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Marketing in Travel & Tourism: Using the Promotional Mix


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Marketing in Travel & Tourism: Using the Promotional Mix

  1. 1. Marketing in Travel & Tourism Unit #5 – Learning Outcome 4 Using the promotional mix in travel and tourism THE ROLE OF THE PROMOTIONAL MIX The International Travel College of New Zealand 1
  2. 2. Integrated Marketing Communications (IMC) Strategies • Advertising, public relations (PR) and sales promotion have always been the most visible outputs of travel and tourism marketing, but not the most important or the largest elements in the marketing budget. • In the 21st century the Internet has become the distribution channel of course, and websites are now the centre of most travel and tourism businesses marketing communications activities. • Traditional media however still plays a part, particularly for larger organizations such as airlines and hotel groups who use print media to communicate with shareholders, politicians or the financial sector. • This use of new technologies combined with traditional media forms part of an integrated marketing communications strategy. (IMC) The International Travel College of New Zealand 2
  3. 3. Integrated Marketing Communications The concept under which a company carefully integrates and co-ordinates its many communications channels to deliver a clear, consistent and compelling message about the organization and its products. The International Travel College of New Zealand 3
  4. 4. Principles of IMC • Every time the consumer comes into contact with the organization they should receive the same clear, consistent message about the brand. (brand consistency) • This applies to the use of the corporate logo, the colours, the positioning of the product, the messages in advertising, the style of ads, the stories or editorials produced for publication – down to the uniforms worn by staff of the company. The International Travel College of New Zealand 4
  5. 5. Why use a range of promotional tools? • People in developed countries are increasingly sophisticated in their consumer behaviour and less likely to be persuaded by ‘hard-sell’ advertising techniques • It is harder for companies to establish unique selling points or differentiate themselves in the market • Proliferation of media outlets has let to intense competition for audiences and advertising spend • The audience is fragmented and advertising has to be spread over many outlets in order to reach the target market • Media advertising may not be the most cost-effective way of reaching the target market • Better to avoid presumptions in favour of any one promotional tool and select the most appropriate one for the objectives of each specific campaign The International Travel College of New Zealand 5
  6. 6. The use of traditional agencies • Traditionally a business would engage an advertising/PR agency who would design, manage and implement complete range of services from campaign planning, creative design through to media buying and evaluation research, PR, sales promotion, and brochure design. • Today companies can buy services from competing specialist agencies offering just one of the functions, or handle many of these activities in-house. • This has cost advantages and puts the business in direct control of their marketing, but can dilute the message through a number of unrelated and uncoordinated ideas and executions. • IMC advocates the use of a single full-service agency or strong control by the client company in order to ensure a unified marketing communications strategy. The International Travel College of New Zealand 6
  7. 7. 3 levels of IMC • Integration of marketing objectives and messages across the range of promotional tools and communications channels • Integration of coordination of the marketing work within the company and its agencies supplying marketing services • The integration of the one-to-many communications of the company with its one-to-one contacts with the customers throughout their relationship with the company. • This level of integration requires input from the marketers, the PR department (where there is one involved) and with the departments responsible for sales and operations as they are the front line of the company’s interaction with its customers. The International Travel College of New Zealand 7
  8. 8. The Dimensions of Marketing Communications • Promotional materials include advertising, PR, direct-marketing, sponsorship and sales promotion. • Advertising includes any paid-for communication in media aimed at the public, traditionally TV, radio, print (eg newspapers and magazines), film or video, poster sites, and now websites and other digital and social media. • Advertising is paid-for ‘space’ using carefully controlled messages by an organization. • PR seeks to obtain publicity for a company and its products through news stories and features and the company does not have direct control over the way messages are used. • Media advertising involves the ‘one-to-many’ approach (one message distributed to many people) whereas direct marketing involves one-to-one communications with customers through the mail, internet or telephone. The International Travel College of New Zealand 8
