CHAPTER 1 CHARACTERISTICS OF HIGH INVOLVEMENT AND LOW

INVOLEMENT PRODUCTS
(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 Expensive Products – is likely to go through a long and detailed
tourist experience. process of canvassing and comparing of brands, suppliers, and
products features.
UNIQUE CHARACTERISTICS OF THE TOURISM INDUSTRY
TOURISM MARKETING
Intangible – Tourism products cannot be subjected to scrutiny
prior to purchase. Philip Kotler – Defined marketing as “the process by which
companies create value for customers and build strong relationships
Inseparable – To consume tourism products, a consumer has to go in order to capture value from the customers in return.”
where the product is. They cannot be separated from each other.
The American Marketing Association – Approved a new
Variable – The tourism experience varies depending on when the definition: marketing is the activity, set of institutions, and processes
product is availed of, and the service provider delivers the service at for creating, communicating, delivering, and exchanging offerings
the time of consumption. that have value for customers, clients, partners, and society at large.
Perishable – Inventory of tourism products cannot be carried Kotler, Bowens, and Makens – Define marketing as the art and
forward to the next day. Hotel rooms and airline seats not sold today science of “finding, retaining, and growing profitable customers.”
will be gone forever.
MARKETING AS A MANAGEMENT PROCESS (LUMSDON 1997)
Seasonal – Seasons of the year and travel behavior patterns of the
travel market affect year-round occupancy. 1. Marketing Information System
2. Marketing Planning
Substitutable – With competition intensifying, tourism destinations 3. Planning Tactical Campaigns
and products can be easily replaced with alternatives. 4. Marketing Operations
TOURISM AS A HIGH INVOLVEMENT PRODUCT 5. Monitoring and Control

High involvement - There is a greater degree of thought or study

involved prior to the purchase.
CORE MARKETING FUNCTIONS
1. Marketing Information Management – Entails gathering
information about customers o 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 task of marketing.
THE TOURISM MARKETING MIX
5. People
6. Partnership
7. Packaging
Kotler (2010) – Says that marketing facilities the exchange process
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
trough a particular place or channel of distribution, and developing
a program of promotion to create awareness and interest.
Product or Service – Is what the company is offering to satisfy a
consumer’s want or need.
Price – is also the amount a customer has to pay in exchange for the
product or service.
Place – Is the means by which the product or service reaches the
consumers.
Promotion – Is the strategic plan by which customers are informed
about the product or service and its value.
CHAPTER 3
(TOURISM AND CONSUMER
BEHAVIOR)
Consumer Behavior – Is the process and activities people engage
in when searching for, selecting, purchasing, using, evaluating, and
disposing of products and services to satisfy their needs and desires.
FACTORS THAT INFLUENCE CONSUMER BEHAVIOR
• Motivations
• Culture
• Age and Gender
• Social Class
• Lifestyle
• Life Cycle
• Reference Groups
 • Personality and Self Concept
Motivations – Are inner drives that make people take a specific
plan to action to satisfy their needs.
Hudson – Defines needs as the gap between what customers have
and what they would like to have.
Maslow’s Hierarchy of needs – Is the most popular theory of
motivation as it is able to outline the different needs of man and
rank them based on the degree of importance in a simple and easy-
to-understand manner.
• Self-Actualization – Refers to the goal of self-fulfillment.
• Esteem/Status – Refers to the desire for prestige and status.
• Belongingness – Refers to acceptance in social groups.
• Safety – Refers to the personal and perceived degree of
safety and security.
• Physiological – Needs Refer to the basic needs for survival
such as the need for food and water.
Dann (1977) – Describes travel motivators as linked with Maslow’s
hierarchy of needs.
TWO FACTRS THAT MAKE YOU WANT TO TRAVEL
• Push Factors – Are those that make you want to travel
• Pull Factors – Are those that affect where you would want
to go.
Crompton – Identifies nine motives which as divided into push and
pull factors. (DANN 1977 AND CROMPTON 1979)
Krippendorf – Elucidates that travel is motivated by a “Going away
from” rather than “Going Forward” something.
Hofstede – In his website, Defines culture as the collective mental
programming of the human mind which distinguishes one group of
people from another.
Culture – Is defined as the collective mental programming of the
human mind which distinguishes one group of people from another.
Age:
• Pertains to the number of years a person has been living.
• Is a traditional way of segmenting the market as it greatly
influences consumer behavior.
Gender – Also influences consumer behavior.
Social Class – is one’s position within the society and is
determined by factors such as income, wealth, education,
occupation, family prestige, and value of home or neighborhood.
Lifestyle – Is a person’s pattern of living as expressed in one’s
activities, interest, and opinions.
Life Cycle – Refers to the stages an individual goes through in
his/her lifetime. Single people choose destinations 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
attitude or behavior.
Personality – Refers to the distinguishing psychological
characteristics that lead to relatively consistent and enduring
responses to the environment.
Consumer’s Self Concept – Refers to his/her personal mental
picture.
BUYER DECISION MAKING PROCESS • Avoidance of Price Competition
• Retention of Good Employees
• Reduction of Cost.
PURCHASE DECISION PROCESS IN ORGANIZATION (IN
ORDER)

