The World S Fastest Growing Industries
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 5345 words||✅ Published: 1st May 2017|
Travel and tourisms is now considered one of the world’s fastest growing industries. These days hospitality and tourism management have gained some extra focuses on it as it has become a major potential sources of business. According to WTTC tourism industry is ranked the largest industry in the business. It is in the top 3 industry through out the world, be it in developed countries or be it a developing. Near about one employee out of sixteen (16) employees are in the tourism industry worldwide. Thus government as well as private organizations is tending towards this business as it adds more value to the gross national income.
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In last few year tourism sector has contributed a major source of income for both the public and private sector. It has become a widely adopted approach for the private organizations to invest in the tourism industry. Over last few years many small countries with natural resources have come up with their intention to invest in tourism sector. One of the major contributors in this entertainment business is India, Malaysia, Thailand, Indonesia etc. Tourism industry not only includes hotel and entertainment but it is also comprises of airlines, road transports, hotels, entertainment, modern amenities and so on. With this view in mind Air Malta has launched new air buses. In addition to that the government of Malta wants to improve the scenario of current hurdles it was facing.
Besides, tourism has experienced a positive upsurge in the post inflationary period (Mlotshwa K, 2010). Hotels and restaurants have record average 37 percent room occupancy in the first half of this year. United Nations world Tourism Organization (UNWTO) has recently reported that the worldwide tourist arrivals grew by jaw dropping seven percent in the first quarter of 2010. The government of US is looking forward to turning the tourism into a billion dollar industry. Even the countries are now engaged with fierce competition in tourism industry. For example Canada has been a lucrative market for many US organizations in restaurant businesses. UNWTO has also reported that the increase in international tourist has also impact in the African countries. But it is great irony that Europe had little to contribute in the increase in the percentage of the international tourist. UK tourism sector has already taken initiatives to improve the competitiveness of the UK tourism industry (Robinson K).
The whole world is now a global village. People are traveling from country to country for many purposes. People are having trips for business purposes for vacation or may be for having new experiences. Whatever the reasons may be people are traveling more than ever before in recent years. In this 21st century we are getting mobile day by day. Our lives depend upon the mobility of ourselves. The more we move from one country to another the wider we can have a horizon of knowledge. Poverty alleviation, climate change, better lifestyle have contributed to people become immigrant or settle in neighboring countries or developed countries. This reason has also influenced the tourism marketer to invest more.
1.1 Current Scenario
Current situation of tourism industry is on the rise. Hotels, restaurants, airlines, everything related to tourism sector are finding huge opportunities in their respective business. For example British Airways has come up with new offers for the world traveler. In this era of globalization people have to move from place to place and country to country. One of the most important contributors, which increased the importance of tourism sector, is globalization. Today the whole world is considered as a global village. International marketers are considering the total earth a single market. That is why they have to move from one region to another for expanding their business. Host country is looking for new scopes to offer the international marketers and foreign investors. Hence raise the question of tourism. It has been anticipated that a country may earn huge amount of foreign income if it focuses on the tourism sector. Host country should make their country welcoming, appealing and enchanting for the tourist. Tourist may be the businessmen, students, or traveler for vacation purposes. Business customs and practice in different world markets vary so much that it is difficult to make generalisations about them. Business people operating in another country must be sensitive to the business environment and must be willing to adapt if necessary. So tourism is primarily based on service based industry. Therefore the major product offerings of tourism sector may be foods, beverages, hotels, restaurants. In short all the facilities comprises of experiences and hospitality. Since these are intangible benefits these services may vary from person to person. Even the service provider has to be conscious and consistent enough while offering these services. Because of different prices that can exist in different country markets, a product sold in one country may be exported to another and undercut the prices charged in that country. This methodology can be used in the tourism sector as well. Every country is bestowed with its own resources. Whether it is natural or industrial each country has the potential to attract the foreign investors and foreign travellers to visit their country. But it is not an easy process to enter into the market. Many catalysts are involved in this process. If anyone wants to expand its domestic region into the world’s market he or she has to know every ins and outs of the international marketing. It should be noted that international marketing firms often use market orientated differential strategy. That is they use different marketing strategy to different international markets according to demand, ability to pay, competition and the ability to separate markets. If the product or service in question is more or less the same then it is a form of market segmentation.
