Tourism 

is one of the world's leading industries. The Philippines is getting substantial economic
gains from tourism, which the goverrnment wants to further maximize. Tourism is not a single
product; it is a combination of products and services that results in a holistic experience for a
traveler.  Tourism products and services have unique characteristics; intangible, inseperable,
variable, perishable, seasonal, and substitutable. Tourism is a high involvement product because
it is expensive, complex, and has an unrepeatable nature.

The seven core marketing functions are marketing information management, financing,

pricing, promotion, products/service management, distribution and selling.The marketing
mnagement process involves information systems, planning, tactical campaigns, operations, and
monitoring and control. The integrated marketing communications approach is the process of
using all forms of promotion to achieve maximum impact while maintaining a consistent image
for the product or service. 

1. Unique Characteristics of the Tourism Industry

Unlike consumer products which can be availed off the shelf, tourism
products have unique characteristics that make their marketing  and
promotions quite challenging.  

1. Intangible - Unlike physical products, services can not be seen

tasted, felt, heard and smelled before they are purchased. Buyers look
for tangible evidence that will provide information and confidence
about the service.
2. Inseparable - Both the service provider and the customer must be
present for the transaction to occur. Customers are part of the
product.
3. Variable - Service quality depends on who provides the service and
when they are provided. Product consistency depends on the service
provider’s skills and performance at the time of the exchange.
4. Perishable - Services can not be stored. If service providers are to
maximize revenue, they must manage capacity and demand. Unsold
inventory from previous day can not be carried forward to the next
day.
5. Seasonal - Services have peak and off-peak season depending on
demand due to weather and visitor behavior.
6. Substitutable - With the new destinations emerging and competing
in the global marketplace, one destination can easily be substituted
for another destination.

Tourism as High Involvement Product

Tourism products of high involvement means that there is a greater

degree of thought or study involved prior to the purchase. Marketing
plays a vital role in the purchase of high involvement products. It leads
consumers to think about the product an its features as well as to
assure them of its quality. It helps clarify doubts and lessen risks
involved in the purchase of the products. Since tourism products and
services are high involvement products, customers also demand a
high level of satisfaction.

Simple definition:
“Marketing is the management process responsible for identifying,
anticipating, and satisfying customer requirements profitably.”

Goals of Marketing:

1.Attracts new customers by promising superior value.

2.Keep and grow current customers by delivering satisfaction.

"Marketing is the activity, set of instructions, and processes for

creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large."

"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)

Kotler, Bowens and Makens (2010) define marketing as the art and

science of finding, retaining and growing profitable customers.
The American Marketing Association, in July 2013, approved a new
definition of marketing. Defined marketing as 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.
"Management is the process of designing and maintaining an environment in which individuals,
working together as groups, efficiently accomplish selected aims.”

Defined as the process of planning, organizing, leading, and controlling the efforts of
organization members and of using all other organization resources to achieve stated
organizational goals.

Marketing as a Management Process

1. 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. 

2. Marketing Planning – This involves an analysis of the marketing environment in relation to

the potentials of one's business. It 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.
 
3. Planning Tactical Campaigns – This step ensures that practical and realistic tactical
campaigns are conducted in support of the comprehensive marketing strategy. 

4. Marketing Operations – This process involves the challenging part of implementing the
planned strategic and tactical campaigns by coordinating with all stakeholders, fine tuning the
marketing mix as they unfold, and ensuring that activities are conducted as planned.
 
5. 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.  
1. Marketing Information Management - entails gathering information
about customers to better serve their needs and improve decision
making.
2. Financing - involves planning to ensure that resources are available
to maintain and improve the business. 

3. Pricing - ensures that the value and cost of goods and services
offered to customers will be at the level that customers are willing to
pay.

4. Promotion - prepares the various promotional strategies that will

enable the products to be introduced and sold to the customers.

5. Product/ Service Management - involves designing, developing,

maintaining, improving, and acquiring products and services to meet
the needs of the customers.

6. Distribution - involves bringing the products and services to the

customers in the best way possible.

7. Selling - is the ultimate measure of marketing success. Strategies

on following up the sale, closing the sale, and making a repeat sale are
crucial tasks of marketing. 

