MARKETING THE DESTINATION

DR. NORAIHAN MOHAMAD 1

Destination Marketing Organizations

1. Destination marketing organizations (DMOs) refer to

vertically structured tourism institutions representing the
destination at the local, regional, national or even
multinational level.
2. The concepts of DMOs is to involve all stakeholders both in
funding and decision-making. Stakeholders may include
government agencies, professional associations, individual
companies etc.
3. Present-day market conditions make it necessary for DMOs
to employ a strategic marketing approach.
4. Marketing research is the basis for conducting market
analysis and strategic diagnosis.

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Destination Marketing Organizations

5. Key tourism indicators for monitoring destination performance

and for deciding on strategic marketing issues:
a. Tourist traffic (measuring tourist arrivals at points of entry
or commercial accommodations as well as overnight
stays)
b. Source markets (measuring the share of tourists according
to place or country of origin)
c. Income (measuring for instance, the average daily rate
charged by commercial accommodation providers)
d. Capacity utilization (measuring, for instance, occupancy or
overnight stays per available hotel bed)
e. Seasonality (calculating the monthly distribution of
tourism traffic)
f. Average length of stay (dividing total overnight stays with
total tourist arrivals)

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What is Marketing?
1. Marketing means “hitting the mark”
2. The aim of marketing is to make selling superfluous, to
know and understand customers so well that the or
service fits them and sells itself.
3. Selling and promotion are part of a larger marketing mix
that work together to produce satisfied customers.
4. Selling and promoting will be effective if we first define
customer targets and needs , prepare an easily accessible
and available value package.
5. Decision concerning issues such as marketing strategy,
market segmentation and product development should
be based on the actual situation that a destination faces.

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 5

Definition of
Marketing

• Marketing is the process by which

companies create value for customers
and society, resulting in strong
customer relationships that captures
values from the customers in return.

DR. NORAIHAN MOHAMAD

 1. Marketing has assumed an increasingly
important role in the tourism destination
management.
2. The entrance of corporate giants into the
hospitality market were transformed tourism
destination from individually owned to an
The industry dominated chains.
3. These chains operate in a highly competitive
Importance of environment where aggressive marketing skills
are used to win customers.
Marketing 4. The hotel industry in undergoing a
consolidation, with establish company buying
hotel chains and operating different brands
under one organization.
5. Example for tourism destination?

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Tourism Marketing

• The two main industries that comprise the activities called

tourism are the hospitality and travel industry.
• Successful hospitality marketing is highly dependent on the
entire travel industry.
• Meeting planners choose destinations based on the cost of
getting to the destination, the value of the hotels, the quality
of restaurants, and evening activities for their attendees.
• The success of cruise lines is the result of coordinated
marketing by many travel industry members such as port
company, travel agents, cruise line, airlines auto rental,
passenger railway etc. this requires coordination in pricing,
promotion, and delivery those packages.
The Marketing
Process

• In the first four steps, companies work

to understand consumers, create
customer value, and build strong
customer relationships. In the final
step, companies reap the rewards of
creating superior customer value.
• By creating value for customers, they
in turn capture value from customers
in the form of sales, profits and
long-term customer equity.

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(1) Understanding the Marketplace
and Customer Needs

Customer needs, wants and demands

Market offerings: tangible products, services and

experience
Customer value and satisfaction

Exchanges and relationship

Markets
 1. Selecting customers to serve
2. Marketing management
orientation:
1. The production concept
2. The product concept
(2) Designing
3. The selling concept
Customer-Driven Strategy
4. The marketing concept
5. The social marketing concept
Marketing Management Orientations

A. The Production Concept

Based on the approach that a company can increase supply as it decreases
its costs.

Assume that consumers are primarily interested in product availability

and low prices.

Managers focusing on this concept concentrate on achieving high

production efficiency, low costs, and mass distribution.

A company oriented towards production believes in economies of scale

that mass production can decrease cost and maximize profits.

This orientation makes sense in developing countries, where consumers

are more interested in obtaining the product than in its features.
Marketing Management Orientations

B. The Product Concept

Holds that consumers will favor those products that offer

the most quality, performance, or innovative features.

Managers focusing on this concept concentrate on

making superior products and improving them
continuously.

