CHAPTER 1
(2017)- defined marketing
INTRODUCTION TO TOURISM AND HOSPITALITY
MARKETING
TOURISM AND MARKETING
 Tourism is one of the leading
industries of the future. Tourism
contributes largely to the generation of
jobs and the strengthening of
economies.
 Marketing for tourism covers several
levels, from the tourism destination as
the product itself down to the specific
tourism products and services that a
tourist should avail of to complete the
tourist experience.
UNIQUE CHARACTERISTICS OF THE
TOURISM INDUSTRY
 Intangible 
  Tourism products cannot be subjected to
scrutiny prior to     purchase.
 Inseparable  1. Marketing Information Management
  To consume tourism products, a consumer
has to go where the product is. They cannot
be separated from each other.
 Variable
  The tourism experience varies depending
on when the product is availed of, and the
service provider delivers the service at the
time of consumption.
 Perishable
   Inventory of tourism products cannot be
carried forward to the next day. Hotel rooms
and airline seats not sold today will be gone
forever.
 Seasonal
  Seasons of the year and travel behavior
patterns of the travel market affect year-
round occupancy.  -Marketing facilitates the exchange process
 Substitutable
   With competition intensifying, tourism
destinations and products can be easily
replaced with alternatives.
TOURISM AS A HIGH-INVOLVEMENT
PRODUCT
There is a greater degree of thought on
decision to purchase tourism products and
services.
Philip Kotler et al.
as “the process by which companies create
value for customers and build strong
relationships in order to capture value from
the customers in return.”
The American Marketing Association
(2013)-approved a new definition: 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.
MARKETING AS A MANAGEMENT
PROCESS (LUMSDON 1997)
1. Marketing Information System
2. Marketing Planning
3. Planning Tactical Campaigns
4. Marketing Operations
5. Monitoring and Control
CORE MARKETING FUNCTIONS
2. Financing
3. Pricing
4. Promotion
5. Product/Service Management
6. Distribution
7. Selling
THE TOURISM MARKETING MIX
THE MARKETING MIX
and the development of relationships by
carefully examining the needs and wants of
consumers, developing a product or service
that satisfies these needs, offering it at a
certain price, making it available through a
particular place or channel of distribution,
and developing a program of promotion to
create awareness and interest (Kotler
2010).
THE INTEGRATED MARKETING
COMMUNICATIONS MIX
-It is the process of using all forms of
promotion to achieve maximum
communications impact while maintaining a
consistent image for the products or
services.
FACTORS THAT CONTRIBUTED TO THE
GROWTH OF IMC
 Growth of technology and the Internet
caused the fragmentation of media
channels.
 Incentive-based compensation for
advertising agencies
 Consolidation of the retail industry to
big retailers
 The growth and development of
database marketing
THE TOURISM MARKETING MIX —
DIAGRAM
Chapter 2
THE TOURIST MARKET AND SEGMENTATION
Market segmentation, targeting, and
positioning are key terms useful in any
marketing process.
 Identifying one’s market segment will
help in identifying the market’s needs
and wants. How their needs should be
met and how to communicate such to
benefit them are covered in this
chapter.
WHAT IS A MARKET?
 A market is a set of actual and
potential buyers of a product. These
buyers share a particular need or
want that can be satisfied through
exchange relationships (Kotler et al.
2016).
 The tourism industry aims to target a
specific set of individuals. It is for a
particular set of buyers, a niche
market. 
A market is comprised of varied
profiles and characteristics that can
be further segregated.
MARKET SEGMENTATION
 Market segmentation is dividing the
market into distinct groups that might
require separate products and/or
marketing mixes (Kotler et al. 2017). 
 A market segment is a subgroup of the
total consumer market that shares similar
characteristics and needs relevant to the
purchase of a product, service, or
experience (Hsu 2008). 
 Each segment is profiled based on its
characteristics.
CHARACTERISTICS OF A MARKET
SEGMENT
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
able to estimate the size and
potential spending of the members
of the market segment.
4. Accessible. The members of the
segment should be easy to reach by
the marketing efforts and
promotional activities to be
conducted.
