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Marketing in Travel and Tourism The marketing environment of the tourism industry By: Vivian U. Oviasehi Learning Outcomes At the end of this lesson students should be able to: • Define Marketing • The role of marketing in T&T industry • Understand and analyse the marketing environment of the industry. What is marketing? Marketing defined as: • Human activity directed at satisfying needs and wants through exchange processes (Kotler, 1983, p.6). • Individual and organisational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, services and ideas (Dibb et al,.1997, p. 5). • Finding out what guests’ wants and needs are and providing them at a reasonable cost and profit (Walker, J.R., 2004, p. 506). Role of marketing • marketing function contributes to firms’ financial performance • customer relationship: marketing helps to create and boost customer relations with the organisation • new product performance – no matter how good a product is, if it is not known by the consumers; it can not be purchased. Marketing the service/product • Service product: define as a service that can be sold and performed within the frame work of customer service Marketing environment • Marketing activities are often influenced by internal (micro) factors e.g suppliers, employees. AND external (macro) environmental factors (occurrences inside and outside the organisation) e.g PESTEL Marketing environment Environmental factors (occurrences outside the organisation). Notably: Political, Economy, Social, Technology, Legislations and environment. • It is pertinent to gain a background knowledge on topical areas of business, such as environmental analysis before decisions about marketing is made. • environmental analysis: involves studying the political, economic, social, legislative and technological influences that could affect the travel and tourism business. • Environmental scanning assist in formulating the next step or decisions in the marketing process. Environmental analysis Political Factor: The government plays important role in marketing. The government are employers, suppliers and purchasers of goods and services. Therefore has power to influence business. - Political instability can as such affect business negatively or positively. Economic factor: affects the industry in several ways – Interest rates, exchange rates (may affect number of tourist visiting a location) , inflation etc. Environmental analysis… • Social factor: The changing demands by consumers may affect the buying pattern and needs. For example: - Emphasise on fitness and wellness has affected approach to eating and demand for gym, spa, adventure sports. - Higher expectations and value for money has added up to ever changing scenario for the tourism industry. Environmental analysis… • Technological factor: Marketing and technology interact in different ways: • Technological advancement in tourism such as computers, the internet, development in transportation which has helped in distribution/ delivery of products/services (low-cost airline). • New technologies that provides competitive advantages for example; electromagnetic room door opener, self –check-in, etc. Environmental analysis… • Legislations: government legislations such as: Employment - minimum wage tax deduction off business meals (from 80% to 50%) carbon emissions Environmental analysis… • Environmental factor: Climate changes can as well affect marketing of a product/services. For example; - Global warming, going green? - Natural disasters – Hurricane, epidemics, earthquakes (Haiti earthquake). Class exercise Task 1 • List the aspect of Value that were as important to you the last time you went on a flight including your time at the airport. Discuss how the service providers could have added more value to your experience. • Task 2 (group discussion) • Discuss with relevant examples how Environmental and social factors have influenced your recent decision to travel to a destination. References • Christine Moorman & Roland T. Rust (1999) ‘The Role of marketing’, Journal of Marketing, Vol. 63, pp. 180-197. • Needle, D (2004) Business in Context: An introduction to business and its environment, 4th edition, Thomson Learning, London. Pp 471-527. • Walker, J. R. (2004) Introduction to Hospitality Management, Pearson Education, New Jersey. Pp. 506-515. • Chris Cooper et al (2005)Tourism: Principles and practice, Third Edn, Prentice Hall. • www.allbusiness.com