• Problem Recognition
• General Need Specification
• Product Specification
• Supplier Search
• Proposal Solicitation
CROTTS (2002) CLASSIFIES INFORMATION SEARCH INTO • Supplier Selection
TWO: • Order Routine Specification
1. Internal Information Search – Is nothing more than • Performance Review
retrieving decision-relevant information stored in an PLOG’S TOURIST MOTIVATION MODEL
individual’s long-term memory.
2. External Information Search – Focuses on acquiring Allocentrics – Prefers what is new, unstructured, exotic, or unusual
information from outside or external Sources. in terms of trips or destination choice.

This outside or external sources Includes: Psychocentrics – Are those who prefer the structured and familiar.

• Personal (Advice from friends)
• Marketer Dominated (Brochures and ads)
• Neutral (Travel clubs and agents)
• Experimental sources
• Internet
Kotler (2000) – Defines satisfaction as a person feelings of pleasure
or disappointment resulting from comparing a products perceived
performance in relation to his/her expectations.
Service Quality – Is an assessment of how well a delivered service
conforms to the client’s expectations.
KOTLER ELUCIDATE SOME BENEFITS OF SERVICE QUALITY
• Customer Retention
Midcentrism – Tourist could portray characteristics of both
Allocentrics and Psychocentrics.
FOUR CLASSIFICATIONS OF TOURIST, COHEN (1972)
• Organized Mass Tourist – Is the type of tourist who buys
all-inclusive tour packages and ensures that everything goes
as planned.
• Individual Mass Tourist – Is more autonomous than the
organized mass tourist, preferring to travel independently but
still choosing popular destinations and activities.
• Explorer – Seeks new areas but would sometimes opt for
the comfort of familiar accommodations.
• Drifter – Is the free spirit who avoids any kind of traditional
tourist establishments.
STEWART’S MODEL OF HOLIDAY TAKING • Public sector services – Cover either national, regional, or
provincial tourism organizations.
• Bubble Travelers – Have low affluence, low travel
experience, and observe foreign culture from a bubble. This DESTINATION LIFE CYCLE
gives them basic confidence to travel.
• Idealized-Experience Seekers – Have more affluence and
a base of overseas travel experience, which gives them more
confidence.
• Wide-Horizon Travelers – Have more affluence, greater
confidence, and more travel experience; they are ready for
more individually oriented travel to a widened range of
destination.
• Total Immersers – Do not seek to merely observe but to be
exposed fully to another culture’s language, food, heritage,
and lifestyle.
NONUSERS CAN BE CLASSIFIED AS:
1. Ex-users who stopped using the products/services for
• Suppliers such as transportation, accommodation,
various reasons;
food and beverage services, attractions, and events.
2. Customers who are aware of the product or service but need
• Travel Intermediaries
to be persuaded to purchase; and
• The Tourist themselves.
3. Those who are not aware of the products or service
existence. Transportation Industry – Is crucial to the success of tourism.

