Tourism and Hospitality Marketing - Essay Example

Tourism and Hospitality Marketing Name Institution Course Date Tourism and Hospitality Marketing Executive summary The purpose of this report is to describe a new experience-based tourism product that can be developed by Intrepid Travel, an Australian tourism agency. The new product discussed in the paper is recreational facilities for tennis, golf and water sports. More and more tourists are looking for destinations that offer unique experiences and adventures in addition to other products such as transportation, and confortable hotel accommodations. The introduction of recreational facilities will enable intrepid gain competitive advantage. The segmentation strategies to be used in marketing the new product include Psychographic segmentation and behavioral segmentation. Marketing and promotion of the new products can be done through strategies such as social media marketing, TV advertisement, contests sponsorships, and media print etc. The positioning strategy of the new product will be differentiation strategy. Table of Contents Executive summary 2 Table of Contents 3 New Experience-Based Product Description 4 Customer Segmentation and Target Markets 6 Competitor Analysis 7 Communication and Promotion Strategies 8 Conclusion 9 References 10 Introduction Tourists often search for tourism destinations that offer unique comfort, and adventurous experiences that will provide unforgettable experiences (Midleton, 2000). Many tourism destinations have identical experience-based products with sight variations that are aimed at attracting tourists and thereby creating revenue and profits (Midleton, 2000). This report will identify a new experience-based product that will be successful in Intrepid Travel in Australia. It will also identify the customer segments that the experienced based product will target and the customer segmentation process. In addition, the report will highlight the major competitors of Travel Agency and the products and services they offer to customers. It will discuss the communication and promotion strategies that can be used for the product. The experience-based product to be discussed in this report is recreational facilities for tennis, golf and water sports. New Experience-Based Product Description The experience-based product in the form of recreational facilities for tennis, golf and water sports should be introduced in many destinations that Intrepid Travel Company manages. Many tourism companies offer the same kind of products to tourists such as transportation, tours, and accommodations. However, these experiences are not enough to many tourists. Many tourists demand to live first-person experiences and explore different involvements that they do not engage in their daily lives (Jaume, 2014). Travellers demand for something different and unique that will keep them engaged and will feel at home. In order to satisfy the needs of the travellers, Intrepid Travel should introduce recreational facilities specifically tennis, golf and water sports. Many tourism and destination companies offer limited products and services such as cosy hotels, tours and travels (Midleton, 2000). In order to differentiate itself from the rest, Intrepid Travel should offer additional experience-based product that will attract many travellers and will ensure that revenue generated is high. Recreational facilities for tennis, golf and water sports will be very successful partly due to its demand by many travellers. In addition, experiences are the best souvenir. Experiences involving recreational games and sports during tour enable guests to get home with memories brought about by exciting and unique experiences that they have never had. Research studies have indicated that about 50 per cent of travellers like to partake in some kind of recreation activity (Jaume, 2014). More than 80 per cent of the travellers reported that there recreational activities are very essential in any holiday destination. And due to such positive reports, introduction of recreational facilities for tennis, golf and water sports in Intrepid Travel will be successful. It will enable the agency raise its revenue and profits. And given the rise of adventure tourism, there is a potential for success of introduction of recreational facilities in Intrepid Travel (Jaume, 2014). The introduction of recreational facilities for tennis, golf and water sports will achieve several objectives. First, it will be able to expand the market percentage of Intrepid Travel. The agency will be able to target tourists seeking adventure and unique experiences. Introduction of recreational facilities will be a great idea as it will expand the number of customers and will enhance customer loyalty. Another objective of introducing recreational facilities is to increase the annual income of the agency and to increase profit(Jaume, 2014). In addition, recreational facilities will enable Intrepid Travel bring to the customers a portfolio of quality and unique products that satisfy the needs and expectations of tourists. Recreational facilities for tennis, golf and water sports may be considered unique tourism product that is able to be appreciated by tourists. One feature of recreational facilities is intangibility (Mazanec, 2000). Recreational facilities cannot be touched since they are only experiences and adventures. This product is only experienced once it takes place and can be reoccurred. In addition, recreational facilities are characterised by inflexibility. They are inflexible on the basis of capacity; it is impossible to meet some surges in them (Mazanec, 2000). In addition, in the periods of low inflow of travellers and tourists, recreational facilities for tennis, golf and water sports remain