Marketing to local and regional markets
This report is to target the marketing in local and regional markets for tourism organisations. It will be covering the reasons why domestic markets are valuable to tourism businesses, particularly in the context of the challenges of seasonality and perishablilty; how the marketing mix can be used to target the needs in domestic markets and to stimulate demand during off-peak periods. Therefore, the marketing mix will be the main part of this report, as well as some examples to illustrate the theory and finally with the conclusion of this report.
Cooper et al. (2005:553) states that marketing is:
"a managerial process of providing the right product, in the right place, at the right time and at the right price."
Middleton (2001) indicates domestic tourism is the activities that people doing within the country. It also covers area people travelling to and staying inside that country or other area that outside their usual environment within a year for leisure, business and other purposes (Spain, 1995). Seasonality means the tourism businesses in high and low periods demand (Cooper et al., 2005:575) and also indentifies as 'off peak', 'high season', 'mid-season' and 'low season' (Fyall et al., 2003:142). Perishability means the tourism businesses will lose the revenue of the services or products if they are not sold on a particular day (Middleton, 2001:44) as they cannot be stored unlike goods (McLean, 1994). For example, tourist hotels suffer from seasonality, which involve high demand during summer times and little or no demand during the winter time. Business hotels suffer from perishability, as their high demand is on the Monday to Thursday nights and little demand on the Friday to Sunday nights, which mean the hotels have to put greater efforts to unsold accommodation by attracting the off-peak customer or the leisure market to the hotels at weekends (Holloway, 2002:171).
With the challenges of seasonality and perishability, the domestic markets are valuable to tourism businesses because the international market forecasted a decrease of 6% and 4% in 2009 June and July with the effects of economic conditions and the influenza A (H1N1) (World Tourism Organisation, 2009). Although the importance of domestic tourism to the economy cannot always be underestimated, it often is; the domestic residents had spent £67.6 billion while the international visitors had spent £18.7 billion in 2007 (Great Britain, 2009:6). Tourism businesses, which they have to improve their services and products, are not very profitable by the effect of seasonality with short summer seasons. Therefore, it showed that the domestic tourism is important to the local, regional and national economies (Great Britain, 2009:39). Cooper et al. (2005:89) explained that international travel is still an alternative activity although high priority of segments had targeted it as the populations of industrialised nations. As a result, domestic markets may appeal to tourism businesses ten times of international markets.
From those points which have proved that domestic markets are not only valuablebut also important to the tourism businesses in the context of the challenges of seasonality and perishability. As residents of Europe mostly take their main holidays in the summer months of June to September of the year, because their winter months of December to March are generally cold and wet and hours of daylight are short. Many tourism businesses only had the capacity utilization 90% to 100% for sixteen weeks of peak periods, but 30% or less for twenty weeks of off peak periods in the year, which caused many leisure tourism businesses close in seasonal periods (Middleton, 2001:45). Therefore, the tourism businesses adapt the marketing mix to stimulate the demand during off-peak periods.
2.0 Marketing Mix
The marketing mix is the four basic variables known as the four Ps: product, price, place and promotion which marketing managers have to put their efforts to manage consumer demand by improving the services and products of their businesses (Middleton, 2001:87).
In tourism businesses point, product is a service and experience (Vogt and Andereck, 2002) that the tourism organisations achieve customer value by providing benefits to meet their needs and wants, quality of service received and the value for money delivered assessed against the competition. In the marketing point, products are designed to match the needs and expectations of target consumers and their ability to pay. Most tourism businesses produce and market several products to match the requirements of several segments (Middleton, 2001:89). Thus the marketing managers need to think about the product on three levels when designing their products for the service operations. Two of the levels are core product and tangible product will be mentioned as well as some examples (Middleton, 2001:129).
The core product is intangible, an idea, which presented in words and pictures designed to motivate purchase (Middleton, 2001:130). As museums are multiproduct and multiservice organisations, they are likely to have additional core collection and exhibition operations, a range of program areas focusing on school groups and families (Kotler et al., 2008:93). For example, the British Museum has a range of events and activities to target family segments, as well as taught sessions to target the school groups (The British Museum, 2009a). The museums should provide guidance notes for teachers, a reading pack and number of exercises for the children on their website (Cole, 2008). The children can entertain when they are educational by using new display and interpretative technology (McLean, 1994), such as the Samsung Digital Discovery Centre in the British Museum, offers free activities and workshops by using the latest Samsung digital equipment (The British Museum, 2009b).
On the other hand, the tangible product contains the formal offer of the product as set out in a brochure or website, stating exactly what is to be provided at a specified time and specified price. For example, ZSL London Zoo group visit 2009 brochure stated that the group benefits included coach drivers free entrance to the Zoo and a £5 meal voucher for use in one of their cafés; a free adult tickets with every 10 children's tickets; and also discounted rates for the summer and winter periods available for groups of 10 or more (ZSL London Zoo, 2009).