5. Substantial. Segments should be
large in order to be substantial or
should have a high spending
capability to make a significant
impact on the business’s bottom
line.
6. Actionable. The company has
enough resources and commitment
to enable effective penetration of the
identified segment to ensure
effective positioning.
VARIABLES TO SEGMENT
CONSUMER MARKETS
VARIABLES TO SEGMENT CONSUMER
MARKETS
TECHNOGRAPHIC SEGMENTATION
Cooper (2006) suggested that there is a fifth
variable for market segmentation which is called
technographic segment. 
 With the prevalence of the Internet and the
World Wide Web, there is an increasing divide
between the users and nonusers of technology
in searching for travel information.
MARKET TARGETING- Market targeting
is evaluating each segment’s attractiveness
and selecting one or more of these market
segments in which to operate one’s
business.
THREE FACTORS TO CONSIDER IN
EVALUATING SEGMENTS
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 on the company  the product or service different from others.
3. Company objectives and availability of
resources — refer to the main reasons for
its decision-making and the available
resources the company will use to make its
objectives a reality.
MARKET COVERAGE STRATEGIES
In undifferentiated marketing, a company ignores
market segmentation and goes after the
entire market with only one market offer
(Kotler et al. 2017).
Differentiated marketing approaches the
market by targeting several market
segments using separate offers per
segment.
Concentrated marketing is practiced by
companies with limited resources. It
pursues getting a big share of a small
market rather than a small share of a large
market.
FACTORS TO CONSIDER WHEN
CHOOSING A MARKET COVERAGE
STRATEGY
1. Company’s Resources. Amount of
money and resources the company
has which can be allocated to
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. 
4. Competitor’s Strategy. It is important
to assess the strategy the competitor
is using to be able to counter its
marketing efforts.
MARKET POSITIONING
-Market positioning is developing
competitive positioning for the product and
an appropriate marketing mix.
-A deliberate way by which marketers would
want to position their products in the
consciousness of their prospective
customers
UNIQUE SELLING PROPOSITION
-USP is a term used to identify what makes
 
-This USP may occur due to the product’s
physical attributes, added services,
personnel, location, or image.
COMPETITIVE ADVANTAGE
- This is the product’s advantage over its
competitors, which is gained by offering
greater value either by offering lower prices
or providing more benefits to justify higher
prices.
TOP OF MIND
-It 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 synonymous with
the generic (e.g., Xerox, Coke, etc.).
POSITIONING STRATEGIES
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 
4. A company can decide to position
itself against an existing competitor
and present its edge over said
competitor.
NEW AND EMERGING MARKETS
GENERATIONAL TRAVEL MARKETS
-Generational segmentation is one of the PUSH AND PULL FACTORS (DANN
easiest ways to segment the travel market. 1977 AND CROMPTON 1979)
-Using various studies, there are similarities
in cohorts’ travel behavior patterns and
decision-making.
OTHER TYPES OF MARKETS

GROWTH MARKETS CULTURE- Culture is defined as the

collective mental programming of the
human mind which distinguishes one group
of people from another.

AGE AND GENDER

 Age pertains to the number of years a
CHAPTER 3 — TOURISM person has been living. Age is a
AND CONSUMER traditional way of segmenting the
market as it greatly influences
BEHAVIOR consumer behavior.

FACTORS THAT INFLUENCE  Gender also influences consumer

CONSUMER BEHAVIOR behavior. The female market is
steadily increasing and has been
 MOTIVATION observed to be more discriminating
 CULTURE than its male counterpart. The
LGBTQ+ market is also emerging.
 AGE AND GENDER
SOCIAL CLASS- Social class is one’s
 SOCIAL CLASS position within the society and is determined
 LIFESTYLE by factors such as income, wealth,
 LIFECYCLE education, occupation, family prestige, and
 REFERENCE GROUP value of home or neighborhood.
 PERSONALITY AND SELF LIFESTYLE- A lifestyle is a person’s pattern
CONCEPT of living as expressed in one’s activities,
interests, and opinions.
