Marketing in Travel and Tourism
MARRIOTT INTERNATIONAL Inc.
Marriott International, Inc., is one of the leading lodging and hospitality company. It’s been founded in Washington, D.C., in 1927 and everything started with a root beer stand. The first hotel has been opened in 1957 and Marriott has established a culture and tradition of innovation, service and performance. At this moment Marriott International has around 3801 properties 660394 rooms in 74 countries and territories (http://www.marriott.com/hotel-development/real-estateinvestments.mi). The company is present in different markets in the tourism sector like: full service lodging, select service lodging, extended service lodging, timeshare and at one point in history they were having theme parks as well which were sold in 1984. Marriott International operates and franchises hotels under 16 brands like Marriott, The Ritz-Carlton, JW Marriott, Bulgary, Edition, Gaylord Hotels, Renaissence, Autograph Collection, AC Hotels by Marriott, Courtyard, Fairfield Inn & Suites, SpringHill Suites, Residence Inn, Towne Place Suites, ExecuStay, and Marriott Executive Apartments (http://www.marriott.com/hotel-development/real-estateinvestments.mi). The biggest competitors for Marriott International are Accor SA, Hilton Worldwide, Inc. and Intercontinental Hotels Group. But they always try to differentiate with their core values which are putting people first, pursuing excellence, embracing change, acting with integrity and serving the world (Marriott annual report, 2012). In the
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Kotler in 2008 wrote that marketing refers to the social and marketing processes that include services, products and value being exchanged to fulfil groups and individuals wants and needs. The core marketing concepts are categorised in 5 groups: needs, wants and demands; products, services and experience; value, satisfaction and cost; exchange, transactions and relationships; and markets. The basic human necessities indicating the state of felt deprivation are called needs. Maslow is the one who classified the needs in: physiological needs, safety needs, social needs, needs for self-actualisation and needs for esteem. On the other hand the wants are the wish for a particular satisfier of need and the demand can be explained as the want for an exact product backed up by the ability and wish to buy it. Another group of the core marketing concepts is composed of products, services and experience. Holidays, city breaks, hotels, packages, transport and excursions are tourism products. The value represents the difference between the cost of having the product and the customer benefits from having and/or using the product on the other hand the satisfaction is perceived as value relatively delivered to the buyers expectations. The transaction between a service or a product and something offered in return usually we are talking about money. Building and maintaining long-term relationships while keeping them profitable that goes beyond the contract is called relationship marketing. As Kotler et al (1999) were saying that is well know that it cost 20 times more to get a new customer than keeping an existing one that shows the key principle in relationship marketing witch is retention. As we talked about the concepts of exchange and relationship we have to jump to the 5th category of core marketing concepts which is the market.
The market is made by actual or possible consumers sharing the same need or want and they can trade money or products to be able to satisfy the need or want. Everything that surrounds and has an impact on the organisation is called marketing environment which can be divided in two categories: microenvironment and macro environment. The microenvironment is all the factors and elements close to the organisation’s area of operation which can affect its performance and decision-making freedom. On the other hand the macro environment is all the external environmental forces that can affect the way in which the company works but in the same are beyond companies control. The economy, natural forces, demographics, social and cultural forces and government regulations are macro environmental forces. With the help of Marriot organization we will try to exemplify a couple of impacts of the marketing environments on the organization. First we will mention the microenvironment, Marriot is present in 5 markets: full-service lodging, select-service lodging, extended stay lodging and timeshare. In the full-service lodging market the competition comes from Hilton but in the select service lodging another competitors appears which is Wingate by Wyndham. If we talk about suppliers the quality of the service provided is affected by the equipment suppliers, catering supliers and so on. In the macro environment however, natural forces affects the demand and forced the company to split the season in 2 of-peak and on-peak
The felt need and want of the individual is called motivation. The motivation can be general or specific. The general ones are aiming to achieve a comprehensive objective like taking a holiday to a place where you can relax and get away from work stress. The specific motivation is when the scenery, good food or relaxation provided by a specific destination make the tourist choose it (Holloway, 2009). Here is where the ‘push’ and ‘pull’ factors are met, where the tourist is pushed to take a holiday by the need to get away from stress but other factors may work to pull the tourist to a specific destination. Another factors affecting the demand in the tourism and travel sector are the growing confidence and physical fitness which are leading to an increase of demand in ‘extreme sports’, the search for knowledge, the need of self actualization and on the other hand are the factors that have a negative effect like political or economic changes in a specific region or country.
Identifying a target audience and positioning the product are done through tourism segmentation. Among the types of segmentation we can mention psychographic segmentation where the basis is the individual’s lifestyle, behaviouristic segmentation where the loyalty towards a particular brand can help classifying people into small groups and geographic segmentation that means classifying the market into geographical areas. In the marketing planning process segmentation has a very important role influencing all processes and functions being done in some occasions before the begin of the strategic plan. Segmentation helps the organisation to identify specific groups and to target them in such a way to achieve short term and long term objectives. In the same time the segmentation creates the opportunity to apply the business and marketing strategies and vary promotion, communication, pricing and distribution systems. On top of all the advantages of segmentation it also offers guidelines of potential areas for diversification and market development.
