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International Tour Operator Management Part II

International Tour Operator Management Part II. Market Research and customer behaviour . Forecasting models in tourism. Forecasting is very necessary in tourism Rational decision cannot be taken with forecast about trends Risk of management mistakes is high in tourism because

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International Tour Operator Management Part II

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  1. International Tour Operator ManagementPart II

  2. Market Research and customer behaviour

  3. Forecasting models in tourism • Forecastingisverynecessary in tourism • Rational decisioncannotbetakenwithforecastabouttrends • Riskofmanagementmistakesishigh in tourismbecause • Tourismservicescannotbestored • Service consumptionispartofproduction, happeningat same time • Customer satisfactiondependsto a large part on externalfactors • Formanyareashighinvestmentcosts (infrastructure, hotels) • Different criteriaformeasuring tourism • Number of visitors/guests, number of tourists (UNWTO) • Number of visitor groups • Number of overnight stays • Level of expenditure per person per day • Value added share of tourism (WTTC) • Market share

  4. Forecasting methods in tourism • Difficulties • New industry, lack oflong-termtimelinesandhistoricdata • Standardisation oftourismstatistics just beginninginternationally (Satelliteaccounts), not existingfordomestictourism • Demand volatile, easilyinfluencedbyexternalfactorsandevents • Under-academicationoftourismindustry, „Ruleofthumb“ • Lack ofmethodicalknowledge in tourismindustry • Forms offorecasting • Qualitative und quantitative Forecastingmethods • Short / longtermmethods • Examples: Survey, Scenarios, Delphi

  5. Market research and analysis • Market research • Systematicprocessofacquiring, processingandanalysing quantitative and qualitative datatoassistthedecisionmakingprocess. • Different formsofmarketresearch • Facts, Images, perceptions, motivations • Analysis ofsituationatgivenmomentorongoingmarketscanto understand developmentsandtrendsofmarket • Major tasksofmarketresearch • Definition of (sub-)markets • Analysis of (sub-)markets • Demand research • Competitionresearch

  6. Market research forms • Primary research – Field research • Ownresearch (companyor Institute) • Surveys • Observation • Experiment • Reporting • Secundaryresearch – Desk research • Internal sources • Externalsources

  7. German tourism market research institutes I • B.A.T. Freizeit-Forschungsinstitut GmbH, Hamburg • Consultant Aviation & Tourism, Stelle • Creatours Destination, Freizeit, Tourismus, Dresden • Dallmeier & Partner, Korschenbroich • Deutscher Reisemonitor – DRM, c/o IPK International GmbH, München • Deutsches Touristik-Institut eV, DTI, Stockdorf/München • dwif – Consulting GmbH, Berlin/München • dwif – Deutsches Wirtschaftswissenschaftliche Institut für Fremdenverkehr eV an der Universität München, München • Europäisches Tourismus Institut – ETI, Trier • Europäischer Reisemonitor c/o European Travel Intelligence Center, Luxemburg • FT – Freizeit und Touristik GmbH, Grafschaft

  8. German tourism market research institutes II • FUR Forschungsgemeinschaft Urlaub und Reisen eV, Kiel • Inspektour GmbH, Heide • Ipsos GmbH, Mölln • ITF Research GmbH, Bremerhaven • Mobility & Touristcope, (DB, LH, T.O., Autoindustrie), Frankfurt • Project M Marketing Research GmbH, Lüneburg • Reppel + Partner GmbH, Karslruhe-Durlach • Studiengemeinschaft für Tourismus SfT, Ammerland/Bayern • TourismusKompetenz, München • Ulysses – Web-Tourismus, München • World-Travel Monitor Ltd. Malta, c/o IPK International GmbH, München

  9. Tourism Fairs in Germany and abroad

  10. Examples of Market research methods • Surveys: oral, written, bytelephone, online • Structured/unstructured, standardised • Open/half open/closedsurveys • Experiment • Test markets • Observation • Customer behaviour • Frequencies, Spatialmovementanalysis, testpurchases • Trend analysis • Extrapolation ofpastdevelopmentsintothefuture: dangerous(„Predictionsaredangerous, especiallyiftheyconcernthefuture“ – Nils Bohrs) especiallyfor fast developingactivityliketourism • Example: Predictionsofsituation 2007 made in 1987 (cold war), or 1997 (nointernet, nobudgetairlines)

