MODULE 1

THE TOURISM MARKETING AND MARKET

SEGMENTATION

LESSON 1: Tourism Marketing

At the end of this lesson, the students should be able to:

1. Define tourism marketing and its functions;
2. Differentiate tourism products from consumer products;
3. Explain marketing as a management process; and
4. Discuss the evolution of marketing and the integrated marketing approach.

Week 1-2

Marketing has evolved from simple trade to a production orientation, and to a sales
orientation. When businesses realized that production was increasing, they began competing for
recognition within the market. The customer has become king, and building relationships with
them has been at the heart of any successful business enterprise. With the rise of relationship
marketing and social media marketing, the rules of the game have changed. Tourism has become
one of the world’s largest and fastest growing industries. Much attention has been given to how
tourism can continually grow. Just like any other business, marketing plays and integral role in its
continuing growth.

Now, I want you to grab anything you see near you. May it be a pen, a book, a glass, etc. On the
blank spaces that follow, write as much as you want promoting the thing/material that you just
grabbed. And you should write something that would convince me to buy it.
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Do you think you had given me enough knowledge about the product that you were selling? Did
you consider the price of the product to its quality? Perishability? Appearance? After the
distribution of the next module, I will let you know if I would buy your product or NOT (bought
products will earn 50pts, and rejected products will only earn 10pts.) Let’s see how well you did!
😊
 Tourism has become one of the world’s largest and fastest growing industries. Many new
destinations are emerging apart from traditional favorites – Europe and North America. These
new destinations are hopeful of the economic gains that tourism can bring, which include increase
in trade, infrastructure, and job generation.
Marketing for tourism covers several levels, from the tourism destination as the product
itself, down to the specific tourism products and services that a tourist should avail to complete
the tourism experience. These products include transportation (airline, cruise ship, bus, etc.),
accommodation (hotels, inns, apartelles, bed and breakfast), food and beverage (restaurants,
catering, bars), attractions (amusement parks, museums, zoos, marine sanctuaries, etc.),
amenities, and souvenir shops, among others.
What is tourism actually selling then? Tourism is not a single product. It is a combination
of products and services which results in a holistic experience for the traveler.

UNIQUE CHARACTERISTICS OF
THE TOURISM INDUSTRY
Unlike consumer products which can be availed off the shelf, tourism products have unique
characteristics that make their marketing and promotions quite challenging. The tourism product
is intangible, inseparable, seasonal, and substitutable. Additionally, tourism is a high involvement
product.
Now, let’s discuss each of the characteristic of tourism product!

Intangible

Tourism products cannot be touched, smelled, tasted, felt nor heard prior to purchase. They
cannot be subjected to prior scrutiny. One cannot examine nor test them before purchase, unlike
consumer products which can be sampled.

A destination that promises fresh air from its beach or a scenic view of the mountains cannot send
a sample. Consumers rely on photographs of place, comments or reviews from those who have
visited the place or availed of the services, and promises from the company itself.
 This is a photograph of Boracay. The beauty of this scene can only
be appreciated when one is actually in the destination. Looking at the photograph will never
equate to the experience of having one’s hair blown by the wind, feeling the sun’s penetrating
heat while basking on it, and hearing the roar of the motorboat. This is why the word of mouth of
a highly effective means of promoting tourist destinations.

Inseparable
The tourism product cannot be separated from the consumer. When tourists avail of products and
services, they have to personally go to where the products are. Since what is being sold is the
experience, the product and the consumer cannot be in two different places; they have to be in
the same place.

A tourist who avails of airline ticket need to be physical present inside

the airplane to avail of the product. Products cannot be delivered to where the consumer is. Most
of the time it is the consumer who goes to where the product is to avail the product.

You are Part of the Product

Activities within the destination can only be enjoyed when one is a part of it. Spectators have a
different experience compared to actual participants in the tourist activity.

Variable

The tourism experience is likely to be different depending on when the product is availed, who
one is with, and how the service providers deliver the service at the time of the consumption.

One may have gone to the same restaurant several times and have a
different ding experience each time. While the first time at the restaurant may have been quiet,
the second time, one finds it to be noisy. Simply because there may have been few customers
the first time and a rowdy group of teenagers the second time. Hence, the variability of the tourism
product.

This is the primary reason why

standardization of operation is crucial in
the tourism industry. Chain and
franchise establishments make it a point
to standardize the way they provide
products and services to address the
variability component of the industry.

