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GROUP PRESENTATION
Done By:
HND TTM & HM – Batch 001
MARKETING MIX
• Marketing Mix strategy is choosing and implementing the best
possible course of action to attain the organization’s long-term
objectives and gain competitive edge.
• The Marketing Mix, more popularly referred to as the 8Ps of
Marketing is a set of controllable and interrelated variables that a
company assembles to satisfy a target group better than it’s
competitor.
• The tourism product unlike a car or a computer that consists of a
combination of tangible and intangible items and the potential
customers “buy” the product before “acquiring” the product.
PARTNER
PRODUCT
SHIP
PLACE
MARKETING
PACKAGING PROMOTION
MIX
Company
Lower fails to
Lower price perceived harvest
value potential
profits
FACTORS AFFECTING
PRICING DECISIONS
• Internal Factors
1. Marketing Objectives
The 4 major marketing objectives are Survival, Profit Maximization, Market
Share Leadership & Quality
2. Other Marketing Mix elements
Product Influences the price level.
Eg- Higher the product quality, higher the price of the product.
3. Costs (Direct & Indirect Costs)
The cost of marketing and promoting the product will have direct impact on
the price. The marketer should mark price to cover up the cost.
4. Nature of Market Demand
(i) Perfect Competition – Where many buyers and sellers exists. Usually in this
companies should set their prices according to the competition.
(ii) Monopoly – Here the market consists of only one seller. Therefore the
seller can change any amount as the price of the product.
Eg – Ceylon Tobacco Company
FACTORS AFFECTING
PRICING DECISIONS
• External Factors
1. Competitors Price & Offer
Price is also determined by how intense the competition is in the industry,
substitutes and etc.
2. Environmental Factors
These factors are also very crucial for the company’s price decisions.
Eg – Government Laws and Regulations, Weather Conditions & etc…
3. Consumer perceptions of price and value
These factors will effect the pricing in long term
Eg – Expecting price of Consumers on Product or service (Iphone 7)
4. Price Elasticity of Demand
This defines as, the percentage change in quantity demanded to the
percentage change in price.
(i) Inelastic demand – Easy to change the market price. (Eg – Fuel, Monopoly)
(ii) Elastic demand – For a small percentage of price changes, there may be a
significant change in quantity ordered. (Eg – Demanded Product)
GENERAL PRICING APPROACHES
• Cost Based Products – Here the anticipated profit on product being sold is
added to cost of production per unit of the product.
• Break even Pricing – Here the firm tries to determine the price that will
produce the profit it is seeking. It is known as target pricing. Normally some
companies keep 10% to 20% profit on its investment.
• Value Based Pricing – Value based pricing users buyers’ perceptions of value,
not the seller’s cost, as the key to pricing. Eg – Fashion Based Products, BMW
• Competition based pricing – The price are set according to the competitors’
price
• Every day low pricing – Constantly low price. Eg – Cargills Food City
• High low pricing – This involves charging higher prices but running frequently
promotions to lower the prices. Eg – Samsung Mobile Phones
• Destroyer pricing – Charging very low prices where competitors can’t survive.
Eg - Monopoly
GENERAL PRICING APPROACHES
• Price Bidding – Winning a contract. In this approach, companies submit the
quotation according to the tender calls.
• Psychological Pricing – According to this even small differences in prices can
suggest product differences.
Eg – Consider a product priced at LKR 4899.99 rather than 5000.00 LKR
• International Pricing – Companies that market their products internationally
must decide the prices according to the countries.
• New Product Pricing Strategies
1. Market Skimming Pricing - charging a high price for a relatively short period
and lowered it when demand from “early adopters” falls.
Eg – Samsung High End Mobile Phones
2. Market Penetration Pricing – Set a low initial market price in order to enter
the market quickly and attract a large number of buyers quickly and win a
large market share.
Eg – Samsung Low End Mobile Phones
PRICING APPROACHES IN TOURISM INDUSTRY
• Rack Rates – This is the full rate before any discounts are applied and
typically is what is provided to wholesalers and printed on brochures for
the season ahead. however accommodation operators – particularly those
in the middle of the market will be changing pricing almost daily for the
month or 2 months ahead to fill gaps.
• Seasonal Pricing - Using a mix of pricing throughout the year to cover low,
high, and shoulder seasons is a standard way for tourism businesses to
cater for differing levels of demand due to the time of year.
• Last Minute Pricing - A common method for accommodation suppliers to
fill those last minute gaps in inventory availability, last minute pricing is
basically discounting daily prices according to forward bookings and
promoted on last minute booking websites.
PRICING APPROACHES IN TOURISM INDUSTRY
• Discounting - While discounting has its place, and often unavoidable in a
competitive market such as tourism, be very wary about continually
discounting your prices to stimulate demand. Consider adding conditions
to a discounted price like a minimum stay or number of travellers in the
booking.
• Package Deals - Strike up deals with local businesses to provide a full
package and share business with each other – you should be able to get
their products or services at a “net” rate so the package pricing is better
than if they had purchased each component separately. This Packaging can
also be used to target niche markets effectively. Eg - Golf weekend
• Commissions - Many bookings will come via some sort of third party who
will charge you a commission such as a retail travel agent, wholesaler,
inbound tour operator or online travel agent (OTA). But this should
actually be considered in the setting of your rack rates.
