- Product
- Price
- Place
- Promotion
Just as the ingredients must be in the correct quantities to
make a successful cake, so the four ingredients of the marketing must be in the
right properties to make an organization’s to successful. Different leisure and
tourism providers will vary the emphasis within or between the four processes
to meet their particular objectives. For example,
- A newly opened hotel will spend a lot of promotion to attract customers
- At tour operator which has just discovered that a major competitor has challenge its prices by 5 per cent may restructure its prices in order to remain competitive
- A visitor attraction that notices it is receiving 50 per cent more school parties than it had anticipated may need to look again at its product to see if the needs of this important sector are being meet fully
- Market research for major leisure company shows that there is an upsurge in electronic games played at home. It decides to shift to resources from its chain of fast food outlets into home based leisure to exploit demand
The above examples show that emphasis on the elements of the
marketing mix will very over time as well as between the various sectors of the
industry.
We shall now look in more details at the four components of
the marketing.
Product
Leisure and tourism product are very different from many
other products that we buy and use. The term product is something of a misnomer
since leisure and tourism are services industries, it is true that a set of
golf clubs, a garden spade or sports shirt are all products in the strict sense
of the word but the bulk of leisure and tourism activity is concerned with the
customer’s experience and how the many elements of the sectors are delivered to
the customer. Below are a few examples of leisure and tourism products,
- Short breaks
- Leisure centers
- Nature resources
- Sports facilities
- Museums
- Holidays
- Art galleries
- Sports equipment
- Events
As you can see some products are tangible. However many
leisure and tourism products can not been seen which are called intangible. As
well as being intangible leisure and tourism products are also perishable, an
air lines seat or ticket to an event not sold today cannot be resold tomorrow.
Leisure and tourism products are also non-standardized. It is difficult to
guarantee the same experience every time. For example a tour operator does not
have control over all the elements of a package holiday, similarly leisure and
tourism events held annually will not be exactly the same from one year to the
next. These two examples highlight the importance of the quality control in
leisure and tourism.
Products in leisure and tourism also tend to be
unpredictable and fragile. A customer treated badly in leisure center may vote
with his or her feet and go elsewhere. Training in customer care is essential
for successful organization.
Price
The pricing of products and services is a key aspect of the
marketing. Price is just as important as place or product or promotion, if the price is wrong no amount of
advertising or other promotional work will make the customer buy the product.
Getting the price right in leisure and tourism is no easy task given that they
are service industries and that most products are intangible. Leisure and tourism
are industries where it is customary to charge different amount for the same
product at different times of the year.
Price is also closely allied to value, a concept that is
notoriously difficult to define since it varies so much between individuals.
Some people put a very high value on a particular leisure pursuit; while other
will not be interested at all and it is clearly of little value to them. Value
will also fluctuate according to particular circumstances windsurfing on a
local lake in high summer will have a greater value than the same activity
taking place in the freezing temperatures of February.
Before we look at some of the methods used to price in
leisure and tourism products, it is important to understand some of the factors
that influence prices.
- Cost: It is important for an organization to be aware of the costs of providing a particular product or services when deciding on its price. This may however be only the starting point of a much more complex pricing policy revolving around many of the concepts discussed above.
- Demand: We have shown that the same product can command a higher price at different times according to the customer demand. People will be often pay high price for exclusivity.
- Competition: In the high competition of leisure and tourism industries, an organization will need to be aware of what competitions are charging and adjust its own price accordingly.
- The state of the economy: In time of recession products may be reduced its price in order to gain revenue like hotels room are heavily discounted particularly at weekends, that it the better to get a little income for the rooms rather than the nothing at all if they are left empty.
- Objectives of the organization: Clearly a private sector or company needs to maximize revenue and will try to set prices that help achieve this objective. In public sector and voluntary bodies may be able to offer more effective prices to achieve their social aims.
Pricing Policies for Leisure and Tours Industries
From the many different pricing policies are used in leisure
and tourism. The following are the some of the most.
- Skimming: When a high price is charged initially for a new product that is unique and that attracts people who are willing to pay the high price for status reasons. The pricing of a virtual reality facility is an example of market skimming.
- Cost plus pricing: Sometimes known as accountant’s pricing that is rather simplistic approach that totals all fixed costs (wages, energy, postage, etc.) and add a small profit margin to arrive at the price to charge. It assumes that an organization can calculate its costs accurately something which a large leisure complex.