2.0 Marketing Strategies for hospitality and tourism industry
Firms already have comprehended that they will not be successful if they focus on wider segmentation of market or all the tourist market at the same time. With the same token buyers or customers or in this case service takers are also scattered through out the globe. They also vary in choices, preferences, needs and cultures. Even the hotel and tourism industry firms also vary in their structure, orientation, strategies, goals and objectives. Therefore companies should design their marketing strategies in such a way that they can maintain long term customer driven, mutually beneficial relationship with their customers. For example a large industry in hospitality and tourism sector British Airways have recently merged with another airline company from Spain is Iberia Airline and did partnership with American Airlines to achieve a global competitiveness in the airline industry throughout the globe.
Creating and Developing Customer Loyalty
Customer loyalty stands for the actions of repeat purchase and those that offer good word of mouth. Some customers do great benefit to the organization by offering favorable word of mouth about the service of the respective firm, uttering about this to friends and family, thus adding value to the service and increasing the number of loyal customers.
Keeping that in mind most successful organizations have shifted their strategy from mass marketing to niche marketing. They are now coming up with new offerings, which are customized for individual customers. Companies are now moving towards long term customer driven marketing strategies.
Guerrilla marketing means promotions that depend on time, energy and imagination rather than a huge advertising expense. It is an uncommon tactics for tourism industry but effective one.
Network and Relationship Marketing
First of all firms seeks to identify which market they are going to target. Who will be their target customer to serve? They have to define the target market. This process is named as market segmentation. Relationship marketing means keeping long term mutually beneficial relationship with the customers. Each segment has a common set of characteristics which is known to the marketers. There are several ways to maintain relation with customers. Companies first have to collect detailed information about the market.
Brand Identity and Strategy
Identifying the appropriate brand in the market within the firms now will tend to look for ways how to approach the target customer, which is called brand identity. Brand indentity is distinguishing one market from another depending on their distinct attributes. In a targeting approach firms identify the characteristics of each market and select which market to target. For example British Airways has special service offering which is named Executive Club (Alastair J, 2009). This Executive club is for the frequent flyers of British Airways. They wanted to value their customers and increase the opportunities in tourism. This executive club has offered discounted economy fare. The target market for this service for British Airways is the regular and frequent flyers.
Strategic Customer Relations
Because tourism sector is solely a service sector, the marketing plan it should follow is service marketing. Apparently it might be viewed as its marketing for a small business but using the strength and experience of a national or international company. But this doesn’t need to be a large powerful organisation but a powerful entrepreneurial spirit of the individual. Marketers have to maintain a strong customer relation and sort out the problems that occur with the customers.
Effectiveness of e-marketing
The on-line environment to be a truly successful medium for consumer spending, the technologies will need to match the utility provided by the traditional high street retail formats. Such utilities include immediate delivery; credit facilities and choice of method of payment; display; personal assistance in selecting goods; return services and warrantees. (Hadjiphanis et al, 2006)
2.1 Market Segmentation
Market is a set of potential and existing buyers. But not all buyers are same in response to the product and service offerings. For example those who are afraid of flying or afraid of airlines are not the customers of the British Airways. Again who are not eager to spend a lot of money in transport are not the customers of British Airways Business Class. So buyers differ in many characteristics. It may be demographic, psychographic, geographic behavioral reasons. Market segmenting comprises of isolating the large, assorted market into smaller segments that can be achieve more competently and successfully with manufactured goods and services. The reason for segmenting a market, is to permit the firm’s marketing/sales plan to concentrate on the split of prospects that are probably acquire the firm’s products or services. If these steps can be executed appropriately, this initiative will help to assure the maximum sales for the respected firms in question. Though the total factors depend on whether the firm is selling its service to individual consumers or a business, there are specific distinction in what the firm will regard as when central market segments. The marketing strategy is still consists of another two steps which is called differentiation and positioning. Differentiation means separating the market from other firms in respect to products and services. It will have a distinct image in the minds of the customer. And lastly the process is named positioning. Positioning means, putting a distinct and significant place in the mind of customer opposed to competitors. We will be discussing about these steps in detail in the following section.
For example: in Ritz Carlton hotel all the suits are not for the commercial traveler Because, commercial and regular travelers can not afford to pay for those suits. Basically the segmentation process is created to recognize exact feature of a customer segment that are alike and unlike to others inside the same cluster. If we see more precisely into the scenario we will find that usual industry or firm dimension in a business atmosphere and standard age, sex and salary trait in a buyer situation, these separate and spot combination of attributes that make markets, prospects and customers unique. Segmentation model output is used to define and predict the success levels of sales & marketing initiatives, only if the sustaining methodology to ensure the efficiency of each initiative.
