Business: Tourism and Hospitality Marketing - Essay Example

?Business: Tourism and Hospitality Marketing Business organizations have to face stiff competition in their related market and therefore need to develop new and essential strategy to remain in the market and provide stiff competition to its rivals. Marketing is the essence of any business and organizations use it effectively to be successful in their related market. Increasingly, collaboration between business, non-profit, health and educational agencies is being championed as a powerful strategy to achieve a vision otherwise not possible when independent entities work alone (Gajda, 2004). According to Fyall and Garrod (2005) globalization, international political and trade agreements, shareholding restrictions, integration and networks, consolidation and concentration of economic power, advances in technology, growth in tourism demand, strategic alliances, heightened competition, increasing customer expectations, sustainable development and public funding are the main drivers for collaborative marketing in businesses so as to eliminate competition. The growth in international trade, opening of economies and global access to information have brought increasing competition in several industries, resulting in strong consolidation and reduction of margins which has introduced the marketing strategists to an era of strict budgetary control and coordination, demanding very careful decision making with respect to where and how to spend what resources were available. In response to the constraints imposed by the globalization of markets, which often have no conventional boundaries, firms and their marketing function have become more international, and recognized a growing need to focus on their core businesses, outsourcing activities and contractual relationships, so as to manage their inputs and distribute their outputs efficiently. Real networks are being developed, focusing on relationships, and continuous and sustainable development (Neves, 2007). According to Cravens and Piercy (1994) rapidly changing markets, a complex array of technologies, shortages of skills and resources and more demanding customers present service organizations with an unprecedenting set of challenges. Many business executives recognize that building relationships with other companies is essential to compete effectively in the turbulent and rapidly changing post-industrial era confronting developed world economies. According to Fyall and Garrod (2005) achieving organizational objectives by satisfying consumers is the main essence of marketing concept. The marketing perspective also asserts that the key to achieving organizational goals is for organizations to determine the needs and wants of target markets and to deliver the desired satisfactions more efficiently and effectively than competitors. However it is important to mention that collaborative marketing can enable marketers to initiate and manage collaborative relationships with customers to potentially obtain sustainable competitive advantages over competitors who do not rely on such an approach in the area of new product or service development (Dacko, 2008). Corsten and Kumar (2005) mention that marketing theory and practice has embraced the idea of relationship marketing making it necessary for the firms to develop collaborative partnerships and relational governance that adopts a long term perspective and include an ongoing process to lower acquisition and operating costs in contrast to typical adversarial transactions that involve bidding procedures in which multiple suppliers compete against one another in an effort to drive down prices. Cravens and Piercy (1994) mentions that building trust between two organizations encourages them to assume joint risks in an environment of high risk and to engage in recurrent business transactions wherein the businesses will enter into cooperative relationships, which are the key dimensions of relationship marketing, developing interdependent and cooperative relationships with suppliers, competitors, channel organizations, and consumer and organizational end users. Tourism planners and operators are discovering the power of collaborative action and are moving away from the traditional adversarial model of conducting business (Fyall and Garrod, 2005). Fyall and Garrod (2005) mention that the trend of collaborative marketing is evident in tourism industry as fragmented, multisectoral and interdependent nature of tourism provides a powerful catalytic focus for inter organizational coordination and collective decision making. Tourism destination marketing involves many stakeholders and a complex product offer which has resulted in the creation of many local tourism marketing alliances (Palmer and Bejou, 1995). A key reason for growing interest in collaboration in tourism is the belief that organizations and destination areas may be able to gain competitive advantage by bringing together and sharing their combined knowledge, expertise, capital and other resources (Fyall and Garrod, 2005). The fragmented nature of the tourism industry requires a substantial degree of coordination and collaboration among the variety of different players in destination marketing (Wang and Fesenmaier, 