HPR4101

1. HPR4101 Hospitality, Tourism and Recreational Marketing

2. Text/ materials: • Hospitality and Travel Marketing (Morrison, 3rd edition) • Marketing for Hospitality and Tourism (Kotler et al. 4th edition) • Journal articles/ case studies – as appropriate

3. Marks allocation • Presentation 10% • Group report 20% • Test 1 15% • Test 2 15% • Final exam 40%

4. Course Work & Presentation • Presentation 10% • Final Course Work 20% -(Group) due on wk 14: Analyse a MALAYSIAN HOSPITALITY/ TOURISM/ TRAVEL company (of your choice) on their market environment as well as marketing strategy WARNING- NO Cut & Paste/submission of previous works. – 0 marks will be allocated

5. Your final report should contain • Background/description of company (20%) • Marketing analysis (40%) • The market environment • Nature of the industry (porter 5 forces, PEST and any other marketing tools that you think appropriate) • The target consumer (who and why) • Marketing Mix analysis (40%) • Discuss how the company that you examine deploy their marketing mix • The report should be between 2000-3000 words (excluding tables, illustration or appendices) • Please submit hard copy as well as soft copy of your work. • NO Cut & Paste/submission of previous works. – 0 marks will be allocated

6. Group presentation • Read one RECENT journal article from either Annals of Tourism or Tourism Management that relates to MARKETING (directly or not), • Discuss the article (what the author said/argued), • Illustrate how the knowledge is useful in tourism marketing • The presenting group need to submit a 5 pages report. • Each group must present a unique article (no duplication of title by the same author • NO part of the report shall be a direct copy of the article or any other that has been published/submitted

7. Presentation Presentation – 2 groups, 15 - 20 min long.

8. Introduction to HPR Marketing Reading : C1, 2, 3

9. WHAT IS TOURISM?

10. Definition • “Tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, or other purposes”. (WTO, 1993) Destination: • related to location visited by tourists • tourism supply side that contributes certain attraction powers to tourists. Origin: • the region or country generating the tourists • the source of the tourism demand,

11. Definition • “The sum of the process, activities and outcomes arising from the interaction among stakeholders (tourists, tourism suppliers, host governments, host communities, origin government, universities, community colleges and nongovernmental organisations), in the process of attracting, transporting, hosting and managing tourists and other visitors” (Weaver and Lawton, Tourism Management. 2002, 2006)

12. Tourism is not one single service, but a combined set of several services, such as plane seats, accommodation, and restaurant meals, that all help to make up the entire tourism experience. Therefore, a bad execution of any of these services might ruin the whole vacation experience

13. Food Entertainment Accommodation Tourism related services Activities & experiences Infrastructure Transport Travellers Destination (Place/ location) Events Social & Cultural elements Climate & Natural resources Political & Legal system

14. What is Marketing? (Watch the videos and try to answer this question)

16. What is Marketing? • Marketing Defined: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others” • “ the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives”

17. Marketing • “management process responsible for identifying, anticipating and satisfying customer requirements profitably” • Marketing as a philosophy which involves marketing activities driven by what the consumer needs and wants. • A social process by which individuals and groups obtain what they need and want through creating and exchanging products and value.

18. Marketing • Systematically offering products/services that meets the wants and demand of consumers profitably • Tourism marketing is shaped and determined by the nature of demand, the characteristics of suppliers and the external environment

19. Marketplace Value proposition in term of product or services offerings business Other Business offerings External influencing factors Exchange process customers Customers’ demand • Marketing as a philosophy which involves marketing activities driven by what the consumer needs and wants

20. Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Need State of felt deprivation Example: Need food Wants The form of needs as shaped by culture and the individual Example: Want a Big Mac Demands Wants which are backed by buying power Understanding the Marketplace Core Concepts

21. Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Marketing offer Combination of products, services, information or experiences that satisfy a need or want Offer may include services, activities, people, places, information or ideas Understanding the Marketplace Core Concepts

22. Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Value Customers form expectations regarding value Marketers must deliver value to consumers Satisfaction A satisfied customer will buy again and tell others about their good experience Understanding the Marketplace Core Concepts

23. Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Exchange The act of obtaining a desired object from someone by offering something in return One exchange is not the goal, relationships with several exchanges are the goal Relationships are built through delivering value and satisfaction Understanding the Marketplace Core Concepts

24. Needs, wants, and demands Marketing offers: including products, services and experiences Value and satisfaction Exchange, transactions and relationships Markets Market Set of actual and potential buyers of a product Marketers seek buyers that are profitable Understanding the Marketplace Core Concepts

25. Marketing orientation • Customer needs are first priority • Ongoing marketing research • Customers’ perception of the organisation are known • Frequent reviews of strength and weaknesses relative to competitors • Value of long term planning is fully appreciated • Avoiding myopic view of marketing – scope of business is broadly set, changes is seen as inevitable • Cooperation among all business units in an organisation • Cooperation with complementary organisations • Measurement and evaluation of marketing performance are done frequently

26. Core principles of marketing • The marketing concept – satisfying customers needs as 1st priority • Marketing orientation – accept marketing concept and act accordingly • Satisfying customers needs and wants – key to long run survival (needs and wants changes due to many influencing factors) • Market segmentation – limited resources vs. Differences in consumers render the importance of target market(s)

27. Core principles of marketing • Value and exchange process – value represents consumers’ perception on offerings ability to satisfy their wants, exchange process can only occur if offerings meet or exceed value perception • Product life-cycle – all products will undergo a certain life cycle: varying marketing strategies at each lifecycle, the need to think forward • Marketing mix – influencing and manipulating the controllable internal factors to try to create exchanges

28. Value satisfaction, quality Other influencing factors Our business Our product offerings Our capability Strengths & weaknesses Political Legal Climate Events Social Technology EXCHANGE, TRANSACTIONS, RELATIONSHIP Consumers Demand Various needs & wants Other business other product offerings Complementary capability Strengths & weaknesses Competing Value satisfaction, quality

29. Four Eras in the History of Marketing

30. PRICEPlanning, Research, Implementation, Control, Evaluation • It is impossible to meet all needs, wants and demand • focus on specific group(s) of consumers – to maximize the utility of “our” resources and generate desired profit • take account on the competitive environment (competitors, as well as complementary and supplementary businesses) Businesses have limited resources (fixed assets, money, people, technology..) • Formulation of marketing strategies, implementation and evaluation • Marketing research • Market segmentation

31. Marketing Process Understand the marketplace and customer needs and wants understand consumers, create customers value and build customer relationship Design a customer-driven marketing strategy Construct a marketing program that delivers superior value Build profitable relationships and create customer delight Capture value from customers to create profits and customer quality Sales, profit and long term customer equity The basic marketing process

32. Knowledge: what do we need to know? The consumers The industry • What is the nature of products/services offered • How the offerings can be made • Who are “our” competitors • What are the other elements that effects “our” business (external environment) • Who are the consumers? • Who make the buying decisions? • What do they want? • How do they make the buying decisions? Marketing strategies What product, at what price, where to sell (place), how to sell (promotion, packaging, programming and partnership), who is involved (people): (8 Ps of marketing)

33. What is the nature of our offerings?

34. The Industry: Tourism • the production and distribution of services that are consumed by travellers who stay in places other than their domiciles or workplaces for leisure and other purposes that are not related to salaried activities from within the place visited

35. The Industry: Tourism • Tourism involves many aspects of service management which is highly process-oriented, particularly due to the different transaction and interaction processes that take place between traveller or tourist and tourism business agents/employees

36. The Industry: Tourism • an information-intensive service industry that takes care of visitors when they are away from home • the activities of people taking trip away from home • a science, art and businesses of attracting and transporting visitors (to and within a destination), accommodating them and catering to their needs and wants

37. Generating Regions /Origin (the source of the tourism demand) • Destination Regions: (location visited by tourist - tourism supply side that contributes certain attraction powers to tourists) Transportation (to the destination) Information, marketing and sales channels Tourism assets attractions facilities social, cultural and social characteristics , physical environment, transport, lodging facilities, and other travel related services

38. Tourists Enjoy/ experience offerings of a destination travellers dreams and fantasies - emotional and irrational motivations (fantasies of exotic escape, self-realisation and personal transformation) Destination Marketing – more supply led: taking an existing place and then determining who might be interested in it. Travel, hospitality and recreation marketing – more flexible, services can be designed to meet consumers’ demand Consume tourism related services • tourism product is a complex consumptive experience that results from a process where tourists use multiple travel services at the destination during the course of their visit which include information, transportation, accommodation and attraction services.