- Penetration pricing: This is used by organization wanting to get into a new market where they are existing suppliers of the same products or services. The price will be set sufficiently low to persuade customers to switch their allegiance. It is important that this pricing method to seen as a long term strategy since customers will present an early an early rise in price.
- Competitive pricing: Sometimes referred to as the going rate’ competitive pricing assumes that where products or services are similar. The organization will charge the going rates.
Place
Place in the context of the marketing is concerned not only
with the location of where leisure and tourism activities are undertaken but
also with how they are made available to the customer. We shall look at each of
these in turn. The right location can often mean the different between success and
failure for a leisure or tourism facility. For example, a farm guest house
which is deep in countryside and well off the beaten track will not benefit
from passing trade. Other hand a travel agency in a busy high street location
should attract a constant stream of clients. Location therefore is closely
linked to accessibility at the local, regional and national level.
Promotion
Once the leisure and tourism product has the right features
is correctly priced and offered for sale in the right place, the fourth element
of the marketing namely promotion comes into play. In the dynamic world of
leisure or tourism, promotion is used to:
- Make customers aware of the availability of leisure and tourism products
- Inform to customers of the benefits of one product over another
- Stimulate demand for products
- Provide incentives to purchase or use products
- Remind customers of the existence of a product
Different Promotional Techniques
The leisure and tourism use a number of different promotional techniques. The most important are;
- Advertising
- Direct marketing
- Public relation
- Personal selling
- Sales promotion
Advertising: Advertising is the most obvious of all the promotional techniques in use today. We are all subjected to advertising on our TV screen, Google ads, buses, trains, radio, newspapers and magazines. These are known as advertising media. Many people believe that leisure and tourism organizations put nearly all of their promotional effort and budget into advertising and above other types of promotional activity. This is far from the case, since many small and medium size organizations find it hard to justify the expense of the advertising campaigns. They rely much more on methods such as direct marketing and public relation which can be just as effective with less investment.
Direct Marketing: While advertising is sometimes criticized for not always hitting its intended audience but direct marketing has able to target particular customers very successfully. Direct mail is the best known method of direct marketing, a technique used extensively in the leisure and tourism industries. Using a mailing list, which may have been bought, hired with owns records. If planned carefully, a direct mail campaign can brings excellent results for a whole host of leisure and tourism organizations. Direct mail is one of the fastest growing types of promotional activity in leisure and tourism today.
Public Relations: Public relation is used a great deal in leisure and tourism. Organizations some time think of it as free publicity, particularly when associated with a newspapers or magazines article that features its facilities. In reality there is usually a price to be paid for such editorial coverage even it is just the cost of entertaining to journalists who wrote it.
Personal Selling: Being services industries, leisure and tourism rely heavily on the selling skills of those employed in order to achieve success. Selling is all about helping people to buy rather than selling them something they don’t really want. Training in selling techniques is important for leisure and tourism staff, particularly in the commercial sectors.
Sales Promotion: There are many different sales promotion techniques used in the leisure and tourism industries. Some of the most common are;
- Make discount on vouchers and coupons
- Use brochures and leaflets
- Price cuts and makes sales offers
- Extra product (three for the price of two)
- Free gifts
- Prize draw
- Competitions
- Giveaways
- Free demonstration
- Free memberships
- Displays and exhibitions
The main features of all sales promotion techniques are that
they are temporary and aim to stimulate demand in the short term. The fast-moving
nature of leisure and tourism means that managers constantly having to react to
fluctuations in demand from customers on a daily, weekly or seasonal basis.
Marketing Research for Leisure
and Tours Industries
Marketing research is the collection and analysis of data about customers and its use for management purposes. Marketing research data from whatever source is invaluable to the manager in providing a sound base on which effective marketing decisions can be made. All leisure and tourism organization need feedback from their existing customers and many will want to know why people are not using their facilities but prefer what a competitor is providing. It is the job of marketing research to provide such data in as objective a form as possible. Get informal feedback from guests on their opinion of the hotel facilities or standards of service and will make the necessary adjustments. Successful marketing in leisure and tourism is founded on an effective marketing research base. All organization needs to have detailed information on their existing customers and users as well as with which to plan for the future, a concept known as forecasting.
