation establishments such as lodges and hotels, parks and reserves, hunting farms, taxidermists, vehicle rentals and camping equipment hire companies, curio and souvenir shops. These employ the following different types of workers: porters, cooks, cleaners, gardeners, drivers, security guards, cruise ship workers, guides, secretaries, accountants, land-ladies, hotel managers, waiters, marketers, chefs and bartenders. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd A tourism customer can be defined as a person, who makes a tour away from home for leisure, business or other purposes for more than one day but less than a year. Based on their various needs and reasons for traveling, tourists can be classified in the following categories according to Hotel Resorts Insider (HRI, 2007): SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Who is a tourism customer? 1. Incentive tourists Incentives tourists are those few lucky individuals, who get a holiday package as a reward from his company, for good work or achieving targets, set by the company. Incentive tourists draw inspiration from such tours to work harder, improve work relations and focus on team bonding. A salesman who is awarded with a nice holiday package for accomplishing the target sales is a perfect example of incentive tourist. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Classification of Tourists/Types of Tourists 2. Health or medical tourists Those who seek special medical treatment, which is only possible away from home, make trips to other places and are called health or medical tourist. Some of these tourists avail medical assistance in other countries, for they may be expensive in their own country. Many health or medical tourists also make trips simply to stay for few days in healthier climate. Hoards of medical tourist fly to Namibia from oversee countries to undergo certain medical treatment or just to recuperate. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) 3. Business tourists: Tourist traveling with relation to business is known as business tourist. Business tourism is part of the business world. Most of the cities feature conference centres that cater to the needs of business tourists. A proper example of a business tourist is a salesperson, who makes trips to different places to attend trade shows, to display and promote his own products also. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Contd 4. Education tourists Tourists traveling to a particular place in another town, city or country for further study in order to improve his or her educational qualification are termed as education tourist. There are also groups of people, who travel to attend workshops to upgrade skills. A clinic nurse, who makes trip to another province to attend a particular workshop, qualifying individual about infectious diseases is an example of an educational tourist. 5. Adventure tourists Adventure tourists look for some unusual or bizarre experience. They seek adventurous activities that may be dangerous, such as rock climbing, river rafting, skydiving, shark cave diving and bungee jumping. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) 6. Cultural tourists These types of tourists travel to experience the essence of assorted cultures, such as San rock art, or cultural festivals such as the Bank Windhoek Art Festival or the Ae/Gams in Windhoek, or the City of Windhoek Jazz Festival. Cultural tourists also prefer to witness the World Heritage Sites of the travelled country. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) 7. Eco-tourists Nature loving tourists, who love to go green like traveling to Botanical Gardens in Windhoek, skeleton coast or similar destinations are called eco-tourists. They travel throughout the world in search of destinations not affected by pollution or much human intervention. 8. Leisure tourists These tourists want to rejuvenate and revitalize with comfort, while enjoying a break from mundane routine of life. Examples of this type of tourism are cruising while vacationing or simple relaxing on a beach. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) 9. Religious tourist Religious tourist travel to sites of religious significance. The world is dotted with a number of religious locations like, Jerusalem in Israel, Varanasi in India, and the Vatican in Rome. A huge conglomeration of Christian pilgrimage takes place in Zion City. 10. Sport and recreation tourists These sorts of tourists either take active part in or just watch sports events. Some of such popular sport events are the Soccer World Cup, Wimbledon Tennis Championship, Comrades Marathon, and Fisher River Canoe Marathon. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) 11. Backpacking or youth tourists This group of tourist is of young age and they travel with minimum luggage and on a limited budget. But they are very passionate and love excitements and adventures, while traveling. They generally have no specific travel schedules and tend to travel independently. 12. Special interest tourists (SIT) They nurture particular passion in different things like bird watching, nature, fishing during a particular fishing events, food and wine or attending the Cape Town Book Fair. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Do a mini survey at Air Namibia offices in Windhoek or visit a Hotel establishment to determine the percentages of the different types of tourists visiting Windhoek for that period. Use a sample of 25 travellers. Lets discuss your findings next class. SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) Class Activity SCM812S - Unit 4 - Efigenia Semente PON, Source (Adkins & Peattie, Kottler, Lee, COLL Guide, Simataa E.) END OF UNIT 4