CHAPTER 5 Accommodation Sector – Covers a huge part of a tourist’s

(THE TOURISM AND HOSPITALITY
PRODUCT)
KEY PLAYERS IN THE TOURISM INDUSTRY:
• Private and nonprofit sectors – Include industry
associations that have been established to protect special
interest groups such as travel agency associations (Philippine
Travel Agency Associations (PPTA) and Philippine Tour
Operators Associations (PHILTOA).
expenditure during travel.
Food and Beverage Service Sector – Is another important
supplier of the tourism industry as it provides for one’s biological
need to eat and the need to socialized when dining in.
Attractions – Are basic requirements in having a successful tourist
destination. Can be classified into natural or man-made.
Events and Conference – Play a key role in attracting both leisure
and business travelers to a destination. Also known as MICE.
Travel Intermediaries – Help bring the tourism product to the
customer. These are also known as channels of distribution or
referred to as the middlemen.
Tourist – Are the heart of the tourism industry.
COMPONENTS OF A TOURISM AND HOSPITALITY PRODUCT

• Destination Attractions
• Destination Facilities
• Accessibility
• Image
• Price
Growth Stage – Is a period of rapid market acceptance and its
PRODUCT TYPES increasing profits.
• Core Products – Are products that are primarily what the Maturity Stage – IS a period where sales plateau because the
consumer is buying product has achieved acceptance by most of its potential buyers.
• Facilitating Products – Are goods that must be present for
MATURITY STAGE
the guest to enjoy and use the core product.
• Supporting Products – On the other hand, add value to the • Market Modification
core product and help differentiate it from its competitors. • Product Modification
• Augmented Products – Are factors that help the consumer • Marketing Mix Modification
consider the core product over other products because these
include product accessibility, geographical location, operating STAGES OF PRODUCT DEVELOPMENT
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
SIX DISCRETE STAGES OF DESTINATION LIFE CYCLE
BUTLER(1980)
1. Exploration – Marks the beginning of a tourist destination
2. Involvement – Marks the beginning of tourist development
3. Development – Is when tourist arrivals are fast increasing;
there is loss of local control and rise of foreign-owned
facilities, migrant laborers, and promotion of artificial
attractions.
4. Consolidation – Occurs when tourism has become a major
economic factor.
5. Stagnation – Occurs when the carrying capacity of the
destination has been reached or exceeded.
6. Decline/Rejuvenation – Is characterized by a downward
rate of tourist arrivals.
Product Development – Is an integral part of the success of any
business.
Idea Generation – Is a systematic way of coming up with new
ideas.
SOURCES OF NEW PRODUCT IDEAS
• External Environment
• Internal Sources
• Customers
• Competitors
• Distributors
• Suppliers
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 – 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
geographic area to test the components of the marketing mix before
it is launched in a larger scope.
Commercialization – Fully launching the product to the entire
market to observe market acceptance.
Evaluation – This is the stage wherein the company will know
whether the product has gained market acceptance and if
production will be continued, enhanced, or stopped.
CHAPTER 6
(PRICING IN TOURISM AND
HOSPITALITY)
Price – Is the sum of values that consumers exchange for the
benefit of having or using the product.
KEY CONCEPTS RELEVANT TO PRICING
• Sales – Are the total amount that a company gets based on
the quantity sold multiplied by the selling price.
• Revenue – Is the total income/profit that the company
keeps after all the expenses have been paid for.
 • Fixed Costs – Are cost incurred due to the operations of the Government Regulations and Taxes
business.
• Taxes
• Profit Margin – Is the level of income that is desired by the
• Regulations
company.
• Fees
• Variable Cost – Are cost that vary based on volume or
quantity. Bigger quantities of the same order will cost less Nature of the Market and Demand
than smaller quantities of the same specifications.
• Nature of each segment of the market
• Break-even point – Is the point wherein total cost is equal
to total revenue. • Difference in the demand for each segment.