  9. 9. Monitoring and Evaluating Advertising Effectiveness “Half of my advertising spend is wasted - I just don't know which half!“ • Smart marketers monitor their advertising spend and compare the expenditure with the revenue or sales it generates. • When the advertising/marketing is designed to ‘build the brand’, inform the market about the company, raise the company profile, inform the potential customers of new products etc, it is very difficult to calculate a precisereturn on the marketing investment. • It is also difficult to precisely measure the true effectiveness of advertising as there are so many external factors to take into consideration such as the weather, political or other global events that might dominate people’s thoughts and plans. • Response measurement in ads may have some coding that identifies the media used, date of insertion. Replies are assessed against the original expenditure. Response coupons used to be very popular in travel and tourism but are being phased out since online activity is so dominant. It is easy to measure online response though website applications and data bases that gather not only the contact and personal details of enquirers but the channel through which they accessed any particular business website or product. • • The International Travel College of New Zealand 9
  10. 10. The Promotional Mix: The main Tools of IMC The International Travel College of New Zealand 10
  11. 11. Advertising • Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services to a targeted audience by an identified sponsor. • The advantage of paid-for advertising is that the advertiser has full control over the message content, and depending on the budget, can choose ad size, position and insertion frequency. • The cost of media advertising and the difficulties of being noticed and remembered among so many other competing messages are also drawbacks, particularly for organizations with limited budgets. The International Travel College of New Zealand 11
  12. 12. Advertising Objectives Typical objectives will include: • • • • Creating awareness Informing Persuading Reminding • Objectives must be fixed to a specified time period and measurement. • Some advertising in travel and tourism is designed to stimulate ‘immediate’ action, ie the ordering of a brochure or the purchase of the product! The International Travel College of New Zealand 12
  13. 13. The Role of Advertising Agencies • Small businesses often undertake their own advertising, and in New Zealand this is very common. Profit margins are low and using an advertising agency adds to the marketing cost. • A small business may use a company to purchase advertising space on their behalf but they still create their own ads. • Advertising agencies can achieve lower costs through ‘bulk buying’ on behalf of their clients, and their knowledge of the industry is invaluable when preparing ad campaigns. • A typical advertising agency is involved in creative planning, development of concepts and ideas, design and production of visual materials, media planning, scheduling and buying, monitoring and evaluation of advertising performance. • Ad agencies are usually selected through a competitive tender process and once selected build-up a long term relationship with their clients. • Ad agencies will appoint an account director or executive who liaises between the agency team and the client. The International Travel College of New Zealand 13
  14. 14. PR in Travel and Tourism • Complementary to media advertising • Helps to develop credibility across an organization • Seeks to raise the company’s visibility through media relations • Tourism is subject to both positive and negative publicity due to the high profile of the industry • A need for tourism organizations to be seen to behave responsibility towards the natural and social environment • Successful PR needs a planned and budgeted programme The International Travel College of New Zealand 14
  15. 15. Measuring the results of PR • Evaluation of PR results should be against the objectives for the programme. Activities usually include: • Media content analysis involving:  the counting of column centimeters of media coverage obtained in any given period or relating to any specific programme. The column centimeters are costed out at the rate that would have been charged had the coverage been paid-for advertising. The $$ amount is the ‘value’ of the free coverage.  A key word count which monitors the number of times an organization’s name or brand is mentioned. Much of that can now be handled via Google alerts whereby Google emails a user any links to content containing words they have identified as requiring alerts. The International Travel College of New Zealand 15
  16. 16. Sponsorship • Sponsorship is a business relationship between a provider of funds, resources or services and an individual, event or organisation, which offers in return, rights and association that may be used for commercial advantage Sleight, 1989 • Sponsorship can be closely related to advertising in that it involves paying in order to communicate to a selected target audience a message about the brand through its association with the event. The sponsorship itself may only give the right to display the brand name and logo eg on clothing, buildings, at rugby games In reality sponsors will also have their brand featured in associated literature and promotional material. Expenditure on sponsorship has grown rapidly in recent years due to a range of factors: It is seen in a context where competitors are excluded It can reach audiences difficult to reach through other media It creates favourable brand associations with exciting and prestigious events It appeals across linguistic and cultural barriers Sponsorship can also create goodwill among the public through sponsoring community or cultural events, thus regarded as a PR activity Also used as an opportunity for corporate hospitality and entertaining • • •     • • The International Travel College of New Zealand 16