2007). Most of the companies that are motivated for collaboration do it so to gain access to new international markets, circumvent barriers to entering international markets posed by legal, regulatory or political factors, defend and enhance market positions in present markets apart from filling gaps in present product lines by broadening and differentiating the product from others in the market to add value to the customers (Fyall and Garrod, 2005). According to Piboonrungroj and Disney (2009) firms could expect a better level of responsiveness and service level improvements from their supply chain collaborative programmes while reducing supply chain costs, covering costs of processes, inventory and production. Williams and Jantarat (1998) mention that collaboration between organizations involved in the tourism industry is a widely established phenomenon as organizations have been known to co-ordinate their activities to cope with the turbulence and complexity of their environments, to solve environmentally-related problems, and to enhance sustainable development as mentioned by Reid, (1987); Palmer and Bejou, (1995) (cited in Williams and Jantarat 1998). Tourism is particularly fascinating when it comes to the purpose of services-marketing theory. There are many things happening technologically, with the impact of the internet creating opportunities as well as threats across the industry. Collaboration is, therefore, likely to represent the sine qua non for successful marketing in the future. Likewise the destination's ability to gain — and maintain — control over its destiny in the market is more often than not dependent on inter-destination solutions while the need for a change in organizational culture, is beginning to emerge in the form of cross-border (be it local or regional) marketing partnerships (Gruesco, Nanu and Pirvu, 2008). Leiper (cited in Williams and Jantarat 1998 ) explains the behavioural element, (1) tourists, are represented leaving (2) generating regions, travelling to and staying in (3) destinations, and returning home. The tourist industry element is represented within all three (4) geographic elements. Also symbolic is the representation of part of the tourist element outside the (5) industrial element, signifying the partially industrialized characteristics of the process. Collaborative initiatives are voluntary arrangements between tourism organizations involved in managing and promoting destinations (Wang, 2008). Marketing a destination has been a challenging task for many communities that rely on tourism for economic development. Collaborative marketing efforts of the tourism organizations representing the destination provide solutions to this challenge (Wang and Xiang, 2007). The development and marketing of tourism destinations has increasingly focused on collaboration and community approach in which convention and visitor’s bureaus (CVBs) are playing important roles in coordinating marketing activities and developing desired image of the destination in the marketplace. However, the fulfillment of the CVB's destination marketing role has been challenged by a number of issues related to governance and positioning (Wang, 2008). When tourism stakeholders/businesses in a destination participate in collaborative marketing, there are many relationship forms they can choose, ranging from loosely connected to more formal and integrated relationships. It was revealed during research that for many of the different sectors of the tourism businesses in the local destination, the experience of providing, coordinating, and delivering collaborative marketing activities are not an easy one. Although many businesses recognize their interdependence and the need to align their activities by establishing relationships either directly with other businesses or through the mediation of CVB, they are also compelled by competitive forces to maintain their own business advantage. It is interesting to note that different configuration of relationships exists across the various sectors of the tourism industry, with some sectors adopting certain relationship configuration more than others (Wang and Krakover, 2008). Threats in the external environment and changes in the industry’s markets and structures have challenged destination marketing organizations to change in fundamental ways. Destination marketing organizations currently face a number of challenges emerging from changes within the tourism industry as well as from broader social, political, environmental, and economic developments (Gretzel et al, 2006). Many tourist industries enter in intra destination collaboration as argued by various researchers which examines destination collaboration at the local level with a focus on destination development. Sonmez and Apostolopoulos (cited in Fyall and Garrod, 2005) mentioned that intra destination collaboration can play in resolving conflict while Standeven argues that it can act as vehicle to drive the development of sport tourism in view of the responsibilities for sport and tourism being both dispersed and fragmented. However other studies like Darrow and Henderson (cited in Fyall and Garrod, 2005) explored the means by which destinations can work in partnership with other destinations in improving the