unused and this may lead to poor revenue generation. Inconsistency is another feature of recreational facilities for tennis, golf and water sports. The price offering of recreational activities can easily be changed. The prices of recreational activities change with demand. During high demand, the prices are high and during low season, the prices are low. Customer Segmentation and Target Markets Every tourist and traveller is different and is attracted to different experiences and destinations (Frochot and Marrison, 2000). Understanding that every traveller and tourist is different and that the tourism and destination industry cannot offer products and services to each person separately forms the foundation of tourism market segmentation. Market segmentation is very important to Intrepid Travel since it will enable it specialize on the specifications of a specific group of customers and end up gaining competitive advantage (Frochot and Marrison, 2000). Customer segmentation to be used in offering recreational facilities for tennis, golf and water sports includes behavioural segments and psychographic segmentation. Psychographic segmentation involves lifestyle of individual customers. It also entails the customer’s activities together with their corresponding interests and opinions (Weinstein, 2004). It classifies individuals according to the way they spend their leisure. Introduction of recreational facilities in Intrepid targets customers who relish extravagant lifestyle and who do not fear using their money to explore new experiences and adventure. This customer segment is very important since it entails people who are ready to spend their savings in pursuit of fun and adventure (Biegar and Lasser, 2002). The customers in this target segment narrow down their choices of travel to destinations based upon comfort, adventure and uniqueness of adventure. They are not too much focused prices and expenses; they are more focused on having fun (Biegar and Lasser, 2002). Therefore, Intrepid Travel through recreational activities can seek market from such market segment by targeting customers who are in the following social group; entrepreneurs, those that are self-employed and other high income earners (Biegar and Lasser, 2002). Therefore, the first essential target market for recreational facilities for water sports, golf and tennis is group of customers who relish extravagant lifestyle and are in pursuit of adventure. On the other hand, behavioral segmentation separates customers into classes with regard to their knowledge, response, their rate of usage and also their readiness stage to purchase a certain product (Biegar and Lasser, 2002). In terms of behavioral segmentation, customers can be classified into tourists who are motivated by rest and comfort and tourists who are motivated by adventure and challenge. Due to technological advancement, more and more tourists are seeking for a tourism destination that not only offers confront but that provide adventure and experience (Biegar and Lasser, 2002). Therefore, the number of tourists motivated by adventure and challenge is increasing at a faster rate and this would be a great market segment to target. Customers in this target market are less interested in price and make purchasing decisions based on whether the products satisfy their needs and expectations (Frochot and Morrison, 2000). The ultimate purchasing decisions are based on availability of activity and quality of experience. These customers prefer using their leisure time to go for adventurous experiences. Tourists motivated by adventure and challenge may include young to middle-aged working individuals and small families of young people (Frochot and Morrison, 2000). Strategic targeting and positioning of recreational activities can be done using Porters generic strategies (Bieger and Lasser, 2002). Porter’s generic strategies theory has offered three strategies an organisation can adapt in order to gain competitive advantage; differentiation, cost leadership strategy and focus strategy (Bieger and Lasser, 2002). The best positioning strategy to be used by Intrepid Travel when implementing recreational activities is differentiation strategy. The tourism agency can differentiate itself from the competitors in different ways. For instance, it can invest some amount of money in unique advertising and promotional activities in order to create awareness of the new experience-based product. Competitor Analysis The number of agencies and destination areas that offer recreational activities in Australia and around the world is limited. Tourism industry is made up of travel websites, agencies and hotels among others (Cogswell, 2015). When Intrepid Travel introduces recreational facilities for tennis, golf and water sports, it will be faced with competition from players such as Travelocity, Liberty Travel Inc. and Adventure Tours Australia among others. Travelocity is an online tourism agency that offers travel products and services directly to customers. The company is focussed on offering an opportunity to consumer’s travel by means of online and offline capabilities (Cogswell, 2015). The market share owned by Travelocity is small but is used worldwide due to its online presence. The company offer tourism products such as travel and transportation, accommodation, food and drinks and travel advice. On the other hand, Adventure Tours Australia is an adventure travel company that offer products such as tours, local food, local accommodation, and out-door experiences (Cogswell, 2015). The company is established in Australia but takes up a small percentage of the world market. Generally, Intrepid Travel is faced with intense competition from travel internet companies, metasearch companies and suppliers