Marketing of the UK Tourism Agencies - Essay Example

Topic: Critically analyse marketing strategies in tour operator agencies in the UK. The World Tourism Organization has defined tourism as “the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes”. It has become a global concept, relying specifically on living standards, income, transport developments, entertainment and leisure offered. The tourism industry encompasses in itself three sub-industries: (1) travel agents and tour operators; (2) accommodation and (3) passenger transportation. The tour operators and travel agents have a major impact on the expenditure spent by tourists. They offer a complete in itself tour and ensure that the product offered by them is standard, unique, produced in large scale and decently packaged. The tour operators’ marketing tactics are similar to any other consumer product, which is successfully marketed. In tourism, target market is (Boone, L. E. & Kurtz, D. L., 1992) “A group of consumers who the tourist attraction decide to direct its marketing efforts to. The marketing strategy is designed to satisfy the consumer groups’ specific needs and preferences”. In tourism marketing, focus has been on sales promotion, advertising, customer identity and size of the market among other factors. Market segmentation -- According to Boone, L. E. et al. (1992: 261) it is the “Process of dividing the total market into several relatively homogeneous (similar) groups with much the same product interests”. The tourist market is categorised (Boone et al. 2005) according to (i) age group; (ii) number of trips taken per season; (iii) education; (iv) occupation; (v) income groups; (vi) purpose of trips. The purpose of trip is a famous category to recognize among different sub-sections of business, vacation, convention, personal emergencies, visit to relatives and other types of travellers, as it helps to decide the various elements in the marketing mix. Plans are formulated to know how far demand for travel and tourism of these types of tourists could be stretched. The marketing policies and packages offered differ in prices, promotions, and products for same tourist places. Classifying tourists in sub-categories helps in guessing their behaviour, future market requirements, becoming relevant to their needs to customise them accordingly and making it easy to communicate with customers. Tourists’ marketing strategies are based on the types of tourists, their behaviours and tastes as it increases tourist satisfaction, coming out of product use. As choice of a destination is affected by social and personal factors and tourists’ stimuli factors among others, tourist marketing plays a crucial role in deciding and affecting their variables. One thing is clear that tourists’ stimuli is contoured not only by advertisement and promotion of products but also travel agents in distributing image as well as cost/value, and expectations of a destination. Tour operators and to a certain limit, travel agents play a marketing part in affecting tourists’ behaviour through market segmentation and tourists’ products, especially package tours. Pricing and locations are also important considerations. The UK tour operators, according to Carey & Gountas (1997) can be divided into mass tour operators and specialist tour operators. They have a great influence on tourist market. They decide market trends and have an impact on the demand level of destinations as well. The tour operators’ influence and sustainability of tourist destinations can be measured by evaluating critically the mass tour operators and specialist tour operators of different sizes, their marketing strategies and methods of operation. Sustainable tourism needs ‘right’ level of demand, supply of which is mutually affected by demand characteristics. Through an interview based analysis (Carey & Gountas, 1997) on UK mass and specialist tour operators, it was revealed that mass tour operators’ marketing mix was aimed at large numbers, minimum prices and maximum returns, whichever country tourists preferred. Product -- The supply of (Carey & Gountas, 1997) tourist product was not only exceeding demand but was on the increase. Mass tour operators offered standardised products, paid little attention to relative quality in comparison to specialist or alternative tour operators, offering unique locations, specialising in activities offering experiences of local cultures. Price – Mass tour operators offered low to medium price variation based on high level of sales. Price included sales promotion, cost and profit, market could generate. On the other hand, survey revealed that specialist tour operators charged double prices including cost, profit market could generate, with an emphasis on essential profitability. Promotion – Sales promotion is very crucial in overall promotional programme. Brochure is another important promotional tool, which still carries importance although great advances in the tourism information search technology have been attained. The mass tour operators (Carey & Gountas, 1997) used brochures to target market, promoting actual holiday product, providing balanced information for all components of holiday offering. Specialist tour operators used brochures to promote product, country and particular aspect of unique image. Andereck (2005) has evaluated the tourist brochure and analysed its influence on tourists’ interest levels and actual realisation of tourists’ visits. A survey was conducted, providing travel information from Glendale, Arizona. It hinted that tourists’ traffic to Glendale increased and was followed by revisits and brochure evaluation actually increased the number of tourists to Glendale. Being a preferred consumer information source, brochures are used by small manufacturers, dentists, accountants, insurance providers and