Segmentation process can consist of as many as 4 steps:
Geographic segmentation means dividing the market into geographic base. In this process there are several criteria to segment such as regions, cities, neighborhood, towns, states, counties etc. The well-known customer base is cutting by side view, always set a vivid name. According to such bases, the pleasant appearance of every division is estimated and a target market segment is selected.
In this segmentation process segmentation variation are age, gender, ethnicity, education, occupation, income, and family status.
Psychographic segmentation divides buyers into different groups based on social classes, attitudes, opinion and lifestyle.
This process involves categorizing market into groups primarily focusing on customer interest, knowledge, use or response of the product.
But in hotel and tourism sector this segmentation differs from other, because hotel and tourism industry mostly based on service. So service marketing strategy is somewhat distinct which is drawn below:
2.2 Market segmentation in hospitality and tourism management
In hospitality and tourism marketing it is vital to know the model of market segmentation. Marketers divide the total market followed by deciding on definite target markets for their hospitality firm. Market segmentation is the work of separating a market into separate and important set of customers who might value distinct products and/or services. Firms might classify prime and less important markets they want to mark. One of the chief hypothesis in the performance of market segmentation is that the marketplace is encompass with assorted sets of customers, for example, distinct classes of people have distinct desires and requirements and, hence, are concerned with diverse service offerings.
Within tourism and hotel management, the reason of the tour is an initial finish for the segmentation method. The firm must take into account whether customers are mainly traveling for business purposes or for vacation purposes. For any of the reason each sort of segments comes into sights. The following discussion will clarify the segmentation procedures done in hotel and tourism industry:
Business purposes tourist
The business traveler always seeks for competence and usefulness in an appropriate way to carry out trade away from domestic market to across the global market. Key sector in business travel comprises of individual, commercial, and the seminar and conference. Individual business persons are generally entrepreneurs. They travel to different nations to carry out business by themselves. Entrepreneurs may be lawyers, accountants, doctors, contractors, consultants, and the like. These people do not work for any organization they work for themselves and generally they do not work for any corporate firm. These people are the target customers of this segment. They don’t depend upon others when and where to travel to perform their personal business. With the same token these individuals run small- or medium-sized business, the exact reason of their visit will certainly influence their budget, mid-scale, or upscale accommodations. There is an important term to define these travelers which is called ‘FIT,’ or free independent traveler. They are frequently defined by this market. Nevertheless, the FIT arrangement does not necessarily differentiate the significant difference between businesses and vacation travel. Individual business travelers travel to conduct business for the organizations they work for. So it is implied that they are traveling on their own cost and not in any group meeting or seminar or corporate gatherings. A lot of giant firms have travel departments from which the respective business travelers can get the cost of the travel in question. This department makes the payment of the part or whole cost of travel and accommodation for their traveling employees. In reality, travel managers for such conglomerate are a fragment in them and are habitually besieged by the giant chain hotel corporation that looks for business customers. This method will eventually help to define the target customers. Besides a sales meeting with a prospective buyer or an intra-company trade appointment are alike to the individual traveler have the same purpose of the trip. With the same token, all business travelers are not necessarily in the same target market. The bottom line is actual reason for the trip which is executed. The conference and meeting market which is popularly known as convention market is another major prospect in business trip. There are also corporate meetings where people gather for sharing an identical business purpose. Conference and seminars generally consists of smaller groups of 30-100 persons, where as general rule normally suggests groups of 200 people. Major participants are associations and corporations.
Leisure purposes tourist
Leisure purpose tourists are almost related to the business purpose tourist, though this market segments depends mostly on family trip. Vacation tourists always seem in a refreshing mood. They travel for a change and entertainment. So they want to go away from home. Most of the cases the reason for visit may be to participate in relative’s weddings, funerals, family parties or may be just for recreation. Most adventurers are even travel for a new experience.
