Strategic Marketing in Tourism and Leisure - Coursework Example

Running Head: STRATEGIC MARKETING IN TOURISM AND LEISURE Strategic Marketing in Tourism and Leisure s Strategic Marketing in Tourism and Leisure Introduction Planning is important in tourism for a wide range of reasons. First, through the capacity of physical planning processes to control development, it provides a mechanism for a structured provision of tourist facilities and associated infrastructure over quite large geographic areas. This geographic dimension has become a more significant aspect as tourism has developed. Initially, most forms of tourism planning were localised and site-specific, reflecting the rather limited horizons that originally characterised most patterns of tourism. But as the spatial range of tourists has become more extensive as mobility levels have increased, planning systems that are capable of co-ordinating development over regional and even national spaces have become more necessary. Second, in view of the natural patterns of fragmentation within tourism, any systems that permit co-ordination of activity are likely to become essential to the development of the industry’s potential. This fragmentation is mirrored in the many different elements that are required to come together within a tourism plan, including accommodation, attractions, transportation, marketing and a range of human resources, and, given the diverse patterns of ownership and control of these factors in most destinations, a planning system that provides both integration and structure to these disparate elements is clearly of value. (Alan, 2005: 48-56) Planning systems (when applied in a marketing context) will also enable the promotion and management of tourism places and their products, once they are formed. Third, as noted in the introduction to this paper, there are clear links between planning and principles of sustainability. Implicit in the concept of sustainable tourism are a range of interventions aimed not only at conserving resources upon which the industry depends, but also at maximising the benefits to local populations that may accrue through proper management of those resources. The commonest form of intervention is via a tourism development or management plan. Fourth, planning can be a mechanism for the distribution and redistribution of tourism-related investment and economic benefits. This is a particularly important role for planning given that tourism is becoming an industry of global significance but one where activity does not fall evenly across different regions and where the spatial patterns of tourist preference are also prone to variation through time. (Ensor, 2001: 126-131) Planning may assist both the development of new tourist places and, where necessary, the economic realignment of established places that tourists have begun to desert. Fifth, the integration of tourism into planning systems gives the industry a political significance (since most planning systems are subject to political influence and control) and therefore provides a measure of status and legitimacy for an activity that has not always been taken too seriously as a force for economic and social change. Lastly, a common goal of planning is to anticipate likely demand patterns and to attempt to match supply to those demands. Furthermore, through the exercise of proper controls over physical development and service delivery, planning will aim to maximize visitor satisfaction. There is now ample evidence from around the world that the unplanned tourist destinations are the ones that are most likely to be associated with negative impacts and low levels of visitor satisfaction, whereas the application of effective planning has often enhanced the tourism product, to the benefit of both host and visitor alike. (Nigel, 2004: 212-217) Strategies for development: the role of planning in tourism Implicit in many perspectives upon sustainable tourism and indeed, on tourism development in general is the view that planning has a key role to play in resolving many of the conflicts that such developments may generate. Planning, in its different forms, can be a mechanism for: integrating tourism alongside other economic sectors; shaping and controlling physical patterns of development; conserving scarce or important resources; providing frameworks for active promotion and marketing of destinations. In the absence of planning there are evident risks that tourism development will become unregulated, formless or haphazard, inefficient and likely to lead directly to a range of negative economic, social and environmental impacts. (Pat, 2004: 124-129) This paper attempts two tasks. The first sections aim to explore the basic nature of planning processes and some of the types of planning approach that have been applied to tourism development. Second, the importance of planning tourism is explained, and some of the main strengths and limitations in both conception and implementation of tourism plans are highlighted. Planning and planning processes ‘Planning’ has been defined in various ways, but a common perspective recognises it as an ordered sequence of operations and actions that are designed to realise either a single goal or a set of inter-related goals and objectives. This conceptualisation implies that planning is (or should be) a process: for anticipating and ordering change; that is forward-looking; that seeks optimal solutions to perceived problems; that is designed to increase and (ideally) maximise possible developmental benefits, whether they be physical, economic, social or environmental in character; that will produce predictable outcomes. (Bonita, 2006: 102-111) From this broadly based definition, it follows that planning (including planning for tourism) may take on a variety of forms and may be deployed in a great diversity of situations including physical and economic development, service provision, infrastructure improvement, marketing and business operations. A general model of the planning process Although there are a diversity of potential applications for planning, the basic nature of the planning process is remarkably uniform, even allowing for the variation in detail that will reflect the specific applications in which planning is being exercised. The general model is one of the planning process in which the principal elements in devising and implementing a plan are envisaged as a series of key stages. There are several features of the general planning model to emphasise: 1. There is a progression within the planning process from the general to the specific. The process begins with broad goals and refines these to produce specific policies for implementation. 