The marketing mix refers to the set of actions, or tactics, that a

company uses to promote its brand or product in the market.
The product or service is what the company is offering to satisfy a
consumer's want or need. The price is the value that the seller puts on
the product or service. This includes the cost of the product and the
profit the seller wishes to make. The price is also the amount a
customer has to pay in exchange of the product or service. 
The  place is the means by which the product or service reaches the
consumer. Promotion is the strategic plan by which customers are
informed about the product or service and its value. Promotions also
encourage customers to purchase the product or service. A well-
planned and executed marketing mix will enable marketers to move
their products or services successfully to the consumers.

7P's of Tourism Marketing

1. Price
2. Place
3. Product
4. Promotion
5.  People  – a tourism organizations most valuable resources.
6. Process  – is inseparable product. If any part of the process is
found to be unsuitable by the consumer, it could result in a negative
evaluation of the whole product.
7. Physical Evidence  – is the tangible aspect of the tourism
product. Defined as the built environment owned and controlled by a
tourism organization.
6. Integrated Marketing Communications Approach

Promoting and selling products have become heavily reliant on

traditional advertising techniques which have become more expensive
but less effective. The  Integrated Marketing Communications  (IMC)
approach was born out of a need to enhance the demands of
businesses to promote their products. 

WHAT IS INTEGRATED MARKETING COMMUNICATIONS?

IMC is the process of using all forms of promotion to achieve

maximum communications impact while maintaining a consistent
image for all products or services.

Factors that led to the growth of IMC

1. Growth of technology
2. Incentive-based compensation
3. Consolidation of the retail industry
4. Database Marketing

Various studies have shown that the integrated marketing

communications approach has been an effective way for
companies to reach its target market and to achieve company
objectives within the available budget.

DIFFERENT MARKET LEVELS

1. Total Market is the sum of the actual and potential customers of

product.

2. Potential Market consists of those consumers that profess some

interest in a defined product.

3. Available Market consists of those consumers who have the

interest and the necessary income to visit a destination, along with no
constraints.

4. Served Market  is part of the available market. The destination

management can decide to pursue only well defined segments or
limited target.

5. Penetrated Market consists of the set of consumers who actually

purchased the tourist products. It must be clear that this is only a
fraction of the total population

The tourism product is not for all. The tourism industry aims to target
a specific set of individuals. It is for a particular set of buyers,
a  niche  market. There are three steps to target maketing:  (1) market
segmentation, (2) market targeting, and (3) market positioning.

2. Market Segmentation

A market is comprised of varied profiles and characteristics that can

be further segregated. Imagine the market as an entire pizza that can
be divided into several pieces or an oramge fruit with several
segments . Each slice or segment has different characteristics from
the others. These segments differ in their wants or desires, socio-
economic status, age, travel behavior, etc. 

Market segmentation is dividing the market into disctinct groups who

might require separate products and/or marketing mixes. A market
segment is a subgroup of the total consumer market who share
similar charactersitics and needs relevant to the purchase of a
product, service, or experience. Each segment is profiled based on its
characteristics. 

Characteristics of a Market Segment

Lumsdon (1997) identified six characteristics of a segment, as

follows:

1. Identifiable. The people who comprise the segment can be located

and identified such that targeting them would be easy.

2. Cohesive. The consumers should be part of a whole whose specific

qualities are common to all.

3. Measurable. The marketer should be abe to estimate the size and

potential spending of the members of the market segment.
4. Accessible. The members of the segment should be accessed by
maketing efforts and promotopnal activities to be conduted. If they
are difficult to reach, efforts to reach out to the speccific segment
might be futile.

5. Substantial. Segments should be large in order to be substantial. If

the segment is small, it should have a high spending  capability to
make a significant impact on the business' bottom line. 

6. Actionable. The company has enough resources and commitment

to enable effective penetration of the identified segment to ensure
effective positioning. 

1. Geographic Segmentation.  To group potential tourism customers

based on their location. It is considered as the oldest and simplest
basis for market segmentation. (Nations, Regions, Countries, Towns)

2. Demographic Segmentation. To group the consumers according to

variables that define them in an objective, easily measurably
way. (Age, Gender, Income)

3. Psychographic Segmentation. Involves grouping people on how

they live, their priorities, their opinions, their attitudes and their
interests. Personal lifestyle and personality. With similar hobbies,
sports and musical interests.  (Social Class, Lifestyle, Personality)

4. Behavioral Segmentation. Also known as Product-related

Segmentation  is multifaceted and aims to group consumers
according to their relationship to the product. (Benefits sought, User
Rate, Loyalty Status)
5. Technographic  Segmentation. With the use of Internet and World
Wide Web. (Between users and non-users of technology in searching
information for technology.)