MOTIVATIONS- Motivations are inner LIFE CYCLE- Life cycle refers to the stages
drives that make people take a specific an individual goes through in his/her
lifetime. Single people choose destinations
plan of action to satisfy their needs.
that are fun and adventurous more than
those who are married and have young
children.
REFERENCE GROUPS- Reference
groups are known to be a set of people who
have a direct or indirect influence on other
people’s attitudes or behavior.
PERSONALITY AND SELF-CONCEPT-
Personality refers to the distinguishing
psychological characteristics that lead to
relatively consistent and enduring
responses to the environment.
THE BUYER DECISION-MAKING
PROCESS
 CUSTOMER SATISFACTION
THROUGH SERVICE QUALITY-
Service quality is an assessment of
how well a delivered service conforms
to the client’s expectations.
ORGANIZATIONAL BUYER BEHAVIOR-
The organizational buying process is a more
formal version of the consumer buying
process.
PURCHASE DECISION PROCESS IN
ORGANIZATIONS
TYPOLOGY OF TOURISTS
Plog’s Tourist Motivation Model
 Allocentric tourists prefer what is new,
unstructured, exotic, or unusual in
terms of trips or destination choice. 
 Psychocentric tourists are those who
prefer the structured and familiar.
Cohen’s Model- Cohen (1972) proposed
four classifications of tourists: the
organized mass tourist, the individual
mass tourist, the explorer, and the drifter.
TYPOLOGY OF TOURISTS
Stewart’s Model of Holiday Taking
distinguishes the following four phases of
holiday taking:
1. Bubble 
2. Idealized-experience seekers
3.   Wide-horizon travelers
4.   Total immersers
TYPOLOGY OF TOURISTS
Nonusers can be classified as:
(1) ex-users who stopped using the
products/services for various reasons;
(2) customers who are aware of the product or
service but need to be persuaded to
purchase; and
(3) those who are not aware of the product’s or
service’s existence.
CHAPTER 4 — THE
MARKETING PLAN
A marketing plan serves as a practical,
concise, and strategic tool for tourism
practitioners on future action plans that are
carefully studied, taking into consideration
the current status of the company and
external forces that may propel or hinder the
growth of the business.
IMPORTANCE OF A MARKETING PLAN
A marketing plan is important in any
organization because it:
1. serves as a road map for all marketing
activities of the firm;
2. aligns the marketing activities with the
corporate strategic plan;
3. encourages marketing managers to
review and objectively think through
all steps in the marketing process;
and
4. assists the budgeting process to
match resources with marketing
objectives.
THREE KEY ELEMENTS TO A
SUCCESSFUL MARKETING PLAN
1.  It is workable. 
2.  It is realistic and flexible. 
3.  It has measurable and achievable
goals.
INTRODUCTION
The introduction should include the
following information:
1. Current Situation of the Company
2. Environmental Factors
3. Competitive Analysis
4. Marketing Trends
5. Market Potential
6. Marketing Research Findings
BACKGROUND OF THE PLAN
This section reveals the background of why
the marketing plan should be created.
1. Property Needs Analysis
2. Strengths, Weaknesses, Opportunities,
and Threats (SWOT)
3. Market Positioning Statement
OBJECTIVES
Objectives are goals that companies want to
achieve within a certain period of time.
They provide a clear direction for the
strategies, tactics, and activities that will be
done. By writing them down, the company is
committing to using all its resources to
achieve them.
Objectives need to be SMART (Specific,
Measurable, Attainable, Realistic, and Time-
bound).
TARGET MARKET
A brief description of the demographics and
psychographics of the market segments
identified shall be placed in this portion.
Primary Market — Key Result Areas
Secondary/Marginal Accounts
New Accounts
MARKETING STRATEGIES
An overarching creative strategy can help
put together the marketing strategies:
1. Product Strategy
2. Pricing Strategy
3. Promotional Mix Strategy
4. Distribution Strategy
TIMETABLE- This section should include
specific activities based on the identified
marketing strategies, their expected time of
rollout, duration, and person-in-charge.
BUDGET- The marketing budget is a
numerical representation of the marketing
commitment.
Items incorporated in the budget should
include projected annual income (broken
down on a monthly basis to address
seasonality) and the resources needed to
implement the marketing plan.