Perishable

The tourism product is one of the most highly perishable of products. Perishability, as used in this
context, refers to not being able to forward inventory to the next day. It does not refer to food
being spoiled and thrown away. Products become perishable when it can no longer be consumed
today even when no one consumed it the day before. Unlike consumer products such as a pen;
if the pen was not sold today, it can still be stored in a warehouse to available for the sale the next
day.
 Airline and restaurant seats, hotel rooms, and function rooms are perishable products. A seat or
a room that is not sold today cannot be sold some other day.

For instance, a hotel with 100 rooms that

was half full yesterday will only again have
100 rooms today. The 50 rooms that were
unoccupied the day before cannot be sold
the following day; the hotel fails to earn
from the unsold rooms. A hotel will always
have the same number of rooms for sale
at any given day.

Seasonal

Seasonality does not only refer to seasons of the year or the whether conditions. It also refers to
behavioral patterns of the travel market. The seasonality of the tourism product hinders it from
maximizing its profits all year round. Hence, intensified marketing during the lean season will help
increase demand for the product. This is also the reason most tourism products, such as airlines
and resorts, have different rates throughout the year. Such differences in rates help manage
capacity and yield to maximize profitability.

Take note!

Revenue management addresses the perishability factor of the tourism product. With the
proper tools for forecasting price and occupancy, yield can be maximized.
Substitutable

Competition in the tourism industry is intensifying. With new destinations emerging and competing
in the global marketplace, one destination can easily be substituted for another destination.

With a new restaurant opens, the old favorites are relegated to second choice.

It is quite a challenge to establish loyalty among clients since there is a wide range of product
offerings to choose from. With many choices available, the tourism product is highly substitutable.
However, identifying one’s competitive advantage and a unique selling proposition may help make
a tourism product less substitutable.
Tourism as a High Involvement Product
Decision making in the purchase of tourism products is considered to be of high involvement.
Tourism products of high involvement mean that there is a greater degree of thought or study
involved prior to purchase. EXPENSIVE, COMPLEX and UNREPEATABLE are characteristics of
high involvement products.

Purchase of expensive products is likely to go through a long and detailed process of

canvassing and comparing of brands, suppliers, and product features.
If the product commands a high price worth more than one’s monthly salary, one would surely
make detailed comparisons before finalizing any purchase. Travel products, home appliances,
and real estate properties fall under this attribute.

Consumers may find complex products difficult to purchase.

The difficulty may arise from the need to understand the features or details of the products. Travel
packages can be considered as complex mainly due to the variety of products and services
available, and the “jargons” (technical words) used in explaining some of these products. The
same holds true for highly technical products such as electronic gadgets and computers.

The unrepeatable nature of travel makes it a “once-in-a-lifetime” purchase.

With the novelty-seeking behavior of most tourists and the high cost of travel, travel purchases
may not be repeated or may be infrequent. Hence, more careful scrutiny is exercised prior to
purchase. Aside from travel products, special events such as weddings and debuts fall under this
characteristic.

Take note!

Marketing necessarily plays and important role in the purchase of tourism products. Because
of the aforementioned characteristics of the tourism product, a marketing strategy needs to
be developed to make the product competitive in a highly commercialized market place.
 Table 1.1 High Involvement vs. Low Involvement Products
High Involvement Low Involvement
Expensive Inexpensive
Complex Simple
Unrepeatable Familiar

TOURISM MARKETING
DEFINED
In the past, marketing was associated with only advertising and selling. However, these
two activities are now part of a more complex set of strategic activities that comprise marketing.
There has been a misconception that marketing is a task that is performed solely by account
managers and marketing officers. A highly successful establishment makes marketing a concern
not only of guest contact positions but of each and every employee of the establishment.
Costumer satisfaction is at the center of marketing. It is easy to persuade a customer to make the
initial purchase, but making the customers return for more is dependent on his satisfaction from
his initial experience.
 The American
Marketing
Association (2013)
approved a new
Kotler, Bowens, and definition: marketing
Makens (2010) define is the activity, set of
marketing as the art institutions, and
and science of finding, process for creating,
retaining, and growing communicating,
profitable customers. delivering, and
Philip Kotler (2002) defines exchanging offerings
marketing as a social process that have value for
by which individuals and customers, clients,
groups obtain what they need partners, and society
and want through creating at large.
and exchanging products and
values

Figure 1.1 The Evolution of Marketing Definition

MARKETING AS A
MANAGEMENT PROCESS
Since the provision and consumption of the tourism products and services usually occur
simultaneously, the marketing orientation should involve the entire organization. The marketing
management process involves the following key processes (Lumsdon 1997):
Table 1.2 The Marketing Management Process