Recreation is a subjective matter to most of the people. Let suppose, one may perceive it as bask in the sun in Bali or in Mauritius. For others, it might be going to Las Vegas and enjoying the shiny and flashy night. Cuisine tourism is increasing these days. As illustrated in a magazine, ‘cooking schools are searching for new methods and recipes throughout the world from different continent and country (Globe and Mail, 2003). Likewise, the idea of vacation trek differs extensively. These tourist groups mainly cover singles, couples, families, and experienced travelers. The same reason validates for a couple as well. Usually couples prefer cottage, public housing. Honeymoon couples, needless to say, generally favor personal housing. Families might go to see relatives, discover new places, or they may go for a routine annual holiday. Experienced explorer is rising in numbers and takes a trip for countless reasons. The same things hold true for the singles, couples, and families. The adult tourist is usually distinct as they are aged between 40 and 50. They frequently want to tour with planned trip group. Group trip is a key target in leisure travel. This segment is mostly prepared for leisure trips who would like a complete plan for them. Here comes the opportunity for the hotel and tourism marketers. Hotels and restaurants may come up with new ideas to attract these tour groups because these groups are often adventurous in nature. There might be many tour organizers who arrange the tours, which consist of decide on a destination, arrangement of the route, and organize accommodation facilities, by road or by air transportation, foods, sightseeing and so on. These planned outings are guided by the guise that will lead the team throughout the excursion and will be paid.
2.3 Industry/market positioning
Travel and tourism industry should figure out their market position in the foreign market before adopting the aforementioned mix of these market segmentations. Let suppose if we take the example of Australia and New Zealand and their complex tourism industry/market positions, we will find that Travel and tourism is an important factor influencing the Australian and New Zealand growth industry. Besides, many other catalysts are also providing prospects of a long-term growth market. Australian Tourist Commission (1994b) have forecasted the sales in tourism industry for the next decades which resulted in record high growth rates in total numbers of tourists arrival, specifically in the leisure purposes, and increasing the gross national product (GDP) of the country which will lead to a significant level yield figures from almost all foreign countries emphasize the rising consequence of the travel and tourism industry. Yet, the two countries are engaged in fierce completion for individual and corporate travelers against the all large market beyond the marketing expenditures and reserve structure of other positioning authorities of the South-East Asian and Pacific region. Even in these days, Australia is considered to be the direct competitor of tourist places in Asia among which Hong Kong, Singapore are important. Hong Kong and Singapore are situated in the long-haul travel market. Another major challenger of Australia is UK in the East Asian/Pacific (WTO, 1994b).
Both Hong Kong and Singapore are strong players in the tourism market because they have associated with Cathay Pacific and Singapore Airlines which are targeted National Tourist Offices with proactive and strong marketing strategies. On the other side of the world in Eastern Europe, there are many faster growing markets, like Germany has also possessed a strong threat for Australia and New-Zealand. Though Australia is perceived to be a niche market, still there are huge opportunities for them to increase their market share. Today Australia is in the sixth position in the most popular East Asian/Pacific tourist spots. On the other hand, New Zealand is a suitable place and a potential market for both the UK and Germany. There are many ever growing tourist destinations in the new long-haul destinations. Among these most popular are South Africa, Vietnam, Cuba and the South Pacific. These destinations are also placing challenge in the path of Australia and New Zealand.
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In this Football world cup South Africa has open up a new vista to the world as a new tourist destination to visit. It has come up with new places and opportunities which were new experiences for the people from the developed world. In these ways countries from developing region can increase their foreign earnings by developing their hotel and tourism sector.
3.0 Public relations for hotel and tourism industry
The fact in hotel and tourism industry is that manager does not take into account the common factors. They usually consider the factors beyond the scope which is very unfortunate. This results in an unnecessary expense item, rather than a profit. The expenditure idea is about costs of goods sold in dollars or on ad placing in media, to communicate the message and elicit response from the target customers. This is definitely vital, but if the consequences know how to be exact, but hits might not be the most effective to way to communicate the message to the target customer.
Promotion policy is comprised of public relations, direct mail, advertising, direct marketing, and personal selling. So marketers have to be conscious enough to spend each single dollar very effectively and efficiently.
Amongst the various tools of public relations event marketing and sponsorship are significant. These techniques have gained consequence in the marketing communication system.
Hotel and tourism public relations consist of behavior such as press release, event management and sponsorship, which encompasses the output for focused editorial column reporting, association of press adjustment trips, newsletter, neighborhood relations and charity.
As opposed to the prior discussion public relation has got more footage over the past few years where all other integrated marketing communication tools have become invalid and obsolete. The primary reason behind this incident is because less cost related to public relations than other expensive marketing communication tools such as advertising or sponsorship. Even for hotel and tourism business it is the public relations that have major effect over their sales and profit revenue. But before public relation was just an afterthought. However it has gained a significant amount of importance and treated as a core marketing tactic. Example: Emirates has built a 60000 seated Emirates Stadium in Arsenal as a part of public relation. Emirates also organizes Dubai International firm Festival which provoke the public to perceive Emirates as a brand close to customers.
