TOUR OPERATIONS MANAGEMENT( (WEEK10)Tourism Marketing and Sales Dynamics

Learning Objectives Understanding the concept and

importance of Marketing Identifying the difference between sales

and marketing Upon completion students should be

able to determine what is takes to have a competitive advantage

Understanding Service Culture

WHAT IS MARKETING Marketing is a social and managerial

process by which individuals and groups obtain that they need and want through creating and exchanging products and value with others(kotler & Makens)

IMPORTANCE OF MARKETING1.) The entrance of corporate giants into

the hospitality market along with their marketing skills an resources.

2.)The prediction that the hotel industry will consolidate much like the airline industry.

3.) Rise in growing competitive pressure.

MARKETING

THE IMPORTANCE OF MARKETING Like other industries, the hospitality industry is subject to both

controllable and uncontrollable variables which will affect sales efforts.

External variables, such as weather conditions, fuels shortages and airline strikes are largely uncontrollable. Other market variables , however, are inherent to all companies and can be controlled through marketing strategies to attract and retain new and repeat business.

These controllable variables, are called the marketing mix, consisting of “four Ps”:

1. Product2. Place3. Promotion4. Price.

ADDITIONAL PS’ IN MARKETING

Partnership- It is critical that all travel suppliers consider themselves as apart of the travel partnership

Positioning- establishes overtime a “niche” or level of price/value relationship that must be favorable viewed by clientele

Programming- shows the product or service in a favorable light as part of an array of services

People – Good employees, delivering stupendous vision for any service

Packaging- several travel elements sold together for one price.

MARKETING PLAN This serves as the companies “road map”, and should

include programmes to attract business to each tour company revenue centers. A detailed, written plan creates an awareness of the problems and obstacles faced by the property and helps managers to think ahead to make better allocation of resources.

The plan sets responsibilities, coordinates efforts and helps evaluate the results of marketing and sales efforts.

The (4) steps of a marketing plan are:

1. Conducting market research2. Selecting target markets and positioning the property3. Establishing objectives and action plans4. Reviewing and monitoring the marketing plan.

COMPETITIVE ADVANTAGE

To build profitable relationships with target customers, marketers must understand customers needs better than competitors do and deliver more value

Competitive AdvantageAn advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices

COMPETITIVE ADVANTAGE

If a company positions its product as offering the best quality and service; it must deliver the promised quality and services. Thus positioning begins with actually differentiating the company’s marketing offer so that it will give consumers superior value

THE SERVICE CULTURE The Service Culture focuses on serving and

satisfying the customer. This has to start with top management and flow down.

A Service Culture empowers employees to solve customer problems

CHARACTERISTICS OF SERVICE MARKETING

Intangibility

Inseparability

Variability

Perishability

CHARACTERISTICS OF SERVICE MARKETING

Intangibility Unlike physical products, services cannot be

seen tasted felt or smelled before they are purchased.

Inseparability In most hospitality services both the service

provider and the consumer must be present for the transaction to occur.

CHARACTERISTICS OF SERVICE MARKETING Variability Service quality depends on who

provides service and when and where they are provided. Services are produced and consumed simultaneously.

CHARACTERISTICS OF SERVICE MARKETING Perishability

Services cannot be stored. If service providers are to maximize revenue, they must manage their capacity and demand since they cannot forward unsold inventory

Successful Services Marketing calls not only for external marketing , but also internal marketing to motivate employees and interactive marketing to emphasize both high-tech and high-touch elements.

Service Marketing Cont’d

The Service Organization must focus on these primary marketing tasks:

It must differentiate its offer, delivery and image

It must manage service quality to meet or exceed customer expectations

It must manage worker productivity by getting its employees to work more skillfully

Use technology to save time and money

Service Marketing Cont’d

SERVICE MARKETING STRATEGY The alternative to price competition in services marketing

is to develop a differentiated offer, delivery, or image.

Offer- The service offering can include innovative features. The customer expects the primary service package; to this secondary service features can be added. Marriott, for example, offers hotel rooms (primary service package) with connections for computers, fax machines, and e-mail (secondary service features).

Although most service innovations are easily copied, the company that regularly introduces new features will gain a succession of temporary competitive advantages and earn a reputation for innovation.

Delivery. A service company can hire and train better people to deliver its service Delivery thus enhances the firm’s differentiation.

Image. Service companies can also differentiate their image through symbols and branding.

Service Marketing Strategy Cont’d

5 CATEGORIES OF SERVICE MIX

1. Pure tangible good: The offering is a tangible good such as soap; no services accompany the product.

2. Tangible good with accompanying services: The offering consists of a tangible good, maintenance, warranty fulfillment, and other services along with its cars and trucks.

3. Hybrid: The offering consists of equal parts of goods and services. For example, people patronize restaurants for both food and service.