CHAPTER 5 — THE
TOURISM AND
HOSPITALITY PRODUCT
TOURISM AND HOSPITALITY PRODUCT
COMPONENTS OF A TOURISM AND
HOSPITALITY PRODUCT:
 Destination attractions 
 Destination facilities 
 Accessibility 
 Image
 Price
PRODUCT TYPES
 Core products are products that are
primarily what the consumer is
buying. 
 Facilitating products are goods and
services that must be present for the
guest to enjoy and use the core
product. 
 Supporting products, on the other
hand, add value to the core product
and help differentiate it from its
competitors.
 Augmented products are factors that
help the consumer consider the core
product over other products because
these include product accessibility,
geographical location, operating
hours, atmosphere, customer
satisfaction, and customer interaction
with each other.
PRODUCT CONSIDERATIONS
 Accessibility
 Atmosphere
 Customer interactions with the service
system 
 Customer interactions with other
customers
 Coproduction
PRODUCT LIFE CYCLE
MATURITY STAGE COMMERCIALIZATION- Fully launching
 Market Modification the product to the entire market to observe
market acceptance.
 Product Modification EVALUATION- This is the stage wherein
 Marketing Mix Modification the company will know whether the product
DESTINATION LIFE CYCLE has gained market acceptance and if
production will be continued, enhanced, or
stopped.
SUGGESTED ACTIVITY- Surf the Internet
and choose the best tour package you can
find that highlights any Philippine
destination. Convince your classmates that
this is the best place to go on your next field
trip.

STAGES OF PRODUCT
DEVELOPMENT
IDEA GENERATION- New products begin
with an idea. Idea generation is a
systematic way of coming up with new
ideas.
IDEA SCREENING- Idea generation leaves
you with so many new ideas that need to be
screened to see which ones match the
company’s objectives and can be developed
further.
CONCEPT DEVELOPMENT AND
TESTING- A product concept is developed and
tested. The customers should be consulted on
which product concepts are actually helpful to
them because they are the primary users of the
product.
MARKETING STRATEGY- A new product
should be developed to match the
company’s image and resources, which in
turn should be what its existing and
potential markets need. In short, there
should be a product-company-market fit.
BUSINESS ANALYSIS- The business
analysis stage looks more deeply into how
much revenue the product can generate,
what the cost will be, how much market
share the product may achieve, and the
expected life of the product.
PROTOTYPE CREATION- When the
concept has been developed, when
marketing seems to be feasible, and the
product is financially viable, a prototype of
the product is created and presented to its
target market.
TEST MARKETING- The product is then
launched in a small geographical area to
test the components of the marketing mix
before it is launched in a larger scope.

CHAPTER 6 — PRICING IN
TOURISM AND
HOSPITALITY
WHAT IS PRICE?
 Price is the amount that the customer
pays for a product; it is the amount of
money exchanged for something of
value.
 Price makes products available to the
target market and reflects the value of
the product.
 It is the sum of values that consumers
exchange for the benefit of having or
using the product.
KEY CONCEPTS RELEVANT TO PRICING
1. Sales are the total amount that a company
gets based on the quantity sold multiplied by
the selling price.
2. Revenue is the total income/profit that the
company keeps after all the expenses have
been paid for.
3. Fixed Costs are costs incurred due to the
operations of the business.
4. Profit Margin is the level of income that is
desired by the company.
5. Variable Costs are costs that vary based on
volume or quantity. Bigger quantities of the
same order will cost less than smaller quantities
of the same specifications.
6. Break-Even Point is the point wherein total
cost is equal to total revenue.
KEY FACTORS AFFECTING PRICE
Costs- Variable and fixed costs
Organizational and Marketing Objectives
 Survival
 Profit maximization
 Rate of return on investment
 Brand equity growth
 Market share
Other Marketing Mix Variables
 Distribution channels
 Promotions
 Product packaging
 Service quality
Buyer Perception of Value and Price
 Based on branding and image
Competition
 Price offer of competition
Government Regulations and Taxes
 Taxes
 Regulations
 Fees
Nature of the Market and Demand
 Nature of each segment of the market
 Difference in the demand for each
segment
Pricing in Different Markets
 Different markets have different levels
of price sensitivity.