  17. 17. Sales Promotion + Merchandising • • Sales promotion involves a range of tactical marketing techniques designed within a strategic marketing framework to add value to a product or service in order to achieve specific sales or marketing objectives Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase. • The travel and tourism sector product is ‘intangible’ with no physical product to display, so the retail store (travel agent, airline office, visitor information centre etc) relies on displaying supplier materials (print and non print) in such a way as to be eye catching and appealing. • Much of sales promotion takes place at the point of sale in the form of merchandising eg the displaying of brochures, use of posters or videos, setting up of window displays. • Price based promotions are used to stimulate sales, and offer the consumer a reduction in price or feature new extras for no additional cost. These ‘price cuts’ are easy for competitors to copy and risk provoking a price war. Price cuts can also devalue the image of the product with low price being equated with low quality. There is also the real risk of customers coming to expect the lower price, making it difficult to increase it again. • Added-value packages also stimulate sales, and avoid some of these dangers provided they enhance the product and reinforce the brand The International Travel College of New Zealand 17
  18. 18. Brochures and Printed Collateral The International Travel College of New Zealand 18
  19. 19. The use of brochures in travel and tourism • Brochures and other print materials represent the third distinctive group of marketing communications for a planned marketing campaign, in addition to advertising/PR and sales promotion and merchandising. • Travel and tourism relied heavily on printed materials until the advent and growth of the internet. • The design, distribution and large volume use of printed items has been a major distinguishing feature of travel and tourism marketing. • Concerns over wastage, cost savings, the need to adapt to a more fluid pricing model, and consumer demand for continuous access to up to date information 24/7 has contributed to the shift to web based materials. • Brochures are now available online, easy to read and navigate, downloadable, printable, with consumers being able make notes within a brochure, email it to a friend, ‘like’ it or save it to a wish list for further browsing later. The International Travel College of New Zealand 19
  20. 20. Stages in producing effective information materials • Determining the size, profile and needs of the target audience through market segmentation and the marketing planning process. Print volume is based on objectives in the marketing plan. • Marketing strategy, branding and positioning – print and website materials are planned together with coordinated messages, images and positioning. • Paper quality, choice of colours, density of copy and graphics along with style and density of photographs matching images to selected target audiences, ensuring images can be scaled for online use. • Specifying brochure/website/objectives. Clarify what the brochure or website is expected to achieve in the campaign. • Deciding the method of distribution. Cost of distribution often exceeds cost of print production (ITC example of the brochure costing $8 and the ‘pizza box’ that contained it for mailing cost $10!). Travel and tourism operators have to choose distribution options that meet objectives but minimize cost. • Creative execution. The way in which product concepts and images are • Timing. Most printed material are required to be available for distribution at specific times of the year (in booking seasons, which vary depending on which part of the world the operator is located). It takes several weeks from the issuing of the initial brief to the agency or printer to final production of print. Websites can be much more readily created and amended, edited and updated, and with minimal cost. For operators in a fluid pricing market context website flexibility is an attractive option as changing prices after materials are printed is extremely costly and time consuming. The International Travel College of New Zealand 20
  21. 21. Personal Selling Word of mouth is one of the key factors influencing the final choice of destination (Collier, 2006) The International Travel College of New Zealand 21
  22. 22. Personal Selling in NZ Tourism • Research (Lim, 1981) examining the role of promotions in the decision of tourists to visit New Zealand determined that advertising influenced the actual decision in only 17% of cases whilst 73% of respondents felt that personal communication was the most important variable in the decision to visit New Zealand. • Personal selling (word of mouth) seems to be the most powerful promotional tool with regard to the actual purchase decision. • 1995 research looked at methods by which clients came to use a particular service or amenity: 80% of all customers using services provided by businesses within the tourism industry in New Zealand did so as a result of recommendations from friends, families and others. • Tourism NZ has been aware of the importance of personal selling for more than a decade and has integrated activities to address this key area of influence in its markets. • Personal selling initiatives undertaken by Tourism NZ include:  The operation of overseas offices in NZ’s key generating markets, staffed by a sales and marketing team who regularly promoted NZ o the trade (travel agents and operators) in those markets.  Personal selling also occurs at trade shows and exhibitions attended by Tourism NZ staff in addition to representatives from other NZ tourism organizations.  Personal selling via distribution agents is facilitated by Tourism NZ who organize educational trips to NZ so travel agents can experience the product first hand. These visits are part of the International Media Programme (IMP) Collier, 2006 The International Travel College of New Zealand 22
  23. 23. The International Travel College of New Zealand 23