KEY FACTORS AFFECTING PRICE Pricing in Different Markets

Costs • Different markets have different levels of price sensitivity

• Variable and fixed cost Price Elasticity of Demand

Organizational and Marketing Objectives • Consumer demand is highly sensitive to price changes

• Survival Other Environmental Factors

• Profit Maximization • May include political instability, calamities, and
• Rate of return on investment environmental issues
• Brand Equity Growth
GENERAL PRICING APPROACHES
• Market Share
Cost-Based Pricing
Other Marketing Mix Variables
• Aims to cover most and put a markup
• Distribution Channels
• Promotions Break-Even Analysis and Target Profit Pricing
• Product Packaging
• Use of break-even price and project a target profit
• Service Quality
Buyer-Based Pricing (Value Based)
Buyer Perception of Value and Price
• Determined by knowing the buyer’s perception of value
• Based on branding and image
Competition-Based Pricing
Competition
• Looks at price pegged by competitors and not on cost,
• Price offer of competition
margins, and demand.
PRICING STRATEGIES
Prestige Pricing – Product is Positioned as luxurious and elegant.
Market Skimming Pricing – Setting high prices when demand is
high, and supply is low.
Market Penetration Pricing – Setting a low initial selling price to
penetrate the market
Product Bundling Pricing – Use of reduced rates for products that
are sold together.
Volume – Discounts given to high-volume or frequent users.
Discounts Based on Time of Purchase – A Price based on
seasonality and Demand.
Discriminatory Pricing – Price difference based on the
characteristics of the market segments.
Psychological Pricing – Aspects such as prestige, reference
pricing, round figures, and ignoring end figures are used.
Promotional Pricing – Use of short-term incentives and discounts.
Value Pricing – Offering a lower price compared to competitors
permanently.
REVENUE MANAGEMENT
Revenue management – Is a systematic approach to matching
demand for services with an appropriate supply in order to
maximize revenues.
CHAPTER 7
(PROMOTIONAL TOOLS)
Promotion – defined as the coordination of all “seller-initiated
efforts to set up channels of information and persuasion to sell
goods and services or promote an idea.
Advertising – defined as any paid form of nonpersonal
communication about an organization, product, service, or idea by
an identified sponsor. It covers the various messages consumers
receive from television, radio, newspapers, magazines, billboards,
transit displays, and even online. Online options include banner
advertising, skyscraper ads, pay-per-click, etc. It’s objectives are:
• To inform;
• To persuade;
• To remind
Informative Advertising – Is used to introduce a new product or
to build up primary demands for the product.
Persuasive Advertising – Is used when competition is stiff.
Companies rely on this to be able to keep their market share.
Reminder Advertising – Is very important for products that have
reached the maturity stage.
TYPES OF ADVERTISING EXECUTION
• Slice of Life – Shows how people use the product in a
normal setting.
• Lifestyle – Shows how the product fits in one’s way of life.
• Fantasy – Creates a “wonder” world around the product of
its use.
• Mood or Image – Builds positive images or moods around
the product such as beauty, love, fun, serenity.
• Musical – Uses simple but catchy music effectively through
product jingles or songs.
• Personality – Creates a character that represents the
product such as Jollibee, the friendly bee.
• Technical Expertise – Reveals the company’s expertise
with the product or service.
 • Scientific Evidence – Presents research or scientific ELEMENTS OF A DIRECT MARKETING CAMPAIGN
evidence that the brand is better than competing brands.
• List – contains names and contact information of your target
• Testimonial Evidence – Features a highly credible person
market.
such as a celebrity endorsing the product.
• Message – customized and creative messages that catch
USE OF CELEBRITY ENDORSERS attention of receiver.
• Offer – interesting offer to move client into action.
The use of celebrity endorsers may become a preferred strategy for
promoting a product or service because the celebrity lends his/her MEASURES OF SUCCESS OF DIRECT MARKETING CAMPAIGN
credibility to the product, helps attract attention, provides a
• The number of inquiries generated
persuasive message, and targets the audience based on the
• The ratio of conversions or purchases realized from inquiries
celebrity’s demographic profile.
generated
THREE MAIN ASPECTS TO CONSIDER IN CHOOSING • Its communication impact
ENDORSERS