Price Elasticity of Demand
 Consumer demand is highly sensitive to
price changes.
Other Environmental Factors
 May include political instability,
calamities, and environmental issues
PRICE AND ITS RELATIONSHIP TO MARKETING
OBJECTIVES
 Survival
 Current Profit Maximization
 Market Share Leadership
 Brand Equity Growth
 Product-Quality Relationship
GENERAL PRICING APPROACHES
 Cost-Based Pricing- Aims to cover cost
and put a markup
 Break-Even Analysis and Target Profit
Pricing-Use of break-even price and
project a target profit
 Buyer-Based Pricing (Value-Based)-
Determined by knowing the buyer’s
perception of value
 Competition-Based Pricing- Looks at
price pegged by competitors and not on
costs, margins, and demand
PRICING STRATEGIES
  PRESTIGE PRICING- Product is Average Rate Rooms Sold Revenue Realized
positioned as luxurious and elegant. Yield
 MARKET SKIMMING PRICING- Setting
2,500.00 at 350 rooms = 875,000.00
high prices when demand is high and
supply is low Yield: 58.33%
 MARKET PENETRATION PRICING-
Setting a low initial selling price to
penetrate the market Same yield if fewer rooms and higher room
 PRODUCT BUNDLING PRICING- Use of rate
reduced rates for products that are sold
together 2,916.67 at 300 rooms = 875,000.00
 VOLUME DISCOUNTS- Discounts given Yield: 58.33%
to high-volume or frequent users
 DISCOUNTS BASED ON TIME OF
PURCHASE- A price based on Same yield if more rooms at lower room rate
seasonality and demand
 DISCRIMINATORY PRICING- Price 2,187.50 at 400 rooms = 875,000.00
difference based on the characteristics Yield: 58.33%
of the market segments
 PSYCHOLOGICAL PRICING- Aspects such MARKET RECOVERY THROUGH PRICE
as prestige, reference pricing, round
 Some destinations that have lost
figures, and ignoring end figures are
market share through different
used.
external and internal reasons may
 PROMOTIONAL PRICING- Use of short-
recover from their loss through
term incentives and discounts
price combined with effective
 VALUE PRICING- Offering a lower price
promotions.
compared to competitors permanently
DEALING WITH PRICE CHANGES
REVENUE MANAGEMENT
When to reduce price?
 Revenue management is a systematic
approach to matching demand for  Excess capacity or inventory
services with an appropriate supply in  Gain higher market share
order to maximize revenues
When to increase price?
(Shoemaker et al. 2007).
 It plans out the ideal business mix  Increase in cost of raw materials
(types of clients vary from different  Increase in overhead expenses
industries, group size, length of stay,
etc.) and adjusts rates on an ongoing CHAPTER 7 — PROMOTIONAL TOOLS
basis as reservations materialize.
WHAT IS PROMOTION?
BENEFITS OF REVENUE MANAGEMENT
- Promotions have been defined as
 Product is perishable; thus, it is better
to sell the room/seat at allow price the coordination of all“seller-
than leave it empty. initiated efforts to set up channels of
 Capacity is fixed daily. information and persuasion to sell
 Demand fluctuates and is uncertain.
goods and services or promote an
 Different market segments have
different lead times for purchase. idea” (Belchand Belch 2008).
 There is flexibility in pricing hotel
ADVERTISING
rooms and airline seats.
Advertising is defined as any paid
form of no personal communication
CALCULATING YIELD
about an organization, product,
service, or idea by an identified
sponsor.
OBJECTIVES OF ADVERTISING
Advertising can be classified based on its
objectives:  5. Variety of Packaging Options
1. to inform  7. Immediate Results
2. to persuade
3. to remind
TYPES OF ADVERTISING
EXECUTION
1. Slice of Life 
2. Lifestyle
3. Fantasy  OFFER- Interesting offer to move client into
4. Mood or Image  action
5. Musical  MARKETING CAMPAIGN
6. Personality
7. Technical Expertise
8. Scientific Evidence
9. Testimonial Evidence
USE OF CELEBRITY ENDORSERS
- The use of celebrity endorsers may
become a preferred strategy for promoting a
product or service because the celebrity
lends his/her credibility to the product, helps
attract attention, provides a persuasive
message, and targets the audience based
on the celebrity’s demographic profile.