2. There is an evident circularity in the process by which objectives and the options for realising those objectives are open to review and amendment in the light of either background analysis or the performance of the plan in practice. 3. The dynamic quality of the process. The general model maps out a set of procedures that allow planning to be adaptive to changing circumstances, a quality that is especially important to tourism planning, where patterns of demand and supply are often volatile. Flexibility should be a key concept for tourism planners. (Alan, 2005: 48-56) Types of plan The general model defines a typical process out of which may be derived many different types of plan or planning approach. Space precludes a detailed discussion of these variations, but to draw some basic points of contrast and comparison, three approaches that will be encountered in the application of planning in tourism are outlined in what follows: master plans, incremental plans and systematic plans. The master plan approach is arguably the most traditional and also the least suited to the particular requirements of tourism. Master plans centre on the production of a definitive statement that provides a framework for guiding development. The plan defines an end-state (or set of targets) towards which public and/or private agencies are encouraged (or required) to work. Targets are normally expected to be attainable within set time periods typically a five-year time horizon and once set in motion, a master plan is normally left to run its course until its time has elapsed. (Ensor, 2001: 126-131) At the end of the plan period, a new master is produced. The master plan approach has the advantage of adopting a comprehensive view of development processes but has also been widely criticised as being too rigid, inflexible and ultimately unrealistic not least in the guidance of a variable activity such as tourism. The natural dynamism in tourism (whereby new tourists and new tourism products and destinations tend to redefine patterns more or less continuously) has encouraged some tourism planners to move away from a master plan approach and towards the more adaptable forms of incremental (or continuous) planning. The key difference between incremental plans and master plans is that whereas the master plan is a periodic exercise, incremental planning recognises a need for constant adjustment of development process to reflect changing conditions. (Nigel, 2004: 212-217) So whereas the master plan approach, in defining a blueprint for development, would place an emphasis upon (specification of broad goals and objectives), the incremental approach shows a much greater concern for (monitoring, revision of policy and objectives, and adoption of revised plans). Since one of the primary objectives of tourism planning is to match levels of demand to supply, this capacity to adjust planning programmes as required is a particular advantage. One of the recurring themes in the tourism planning literature is the need to plan such a diffuse activity comprehensively and in a manner that integrates the planning of tourism with the other sectors with which it has linkages. Given the breadth of those linkages and the diverse impacts that tourism tends to generate, a planning approach that is comprehensive yet allows for the need for regular readjustment in physical development, service delivery and visitor management is clearly advantageous. Some writers believe such an approach is provided by systems planning. The systems approach (which originated in the science of cybernetics but is now applied widely in a range of investigative, managerial and planning contexts) is founded on the recognition of interconnections between elements within the system, such that change in one factor will produce consequential and predictable change elsewhere within the system. Thus in order to anticipate (or plan for) change, the structure and workings of the system need to be fully understood and taken into account in any decision-making. (Steven, 2004: 23-37) In a planning context, systems approaches attempt to draw together four key elements activity, communications, spaces and time and map the interdependence between these in producing patterns of development. The advantages of a systems approach to planning are that it is comprehensive, flexible, integrative and realistic, as well as being amenable to implementation at a range of geographic scales. On the negative side, however, a systems approach requires a great deal of information in order to comprehend how the system actually works; it is dependent upon high levels of expertise on the part of the planners and is, therefore, an expensive option to implement. For these reasons it remains the least widely applied of the three methods described, although as planning techniques become more developed, it is an approach that is likely to become more prominent through time. The Nature And Contents Of A Marketing Plan The marketing planning process tends to have the following stages and these are reflected in the plan: a) corporate objectives b) marketing audit c) SWOT analysis d) assumptions e) marketing objectives f) strategic options g) appraisal of strategic options h) recommendation of strategy i) contingency plans j) implementation k) feedback/control. Although there is no absolute prescription for the format of a marketing plan, the following provides an indication of a suitable layout. An alternative structure is provided 1. The executive summary The plan should commence with a summary of the main objectives and recommendations. Such a summary allows senior management to get to grips with the major thrust of the plan. Following the executive summary there should be a table of contents for the planning document. The executive summary might point to: (a) The anticipated level of sales and profits in the planning period as compared with the same figures for the previous period. (b) The planned changes in the marketing mix which are intended to facilitate the achievement of the planned levels of sales and profits. (c) The level of the marketing budget, compared with that for the previous period, which will be required to achieve the planned levels of sales and profits. 