3. Market Targeting

Market segmentation shows the various market segment

opportunities available for a company. A careful assessment of these
specific market segments will help the firm identity which ones it
should target. Market Targeting is evaluating each segment’s
attractiveness and selecting one or more of these market segments in
which to operate one’s business. (Kotler, 2010)

Photo source: Business Education

Kotler suggests three factors to consider in evaluating which

segments should be targeted. These factors are:

1. Segment Size – refers to the current sales volume, growth rate, and
high profit margin.

2. Attractiveness – refers to the potential impact of the segment to

the company. One that is not saturated and has few aggressive would
be structurally attractive.

3. Company objectives and availability of resources – refers to the

main for its decision making and the available resources the company
will use to make its objectives a reality.
Market Coverage Strategies

In the selection of specific market segments, a company decides on a

market strategy that is in line with its objectives and resources. Kotler
et al. suggests that it can adopt any of three market coverage
strategies. 

1. Undifferentiated Marketing
2. Differentiated Marketing
3. Concentrated Marketing

In undifferentiated marketing, a company ignores market

segmentation and goes after the entire market with only one market
offer. This looks into what the market has in common and is designed
to reach a huge number of buyers. This market coverage strategy can
be used effectively for consumer products mainly because a lot of
buyers would need the same product. 

Differentiated marketing approaches the market by targeting several market

segments using separate offers per segment. Companies may offer serveral
products for different market segments to capture bigger chunk of the
market. 

Concentrated Marketing is practiced by companies with limited resources. It

pursues getting a big share of a small market rather a small share of a large
market. Companies are able to allot its resources in making its presence felt
in a specific market with greater impact. If the segment is well chosen, it may
yield high returns for a company. 

1. Company's Resources. This refers to how much money and

resources the company has which can be allocated to marketing. If
the company has limited resources, it is logical to use concentrated
marketing.

2. Degree of Product Homogeneity. If products are standardized and

identical, it is more advisable to go for undifferentiated or
concentrated marketing.

3. Market Homogeneity. If there is a diverse market, differentiated

marketing is advisable. If the market has a lot of
similarities, undifferentiated marketing maybe used.

4. Competitor's Strategy. It is important to assess the strategy

competitors are using so the the correct strategy can be implemented
to counter their marketing efforts. If competition is
doing undifferentiated marketing, it would be advantageous to
do differentiated or concentrated marketing. If competitors are doing
segmentation, concentrated marketing is a must.

4. Market Positioning

Market positioning is developing competitive positioning for the

product and an appropriate marketing mix. (Kotler, 2010)

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Positioning has everything to do with the deliberate way by which

marketers would want to position their product in the consciousness
of its prospective customers. Its goal is to identify the product's
unique characteristics in a way that will differentiate it in the
marketplace. Theses three positioning concepts will help reinforce the
idea of market position: (1) unique selling proposition,  (2) competitive
advantage, and (3) top of mind.
Unique selling proposition (USP) is a term used to identify what
makes the product or service different from others. This USP may
occur due to the product's physical attributes, added services,
personnel, location, or image (Kotler et al. 2010).

Competitive advantage is the product's advantage over competitorss,

which is gained by offering grater value by offering lower prices or
providing more benefits to justify higher prices (Kotler et al. 2010).
Top of mind is the highest level of recall that a brand receives. It
means that the brand occupies the top spot in a consumer's mind.
The ultimate top of mind level a brand can reach is when it becomes a
synonymous to the generic. Market positioning is a deliberate way of
making sure that the product has a high recall in the consumer's
minds relative to its competitors.
Some positioning strategies include the following:

1. Specific product attributes such as price and special features can

be used to position a product.
2. The product can also be positioned based on its benefits and the
needs the product fills.
3. Positioning the product based on certain classes or segments of
users can also be done.
4. A company can decide to position itself against an existing
competitor and present its edge  over said competitor.