Marketing Strategy and Communications HTM_ 2_MSC 2011/2012

Answer two questions, one from each section, in two hours. The exam is seen but no notes are allowed in the exam room. Students may bring into the exam room a full reference list which you may use to reference your answers. This list will be checked before the exam starts and should, therefore, contain no other information. Any lists contravening this rule will be confiscated before the exam starts. You should hand the list in along with your answers at the end of the exam.

Each answer should be at least four pages long. Fully referenced, structured and well argued answers are expected. Include at least ten academic or professional references. You should include examples/case studies to illustrate your answers.

1. Examine the range of promotional tools used by travel and tourism businesses and by destinations to reach their audiences. Discuss their strengths and weaknesses and provide contrasting examples of how they have been used to achieve results.
A good answer will: Explain the role of promotion within the marketing mix and at which point promotional techniques are employed. Summarise the range of promotions available to marketers in businesses and destinations. This could include advertising, PR, sales promotions, e-marketing, direct/database marketing, social media. It will assess the appropriateness, costs and benefits of each and look at how they can be used to achieve different outputs in relation to marketing objectives. It should highlight any differences between how businesses and destinations may use the same promotional tools and suggest what works best for each. This should also look at the importance of CRM and loyalty marketing. It should include the terms strategic and tactical, push and pull.

It should reference the standard course works of Kotler, Hudson, Middleton, Fyall et al, Vellas and Becherel

2.Critically assess the impact of user generated content on travel and tourism marketing and the industry response.
A good answer will: Define UGC and explain the growth of UGC and social media as part of the development of Web 2.0

Assess the impact of UGC on the way people purchase products, including travel. Growth in importance of word of mouth and decline in traditional advertising. Assess the benefits and disadvantages for buyers.
Assess the challenges for organisations eg commoditisation, the challenges in managing a brand in the era of instant communication and 24 hour media. The impact that this has had on how companies and destinations market themselves eg in engaging with social media and blogs, the change in marketing models from outbound and conversion marketing to inbound and advocacy marketing. The particular opportunities it provides business and destinations and how they have responded, including CRM, brand and reputation management.

Impact of UGC: new models of marketing

Source: VisitBritain 2010-2013 Strategy

Consumer - Online Activities On/After Holiday

Online Activities On/After Holiday, April 2011
On holiday 60 50 50 40 %
30 28

After holiday

43

26

24

23

24 12

20 10 0 6 4

Source: GMI/Mintel

Base:

1,148 internet users aged 16+ who have booked a holiday abroad in the last 12 months

Sources Reference the standard course works of Kotler, Hudson (see chapter 13), Middleton, Fyall et al. and draw on up to date data from research reports eg Mintel, Nielsen, on the impact of UGC on decisionmaking/purchasing. Press release from Neilson April 10, 2012 Ninety-two percent of consumers around the world say they trust earned media, such as word-of-mouth and recommendations from friends and family, above all other forms of advertisingan increase of 18 percent since 2007, according to a new study from Nielsen. Online consumer reviews are the second most trusted form of advertising with 70 percent of global consumers surveyed online indicating they trust this platform, an increase of 15 percent in four years. http://www.nielsen.com/us/en/insights/press-room/2012/nielsen-globalconsumers-trust-in-earned-advertising-grows.html On BB: Four BGB, Social Media Travel Insights, 2011. Tomorrow's tourist and the info society Yeoman and McMahon-Beattie 2006 Web 2.0 and the Travel Industry, Ellion UGC in tourism, LSE working paper 2011 Unleashing the Power of Social Media on Travel Global Briefing | 28 Feb 2011, Euromonitor International

3. Analyse the role of customer segmentation in travel marketing planning and illustrate your answer use case examples.
A good answer will: Define segmentation, the development of segmentation theory and practice in relation to marketing. Explain how segmentation is used in the travel marketing planning process. Compare and contrast types most used in the travel and tourism industry. Explore the strengths and weaknesses of each. Use extensive examples from the travel industry to illustrate how segmentation can be used effectively eg to inform product development, loyalty programmes, promotional activity. The answer should reference the standard course works of Kotler, Hudson, Middleton, Fyall et al, plus Cohen, Swarbrooke and Horner. It should draw on examples from destinations and businesses to illustrate the points. A poor answer will merely name the main segmentation types eg geographic segmentation, demographic, socio demographic and psychographic and outline the key components.

Why use segmentation in marketing?

Geographic, demographic, geo-demographic, behavioural, psychographic Helps you to: Understand the market Identify potential gaps Develop or amend products and services to differentiate from your competitors Target your marketing and minimise budget waste: micro-marketing, relationship marketing (CRM) Be competitive!

Requirements for effective segmentation

Measurable

Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served.
Segments are large or profitable enough to serve. Effective programmes can be designed to attract and serve the segments. Kotler 2003

Accessible

Substantial

Actionable

Key targeted CM campaign messages

Target 1 Luxury Travellers UK
A,B, C1

Internet

Target 2 Sport and Wellness Enthusiasts UK Internet

Target 3 Sun & fun Seekers UK Internet

Target 4 Exotic Explorers UK Internet

High Value GM Traveller

3554

Experience the exceptional

experience yourself in a completely different way

50K +
A,B, C1

Summer 2010 savings until March. Make it especially joyful and extravagant this year

Discover new cultures in new horizons

Low Value GM Intender

3554
50K +

unique retreat: time far out from the daily stresses

More exclusive more inclusive with Club Med

Your peace of mind and tranquillity are essential to us

Looking for a sense of discovery, excitement and adventure?