Research may be required at any stage of the marketing
process, perhaps linked to a feasibility study to investigate the expansion of
an existing theme park or to consider alternation to the pricing levels at a
bowling complex. More specifically marketing research can;
- Identify problems and suggest solution
- Allow an organization to plan for the future with confidence
- Identify new market opportunities or sales outlets
- Monitor the reaction of customers and users to a product, service or facility
- Find pinpoint specific business solution
- Watch trends in the industry and its constituent sectors
- Project an image of an organization that cares about its customers and respect their views or comments
- Reduce costs by highlighting ineffective practices and system
It is vital
for any leisure or tourism organization to put the customer at the center of
all its activity and to develop a market or customer oriented culture. Organization
that fails to understand or implement this concept will not display in the
highly competitive leisure and tourism sectors of the economy. In order to able
to put the customer as the hub of all activity. We shall need to have certain
basic information on the characteristics of its customers such as;
- How many they are?
- What ages are they?
- Are they male or female?
- How far do they travel to get to you?
- What level of income do they have?
- What is their attitude to facility?
- How much money do they spend at the facility?
Decisions on
matters such as pricing, design of promotional material, advertising channel
and choice of menus can be carried out effectively with accurate knowledge of
present and future customers. If we start from the point of view that everybody
is unique then the number and range of customers for any leisure or tourism
product is huge. Customers are so different, a number of attempts have been
made to classify them or put them into different categories in order to
simplify the process of providing data for marketing purposes. Three of the
best known classification techniques are;
- Sociology Economic Classification
- Life Cycle Classification
- Lifestyle Classification
Sociology Economic Classification
- Upper middle - Higher managerial, admin, professional (e.g. judges, surgeons)
- Middle - Intermediate managerial and admin (e.g. lawyers, teachers, doctors)
- Lower middle - Supervisory, clerical, junior management (e.g. bank clerk, estate agent)
- Skilled workers - Skilled manual workers (e.g. joiner, welder)
- Workers - Semi and unskilled manual workers (e.g. driver, postman, porter)
- Lowest level of subsistence - Pensioners, widows, casual workers, students, unemployed people
Life Cycle Classifications
The
shortcoming of the sociology economic classification led marketers to investigate
if there wasn’t a better way of categorizing segments of the population. The
little cycle concept puts an individual into one of nine categories which are
based not on income bit on where that person is on his or her life cycle. The
categories with an indication of their likely demand for leisure and tourism
products are;
- Bachelor stage: Young single people with few ties and a reasonable level of disposable income. Likely to frequent clubs discos or bars.
- Newly wed/living together: Possibly a higher disposable income with leisure pursuits such as going to the cinema or clubs and eating out.
- Full nest 1: Young married/living together with youngest child less than 6 years old. Beginning of family oriented leisure including visits to the park, tourist attraction and family holidays.
- Full nest 2: Young married/living together with youngest child over than 6 years old.
- Full nest 3: Older couples with dependent children, still studying. Leisure centered at home.
- Empty nest 1: Older couples, children all left home. Demand for short breaks, overseas travel and active leisure.
- Empty nest 2: Older couples and retired, income again restricted.
- Solitary survivor 1: Single, widowed person in work. Home and garden liked.
- Solitary survivor 2: little spare cash for leisure. Television, radio and other home entertainment are important for leisure activities.
Lifestyle Classification
A well-known
advertising agency who developed a lifestyle classification known as 4Cs’, four
classes of people who were categorized according to their innermost needs into
one of the following;
- Main streamers: People who are looking for security and who live a conventional lifestyle. They usually buy well-known brands of products. Main streamers do not want to stick out from the crowd. They are by far the largest of the four groups. Their leisure habits are rather conventional including reading, gardening, knitting and walking in the country.
- Admirer: These are people looking for status and who like to be thought of as being at the cutting edge of society. They buy status symbols such as fast cars and expensive jewelry or generally like the good things in life. They are risk-takers and many mostly run their own business. Leisure interests include hang gliding motor sports, power boating, martial arts and listening to hi-fi music.
- Prospers: These are people who have already achieved status and ultimately to be in control of their lives. They have no needs for status symbol but have value quality in all that they purchase. Leisure interests include gardening, entertaining, taking short breaks and playing golf.
- Reformers: These are people who consider that quality of life is more important than status or status symbol. These are the best educated of all four groups and tend to join groups to influence decision making in society. They buy many natural products. Leisure is often family orientated and includes camping, walking, cycling, reading and playing games.