MODULE

MARKETING IN TOURISM AND

HOSPITALITY

HPC 7

ACADEMIC YEAR 2022-2023

Prepared by:
MR. TYRON C. DE CASTRO
Instructor
)
 Tourism Marketing: An Introduction
Alternative Delivery Mode
WEEK 2:

Credits : 3 Units Lecture (3 hours/week),

Pre-Requisite : 3rd Year Standing

Lesson Title:

 Characteristics of the Tourism Industry

 Introducing Marketing in Tourism
 Integrated Marketing Approach
Lesson Objective:
At the end of the module, the learners will be able to:

1. Obtain knowledge of marketing, its core functions, the marketing mix, and the concept
of integrated marketing communications;
2. Discuss the importance of marketing in selling tourism products and services; and
3. Explain how the unique characteristics of tourism are evident in identified tourism
products and services.

INTRODUCTION
Over the decades, tourism has experienced continued growth and it is expected that international
tourist arrivals worldwide will increase by 3.3% a year between 2010 and 2030 to reach 1.8
billion by 2030 (UNWTO: Tourism Towards 2030).

Tourism has become one of the world’s largest and fastest growing industries. With the
emergence of new destinations, competition is stiff; therefore, tourism businesses should strive to
be recognized within the market through efficient marketing.

 Characteristics of the Tourism Industry

Characteristics of Tourism Products and Services

Tourism products have unique characteristics that make their marketing and promotions
demanding. These are distinct from consumer products, which can be availed directly from the
shelf. The tourism product is intangible, inseparable, variable, perishable, seasonal,
substitutable, and is a high involvement product.

The following are the unique characteristics of the tourism industry (Badilla, 2015):
 Intangible – before the purchase of tourism products, these cannot be touched, smelled,
tasted, felt, nor heard; and cannot be placed into prior inspection.
Example: A destination that assures a breath-taking view of the sunset or the beach cannot send a
sample. Potential consumers can only rely on photographs, comments, or reviews from those
who have been to such destination.
 Inseparable – a tourism product cannot be separated from the consumer; to avail of it,
the consumer/tourist has to be personally present in the place where a product/service is.
What is being sold is the experience, thus, the product and the consumer have to be in
the same place.
Example: Scuba diving, surfing, and other activities offered by a resort can only be enjoyed
when a consumer goes to the place. Most of the time, it is the consumer who goes to where a
product is to avail of it.
 Variable – the tourism experience is diverse depending on when a product is availed,
who availed it, and how it is delivered by the service providers.
Example: A consumer may have visited a destination a few times but have different experiences
each time. S/he may find it fun and exciting the first time since various activities are conducted,
but find it boring the second time because of unfavorable weather.
To address such variability is the major reason why standardization of operations and
products/services is fundamental in tourism.
 Perishable – tourism products are one of the most highly perishable products.
Perishability means that a tourism product cannot be moved or counted as part of an
inventory on the next day when it is not consumed today. Tourism products are unlike
consumer products such as clothing, which when unsold on a certain day can be
left/placed in the store to be available the next day.
Example: A hotel with 200 rooms that had 50% occupancy yesterday will still and only have 200
rooms today. The 100 rooms that were unsold the previous day cannot be sold the following day.
The hotel fails to earn from the unsold rooms.
With proper revenue management, yield can be maximized, thus addressing the perishability
factor of a tourism product.
 Seasonal – seasonality does not only refer to seasons of the year, but also the behavioral
patterns of travellers. Such factor prevents the industry from maximizing its profits.
Intensified marketing during the lean season will help increase demand for a product.
Example: Usually, airlines have lower rates during the lean season to attract demand of the
product.
 Substitutable – there is an intensive competition in the tourism industry. With the
emergence of new destinations and competition in the global marketplace, one
destination can be substituted for another destination. Since there are many choices
available, a tourism product is highly substitutable. To identify one’s competitive
advantage and unique selling proposition is one (1) way to help make a tourism product
less substitutable.
Moreover, marketing strategies should be developed to make a product competitive in a highly
commercialized marketplace.

 High Involvement – in the purchase of a tourism product, the decision making is said to
be of high involvement, meaning, there is a greater degree of study before the purchase.
The following are the characteristics of high involvement products:

o Expensive – most likely, the purchase of expensive products go through a long

process of canvassing and comparing of brands, suppliers, and product features.
 Travel products, home appliances, and real estate properties fall under this
attribute.

o Complex – the purchase of complex products may be found difficult by

consumers. The difficulty comes from the need to understand the features of a
product. For instance, travel packages, since these contain a variety of products
and services and the jargons (technical words) used in some of these products.

o Unrepeatable – the purchase of a travel, most often, is “once-in-a-lifetime”.

With tourists’ unusual behavior and the high cost of travel, travel purchases tend
to be unrepeated or may be uncommon.

Unlike low involvement products, which are inexpensive, simple, and familiar, more detailed
assessment, longer time for deliberation, and high expectations for satisfaction happen when
consumers purchase products of high involvement.

 Introducing Marketing in Tourism

Marketing Defined

 Marketing is a social process by which individuals and groups obtain what they need
and want through creating and exchanging products and value with others (Kotler,
2002). To market a need (necessity) is easy since customers have no choice but to buy
it; marketing a want, however, is challenging. Tourism products fall into the want
category, therefore, it is more challenging to persuade consumers to make a purchase.

 Marketing is the art and science of finding, retaining, and growing profitable customers
(Kotler, Bowens, and Makens, 2010). This definition overlays concepts such as
customer-centered marketing and relationship marketing. Finding, retaining, and
growing profitable customers require strategic planning to ensure customer satisfaction
and building of customer loyalty. The goals of ensuring satisfied customers is repeat
visits and referrals.

 Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners,
and society at large (The American Marketing Association, 2013).

Marketing as a Management Process

Because the delivery and consumption of tourism products and services happen at the same time,
marketing orientation should include an entire organization. The marketing management process
involves the following key processes (Lumsdon, 1997):

A. Marketing Information System – with the advent of technology, the provision for a
marketing information system enables the organization to compile an updated set of
information about its customers, competitors, and the organization’s capability and
effectiveness.
 B. Marketing Planning – this involves an analysis of the marketing environment in relation
to the potentials of one’s business. It also involves the setting up of objectives and an
evaluation of the milestones that the company has reached. The creation of marketing
strategies will help increase the business by obtaining the best fit between the
company’s resources and its target market position.
C. Planning Tactical Campaigns – this step ensures that practical and realistic tactical
campaigns are conducted in support of the comprehensive marketing strategy.
D. Marketing Operations – this involves the part of implementing the planned strategic
and tactical campaigns by coordinating with all stakeholders, fine tuning the marketing
mix, and ensuring that activities are conducted as planned.
E. Monitoring and Control – this involves the ongoing process of evaluating sales data and
financial performance versus marketing activities conducted. It also includes the
handling of customer feedback and complaints, and coordination with what the staff has
to say about the marketing campaigns. Finally, it includes being aware of what the
competitors are doing.

Core Marketing Functions

The following are the key functions of marketing (Badilla, 2015):

 Marketing Information Management – involves collecting of information about

customers to better serve their needs and improve decision making.
 Financing – involves planning to ensure that resources are available to maintain and
improve the business.
 Pricing – makes sure that the value and cost of goods and services offered to customers
will be at the level that customers are willing to pay.
 Promotion – prepares the different promotional strategies that will enable the products
to be introduced and sold to the customers.
 Product/Service Management – involves designing, developing, maintaining,
improving, and acquiring products and services to meet the needs of the customers.
 Distribution – involves bringing the products and services to the customers in the best
way possible.
 Selling – is the measure of marketing success. It involves strategies on following up the
sale, closing the sale, and making a repeat sale.

The Marketing Mix

It is defined as “the four (4) key decision areas that managers must manage so that they satisfy
or exceed customer needs better than the competition” (Jobber, 2007:18). The concept of
marketing mix implies a set of variables or controls that should be synchronized in response to
changing conditions and the actions of others. Continuous manipulation of such controls will
lead to effective progress.

The four (4) controls are product formulation, which is a means of adapting a product to the
changing needs of target consumers; pricing, which is used to increase of slow down the volume
of sales according to market conditions; promotion, which is used to increase the numbers of
those in the market who are aware of a product or service and favorably disposed towards buying
it; and place, which determines the number of prospective customers who are able to find
convenient places and ways to gain information and convert their buying intentions into
purchases (Middleton, Fyall, & Morgan, 2009).

In some books, however, there are three (3) elements added to the mix. These elements, which
are being used by the industry today, include the following (Ace, 2002):
 People – refers to the staff members who provide the product or service to customers
who have a profound effect (positive or negative) on customer satisfaction; they should
be well-motivated and have the right attitude.
 Process – refers to the process of delivering the product or service is delivered to the
customer; customers seek corporate competence, that is, they expect a whole
organization to deliver what it has promised.
 Physical evidence/environment – refers to where the product or service is delivered; can
be used to charge a premium price for a service and establish a positive experience.
The important point to understand about marketing mix decisions is the continuous adjustment
and synchronization of the main controls of the mix according to changing market conditions.

 Integrated Marketing Approach

Integrated Marketing Communications (IMC)

Before, promoting products is done using traditional advertising techniques, which are expensive
but less effective. The need to enhance the demands of businesses to promote their products
leads to the birth of IMC approach. IMC is the process of using all forms of promotion to
achieve maximum communications impact while maintaining a consistent image for products or
services.
Factors that Contributed to the Growth of IMC (Badilla, 2015):
 Growth of technology – the development of technology has caused consumers to be less
responsive to traditional advertising (prints ads, newsletters, flyers, etc.); they rather
choose to use a computer and the Internet. The use of smartphones and Internet allowed
businesses to communicate in more creative ways to its target customers.
 Shift from fixed compensation to incentive-based compensation – this shift is triggered
by the need for advertising agencies and marketing departments to maximize resources
and budget to achieve efficiency. This carries a challenge for advertising agencies to
devise an integrated approach in mixing various promotional tools to produce maximum
results, since the more effective their marketing strategy, the higher their payment from
the business owner.
 Consolidation of the retail industry – the rise of big and famous retailers, such as SM
Malls, Puregold, Robinson’s Mall, etc., has changed the application of marketing and
promotions. Big retailer companies can essentially prescribe what specific brands will
make it to their stores, thus, marketing of manufacturers is directed towards such
companies.
 Database marketing – due to the enhanced computer programs embraced in tourism
establishments, database management is enabled. This allows tracking of customers’
needs and wants, profiles, and history, which is useful is employing direct marketing
campaigns like loyalty programs and telemarketing.
GENERALIZATION
A. Quiz
Learning Outcome: Students will be able to:LO1 & LO2
• Write essays about given questions/topic

NOTE: ALL ATTCHMENT ARE POSTED IN YOUR GOOGLE CLASSROOM..(QUIZES,

ACTIVITIES ETC. AND VIDEO LEARNING MATERIAL

References:

Ace, C. (2002). Effective promotional planning for e-business. MA: Butterworth-Heinemann.

Badilla, M. G. (2015). Tourism marketing. Manila: REX Book Store, Inc.

Middleton, V., Fyall, A., & Morgan, M. (2009). Marketing in travel and tourism (4th ed.). MA:
Elsevier.

Prepared by:

Tyron C. De Castro