PRICING POLICIES
1. Price List
It is a base price of a product consisting various sizes and specifications. This is
a published statement of basic prices and given to the customers.
2. Trade Discounts
Trade discounts are offered to marketing intermediaries, such as dealers and
distributors. Further these trade discounts should be uniform to all industrial
intermediaries.
3. Quantity Discounts
A quantity or volume discount is given to customers who buy in large
quantities as well as this is a price reduction given by deducting the quantity
discount from the list price of the product. This is to encourage customers to
buy in larger quantities and maintain customer loyalty. The amount of quantity
discounts depends on demand, costs and competition.
PRICING POLICIES
4. Cash Discounts
Cash discounts are given to encourage customers for prompt payments. This is
applicable on gross amount (basic price + excise duty + sales tax) of the bill
and this is granted to customers who pay bills within a stated period from the
date of invoice.
5. Geographical Pricing
Employees
• Physical appearance, behavior, knowledge, grooming and attitude has a
powerful impact on customers perception of the tourism & hospitality
product.
• Ensure staff are trained to ensure the product or service is delivered in
accordance with the marketing strategic plan.
EVOLVING TOURISM & HOSPITALITY
INDUSTRY
• When a service is being delivered, the person delivering it is not unique from
the service itself.
• The level of hospitality given to the visitors will define and contribute to the
level of satisfaction of their experience.
• Operators must have top-level service to initially complete the sale and to
encourage repeat customers.
• When dining at a restaurant, if a rude waiter is encountered, the entire
experience will be labeled as bad service.
• This is why companies prefer well trained employees – to be polite pleasant
and positive
• Extent of training and knowledge of the product/service concerned
PARTNERSHIP
WHAT IS PARTNERSHIP????
Partnership refers to the common partners, usually being
governmental agencies. Where packages are jointly marketed, event
managers and partners will have to modify their prices of each product
to become more attractive and to therefore be able to sell well.
It involves the elements and the quality of style of the event.
For the Kandy Esela Perahera, there were not much activity
because it was an street performance where visitors are
allowed to sit, relax and enjoy their performances.
EVOLVING TOURISM & HOSPITALITY
INDUSTRY
Programming is basically customer-oriented activities designed
to increase customer spending or length of stay, or to add to the
appeal of packages…
Example - special events, festivals, special activities or etc..
One way to add value to the standard product and to distinguish
a particular offering from competitors is to offer exclusive
programming.
Customers will purchase a product that cater to their particular
interest. Special programming can address such preferences and
draw in additional customers.
Programming within the event is also a marketing decision,
especially by the way of creating targeted benefits for the
customers.
PACKAGING
WHAT IS PACKAGING?
• A package tour, package vacation, or package holiday comprises transport
and accommodation advertised and sold together by directly or by a vendor
known as a tour operator. Other services may be provided such a rental car,
activities or outing during the holidays.
• Packaging and distribution defines that business can either package events
with other attractions and services or offer them on their own.
EVOLVING TOURISM & HOSPITALITY
INDUSTRY
• The distribution network is important for the sales of tickets. In this factor,
intermediaries will be required for the sales, thus good relationship has to be
cultivated with packaging partners and intermediaries.
• Packaging should never be considered a random part of the marketing mix,
as it incorporates all other elements of your products and/or services.
• Your packaging is the signature you leave everywhere, and it has the ability
to attract today’s customers much better than outdated sales and
advertising tactics.
• Purchasing a package offers tourists convenience by reducing the amount of
time they will need to spend researching what the city/destination has to
offer.
ADVANTAGEOUS OF CHOOSING A
PACKAGE
• Cost Saving – The company offering you the holiday package is much more
aware of the best air fares, hotel tariffs and rates of every other thing.
• Zero Headache – Everything will be done on your behalf by the tour
operator and would simply be paying the charge.
• Complete Tour – Holiday packages are designed specially are major spots in
a place so that customers get best value for their money.
• Best Service – By opting for an all inclusive holiday package you can enjoy
the best of all services available at hotel/ destination.
Eg – Swimming Pool, Spa and Sauna, Safari and etc..
• Safe Travelling – Companies that offer tour packages are completely aware
of situations in a particular place, the risks and the safe zones. By planning a
trip on your own, may fall in trouble at unknown place.
• Planning – Tailor Made tours allows you to make your own planning and
inform the travel agent.
DISADVANTAGEOUS OF CHOOSING A
PACKAGE
• Traveling too quickly – May be it’s seems fun to see 5 cities in 7 days but in
reality the pace of the tour might be too fast.
• Lack of flexibility – You have to stick on their schedule. This means you can’t
decide where you go.
• Big Crowds – While on group tours, You’ll constantly be herded around in a
big group with little time to be on your own.
• Limited interactions with locals – You’ll see the sights but no the
personalities that make up the culture you’re exploring
• Communication – For any problem that is encountered, the first point is
always the travel agent. This may cause inconvenience especially for those
who travelling different countries.
THANK YOU!!!
SOURCE: INTERNET