1. Marketing Information System With the advent of technology, the provision

for a marketing information system enables
the organization to compile an updated set of
information about its customers, competitors,
and the organization’s capability and
effectiveness.
2. Marketing Planning This involves an analysis of the marketing
environment in relation to the potentials of
one’s business. It also involves the setting up
of objectives and an evaluation of the
milestones that the company has reached.
The creation of marketing strategies will help
increase the business by obtaining the best fit
between the company’s resources and its
target market position.
3. Planning Tactical Campaigns This step ensures that practical and realistic
tactical campaigns are conducted in support of
the comprehensive marketing strategy.
4. Marketing Operations This process involves the challenging part of
implementing the planned strategic and
tactical campaigns by coordinating with all
stakeholders, fine tuning the marketing mix as
they unfold, and ensuring the activities are
conducted as planned.
5. Monitoring and Control This involves the ongoing process of
evaluating sales data and financial
performance versus marketing activities
conducted. It also includes the handling of
customer feedback and complains (if any) and
coordination with what the staff has to say
about the marketing campaigns. Finally, it
includes being aware of what the competitors
are doing.
 CORE MARKETING FUNCTIONS
Marketing’s key functions include marketing information management, financing, pricing,
promotion, product/service management, distribution, and selling, briefly discussed as
follows:

1. Marketing Information Management – entails gathering information about customers

to better serve their needs and improve decision making.
2. Financing – involves planning to ensure that resources are available to maintain and
improve the business.
3. Pricing – ensures that the value and cost of goods and services offered to customers
will be at the level that customers are willing to pay.
4. Promotion – prepares the various promotional strategies that will enable the products
to be introduced and sold to the customers.
5. Product/Service Management – involves designing, developing, maintaining,
improving, and acquiring products and services to meet the needs of the customers.
6. Distribution – involves bringing the products and services to the customers in the best
way possible.
7. Selling – is the ultimate measure of marketing success. Strategies on following up the
sale, closing the sale, and making a repeat sale are crucial tasks of marketing.

THE MARKETING MIX

Kotler (2010) says that marketing facilitates the exchange process and the development
of relationships by carefully examining the needs and wants of consumers, developing a
product/service that satisfies these needs, offering it at a certain price, making it available through
a particular place or channel of distribution, and developing a program of promotion to create
awareness and interest.
 Product

Marketing
Place Price
Mix

Promotion

Figure 1.3 The Tourism Marketing Mix (4 P’s)

1. Product/Service – is what the company is offering to satisfy a consumer’s want or need.

2. Price – is the value that the seller puts on the product or service. This includes the cost of
the product and the profit the seller wishes to make, this is also the amount a customer
has to pay in exchange of the product or service.
3. Place – is the means by which the product or service reaches the consumer.

4. Promotion – is the strategic plan by which customers are informed about the product or
service and its value, it also encourages customers to purchase the product or service.
 INTEGRATED MARKETING
COMMUNICATIONS
APPROACH
Promoting and selling products have become heavily reliant on traditional advertising
techniques which have become more expensive but less effective. The Integrated marketing
Communications (IMC) approach was born out of a need to enhance the demands of businesses
to promote their products. What is IMC then? It is the process of using all forms of promotion to
achieve maximum communications impact while maintaining a consistent image for the products
or services.
Let us walk through the factors that contribute to the growth of IMC in order to have an
appreciation of the shift from traditional marketing to the growing paradigm of relationship
marketing.

Factors that Contributed to the Growth of IMC

1. Growth of Technology
2. Incentive-based Compensation
3. Consolidation of the Retail Industry
4. Database Marketing

Research the difference of each factor and give examples.

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 To reach target market

To achieve company
objectives

Within the available

budget

Figure 1.4 Use of Integrated Marketing Approach

Various studies have shown that the integrated marketing communications approach has
been an effective way for companies to reach its target market and to achieve company objectives
within the available budget. Given creativity and strategic thinking, IMC can maximize a
company’s limited resources; thus, allowing small players in tourism industry to compete with
established brands.

Application

When you used to travel to school or anywhere, try to recall how tourism establishments and
destinations are marketing their products and services. When you looked at billboards, transit ads
(posters inside and outside buses and other public transportations), and other ways by which
tourism products and services are promoted. Express your thoughts about those marketing ads
on the space provided.
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Assessment
Give five examples of tourism products that you are familiar with, and explain how the
characteristics of the tourism product are evident in each. And in box provided, choose from your
list a tourism product that you would want to promote and create poster for it.
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