2. The current marketing situation This might comprise five sections: (a) The market situation. In this case data may be made available concerning the target market. In particular the size and growth of the market and trends. Data might be shown for several years and certainly for all the different market segments geographic and otherwise. Data might also be presented on identified customer needs and buying behaviour. (Steven, 2004: 23-37) (b) The product situation. In this case a breakdown of sales, prices, contribution margins and net profits for each of the major product lines over the past few years is appropriate. Actual data might show such things as industry sales, company market share, average price per unit, variable cost per unit, gross contribution per unit, sales volume, sales revenue, gross contribution margin, overhead, net contribution margin, advertising and promotion expenditure, sales force and distribution expenditure, marketing research expenditure and net operating profit. (Pat, 2004: 124-129) (c) The competitive situation. The purpose of this section is identify the major competitors, their size, goals, market share, product quality, marketing strategies and any other characteristics that are needed to understand their intentions and behaviour. (d) The distribution situation. Data indicating the size and importance of any new channels of distribution should be shown in this section, along with any developments or trends in distribution methods. (e) The macro-environment situation. This section should provide data on relevant broad macro-environment trends that have a direct bearing on each product line’s prospects for the future. The trends might include demographic, economic, technological, political and socio-cultural factors. 3 Opportunity and issue analysis Here the main opportunities and threats in the environment, strengths and weaknesses of the organization and issues facing product lines might be identified. (a) Opportunities and threats analysis. This is the part of the SWOT or TOWS analysis which identifies opportunities and threats facing the organization with respect to the product lines. (b) Strengths and weaknesses analysis. This is the part of the SWOT or TOWS analysis which looks at the strengths and weaknesses of the product lines. (c) Issues analysis. Here the organization has to review the findings of the analysis so far to come up with key questions or issues that must be addressed in the unfolding marketing plan which is to be outlined next. Issues might relate to questions such as whether the organization should stay in its current business; whether it can compete effectively; and whether it should maintain its existing marketing mix policies. 4 Objectives The next part of the planning document might relate to the financial and marketing objectives that the organization wants each of its business units to achieve. (a) Financial objectives. In this case, return on investment aspirations, net profits and cash flow figures need to be provided for each of the product lines. (b) Marketing objectives. Financial objectives have to be expressed in terms of marketing objectives. 5. Marketing strategy A Marketing strategy is the process through which organisations take to securing and retaining profitable associations with its customers, commonly involving segmentation, objective and location choices as well as adjustment of a suitable marketing mix. A proper analysis of the strategic aspects of any competitive marketplace may not result in certain success, but it almost always helps to avoid failures. The marketing plan might be structured along the following or similar lines: (a) Specify the target market. (b) Indicate how the product is to be positioned in the minds of the customers. (c) Indicate how the product line is to be changed by the addition/deletion of product offerings. (d) Indicate the pricing strategy or strategies to be adopted. (e) Indicate how effort is to be expended to improve or change levels of distribution. (f) Show how the sales force is too motivated, compensated or altered in strength in order to sustain the new selling effort. (g) Show how service levels are to be maintained, improved or curtailed in order to facilitate the achievement of the plan’s objectives, (h) Indicate the nature of the advertising campaign that is going to help achieve the increase in level of consumer awareness, etc. that will eventually lead to increased market share achievement. (i) Indicate how the sales promotion is to be changed in order to stimulate consumer purchases at the point of sale. (j) Indicate how the R&D budget is to be altered to enable the market share to be sustained in the long term through the introduction of new products and new models. (k) Indicate what is to be spent on marketing research to improve knowledge of consumer wants and needs and to monitor competitor moves. A good example of successful marketing strategy is Dreamworld Gold Coast Theme Park Australia. Dreamworld set are omnipresent to achieve its organisational objectives as being a theme park. By comprehensively analysing with different segmentation variables, the segments examined are primarily situating in the groups of children, the youth, families especially with young generation and people who are thrill seekers. Relevant marketing strategies are adopted by Dreamworld in response to attracting certain segment. Marketing mix, which to a large extent considered as four Ps, assists Dreamworld in its segmentation. In order to attract different targets to pursue success, Dreamworld designs suitable services, sets notable pricing, utilise appropriate distribution channels and integrates with promotions. Dreamworld however, will achieve its dominance in the theme park marketplace if accompanying with new-fashioned services. 