• Attractiveness
Personal Selling – defined as the person-to-person communication
• Credibility
between a salesperson and a prospective customer in which needs
• Compatibility of brand and celebrity.
are met in exchange for money or resources.
PRIMARY TASKS OF A SALESPERSON
Direct Marketing – an interactive system of marketing that uses
1. Prospecting
one or more advertising media to affect a measurable response. It
2. Targeting
seeks to establish continuing relationships between a company and
3. Communicating
its regular customers.
4. Selling
ADVANTAGES OF DIRECT MARKETING 5. Servicing
6. Information Gathering
• Precision Targeting
7. Allocating
• Personalized Messages
• Privacy SELECTING SALES STRATEGIES
• Faster Sales 1. Prevent erosion of key accounts
• Variety of Packaging Options 2. Grow key accounts
• Less Competition 3. Grow selected marginal accounts
• Immediate Results 4. Eliminate selected marginal accounts
• Measurability 5. Retain selected marginal accounts with lower-cost sales
support.
6. Obtain new business from selected prospects.
Public relations (PR) – is the process of creating a positive image PR TOOLS AND AUDIENCES
and customer preference through third-party endorsement.
MAJOR PUBLIC RELATIONS ACTIVITIES

• Press/Media Relations – helps generate publicity and

awareness for huge audiences.
• Product Publicity – introduces or publicizes new products
through product endorsements in various channels.
• Corporate Communications – covers internal and external
communications that promote understanding of the
organization using tools such as newsletters, bulletins, and
email blasts.
• Lobbying – PR also includes building good relations with the
public sector namely, local government units.
• Counseling – employees involved in PR play the role of the
advisers with regard to public issues that may have an effect
on the company’s position and image.
CONTRIBUTIONS OF PR TO MARKETING

• Assist in the launch of new product

• Assist in repositioning a mature product
• Build up interest in a product category
• Influence specific target groups
• Defend products that have encountered problems. IMPORTANT POINTS TO REMEMBER ABOUT PR

PR PROCESS • Effectiive PR begins with top management.

• No amount of PR can overcome a flawed product.
PR OPPORTUNITIES
• The owner or operator
• The location
• The product or service
Sales Promotion – are direct inducements that offer extra value or • Point of Purchase (POP) Promotion – includes displays
incentive for the product to the sales force, distributors, or the and promotions that take place at the point of sale. Some
ultimate consumer, with the primary objective of creating an hotels display brochures of their other branches at the lobby
immediate sale. or front desk.
• Contests and Games – give consumers a chance to win
FACTORS THAT INDUCED THE GROWTH OF SALES
something such as a trip or cash upon the purchase of
PROMOTIONS
products and services.
• Growing power of retailers
SALES PROMOTIONAL PROCESS
• Declining brand loyalty
• Increased promotional sensitivity
• Brand proliferation
• Fragmentation of the consumer market
• Short-term focus of the consumer market
• Increased accountability
• Competition
• Clutter
FACTORS TO CONSIDER IN SETTING UP A SALES
PROMOTIONAL PLAN
PREPARING THE PROMOTIONAL PLAN
• Objectives of the campaign
• Type of market to be tapped • Decide on what promotional tools to use.
• Competition • Decide on which media channels to use.
• Cost and effectiveness of each tool • Identify when the promotional tool will be released and in
which channel.
SALES PROMOTIONAL TOOLS
• Evaluate the media results.
• Samples – trial amount of a product
• Coupons – are certificates that offer buyers savings when
they purchase specific products.
• Packages – set of complementing products to come up with
one bundle at a special price.
• Premiums – goods offered either for free or at a low cost to
provide an incentive for consumers.
• Patronage Rewards – bonuses in the form of cash or items
of value that can be redeemed for regular purchases made.