natural areas. Ian McDonnell (1999) has discussed about another marketing tool in ‘The Intefrag Marketing Continuum: A Tool for Tourism Marketers’. Not only academic scholars but American Association of Advertising Agencies (AAAA) has also supported Interfrag marketing as a tool, defined by Smith [1995] as: A concept of marketing communications planning that recognises the added value in a program that integrates a variety of strategic disciplines, e.g., general advertising, direct response, sales promotion, and public relations--and combines these disciplines to provide clarity, consistency, and maximum communications impact. Linton and Morley [1995: 2] have defined the concept of ‘integrated marketing’ as a situation where ‘…all marketing programmes are channelled through a central coordinator and handled by a single agency’. The major benefits of integrated marketing approach among others are: it saves cost, makes working relations smooth, provides impartial marketing recommendations, and brings operational efficiency and greater responsibility on agency to be answerable. A review of marketing literature shows that some writers take integration of messages rather than integration of elements of marketing mix as the actual meaning of integrated marketing. But it is interesting to know that Kotler et al. [1996] has nowhere mentioned this concept as an approach to marketing in tourism-marketing texts. Loda, Norman and Backman (2005) have researched and analysed the potential tourists’ reactions to mass media marketing – advertising versus publicity. The study analysed four dependent variables: message strength, perceived credibility, attitude towards the destination and purchase intent. The results indicate publicity created importantly higher mean scores than advertising on at least three out of four dependant variable analysed. This analysis highlights the role of publicity as a significant element in tourism marketing mix, providing empirical proof to Gartner’s [1993] typology of image change factors, backing the effectiveness of publicity in creating the tourist product image. Distribution – Tourism distribution strategy decides the methods of selling the product. It needs to consider, while formulating tourism distribution policy, market coverage, cost of distribution and its effectiveness in creating sales in terms of requirements and reputation of the mediums of distribution. Major channels of distribution are airlines, tour operators and travel agents, backed by information services, publicity material, training seminars, jointly carried out promotions and advertising campaigns. Future strategies – The marketing strategy (Carey & Gountas, 1997) of mass tour operators in future was to regulate consumers’ rush for tourist products so that they may be offered better quality and value for money, at the same time not lowering profit levels and following market trends based on price sensitivity and good value for money. Specialist tour operators’ future strategy was to decrease business only in unprofitable destinations. They would search out new destinations to balance the product portfolio risk and avoid only such destinations where public and private sector didn’t cooperate in formulating effective development plans. Sustainable tourism strategies Mass tour operators don’t take the responsibility for ecological concerns. They react according to market demands. Infrastructure and destination maintenance is none of their interests. Public and private sectors need to cooperate to raise the product standards. Effective communication strategies should be developed by destinations for the benefit of tourist and the trade, resulting in the effective planning for sustainable tourism. Specialist tour operators take keen interest in environment protection, participating in anti-pollution campaigns. They promote destination policy makers’ far-sighted strategies to develop sustainable tourism. Specialist tour operators work to enhance the assets of a destination product’s man-made and nature-made attractions. Service delivery is a major concern for long-term sustainability of a product. They work in the direction of providing training and education to tourism employees for sustaining business and enforcement of regulations at the planning and development levels at all times. The effects of both types of tourism on destinations are important. Strategies of both -- tour operators and destination affect tourism. Tourist demand is more affected by tour operators rather than destinations’ marketing. The tourist experience is under the control of mass tour operator rather than specialist tour operator. As global competition is increasing, it requires effective approach in strategic planning, increase in investment, firmer collaborations, unique products and services, education and better value for money in comparison to what others are offering. Approach should be equal and balanced marketing for all types of tourism. The role of tour operator agencies as intermediaries in achieving long- term goals is very crucial in this regard. Otherwise, tourism marketing strategies are divided into two groups: growth strategies whose main element is some purpose of market growth; and competitive strategies that centre on tourism’s market contribution in its competitive position. Which strategy a company decides to pursue, depends on the target market and the marketing objectives. Analysis Tosun et al. (2005) have critically analysed the Greek-Turkish cross-border cooperation in tourism marketing growth strategies. The study has underlined the many strategies and challenges in promoting effectively and efficiently the cooperation in the context of these two countries. It was found that both countries could cooperate in market-penetration strategies by increasing the market share of their