inter-regional, inter-state and inter-destination product. Haidian in Beijing Haidian District is the well known tourist area in China with its abundant natural landscapes and cultural relics with 700 historical sites in the district. The place has evolved into a prime location for sightseeing and relaxation (Beijing Haidian, n.d.) and a district of huge contrasts occupying a vast swath of west and northwest Beijing (Eimer, 2010). Haidian is a major tourist attraction as it is engulfed with tourist attraction spots like relics, temples, courtyards, etc. which attracts number of tourists from various parts of the country. Haidian district, located in the north of Beijing, is one of national high and new technology industry base, of international well-known universities and scientific research institutions accumulation zones, of domestic traveling, culture and sports centers. Haidian district is also rich in ecological tourism resources that are of peculiar characteristics (X in et al 2006). Haidian boasts its historical culture through places like Summer Palace which hosts extensive gardens and the ruins of palaces constructed by the Qing Emperors and the other Old Summer Palace which was built during 18th and early 19th century. Then there is Fragrance Hills, Beijing Botanical Gardens, Five Pagoda Temple, Purple Bamboo Park, and Military Museum apart from being one of the most visited districts for universities. Peking and Tsinghua universities are the two most prestigious universities in China which attract good number of visitors during summer vacation (Mobile Reference, n.d.). It is further added that there are 82 Universities and 115 Research Institutes in Beijing, 68 universities of which are located in Haidian and thousands of foreign students from around the world come each year to study the Chinese language or pursue degrees in a range of fields and disciplines (Littlewood, 2010). Haidian is known for its development in IT sector and promotes technology oriented tourism at Zhongguancun dubbed as ‘Silicon Valley of China”. This area has large number of electronic malls selling everything from phones to computer parts (Mobile Reference, n.d.). Zhongguancun is key in the development of IT, electronics and pharmaceuticals due to which international companies have established their base in this district making a international business hub inviting good number of business representatives, delegates to attend meetings and conferences. Products from Zhongguancun are proving to be on the cutting edge of innovation in technology (Littlewood, 2010). According to Alon (Ed, 2003) Haidian enjoys a high cluster of higher education and its location within Beijing also gives the business organizations an opportunity to access the huge domestic market for new products and technologies. The district is also replete with modern shopping malls and service outlets which include Shaung’an market, Modern Plaza, Cuiwei Plaza, Haidian Theatre and more than 1000 clinics, hospitals and healthcare centers (Anon, 2004). Haidian Administrative Policies Haidian district authorities are committed towards development of tourism and has formulated three year action plan by promoting regional economic development, improving the incentive mechanism so as to create a create image for Haidian as the safest tourism destination (Haidian Tourism, 2010). It is further stated reported by the Beijing Municipal Tourism Administrative Commission for the year 2011, tourism revenue has increased by 11.3% and incoming tourists have increased by 12.8% as compared to previous in the city indicating a good overall operation of the tourism market (Haidian Tourism, 2011). The government is stupendously promoting IT tourism as well as cultural tourism to boost its economic development. Collaborative Marketing Strategy The marketability of any destination depends greatly on the destinations tourism product portfolio and Haidian has enriched resources to fill the gap in portfolio providing much to the visitors for relaxation, luxury, business, education and healthcare (Wang et al 2009). It is further important to mention that creating a network of supply chain is essential in tourism sector so as to provide optimum services to the customers by allying with the best hotel industries, healthcare centers, educational institutions and local travels (Stank et al, 1999). Alliances with these industries will not only help in providing optimum services to the customer but result in reciprocal marketing as promoting their business will advertise our business automatically through direct and indirect referral by allies as well as customers. In order to carry out collaboration marketing for tourism in Haidian District of Beijing, three key stages of the strategic marketing planning process i.e. the situational analysis, strategic marketing planning, and strategic marketing implementation and control are essential as it provides a route map for making for collaborative marketing strategies (Fyall and Garrod, 2005). As it evident from the various studies and websites, Haidian is rich in heritage, culture, education, and tradition; it attracts large number of visitors from most part of the world who come either for visiting the place or for education. Organization intending