MARKETING THE INDUSTRY SEGMENTS 4.01 Explain the use of the marketing mix and promotional mix in the travel, tourism, and recreation industry.

Marketing: The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

Marketing mix: The combination of the four basic marketing strategies; also known as the 4 P’s of marketing Product Place Price Promotion

Packaging: Combining related and complementary services into a single-price offering *As one of the product considerations, packaging serves an important role in every area of the hospitality and tourism industry.

Package Considerations Include a core attraction or “demand generator” Provide value to the customer Provide consistent quality among all the elements Plan well Cover all the details Make a profit

Benefits of packages for the customer “User friendly” Meet specific customer needs Create benefits that might be unavailable or overlooked when making individual arrangements Greater convenience Affordability Ability to budget for trip Consistent quality of services free from surprises Satisfaction for those seeking special interest excursions

Travel Packages Fly-drive Family vacation Fly-rail Lodging and meal Entertainment packages

Corporate Participants in the Packaging Process Lodging providers Restaurants Car rental agencies Travel agents Airlines Buses Attractions

Benefits of Packaging to Businesses Increased customer volumes, thus more prosperity Increased business during off-peak periods Improved focus on meeting the needs of specific target markets Attraction of new target markets More accurate forecasting Improved efficiency Complementary services Repeat customers Increased length of stay and capital spent Increased customer satisfaction

Promotional mix: The combination of advertising, sales promotion, personal selling, merchandising, public relations, and publicity used by hospitality and travel businesses for a particular time period Inform Persuade Remind

Advertising: Any PAID form of NONPERSONAL communication through different media by an identified sponsor Newspapers Magazines Radio Television Outdoor advertising Direct mail Interactive media

Factors to consider when choosing the appropriate advertising media Target market Costs Reach Frequency Waste Lead time Clutter Total advertising budget

Factors to consider when choosing the appropriate advertising media Reach: The number of potential customers exposed to an advertisement at least once Frequency: The number of times potential customers are exposed to a given advertisement Waste: The number of customers exposed to an advertisement who are not part of the company’s target market Lead time: The period of time between the design of an advertisement and its actual appearance in the selected medium

Advantages of Advertising Low cost per contact Reaches customers where salespeople cannot go Allows for creative production The message may be repeated several times

Disadvantages of Advertising Cannot close a sale Messages can be ignored High waste factor Does not provide quick feedback

Cooperative advertising: A partnership between two or more companies to share the cost of an an advertisement Allows businesses to share the cost of an advertisement Reduces control over the message Increases lead-time for planning the ad

Personal selling: Promotion that involves direct contact between a salesperson and a customer Outside the place of business (field calls/outside sales) On the phone Inside the place of business

Advantages of Personal Selling Ability to close sales Capability of holding customer’s attention Allows two-way communication Provides direct feedback Focuses on individual needs Develops relationships Makes immediate action possible

Disadvantages of Personal Selling High cost per contact Customer defensiveness or resistance

Sales promotion: Approaches other than advertising, personal selling, public relations, and publicity that provide customers with a short-term inducement to make an immediate purchase Coupons Samples Games

Advantages of Sales Promotion Ability to generate immediate sales Can be circulated to a large group of people Provides quick feedback because of the time limit associated with the incentive Flexible timing

Disadvantages of Sales Promotion Benefits limited by the constraints of the time frame Does not build long- term loyalty for the company

Recognition programs: A sales promotion technique that rewards customers as an incentive or inducement intended to ensure their loyalty and to generate repeat business Frequent-flyer programs Frequent-guest programs

Merchandising: Point-of-purchase advertising that includes all of the materials used in the business to encourage sales Posters Tent cards Displays Demonstrations Menus

Advantages and Disadvantages of Merchandising Advantages and disadvantages similar to sales promotion Promotes impulse purchases Supports advertising campaigns

Public relations: All of the activities that an organization uses to develop or sustain positive relationships with individuals or other companies Company newsletters Press releases Media kits Feature stories Ceremonies

Publicity: A specific kind of public relations that involves communicating positive and newsworthy information about a business through the media at no cost to the business

Advantages of Publicity No cost Considered reliable by customers since the company does not pay for or control the message Implied approval and support Respected and seen as having stature coming from national television and other media sources Helps maintain a public presence

Disadvantages of Publicity Difficult to generate with any regularity Lacks company control over the message May also include negative influences