like airlines and hotels (Cogswell, 2015). Even with the intense competition, Intrepid is able to remain competitive with the introduction of the new experience-based tourism product. Communication and Promotion Strategies In order for the introduction of the new experience-based product to be successful, there is need to communicate about it to the consumers. One way to do this is through digital communication. Intrepid Travel can maximize the exposure of the new product by using television and print media advertisement (Sheth, 2011). The agency should come up with a television advertisement based on the new product in order to create awareness and enhance customer loyalty (Shankar and Carpenter, 2012). It should spend substantial amount of money for creative television advertisement based on the new product. Another important promotional strategy to be utilized for new recreational activities in Intrepid Travel is social media. Social media pages like Facebook, Instagram, Twitter and Snapchart can be used to promote the new product (Cole, 2015). Social media connects with different people across the world. Promotion of the product through social media is able to reach a large percentage of the market. Social media is growing to be the most important global marketing strategy (Cole, 2015). The company can use twitter to promote its new products in various ways. For instance, the company can post video clips of consumers enjoying recreational facilities and it can offer access to live events such as launching of the new product. Customers will be able to feel included and this will enhance customer loyalty and expand market percentage. Every person loves giveaways and promotions. Therefore, Intrepid can offer discount opportunities for the new products (Ferrell and Hartline, 2014). For instance, the first 100 customers to purchase the experience-based product would be given 50 per cent discount. In addition, the company can also use customer referral incentive program. This may include big discount on the new products and other incentives to customers who refer new customers to try the new product (Guidry, 2011). This will leverage the customer base for recreational facilities for tennis, golf and water sports. Moreover, Intrepid Travel can use contests as promotional strategy for the new experience-based product. The idea of contests is to promote the awareness of the new product and put the logo of the company in front of the public. Sponsoring contests is able to attract attention to the new product without any overtness (Guidry, 2011). Other additional promotional activities to be used in creating awareness for the new product include direct marketing, causes and charity, and radio advertisement among others. Conclusion Many tourism companies offer identical experience-based products aimed at attracting tourists. The tourism industry is faced with intense competition and in order to enhance competitive advantage, Intrepid should introduce new experience-based product. The product should be in form of recreational facilities for tennis, golf and water sports. Travellers demand for something different and unique that will keep them engaged and therefore the introduction of recreational facilities by Intrepid will be a great way to attract more customers. The introduction of recreational facilities for tennis, golf and water sports will be able to increase revenue and profits and expand market base. The introduction of recreational facilities for tennis will be successful due to the increase in the need for adventure and unique experiences by tourists. The target segment for the new product include tourists motivated by adventure and challenge and people who are ready to spend their savings and leisure in pursuit of adventure. In order to create awareness of the product, it is important for Intrepid to implement several promotional strategies such as social media marketing, advertisement and discounts offering etc. References Bieger, T & Lässer, C 2002, Market Segmentation by Motivation: The Case of Switzerland. Journal of Travel Research, vol. 41, no. 1, pp. 68-76. Cogswell, D 2015, "Intrepid Group and TUI Group End PEAK Adventure Travel Group Joint Venture". travelpulse. Retrieved 5th Oct. 2016 from http://www.travelpulse.com/news/tour-operators/intrepid-group-and-tui-group-end-peak-adventure-travel-group-joint-venture.html Cole, G 2015, The value of social media. Strategic Direction, vol. 31, no. 1, pp. 3-5. http://dx.doi.org/10.1108/sd-10-2014-0152 Ferrell, O & Hartline, M 2014, Marketing strategy: text and cases, Mason, OH: South-Western/Cengage Learning. Frochot, I & Morrison, A. M 2000, Benefit segmentation: A review of its application to travel and tourism research. Journal of Travel and Tourism Marketing, vol. 9, no. 4, pp. 21-45. Guidry, M 2011, Marketing Concepts that Win! Save Time, Money and Work by Crafting Concept Right the First Time, Live Oak Book Company, Austin, TX, 2011. Jaume, C 2014, Experience-based tourism: a souvenir made of emotions and feelings. Retrieved 5th Oct. 2016 from http://www.winhotelsolution.com/en/blog/hotel-news/experience-based-tourism-souvenir-emotions/ Mazanec, J 2000, Market Segmentation. In: J. Jafari (Ed), Encyclopedia of Tourism, London, Routledge. Midleton, V 2000, Marketing in Travel and Tourism, Butterworth- Heinemann, London, The Economist. Shankar, V & Carpenter, G 2012, Handbook of marketing strategy, Cheltenham, UK Northampton, MA: Edward Elgar Pub. Sheth, J.N 2011, Impact of emerging markets on marketing: Rethinking existing perspectives and practices. Journal of Marketing, vol. 75, no. 4, pp. 166-182. Weinstein, A 2004, Handbook of market segmentation : strategic targeting for business and technology firms, New York, Haworth Press. Read More