to enter the tourism market of Haidian District must have to analyze the customer needs, though in differential way, in first instance and later collaborate with the companies dealing in providing those needs to the customers. Being in a tourism industry, the company may have to enter into intra – destination collaboration with the travel agencies, hotels, and guides so as to provide optimum services to the customers. As the destination Haidian is in Beijing District, the organization may also enter into intra regional collaboration with travel agencies in Beijing District apart from hotels and guides at other tourist attraction. However it is important for the organizations to consider the benefits and risks of such collaboration as mentioned by Fyall and Garrod (2005) wherein it is stated that destination collaboration benefits in reduction in risk through strength in numbers and interconnectedness within and across destinations; efficient and effective exchange of resources for perceived mutual benefits; the potential for collaborative initiatives to counter the threat of channel intermediary powers; in peripheral locations, collaboration serving as a significant vehicle to broaden the destination domain. Some of the risks associated with destination collaboration are (Fyall and Garrod, 2005): General mistrust and suspicion among collaborating partners due to governance or structures that are in appropriate for moving the shared project forward Inability of various sectors within the destination to work together due to excuses of a political, economic or even interpersonal nature Instances where particular stakeholders fail to recognise the real value of collaboration and remain closed to the benefits of working together The frequent disinterest in collaboration from ‘honey-pot’ attractions, where the need to work more closely together is discounted due to their own individual success in the marketplace Competition between municipal authorities that administer separate geographical regions within a recognised destination resulting in inertia (Fyall and Garrod, 2005) Haidian being a hub of technological innovation, educational centre and cultural heritage portraying the rich history of China, tourism sector provides abundant opportunities as the facilities are inevitable to attract huge visitors for business meetings, national and international policy talks as the district is located within Beijing, students and researchers, and luxury visits. Therefore, a company operating in tourism business may benefit through collaborative marketing by forming alliances on intra destination basis and inter regional collaboration by providing facilities to customers. Conclusion It is established that executives of DMOs need to establish good and reliable personal relationships with their counterparts in other DMOs. They should be willing to work together and have a long?term vision. Businesses need to adopt collaboration in order to avoid competitions, rapidly changing markets, a complex array of technologies, shortages of skills and resources and more demanding customer’s present service organizations with an unprecedenting set of challenges. Fyall and Garrod (2005) mention three key stages of strategic marketing planning process viz. the situational analysis, strategic marketing planning, and strategic marketing implementation and control. This process synthesizes the theoretical components of inter-organizational collaboration to provide a route map for making the collaborative marketing strategies. Haidian District is a good destination for tourism as it is well supported by the policies of government, facilities, cultural heritage and spots which attract visitors on yearly basis for different purpose. However prior to committing the organization to inter organizational collaboration, it is advisable to become familiar with the basic characteristics of the collaborative form and how shared rules, norms, structures can contribute to the successful achievement of collaborative marketing outcomes. It is further concluded that collaboration among international airlines, independent hotels and hotel groups or tourist destination offers both opportunities and challenges which is perhaps not aided by the lack of single, tightly defined concept. The true test of an inter-organizational form is clearly the extent to which it delivers collaborative advantage and meets the objectives (Fyall and Garrod, 2005). The intra destination marketing strategy need to be formulated in a manner that services to the customers and objectives of the company are not compromised. Collaborative marketing strategy is beneficial as the risk of operations is also collectively shared by the allies which reduce the risk of loss to the company nevertheless turning it into a successful venture. References 1. Alon I (Ed) 2003, Chinese economic transition and international marketing strategy, US: Greenwood Publishing Group 2. Beijing Haidian, n.d. A District with Numerous Tourist Attractions, [online] Available at: < http://www.bjhd.gov.cn/english/Tourism/Attractions/> [Accessed on 15th August 2011] 3. China Knowledge Press 2004. Doing Business in Beijing, Ed.2nd China Knowledge Press Pte Ltd 4. 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