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1. Intangibility 1. Price
2. Perishability 2. Place
3. Heterogeneity 3. Product
4. Ownership 4. Promotion
5. Inseparability
6. Difficulty in Standardising
Services
7. Seasonality
A. Price
Price is the term used to describe what customers actually pay in exchange for the
benefits accruing from a product or service
• Perception
The most important factor is consumer perception of price
o Consumer may choose not to buy when offering is perceived to be of
lesser value than the asking price. Hence, bookings or visits will decline.
o If price is low in relation to value offered, then demand will be difficult to
manage and revenue loss could be substantial.
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The marketer's task is to maintain a balance between
;
Price and D e m a n d
o Price has little to do with cost, and far more to do with what customer arc prepared to
pay for a product.
. . '
o How well a changed in price affect a change in total demand — price elasticity of
demand.
o In a market where the product is unique, or without satisfactory substitute, or where
-
o Restrict access
o Control demand in time
o Control demand in space
Pricing M e t h o d s
(1) Cost-plus pricing
o A standard mark-up is added to the cost of the product.
o E.g. A bottle of wine that costs $14 may sell for $28, a 100% mark-up on cost.
•
B. Place
o It is place that represents distribution of and access to the product
o In tourism industries, distribution systems are used to move the customer to the
product: hotel, restaurant cruise ship or airplane
o Various distribution channels or intermediaries are used to market tourism services
o Distribution channels or Intermediaries are used to describe any dealer who acts as a
link in the chain of distribution between the company and its customers
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and determine is all the participants are performing at an acceptable level. It may be
necessary to:
o Either expand or reduce membership at various levels or drop some existing
channel members who are no longer performing
*
This is happening as the interest in call centres grows and hotels are reviewing the need
for hotel representatives where call centres might be able to achieve the same results
more cost effectively. Similarly, major changes are taking place in computer reservations
systems with every advance in technology.
C. Promotion
o Is an aspect of general marketing that promotion management deals with explicitly
o It includes the practices of advertising, personal selling, sales promotion, publicity
and point-of-purchase communications
-
•
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Promotional Mix Strategies
Most leisure and tourism organisations use a combination of promotional activities
including:
1. Advertising: the paid-tor sponsorship of a message in a commercially
available medium. The media (press, broadcast: television and radio, posters/
billboards, cinema) task is essentially to choose and buy the most economical
combination of advertising space and/ or time to reach defined audiences
sufficiently frequently and with sufficient impact to convey the agreed
messages effectively.
2. Sales Promotion: Those marketing activities other than personal selling and
advertising and publicity that stimulate purchasing and dealer effectiveness,
such as displays, shows and exhibitions, demonstrations and various non-
• -
its products; its employees; its communication programmes and media coverage,
its overall corporate identity; its financial reputation; its promotional
activities; the buildings in which it transacts business -- in short everything
that contributes to the image of an organisation. Internal PR is used to build
and maintain morale within an organisation through such things as good
communication practices, incentive benefits (e.g. concessionary travel), sports
and activity provision, etc.
4. Direct Marketing: Tourism organisations make heavy use of promotional
materials mailed out or given away to customers or passed on to them by
intermediaries (travel agents, tourist information centres, hotels, etc)
Photographs are a crucial element of mass tour brochures. Also, maps,
a critical part in tourism promotion in generating interest in a destination. One
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of the most difficult things to achieve in brochures aimed at the mass market
is competitive differentiation.
*
D. Product
Problems in Managing Services
The effectiveness of planning the marketing mix depends as much on the ability to select
the right target market as on the skill in devising a product which will generate high
levels of satisfaction. Hence, the decision depends very much on the capability of the
marketers to tackle the following issues concerning tourism services:
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* Although standardised service is an admirable target that all organisations should try
to achieve it is unrealistic
* The same standardisation cannot be provided since the actions of service staff, other
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customers and the customers themselves make the experience more variable
* Hotels, restaurants, airlines, theme parks and travel agencies are some of the
'factories' in the business. Behaviour of one customer can ruin the service experience
of others
* Implications:
o Tourism marketer design processes to minimise differences in service encounters
and provision between different outlets or between different shifts at a hotel.
Example: Provision of uniforms and of similar physical surroundings illustrates
evidence of standardisation
i
(3) Perishability
* Service is highly perishable - "like a running tap in a sink with no plug"
* An unoccupied seat on a train or bed in a guesthouse is lost forever
•
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(6) Relationship of services to providers
* Some services are inseparable from the individuals who provide them
* Example: Restaurant - whose chefs or owners have developed unique reputations for
their food, personalities or both
* Implications:
o Marketers attempt to devise delivery systems which ease interaction and invest in
campaigns to educate staff and consumers as to how to get the best from the
interaction
o Training in hotels emphasises how staff can manage the interaction
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