4. Major service with accompanying minor goods and services: The offering consists of a major service along with additional services or supporting goods. For example, airline passengers are buying transportation service, but they get food and drinks, as well.

5. Pure service: The offering consists primarily of a service; examples include baby-sitting and psychotherapy.

KEYS TO SUCCESSFUL SERVICE MARKETING

Using the Strategic Concept Top-Management Commitment Setting High Standards Monitoring Systems Satisfying Customer Complaints Satisfying Both Employees and

Customers Managing Productivity

SALES Sale- is the act of selling a product or service in return for

money or other compensation.

The seller or salesperson – is the provider of the goods or services. completes a sale in response to an acquisition or to an appropriation or to a request. There follows the passing of title (property or ownership) in the item, and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership.

Ideally, a seller agrees upon a price at which he willingly parts with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that. To be precise the sale completes prior to the payment and gives rise to the obligation of payment. If the seller completes the first two above stages (consent and passing ownership) of the sale prior to settlement of the price, the sale remains valid and gives rise to an obligation to pay

SALES TOOLS Sales tools- can be used to

communicate with customers

Such tools are : 1. The Internet2. Fax machine3. Direct Mail4. Telephone5. Personal sales calls

INTERNET The Internet is a global system of interconnected

computer networks that use the standard Internet protocol suite (TCP/IP) to serve billions of users worldwide.

The Internet carries an extensive range of information resources and services, such as the inter-linked hypertext documents of the World Wide Web (WWW) and the infrastructure to support email.

Advantages: Disadvantages:

1. Fast, easy & efficient - Impersonal and possible delay

2. Saves time ,offers convenience - Can be costly

3. Ability to reach large groups - Limitations to audience who might not be computer savy

4. Inexpensive

FAX MACHINE Fax , sometimes called telecopying, is the telephonic transmission

of scanned printed material (both text and images), normally to a telephone number connected to a printer or other output device. The original document is scanned with a fax machine (or a telecopier), which processes the contents (text or images) as a single fixed graphic image, converting it into a bitmap

Advantages: Disadvantages:

1. Faster than direct mail - limitation related to connectivity

2. Less expensive than internet - Slow delivery

3. Quicker processing time -less due to the high amount of doc.

4. saving can be generated - time consuming

DIRECT MAIL Direct mail is a way of advertising in which

advertisers mail printed ads, letters or other solicitations to large groups of consumers. Bulk-mail rates are used to lower the cost of the mailing, and targeted mailing lists are used to maximize potential response

Advantages: Disadvantages:1. More info can be sent - Time consuming2. Specific recipients - Loss of mail3. Cheaper than fax - Invasion of privacy4. Not hi-tech & tangible - less personal than

personal sales calls

TELEPHONES

Telephones is a system whose most basic function is to allow two people separated by large distances to talk to each other.

Advantages : Disadvantages:

1. Fast ,immediate response - Polices/restriction

2. Inexpensive - Invasion of privacy

3. More personal than mail - Dropped calls

4. Ability to target large audience - Loss of clients

5. Able to answer questions - Costs6. Handle objections -

Miscommunication

PERSONAL SALES CALLS The most effective tools in convention sales or any other kind of sales is the

personal sales call. This type of face to face selling works well with both professional and freelanced tour planners.

The personal sales call offers you the opportunity to present your case in a detailed manner to answer questions immediately and to create the reaction for the prospects in order to gain a better understanding and take remedial action if necessary.

Advantages: Disadvantages:

1. Ability to persuade - Robbery

2. Ability to handle objections - Rejection

3. Tangible samples - Expensive

4. Visual aid - Time consuming

5. Opportunity for evaluation

6. Suggestive selling

7. Customer loyalties

8. Answer questions more effectively

SIX STEPS TO PERSONAL SALES CALLS

There are six steps in personal sales calls:1. Pre- call Planning2. Opening the sales call3. Getting prospect involvement4. Presenting your Tours5. Handling objections6. Closing and follow up.

DIFFERENCE BETWEEN SALES & MARKETING

The terms are not synonymous Sales and marketing are not equal Marketing is more than sales Being market-minded is much broader than being sales-

minded. Marketing is goal- oriented Marketing is the groundwork, the research, the plan on

which sales promotion is based. The practice of marketing involves combining , blending,

integrating and controlling all of the factors that have an influence on sales.

SALES V.S. MARKETING

Marketing Sales

Focuses on market analysis, planning and control of changing market variables

Focuses on field work and desk work to sell to the customer

Focuses on long- term trends and creating new products, markets and strategies for future growth.

Focuses on short –term considerations- today’s products markets, consumers and strategies.

Focuses on profit planning, including determining the optimum market segment mix.

Focuses on volumes and quotas, current sales, bonuses and commissions.