6. Plan of action The points outlined in the previous section represent the broad strategic plan that is necessary to achieve the company’s objectives. In this next stage, each marketing strategy element has now to be elaborated to show: • what will be done • when it will be done • who will do it • how much it will cost. 7. Projections of profits and losses The action plan will enable the marketing manager to develop a budget requirement. On the revenue side it will show predicted sales volume in units and the average realized price. On the expense side, it will show production costs, physical distribution costs and other marketing costs broken down into fine detail. It will also show the projected profit based on these figures. 8. Controls The final section of the planning document should outline the nature of the controls to be employed in monitoring the progress of the plan when it is put into operation. This section of the plan might also contain contingency plans. Such plans would outline what action would be required as a response to specific adverse developments which might have a profound effect on the achievement of what has been set out in the budget. Conclusion This diversity of roles and functions does, however, lead to problems in defining the essential dimensions of tourism planning. In fact, tourism planning, as a concept, is characterised by a range of meanings, applications and uses. It encompasses many activities; it addresses (but does not necessarily blend) physical, social, economic, business and environmental concerns and in so doing involves different groups, agencies and institutions with their own particular agendas. Tourism planning may be exercised by both the public and the private sectors and be subject to varying degrees of legal enforcement. It also works at local, regional, national and (occasionally) at international scales. To talk of ‘tourism planning’ as if it were a single entity is, therefore, highly misleading, and Table 6:1 attempts to summarise a cross-section of applications that are located within the broad realms of tourism planning. Apart from ambiguities over what may actually constitute tourism planning, there are further constraints and weaknesses to be taken into account. These include a tendency towards short-termism; organisational deficiencies; and problems of implementation. The adoption of short-term perspectives is a common characteristic in tourism, and, in the view of some authors, has limited the development of longer-term, strategic planning for tourism. The primacy of short-term responses arises for several reasons. It is a reflection of the natural rhythm of annual cycles within tourism whereby the industry tends to adopt a season-by-season perspective on its performance. But it is also a consequence of the structure of the industry at most destinations and the dominance of small enterprises a sector that adheres strongly to short-term, tactical views of tourism and is difficult to integrate into wider, longer-term planning frameworks. Those frameworks may themselves be subject to a range of organisational shortcomings. In many destination areas, the speed with which the need for tourism planning has grown has outstripped the development of organisations, expertise and knowledge to undertake the task. Studies of tourism planning in some of the newer global destinations such as New Zealand and the micro-states of the South Pacific, for example, reveal common problems of inconsistencies in the development of tourism strategies both between and within states and regions; fragmentation and division of responsibility between different public and private agencies; lack of knowledge of patterns of tourism in localities; and an absence of planners with specialist knowledge of the industry. Yet even destinations with well-developed planning structures and a good understanding of the tourism markets are not immune from these difficulties. In the UK responsibility for ‘planning’ tourism falls to a range of agencies (including regional tourist boards, national park authorities and local government planning departments), the last of which rarely contain tourism experts. As a result, the emergence of what some writers have termed an ‘implementation gap’ that is a divergence between what is intended by a tourism plan and what is actually delivered has been a problem in many localities. References ‏Alan Fyall, Brian Garrod. (2005) Tourism Marketing: A ‎Collaborative Approach (Aspects of Tourism), Multilingual ‎Matters Limited: 48-56 ‏Bonita Kolb (2006) Tourism Marketing for Cities and Towns: ‎Using Branding and Events to Attract Tourists, ‎Butterworth-Heinemann Bonita: 102-111 ‎ ‏David W. Cravens, Nigel Piercy (2005) Strategic Marketing, McGraw-Hill/Irwin: 145-158 Ensor John, Ruth Ashford Graeme Drummond (2001) Strategic ‎Marketing: Planning And Control, Butterworth ‎Heinemann: 126-131 ‏Ernie Heath, Geoffrey Wall. (1992) ‎ Marketing Tourism ‎Destinations: A Strategic Planning Approach Wiley: 96-104 Moutinho, L. (2000) Strategic Management in Tourism, University of ‎Glasgow Business School, UK: 67-73 ‎ ‏Nigel Morgan, Annette Pritchard, Roger Pride, (2004) Destination Branding, ‎Second Edition: Creating the unique destination ‎proposition, Butterworth-Heinemann: 212-217 ‏Pat, CMP, CSEP, DMCP Schaumann. ‎(2004) The Guide to ‎Successful Destination Management (The Wiley Event ‎Management Series), Wiley: 124-129 ‎ ‏Patricia Click Janes, (2006) Marketing in Leisure and Tourism: Reaching New ‎Heights, Venture Publishing, Inc.: 134-139 ‏Philip Kotler, Donald Haider, Irving Rein (2002) Marketing Places Free Press ‎ ‏Philip Kotler, John R. Bowen and James C. Makens. 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