Strategic marketing is the process dealing with analysing the market competitive, the environmental and business factors that are affecting the organization and its business units, as well as identifying the market opportunities and threads, contributing in the objective setting and creating business and corporate unit strategies.
The strategic plan is the process of determining an organization long term goals and after that identifying the best way of achieving those goals. In the same time the strategic plan shows the organization how to keep a strategic balance between the changing marketing opportunities and the organization’s goals and capabilities. The systematic thinking is encouraged by the strategic planning and at the same time makes the company to revise its policies and objectives, and provides better performance standards for control and this way the organization efforts are better coordinated (Kotler et al. 2008). There are 4 steps involved in the implementation of a strategic plan: analysis, planning, implementation and control. The mission, the strategic objectives, the audit, SWOT analysis, portfolio analysis, objectives and strategies are the components of the strategic plan.
Marriott’s vision is to be the best hospitality company in the world. Their strategy combines their unique culture with an extensive portfolio of global brands, a customer-focused sales organization, tremendous guest loyalty and a broad distribution of hotels at multiple price points (Marriott Annual report 2012). The organisation focuses on the next generation of travellers. Nearly half the people on the planet are under the age of 25. Marriott’s strategy is to get as many new customers from this range by delivering what travellers want.
The process of linking consumers, customers and the public to the marketer with the help of information’s used to define and identify marketing opportunities and problems; to generate, refine and evaluate marketing actions; to monitor marketing performance; and to improve understanding of marketing as a process is called marketing research (American Marketing Association 2004).
Kotler was stating (2008; p.325) ‘the market information system consists of people, equipment and procedures to gather, sort, analyse, evaluate and distribute needed, timely and accurate information to marketing decision makers’.
The marketing plan in an organization is made by managers using the market information systems (MIS) and reports. The internal company information, marketing intelligence and market research are the three important types of information used by the managers. Recognising trends in product, promotion schemes, prices and packaging; the marketing plan is facilitated and it is under control; the decision making quality is improved; tapping the business opportunities are few of the benefits of marketing research and market information system.
Internet surveys, online focus groups, experiments and online panels are part of the online marketing research which is one of the latest marketing research developments and it helps market researchers to get important data from the market. The internet marketing research offers great advantages over traditional surveys and focus groups and the most important advantage would be the low cost and speed.
The grade of satisfaction and value perceived by the customers depends on the quality of the information. Very important as well are the information about competitors, resellers and other actors and forces present in the market. The marketing information system is seen by the marketers as an important marketing tool and not only as a help for taking better decisions.
Not everyone sees with positives eyes the marketing which is been told is
fostering greedy aspiration, creating false wants and urging too much materialism in our society (Kotler et al.,2008), working against the members of the society and the interest of it. People’s desire for goods is stimulated by all the businesses that are spending money on hiring advertising agencies. And that’s why the critics are stating that the huge interest in material possession is created by marketing systems and all these creates the idea of being successful means to have a large house, high-tech gadgets, designer clothing and expensive car. Without even noticing the adverts leave a mark on our minds and now we can’t even imagine life without them. In the business environment there is another important part which is called ethical expectations. The ethical expectations are of society which expects all corporate executives to have in mind while taking decisions the appliance of ethical principles or guidelines to what is right or wrong, fair or unfair and are morally correct.
One of the most important concepts in marketing is the marketing mix and some call it the core of marketing planning. It is the base of marketing plan’s strategy and its role is determining how the company’s budget is allocated. It consists of the 4 P’s that are: product, price, promotion and place.
The product, in tourism, represents what the customer is being delivered and is made of both tangible and intangible elements. Among the tangible elements we can name the room of which use the guest is buying, facilities like bathroom, balcony, coffee machine or food. The intangible elements could be the style in which a room is decorated if it enhances the customer’s satisfaction, a room with seaview, the professional way in which fronf of house deals with incoming guests or the service received in a restaurant by the waiters. In case of Marriott Hotels, the products are the rooms, restaurants, the food, the entertainment and conference rooms. Most services can have a physical aspect like the booking forms. Marriott sells its products through their website and through travel agents. Physical aspects in the Marriott hotels can be lavish furnishing or spectaculat lobbies.
The price represents the amount of money paid for a product or a service. The price is negociable and variable in tourism and is very strongly related to the product. At the same time price means the figure the company is ready to make the product or service available for the consumer, when considering the market conditions, sales target and cost. Because of the tendency of people for judging the quality of the product or service by it’s price, we can admit that price considers consumer psychology as well.