latest tourism products in current markets by encouraging tourists to extend their average period of stay and buy more goods and services during that time. Tourists coming to competing destinations like Spain and Portugal can be attracted by cooperation. Both countries could launch promotional campaigns in collaboration, simplify visa formalities, reduce visa fees and customs taxes, issue discount vouchers, and publish and exchange brochures for each country’s visitors. In the context of Greece and Turkey, as discussed by Tosun et al. (2005), both countries can cooperate in market development strategies by enlarging their market share in current products to new markets or market segments, as new markets are already waiting to receive fresh tourists’ from Greece and Turkey. Regarding cooperation in product development and diversification strategies, it was acknowledged (Tosun et al., 2005) that both countries should plan new product possibilities. The tour operators of both countries could join hands in developing competitive package tours besides other types of tours on global scale. The idea of cultural tours between both countries also came up. Horizon of UK inbound tour operators should not be limited to Europe only. Emerging markets of China and Russia offer huge opportunities. China, according to British Tourist Authority (2005) has granted Britain Approved Destination Status (ADS) in January 2005, allowing its residents to travel for leisure all-inclusive package tours. The UK inbound tour operators should follow the marketing penetration and development strategy to target Chinese citizens from provinces like Beijing, Shanghai and .Guangdong Province in collaboration with Chinese tourist agencies. The number of Chinese outbound tourists has been on the rise. The tour operators should take special care to provide the Chinese tourists’ their own food. The Chinese celebrate the “Golden Weeks” – their one week long holiday. The UK tour operators should take this chance of converting these holidays into Western inclusive package tours for maximum entertainment [Laws, 1997]. Mainland China is admittedly an important emerging market for UK inbound tourism industry (Pan, Scott & Laws 2006). Another potential market is Russia. Moscow has sent very positive messages to inbound tour operators worldwide to welcome Russian tourists, as Russia is the 10th biggest spender on international tourism, with $ 12 million given out in 2002 (Richardson 2004). According to Brian Ferguson, City Council Reporter of Edinburghnews.com, the Russian and Chinese business magnates are to be aimed to provide special package deals at the city’s selected hotels, restaurants and other visiting places. The “Luxury Edinburgh” venture to visit Scotland is a good example to follow. Special attractions are exclusive helicopter trips, private visit to the National Gallery and opportunity to meet the stars at locations like the Playhouse. All this is encouraging news for the British inbound tourism, on tapping high bracketed business tycoons of China and Russia (Ferguson 2006). Britain commands a high status, especially London, which is known as a fashionable and favourite shopping centre amongst the “nouveau riches” of Russia. British tour operators should cash this opportunity. Marketing management needs to be more effective and objective in approach according to the changing scenario of global recession, competition and inflation. A lot more depends on the right marketing approach and related marketing strategies to increase profit and get bigger market share. Tourism marketing involves analysis of the tourists’ requirements, product planning according to tourists’ requirements and promoting the products through advertisements, promotions and contacts. The tendency among tourist firms, mostly, is to neglect marketing planning and policy, which is very crucial for attaining a strong competitive and growth-oriented position and the resulting success of a marketing strategy. References Andereck, Kathleen L, 2005, ‘Evaluation of a tourist brochure’, Journal of Travel & Tourism Marketing, vol. 18, no. 2, viewed 28 December 2006, < http://haworthpress.com/store/login.asp?tp=User_Account.asp> Carey & Gountas, 1997, ‘Tour operators and destination sustainability’, Tourism Management, vol. 18, no. 7, viewed January 4, 2007, < http://sfx.scholarsportal.info/toronto/cgi/core/citation-linker.cgi?rft.genre=article> China Factsheet, 2005, British Tourist Authority, viewed 28 December 2006, Ferguson Brian, 2006, ‘Scotland’s holiday industry’, updated: 29 November 2006 15: 29 GMT, viewed 28 December 2006, Loda et al., 2005, ‘How potential tourists react to mass media marketing: Advertising versus publicity’, Journal of Travel & Tourism Marketing, vol. 18, no. 3, viewed 28 December 2006, < http://haworthpress.com/store/login.asp?tp=User_Account.asp> McDonnell Ian, 1999, ‘The intefrag marketing continuum: A tool for tourism marketers’, Journal of Travel & Tourism Marketing, vol. 8, no. 1, viewed 28 December 2006, Pan, Scott & Laws, 2006, ‘Understanding and sharing knowledge of new tourism markets: The example of Australia’s inbound Chinese tourism’, Knowledge Sharing & Quality Assurance in Hospitality and Tourism, viewed 28 December 2006, EBSCOhost database, Available online Project Tourism, 1995, Griffith University, Marketing Modules 1, 4, viewed 28 December 2006, Richardson Dave, 2004, ‘Meeting the challenges of emerging markets’, Moscow International Travel & Tourism Exhibition, viewed 28 December 2006, Russia Factsheet, 2005, British Tourist Authority, viewed 28 December 2006, Tosun et al., 2005, ‘Cross-border cooperation in tourism marketing growth strategies’, Journal of Travel & Tourism Marketing, vol. 18, no. 1, viewed 28 December 2006, < http://haworthpress.com/store/login.asp?tp=User_Account.asp> Read More