The power of public relation is well proven. It’s the most cost effective method for promoting a travel product. It engages third party integrity and getting the popularity in the hotel and tourism industry and promotes the image of the organizations to its public. Insertion of article as a press releases, editorial, and feature helps the firm to join with myriad countrywide and neighborhood news update, editorials, and correspondents. Thus it can have more impact and have better integrity than conventional demonstrate advertising. From a European Union standpoint, Emirates will abide by every facet of Europe’s informative emissions trading scheme (ETS) for aviation. The Emirates is also stoutly sustaining the proposition of ICAO and IATA for a universal initiative to lessen aviation discharge. This contains the situation of ruthless release decline targets for the organization, as well as carbon-neutral development by 2020.
3.1 The function of Public Relations
The role of public relations is 6 facets which are drawn below:
Corporate Public Relations
Developing sound Relationships
Developing positive Relationships with the community
Fundraising by non-profit firms.
3.2 The tools of the Trade
A public relations (PR) approach can play a vital role in a hotel’s promotional tactic. A well designed technique can uphold public relations prospect and make it more effective than advertising and sales promotions. Public relations are one of the most effective methods to communicate the suites’ offer and specialty vacation offer of a hotel to its target customer. For hotel business it is probably the most influential and most cost efficient of all promotional activities. In extreme situation it is even free of cost.
To achieve the organization goals and objectives a hotel industry may follow the following guidelines while taking the public relation as a communication tool:
â€¢ Initiate innovative offers and services.
â€¢ Re-designing the service offerings.
â€¢ Uphold the image of the service, or brand.
â€¢ Persuade definite target segment.
â€¢ secure the services which have negative consequences and experience a suffered from
â€¢ Augment the company’s overall image.
The prime focus of a hotel is to produce high yield on profits by successful public relations tactic, through better understanding and comprehension for the services the hotel provides.
Ethisphere Magazine declared Marriott International in 2007, Inc as one of the “World’s Most Ethical Companies”. Ethisphere Magazine is a nationwide magazine constant to enlightening the central connection between ethics and profit. The most excellent list of businesses was known for their tough management in principles and morals, progress of business discussion on communal and societal problem. This organization has also a constructive commitment in the environment they conduct business. Ethisphere Magazine has a circulation of 65,000 global board members. Amongst them the most influences groups consists of CEOs, counsel members, chief ethics and compliance officers and investors. By practicing ethical business practices and corporate citizenship the business proposes agenda for increasing the market share and generating competitive advantage.
Hotels and tourism industry may seek to achieve the goals and objectives of its organization by taking into account the following necessary steps:
Press relations means a journal or a newspaper will publish news of the respective firm in their journal and communicate news and information of new offers and service about organizations in a possible lucrative way.
Product and service promotion
This method specifies sponsoring various events to advertise services. For example Emirates sponsor the Arsenal Football Team as their event sponsorship. This shows their relationship with the giant team in the English Premier League.
Firm will also have to focus on upholding the image of the brand and a better understanding of the business with internal and external communications.
Lobbying is a vital part in a marketing strategy. If we define it more precisely we will find that it is equally important for integrated marketing communication tool. Lobbying is keeping a contact with the influential individuals to have good control over the rules and regulation in the business.
Internal feedback is more of a tiny part of the total public relation tactics. It is considered the lender of last resources while taking the public relation as a marketing communication tool. It involves recommending marketers of the hotels within the organization to change negative attitude regarding the firm’s service and offerings and prices. The feedback will eventually change the people’s insight and attitudes about the overall corporate image of the organization in question (Lanz. L, 2004).
It is indeed a fact that and a matter of great sorrow that marketing’s contribution to travel and tourism has been underestimated or untouched, and altered (Calantone and Mazanec, 1991; March, 1994). In fact, an analysis of the existing hospitality and tourism sector specified that minimum study has done to cover the impact and usage strategic marketing and integrated marketing communication tool in travel and tourism (Chon and Olsen, 1990; Haywood, 1990; Mazanec, 1994). With the same token, travel and tourism sector was not primarily considered as a management discipline. So for long days in business it has been suffering from being undervalued. This discipline was regularly misrepresented and undertaking (Faulkner, 1993). But this initiatives assist in providing the requirements of shareholder instead of marketers (March, 1994). The insight of this discussion may have no impact on the implementation of the basic theoretical models of service marketing strategy but practically this approach was taken into account for every now and then. But at the same time experts are now cynical about the implications of the findings of the practical purposes which are more important for the hospitality and tourism management (Cooper et al., 1993).
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