The place represents the scene where the product or service is being sold. In tourism industry place is represented by the distributing channels of the product. In these days, companies sell their products on the Internet or via telephone. This helps them reduce costs and bring the customer closer to their organisation. Promotion consists in the techniques the company uses to communicate their products and services to the market. These techniques are sales promotion, direct selling, advertising and public relations activities. In services case, 3 extra P’s are added: people, process and physical evidence. In people’s case, employees can make or break the organisation. In this concern many companies are training their staff in customer service and interpersonal skills, focusing on the customer’s satisfaction. The way a service is being delivered to a consumer is called service process. It is highly important for a service organisation in delivering its product and at the same time is a very important component in the service sheme when the company decides what will the process be for the service reaching the customer.
Physical evidence is the last element in the service marketing mix and is being used oftenly as a differentiator in service marketing. Physical evidence consist in all the senses received by the tourist when experiencing their package, flight and other services based on smell, sound, touch, taste and sight. Many times it happens that the marketing activity focuses on minor points of differentiation with very small significance for the consumer. Marriott has a strong marketing orientation that is accentuated by putting the guests at the centre of their activities and benefiting from this aproach.
Tourist products are determined on 2 levels: the total tourist product and the specific product. The total tourist product represents the combination of all the elements consumed by the tourists on their trip. Specific products are the elements of the total tourist product that can be sold individual like attraction, accommodations, transport and other facilities for tourists.
The total tourist products are made out of both tangible and intangible components based on an activity at the destination and with its help the total travel experience is created. Most tourists buy either an inclusive tour, or separately the elements of the tourist product. The result of all the purchases is known as a ‘package’.
The elements of the total tourist product are the integral products, public or free goods and complementary services. The integral products are sold separately on the market like accommodation, hence Marriott Hotels or transport. Public or free goods can be the weather or the scenary. Complementary services are information from a tour leader or tourist information office that cannot be sold separately. The functions performed by the total tourist product are allowing the tourists to take part in the main activity of their trip, facilitates transport in, to and from the destination, the social reproduction during the holiday, the execution of the arrangements and enables the tourist to remember, relieve and share the experience with others.
The primary tourist supply and the secondary tourist supply are as well components of the total tourist product. The primary supply consists of all the attractions that convince the tourist to pick that destination and the secondary supply are the gifts and souveniers and also facilities needed by a tourist to visit a destination.
Integrated marketing communication according to Cooper et. al (2005) is the
measure taken by a company to be able to ‘integrate and coordinate its messages and media to deliver, clear reinforcing communication’.
Every time a person gets in contact with a brand a message gets in transmitted to the person. The message could be bad, good or indifferent but all the companies are aiming for a positive and consistent message. Integrated marketing communication (ICM) strategy is focusing on the customer relationship trying to build it as strong as possible by demonstrating how their products are exactly what they need for their problems. ICM is the one that makes sure that all the images and messages are tied together, that the company’s advertisements printed or on television have the same message.
Advertising, sales promotion, personal selling, direct marketing and public relations are the biggest promotional tools which has to be mixed with caution to obtain a very well-coordinated promotion mix to achieve the marketing and advertising goals.
Advertising is the process in which you can generate a durable image of the product, quickly increase sales and you can reach crowds of geographically spread customers with a low cost (Kotler, 2010).
The interaction among 2 or more people which allows them to see each other’s individualities and requirements and they are able to make quick adjustments is called personal selling. The easiest way to build long term relationship with a client is to keep the client’s interest in the mind at all time.
Sell coupons, cents-of deals and premiums are different sales promotions are composed to attract the customer and contain information which may convince the client to buy (Kotler, 2010). Believability is one of the most important advantages of the public relations. It looks like adverts are beginning to be less believable then stories, news, events and features. The infomercial is a new segment of the promotional mix and is a mixture amid public relations and advertising.
The aspects that need to be taken under reflection when the marketers are planning a promotional campaign are: the addition of value for targets; setting condition of participation like the presence of target groups or not, closing date of the offer; the way of promoting and distribution the promotion; and which would be the response mechanism. The marketers have to evaluate as well and it can be done at three moments of the campaign before, during and after.
After promotion campaigns many companies as Marriott are undertaking consumer surveys to make an idea on how many clients remember the promotion, how many of the target customers took advantage of it and with which idea remains after the campaign. Marriott International is an organization which adopts integrated promotional campaigns which allows them to control their brand to retain and grow their customer base while controlling their reputation.
List of References
Cooper, C., Fletcher, J., Fyall, A., Gilbert, D., Wanhill, S. (2005) – Tourism – Principles and Practice, 3rd ed., Pearson Education Ltd.
Dolnicar, S. (2008) – Market Segmentation in Tourism, Faculty of Commerce – Papers, Available at: http://works.bepress.com/sdolnicar/192
Holloway, C., Humphreys, C. and Davidson, R. (2009) – The Business of Tourism, 8th ed., Pearson Education Ltd.
Kotler, P., Armstrong, G., Wong, V. And Saunders, J. (2008) – Principles of Marketing, 5th European ed., Pearson Education Ltd.
Kotler, P., Bowen, J.T., Makens, J.C. (2010) – Marketing for Hospitality and Tourism, 5th ed., Pearson Education Inc.