The tourism businesses operated their prices at two levels. The first level, corresponding with marketing strategy, is the price at which tourism businesses have to publish their productions in brochures, guides, on admission tickets and so on. This strategic price reflects 'marketing decisions concerning product positioning, value for money, long-run return on investment requirements, operating costs and corporate business objectives' (Middleton, 2001:142). For example, the brochure of ZSL London Zoo group visit has a range of admission prices during summer and winter periods. It offers 20% off for advance groups' bookings and 15% off for on day groups, which show that the prices for winter periods are cheaper than the summer periods as the adult price of advance group for the winter periods is £11.80, and contrarily the price for summer periods is £13.40 (ZSL London Zoo, 2009).
Moreover, the second level, corresponding to marketing operations or tactics, is the price at which tourism businesses are prepared to do business on a limitation time basis (Middleton, 2001:142). For example, Premier Inn, the UK's largest budget hotel chain, has announced its biggest sale from £29 per night with 750,000 rooms availability to target family guests, who can book great value family rooms during the off peak periods at weekends (Thursday to Sunday) until January 2010 (Whitbread, 2009). Thomson also offers late deals packaging holidays within Europe for customers, who are seeking the sunshine and beech holidays during the Christmas periods (Thomson, 2009).
For the marketing point, place does not just mean the location of a tourist attraction or facility; it means the location of all selling point that provide customers accessibly to tourist products; it is also the channels of distribution including reservation systems, third party retailers and websites (Middleton, 2001:90,91). For example, 'place' for Stonehenge in the UK is not only Wiltshire, but also the numerous travel agents and tour operators located in the South West of England where sell products that included admission to Stonehenge. Stonehenge Tours, which associated with Premium Tours, offers a range of tours to Stonehenge as well as Bath and Windsor to attract more cultural visitors (Premium Tours, 2009).
Promotion includes advertising, sales promotion, brochure production, Internet communication, PR activity and so on. Many tourism businesses promote their products or services by using sale promotion because the elements of the marketing mix have been decided for established products (Middleton, 2001:256). To target the school groups, the tourism businesses should spread out programmes and events through leaflets and brochures to the consumers who are in the database (schools or colleges) (Cole, 2008) as brochures are designed to stimulate and motivate them to buy the products, and also brochures identify needs, demonstrate in pictures and words and carry the key messages (Middleton, 2001:277). The tourism businesses can get high awareness of their products by launching brochure productions because they are high quality reproduction and colour with high information content (Hudson, 2008:271). For example, the British Museum had design a colourful and informative brochure to attract primary school groups, the brochure highlights what will be included in the Museum during 2009 to 2010 and also indicated a wide range of courses for teachers (The British Museum, 2009c).
Alternatively, to target local and regional communities, tourism businesses should be able to identify areas appropriate within the local community and broader host region. Using inexpensive promotional initiatives, such as posters and leaflets in local press, community places and so on, can easily attract the locals. Open days, community exhibition previews, local competitions can also encourage the community and new visitors to the attraction within the region (Cole, 2008). For example, the National Trust has a range of Christmas events showing in its website to attract the local visitors to the attractions (The National Trust, 2009). English Heritage site also promoted one of its historic houses, Osborne House in the South East, in the Independent press to attract more regional visitors (The Independent, 2009).
This report focuses on how the tourism businesses adapted the marketing mix: product, price, place and promotion to target and stimulate the demand of the relevant segments in domestic markets during the off-peak periods. The domestic markets are valuable to tourism businesses particularly with the challenge of seasonality and perihability because the effects of economic conditions and the influenza A (H1N1) had influenced the international market with a decreased forecast in 2009.
Product in the marketing mix is to achieve the needs and expectations of the consumers. There are three levels of product and two of them are core product and tangible product. Core product is an idea while tangible product is the formal offer of the product. The British Museum adopted the concept of core product to target the families and school groups by providing events and activities and other services. ZSL London Zoo indicated group benefits in the brochure to target the school groups by adopting the concepts of tangible product.
Price in the marketing mix is referring to two levels, marketing strategy and marketing operation. ZSL London Zoo published a group visit brochure which included different admission prices for summer and winter periods to target the school groups by using the concept of marketing strategy. Premier Inn and Thomson offer a sale during the off peak and Christmas holidays, to target families and customers who are seeking sunshine and beach holidays, by using the concept of marketing operation.
Place in the marketing point means the channels of distribution. Stonehenge Tours offers a range of tours to Stonehenge as well as Bath and Windsor to target cultural visitors.
Finally, promotion in the marketing mix is a range of methods to promote the services and products. The British Museum produced colourful and informative brochures to target school groups. The National Trust and English Heritage target the local and regional communities by promoting Christmas events and open days in their attractions.
Yoki, Cho Weng Chan (09206001) MBSP0311 International Tourism Marketing