Negative Value GM Nonintender

A,B, C1 3554 50K + A,B, C1 Club Med luxury collection for your next far away getaway At least Club Med knows there is something medicinal about a beach vacation The pleasures of fine dining Enjoy your passion for sports

experience a truly exceptional holiday at one of our stunning locations throughout the world!

Choose club med for your honeymoon

Uncertain Value Unaware

3554 50K +

Winter sun exotic getaway

If you want happiness for a week or so go on a Club Med Long haul

4. Discuss how and why the fundamentals of the destination marketing plan will vary between business and leisure travel sectors. Use examples to illustrate your answer.
A good answer will: Outline the key components of destination marketing and the range of public and private sector organisations, networks and partnerships involved eg NTOs, DMOs, CVBs etc. Look at the differing aims and objectives of those marketing for business ie conventions/conferences and events and for leisure tourism. Look at the marketing challenges that each face these should be both macro (ie economy etc) and micro eg lack of ownership of the product. What solutions can be employed in the marketing planning process eg developing partnerships.

Look at the stages of the marketing plan and how these will change for each sector, depending on the differing aims and objectives. It should consider issues such as the differing nature of buyer behaviour (the role of gatekeepers in business travel etc).

It should reference the standard course works of Kotler, Chapter 7 and Chapter 18, Hudson chapter 12., Middleton, Fyall et al, plus Vellas and Becherel On BB: Ocean Center Marketing Plan, Puerto Rico Convention Center. Notes: Large number of players promoting destinations. (Many things help to form the perception of a country eg exports, domestic and foreign policy, how citizens behave when abroad, how they treat strangers at home, disasters, world media coverage, images from films, celebrities and sports stars Leisure marketing- The NTOs have influence but no control. Business marketing eg CVBs, conference centres. Sometimes public/private partnerships. (Decisions are made through the buying centre the group involved in making the decisions. Marketers distinguish 6 buyer roles: Initiator/User Influencer - technical personnel Decision-maker chooses the final products and services Gatekeepers controls the flow of information Approver account holder/pays the bill Buyer- selects suppliers and negotiating terms)

Notes: business sales/marketing

Transactions are more complicated, involve more players Buying involves bulk purchase; negotiable prices Often more rational and more likely to seek information about a products features and technical specifications eg planning a major conference Emphasis on reliability, service, past performance; branding of little relevance High effort/can be low repeat; concentrated markets

Can have large impact on a destination eg demand on services; price distortion; but can improve seasonality Marketing activities focus on: Direct promotion to organisers/planners Familiarisation visits or educationals; media/fam trips; opinion leaders visits Hosting trade events/trade fairs acting as a show case Exhibiting at trade fairs eg World Travel Market, ITB/Berlin Travel trade training programmes; travel workshops bringing the agents and operators together Core issues: the economy/shrinking meetings, but increase in sports and events; emerging focus on sustainability; the changing profile and needs of business travellers.

5. Discuss why it is important for the travel marketer to influence the delivery of the marketing promise. Use examples of good practice to illustrate how this can be achieved.
A good answer will: Outline the challenges facing marketers: the travel product as an unseen purchase; multiple touch points for the consumer in experiencing the whole product. Outline the dangers and costs of not meeting expectations (cognitive dissonance): the costs of managing unhappy customers, the lack of repeat business and lifetime value. Outline the points at which delivery of the marketing promise can fail. Discuss the role of the three additional Ps within marketing planning, ie people, process and physical evidence, to address this. Illustrate the techniques available eg the role of service delivery, internal marketing, implementing quality standards, destination management/improving the public realm, increasing skills and training, understanding and responding to satisfaction levels, CRM etc.

It should reference the standard course works of Kotler, Hudson, Middleton, Fyall et al, plus Parasuramam et al, Gronroos

6. Analyse the main stages of consumer decision-making in travel purchasing. Give examples of where marketers can employ specific techniques to influence these stages and therefore help drive bookings.

A good answer will: Outline the models and typologies of buying behaviour including motivations, Maslow, needs v. wants. It will discuss major influences on travel purchase eg cultural, social, personal and psychological (including eg friends and family, internet). It will show an understanding of hierarchies of effects processes and models such as the Communications Life Cycle and AIDA. It will also look at typologies of travellers eg Plog and Cohen. It will look at the main types of demand behaviour (complex, high involvement etc) and the stages in buying process eg Mathieson and Wall (identifies need, looks for information, compares products/assesses risk (financial, social, psychological, performance, physical); purchases product, uses product).

 It will then discuss the techniques to influence behaviour eg: understanding the consumer through segmentation; reducing risk through brand/reputation management; driving demand through pricing, the importance of CRM in the tourism industry It should reference the standard course works of Kotler, Hudson, Middleton, Fyall et al, plus Swarbrooke and Horner, plus Plog, Cohen.

Model of consumer decision-making in travel (Mathieson and Wall 1982)

Identifies a need or want
Information collection

Travel satisfaction outcome and evaluation

Travel preparation and experience

Product comparison; risk assessment (financial, social, psychological, performance, physical)