They assume that buyers admire well-made products

and can appraise quality and performance.
 Marketing Management Orientations

C. The Selling Concept

1. It holds that consumers will not buy enough of the organization’s products unless the
organization undertakes a large selling and promotion effort.
2. The organization must, therefore, undertake an aggressive selling and promotion effort.
3. The aim of selling focus is to get every possible sale, not to worry about satisfaction after the
sale or the revenue contribution of the sale.
4. Does not establish a long-term relationship with the customer because the focus is on getting
rid of what one has rather than creating a product to meet the needs of the market.
Marketing Management Orientations
D. The Marketing Concept
1. It holds that achieving organizational goals depends on determining the needs and wants of
target markets and delivering the desired satisfaction more effectively and efficiently that
competitors.
2. The marketing concept rests on four pillars: target market, customer needs, integrated
marketing and profitability.
3. Distinctions between the Sales Concept and the Marketing Concept:
• The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on
the needs of the buyer.
• The Sales Concept is preoccupied with the seller’s need to convert his/her product into
cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the
customer by means of the product as a solution to the customer’s problem (needs).
The Selling
Concept VS
The
Marketing
Concept
The Marketing Concept

E. The Societal Marketing Concept

• This is a relatively new marketing concept.

• While the societal marketing concept highlights the needs and wants of a target market and
the delivery of better value than its competitors, it also emphasizes the importance of the
well-being of customers and society as a whole (consumer welfare or societal welfare).
• The societal marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices. They must balance and juggle the
often-conflicting criteria of company profits, consumer want satisfaction, and public
interest.
 1. The company’s marketing strategy
outlines which customers the company
will serve and how it will create value for
these customers.
2. The marketer develops an integrated
marketing program that will actually
deliver the intended value to target
(3) Preparing an customers.

Integrated 3. The marketing program builds customer

relationships by transforming the
Marketing Plan marketing strategy into action that
consists of the firm’s marketing mix,-the
set of marketing tools the firm uses to
implement its marketing strategy.
4. The major marketing mix tools are
classified into four broad groups, called
the four Ps of marketing: product, price,
place, and promotion.
 (4) Building
Profitable
Customer
Relationships

1. Three customer value-adding tools:

• To add financial benefits to the customer relationship
• To add social as well as financial benefits.
• To add structural ties, as well as financial and social benefits
2. In marketing a company should develop customer relationships
selectively-not every customer. It helps companies to track purchases,
so companies know the characteristics of their customers and classify
them by their purchasing characteristics.
Characteristics
of Service
Marketing
 Managing
Managing
service
service quality
differentiation

Managing Resolving
service customer
Management productivity complaints

Strategies for
Service

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Managing
Businesses employees as Managing
part of the perceived risk
product

Managing
capacity and
demand 20
The Marketing Environment

1. Tourism marketing is performed on two distinct level:

a. Micro level:
• Individual enterprises perform the marketing task in order to promote their offerings on
the market such as hotels, transport companies and visitor attractions, as well as by the
travel trade, such as travel agencies.
b. Macro level:
• Several types of organizations are involved in promoting destinations or tourism-related
industries such as government agencies and cooperative organizations of varying forms

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Microenvironment

• Marketing management’s job is to build relationships with

customers by creating customers value and satisfaction.
• The success of marketing plans requires working closely with
the company’s microenvironment: suppliers, company,
competitors, marketing intermediaries, customers and
public

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Macroenvironment

• The macroenvironment
consists of the larger societal
forces that affect the whole
microenvironment:
demographic, economic,
natural, technological,
political, competitor, and
cultural forces. Following are
the seven major forces in a
company’s macroenvironment.

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 Each firm must consider its size
and industry position in relation
to its competitors.

Macroenvironment:
Competitive
Environment
A company must satisfy the
needs and wants of consumers
better than its competitors do in
order to survive.

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 • Demography is the study of human populations in terms
of size, density, location, age, sex, race, occupation, and
other statistics. The demographic environment is of
major interest to marketers because markets are made
up of people.

Macroenvironment: • Changing age structure of the population

Demographic • The baby boomers
• Generation X
Environment • Millennials
• Generation marketing
• Increasing diversity
• A better educated, more white-collar, more
professional population

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 The economic environment consists of factors
that affect consumer purchasing power and
spending patterns. Markets require both
power and people. Purchasing power depends
on current income, price, saving, and credit;
marketers must be aware of major economic
trends in income and changing consumer
Macroenvironment: spending patterns.
1. Changes in income
Economic 2. The global economy

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 DR. NORAIHAN MOHAMAD

Macroenvironment: Natural
Environment

The natural environment consists of

natural resources required by
marketers or affected by marketing
activities.

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Macroenvironment:
Technological
Environment

The most dramatic force shaping

our destiny today is technology.

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DR. NORAIHAN MOHAMAD

• The political environment is made up of

laws, government agencies, and pressure
groups that influence and limit various
organizations and individuals in society.

Macroenvironment: • Increased legislation and regulation

affecting business
Political Environment • Changing government agency enforcement
• Increased emphasis on socially actions and
ethics

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Macroenvironment: Cultural
Environment
• The cultural environment includes institutions and other
forces that affect society’s basic values, perceptions,
preferences, and behaviors.
• Persistence of cultural values
• Subcultures

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