  11. Customer behaviour • Influences • Cultural • Cultural background • Subculture • Social background • Social • Peer groups • Family • Role and Status • Perception of tourism • Personal • Age, current biographical situation • Job • Economic situation • Lifestyle • Self-perception • Motivation • Values • Travel Biography • Increasing segmentation • number of milieus increasing • disappearance of clear social roles in post-modern society

  12. Market segmentation • http://www.sinus-sociovision.de/

  13. Analysis of customer behaviour • Seven questions, sevenanswers

  14. Competitor analysis and benchmarking • Ongoinganalysisofcompetitorsbehaviour • Direct: Observation ofproducts, offers, marketingactivitiesofcompetitors • Indirect: Intelligenceaboutcompetitorsplansandstrategies(„Knowyourenemybetterthan he knowshimself“ – Sun Zi) • Benchmarking • Learning fromthebest in thebranch (opposite „bestpractice“ – can also befromotherbranches) • Identifyingbenchmarkcompetitorforspecifictask, analysisofownshortcomings, implementation, feedback (TQM)

  15. Definition of Market for specific product • Marketsarementallyconstructed • Marketsaredynamic • Customers decide on marketstructure • Classical Segmentation • Geographical, demographicalandpsychographical • Postmodern Segmentierung • Lifestyle, activities, milieus

  16. Major trends in customer behaviour • 1. Changingcustomerprofile • 2. Shiftingconsumptionpattern • 3. Intensifyingcompetition / continuingconsolidation • 4. Growingsegmentation • 5. Escalatingconcernforsafety / security • 6. Increasingvalueorientation • 7. Increasinginfluenceoftheinternet • 8. Severalshorttripsinsteadofonelongholiday, short-time decision • 9. Lesscustomersloyaltyfor Tour Operator ordestination

  17. Influences on customers behaviour in tourism

  18. Influences on customers behaviour in tourism

  19. Tourism motivation • Someclassicaltheories: • Maslow‘spyramidofneeds • Fleeingfrombadsituationathome • Searchforauthenticity • Recreation, regeneration • Self-actualization • Contrasttohome • Structuringof time after lossofreligious time frame • Travellingforhealthreasons • Travellingforunrestrictedenactmentofconsumption (sex, alcohol, servility) • Travellingasowngoal (thewayisthegoal: hiking, cruise)

  20. Tourists typologies • Typologiesaccordingto • Activities • Preferredsurroundings • Spatialbehaviour • Level ofintegrationintolocalcommunity • Forms ofinformationgathering • Opposition to normal life • Frequencyoftravel • Position in biographicaldevelopmentoftravelling • Etc. etc. • Problem: multioptional behaviourwithinsourcemarketsandwithin individual touristincreasing, wishforhigherintensity

  21. Tourists and lifestyle typologies - Examples • Opaschowski: Touristsfocussing on • Integration • Prestige • Experience • Culture • Entertainment • Quality • Economy • Austria 2000 – Euro-Lifestyle • The carefulRecreationist • The classical Culture tourist • The demandingExperiencer • The youngEnjoyer • The young Family

  22. Marketing for Tour operators Discussion Major problems: Brand-adequate Quality: Dependance on externalserviceproviders Increasingtransparencyofoffersfromcompetitors / directsales Dependance on destinationmarketing - Necessitiyofcooperation …

  23. Product Management

  24. Product Management Steps

  25. Product Management policies

  26. Types of packages tours • Fullpackage tour • Part package tour • Individual package tour (moduls) • All Inclusive Tour • Dynamic Packaging • Specifictours (f.i. business, incentive, cruise, pilgrime, event tour)