39. Characteristics of tourism products • Tourism involves many aspects of service management which is highly process-oriented, particularly due to the different transaction and interaction processes that take place between traveller or tourist and tourism business agents/employees. • tourism products have some distinctive features in comparison to other products.

40. Characteristics of tourism products • Intangibility Services are difficult to measure, pre-test or demonstrated. This means that promotional tasks assumes a greater importance since we need to create the products in the consumers’ mind prior to purchase decisions. Promotion includes the management of evidence of a product through images, words, facts and figures, etc.

41. Characteristics of tourism products • Heterogeneity It is difficult to standardise services since it will differ based on the people/employees who delivered the services, as well as variation in consumers’ experiences and expectations. To a certain extent, heterogeneity could be “overcome” by standardisation of products/services delivery standard and training of employees who directly and indirectly involved in services delivery.

42. Characteristics of tourism products • Temporary ownership The consumers only owns a service temporarily (during consumption processes) Examples: in renting holiday cottages, buying an aircraft seat, paying for time in a museum or a theme park.

43. Characteristics of tourism products • Permissibility A service “dies” if not consumed within a given time. It cannot be stored. A package holiday, an airline seat or a hotel room which has not been booked at the time they are available are lost. Companies use demand management policies to alter demand by manipulating price. E.g.: hotel and airfare prices vary according to seasonality factors.

44. Characteristics of tourism products • Inseparability Services are produced and consumed simultaneously in interactions between customers and service provider with no time delay between the two. As the result, the tourism provider has only one chance to “get it right” / to ensure customers are satisfied with the services purchased/consumed. (recovery is costly and if not executed carefully will result in loss of future sale (repeat purchase))

45. Characteristics of tourism products • Tourism products (usually) involves multiple suppliers Tourism is a combination of products supplied by different parties. A tour for example involves transport services (air and land), accommodation as well as food and beverages – Difficulty in controlling the level of services • Consumers plays a direct role in the design of the tourism products that they consume and how they experience it.

46. Characteristics of tourism products • Tourism is high involvement, high-risk products Consuming tourism often involves committing large sums of money and devoting time to something that cannot be seen or evaluated before consumption. It also involve the encounters with the unknown in term of destinations, accommodation, transport, food, culture (and increasingly crime) The opportunity cost of a “failed” holiday is irreversible. - the degree of perceived risks involved in holiday decisions means that in tourism marketing, marketers need to focus on reassurance and security building.

47. Characteristics of tourism products • Tourism products is build partly by dreams and fantasies of its consumers. In services such as banking, medical care, or car repair, decisions are based on rational and functional purposes. Tourism however are bound up with fantasies, ideas of exotic escape, romantic sublimation, and other transcendental yearnings. – it involves more irrational and emotional buying. (see video example)

48. Characteristics of tourism products • Tourism is more supply led Traditionally marketing begins with the analysis of consumers’ needs and wants, followed by design and offerings of services/products that are able to meet these requirements. Tourism however, are more supply-led: taking an existing place (destination) and determining who might be interested in purchasing it.

49. Characteristics of tourism products • Tourism are fragile to external forces beyond the control of its suppliers. All service (and products) are affected to some degree of external forces, but tourism is prone to more. War, terrorism, hurricane, tsunami, health scare (e.g. bird flue) at destination (and its immediate surrounding areas) can influence consumer evaluation of a destination/ decisions

50. Why Tourism/Hospitality marketing different? • Shorter exposure to services • More emotional buying • Greater importance of managing evidence • Greater emphasis on stature and imagery • More variety and types of distribution channels • More dependence on complementary organisations • Easier copying of services • More emphasis on off-peak promotion