THREE MAIN ASPECTS TO CONSIDER
IN CHOOSING ENDORSERS
1. The attractiveness of the celebrity
creates a positive impact on the
product.
2. The credibility of the celebrity is
expressed through expertise and
trustworthiness.
3. The meaning transfer between brand
and celebrity refers to the
compatibility of brand and celebrity in
terms of identity, personality, market
positioning, and lifestyle.
DIRECT MARKETING- Direct marketing
is an interactive system of marketing that
uses one or more advertising media to
affect a measurable response. It seeks to
establish continuing relationships
between a company and its regular
customers . CONTRIBUTIONS OF PR TO
ADVANTAGES OF DIRECT
MARKETING
1. Precision Targeting
2. Personalized Messages
3. Privacy
4. Faster Sales
6. Less Competition
8. Measurability
ELEMENTS OF A DIRECT MARKETING
CAMPAIGN
LIST- Contains names and contact
information of your target market
MESSAGE-Customized and creative
messages that catch attention of receiver
MEASURES OF SUCCESS OF DIRECT
1. The number of inquiries generated
2. The ratio of conversions or purchases
realized from inquiries generated
3. Its communication impact
PERSONAL SELLING- Personal selling
can be defined as the person-to-person
communication between a salesperson and
a prospective customer in which needs are
met in exchange for money or resources.
PRIMARY TASKS OF A SALESPERSON
1. Prospecting
2. Targeting
3. Communicating
4. Selling
5. Servicing
6. Information Gathering
7. Allocating
SELECTING SALES STRATEGIES
1. Prevent erosion of key accounts.
2. Grow key accounts.
3. Grow selected marginal accounts.
4. Eliminate selected marginal accounts.
5. Retain selected marginal accounts
with lower-cost sales support.
6. Obtain new business from selected
prospects.
PUBLIC RELATIONS- Public relations
(PR) is the process of creating a positive
image and customer preference through
third-party endorsement.
MAJOR PUBLIC RELATIONS ACTIVITIES
1. Press/Media Relations
2. Product Publicity
3. Corporate Communications
4. Lobbying
5. Counseling
MARKETING
1. Assist in the launch of new product
 2. Assist in repositioning a mature
product
3. Build up interest in a product category
4. Influence specific target groups
5. Defend products that have
encountered problems
IMPORTANT POINTS TO REMEMBER ABOUT
PR
 Effective PR begins with top
management.
 No amount of PR can overcome a
flawed product.
PR OPPORTUNITIES
Public relations opportunities can be
created based on a strategic plan of action.
Based on the company’s resources and
objectives, the PR messages and activities
may be built around any of the following:
1. The Owner or Operator
2. The Location
3. The Product or Service
SALES PROMOTIONS
Sales promotions are direct inducements
that offer extra value or incentive for the
product to the sales force, distributors, or
the ultimate consumer, with the primary
objective of creating an immediate sale.
FACTORS THAT INDUCED THE
GROWTH OF SALES PROMOTIONS
1. Growing power of retailers
2. Declining brand loyalty
3. Increased promotional sensitivity
4. Brand proliferation
5. Fragmentation of the consumer market
6. Short-term focus of the consumer market
7. Increased accountability
8. Competition
9. Clutter
FACTORS TO CONSIDER IN SETTING UP
A SALES PROMOTIONAL PLAN
1. Objectives of the campaign
2. Type of market to be tapped
3. Competition
4. Cost and effectiveness of each tool
SALES PROMOTIONAL TOOLS
1. Samples
2. Coupons
3. Packages
4. Premiums
5. Patronage Rewards
6. Point of Purchase Promotion
7. Contests and Games
PREPARING THE PROMOTIONAL
PLAN
1. Decide on what promotional tools to
use.
2. Decide on which media channels to
use.
3. Identify when the promotional tool will
be released and in which channel.
4. Evaluate the media results.