  27. Product development • Whatisthecustomerreallylookingfor? • Example „Space“ tourism • Genericproduct • Expectedproduct • Extended product • Potential product • Productincludes • Competence toofferproductsolutions • Bundleofservicesnecessary • Service claimsandpromises • Risktaking • Packageprice • Preparation, Standardisation, Quality control

  28. Product adaptation • Whatare different sourcemarketcustomersreallylookingfor? • Productadaptationaccordingtocustomersexpectationsandbehaviour • Different stories for same productfor different customers • Spatialdifferentationfor different customergroupsatdestination

  29. Parts of product • Technical • Material, Construction • Aesthetic • Form, Colour, Design, Packaging • Symbolic • Brand, Image • Main features • Aim/Goal ofproductpurchase • Additional features • Information, Customer service

  30. Dynamic Packaging • Definition • Choosing, packagingandbookingfor different modulsof a package tour in realtimewith a packageprice • Dynamic Packagingdisappears in massmarket • Withincreaseofpackagetouristsstandardisedpre-packedtourswithstandardlengthandprogrammeeasierttoorganiseandtosell • Dynamic Packagingreappears in post-industrialconsumermarket • Wishfor multi-purpose, multi-dimensional travel. Increase in travelexperiencebycustomers, IT advantages • Dynamic Packagingchanges T.O. business • Need tohave stand-alonecomponentsready in realtime • Muddlingofbordertravelagency – tour operator

  31. Pricing

  32. Price in the product life cycle Price Cost plus Pricing Penetration Time

  33. Price limits

  34. Distribution

  35. Distribution • Waysofdistribution • Directdistribution • indirectdistribution • Forms ofsalesorganisations • Own / others: broker, consolidators, traders • Withintheindustry (cooperation, franchise, travelagencies) / outside theindustry (retail, departmentstores, gas station) • Instruments ofdistribution • Agency agreement, commission, direct/indirectsalessupport, trainingofstaff

  36. Direct and indirect Distribution DIRECT • Lowercosts • Bettercustomerrelation • Higher brandawareness • Lessreliance on distributionpartners • But: conflictwithtravelagenciesandotherdistributionpartners • (examples German Railway, Colorline) INDIRECT • Ownchannels (travelagencies, mediagroups, franchise) • Other channels (general, selectiveorexclusive)

  37. Travel agencies as distribution channel for tour operators • „Ein Reisebüro/Reisevermittler ist im Verhältnis zum Reiseveranstalter Handelsvertreter im Sinne der §§ 84 ff HGB und für den Kunden / Reisenden auf der Basis eines entgeltlichen (Provision) Geschäftsbesorgungsvertrages § 675 BGB mit Werkvertragscharakter §§ 631 ff BGB tätig.“ • Vertragsgegenstand zwischen Reisebüro und Kunde ist die • Vermittlung einer einzelnen Reiseleistung eines fremden Leistungsträgers oder • Vermittlung einer Pauschalreise eines fremden Reiseveranstalters.

  38. Function of the travel agency • Tour operatorspointofview: • Matchmakingbetweencustomerand T.O. • Commission isonlypaidifbusinessisgenerated, partof variable coststructure • Provision ofcomprehensivedistributionnetworkwithoutonwinvestment • Known POS • Oftengoodlocation (1A) (physical / internet) • Existenceof loyal regularcustomers, goodexperiencesofcustomerswithtravelagencycrossingovertorecommended T.O. product • Customers pointofview: • Easy toreach, personal service • Physicalinformation (catalogues) • Consultation, answersto „silly“ questions • Face-to-facecommunication, also forcomplaints • Filters out unsuitable, unrealiableoffers

  39. Communication policy

  40. Communication policy • Goal: PositivelyInfluencing • Ownstaff • Potential customers • Actualcustomers • Public opinion • Politicians, institutions

  41. Advertisement – above the line • Openlyinfluencingpublicopinionto • Keep customers • Getnewcustomers • Produce positive environmentforownproducts • Directlyadresscustomers

  42. Sales support • Supportingdistributionchannels: • Monetaryactivities: Commission on sales (basic, special, volume-based, target-based) Incentivesfor individual sellers Refinancingof PR/advertisementactivities Payment ofcreditcardcosts etc. • Non-monetaryactivities: Productinformation Trainings discountedtravels decorationmaterials Hotline etc. • Supportingdirectdistribution: • Catalogues, discounts, loyaltybonusses etc.

  43. Public Relations work - below the line • IndirectlyorCovertlyinfluencingpublicopinionby • Press releases • Events • Sponsoring • Customers forum • House magazines • Website • Participation in fairs etc. • Productplacement • Guerilla marketing • Covert websitessupport • Cross selling etc.

  44. Quality Management

  45. Quality management • Quality ≠ Expensive • Quality: Hardware, Surroundings, Software • Quality: Ongoingprocess

  46. TQM – Total Quality Management • Customer pointofview: Howimportantistheserviceofferedandhow was thequalityoftheserviceperceived? • Producers pointofview: Howgood was thequalitymanagement? • TQM as a never-endingupward spiral (Kaizen)

  47. Ecology management • Based on: • Laws andregulations • Customer demand • Staffdemand • In Germany: • DeHoGa Eco Criteria • Governmentsubsidiesfrom • European Recovery Program (ERP) • Deutsche Ausgleichsbank (DtA) • Kreditanstalt für Wiederaufbau (KfW) • Bundesländer Subsidies

  48. Ecology management • Labels: • Many Ecology labelsworldwide on different levels • Example Bavaria: http://www.stmugv.bayern.de/umwelt/wirtschaft/siegel/index.htm • Other examples: • Blaue Flagge, Grüner Koffer • Top label in Germany: Viabono

  49. Sources • Bastian, H., Born, K., (2004): Der integrierte Tourismuskonzern, München/Wien. • Becker, P., (2004): Yield-Management, Düsseldorf. • Berg, W., (2001): Tourismus 3, (Hrsg.) Dettmer, H., Stuttgart. • Bieger, T., (2002): Management der Destination, 5. Auflage, München/Wien. • Böttcher, V., (2005): Virtuell oder real?, TUI Deutschland, Köln. • Dettmer, H., Glück, E., Hausmann, Th., Kaspar, C., Logins, H., Opitz, W., Schneid, W., (2000): Tourismustypen, München/Wien. • Dettmer, H., Hausmann, Th., Kloss, I., Meisl, H., Weithöner, U., Degott, P., (1999): Tourismus-Marketing-Management, München/Wien. • Dettmer, H., Hausmann, T., Kaspar, C., Oppitz, W., Schneid, W., (2001): Tourismusbetriebswirtschaft 2 – Managementformen im Tourismus, Wien/Köln/Aarau. • Dettmer, H., Hausmann, Th., (2004): Yield-Management, Bad Harzburg. • Dettmer, H., u.a., (2005): Managementformen im Tourismus, München/Wien.

  50. DSF - Deutsches Seminar für Fremdenverkehr, (2002): Pauschalreisen rechtlich absichern, Berlin. • Eisner, H., (1987): Reiserecht Entscheidungen, München. • Echtermeyer, M., (1998): Elektronisches Tourismus-Marketing, Berlin/New York. • Fresi, A., (2005): Die nächste Generation der Reiseproduktion – Realtime Enterprise Kollaboration in der Reiseindustrie, Siemens, Köln. • Freyer, W., (1998): Tourismus, 7. Auflage, München/Wien. • Freyer W., Pompl, W., (1999): Reisebüro-Management, München/Wien. • fvw, (2005): TID, Der Touristik Informationsdienst, Hamburg. • Glaeßer, D., (2001): Krisenmanagement im Tourismus, Frankfurt. • Gruner, A., (2000): Tourismus 2, (Hrsg.) Dettmer, H., Köln. • Gruner, A., (2004): Methoden des Yield-Managements im Logisbereich der internationalen Hotellerie, München. • Haedrich, G., Kaspar, C., Klemm, Ch., Kreilkamp, E., (1998): Tourismus-Management, 3. Auflage, Berlin/New York.

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