After determining the main characteristics of the clients, the hotel/ restaurant manager should develop a marketing plan, which meets the needs and expectations of current and future guests. The most essential part of it represents the marketing mix. To be successful and profitable, it must include the key elements shown in the graphic below:
- Tourist product/ services/ facilities;
- Pricing of the tourist products;
- Place and distribution;
- Promotion and communication.
Product
To know what product to offer to your customers is an essential element of marketing planning. The definition of the product includes answers to the following questions:
- What products/ services will be available?
- What are its characteristics and advantages?
- How does this product meet the customer needs?
- How will the quality of the product be maintained and monitored?
- What added value will the product/ service have for the community?
- What product can I offer from my place/ area?
- How can my service/ product protect the environment?
The tourist product is a complex of different types of services that meet the most varied needs of people.
The tourist product is actually a combination of tangible and intangible components: resources and attractions; conditions and infrastructure; services and activities; imaginary beliefs and values that bring benefits, which are attractive for given groups by meeting their motivations and expectations regarding their leisure time.
The tourist product is being constantly developed and implemented according to the Marketing principles. Therefore the introduction of innovative elements is essential for successful delivery and demand for the respective tourism product/ service. Innovation must be evident in the whole process from the invention to the realization of the touristic product its marketing and management.
Tourist services take the predominant place in the touristic product. They can be grouped into two areas:
- Main tourist services (meals, accommodation and transport)
- Additional tourist services – sports, medical, recreational, cultural and others.
The main tourist services meet secondary needs, which are essential for tourists. In modern tourism, however, their share declined in favor of additional services.
Today, excellence in tourism can be successfully achieved through a variety of additional quality services that rationalize travel, enrich and diversify the time for rest or holiday.
A key concept in the analysis of the product is the life cycle or the period from the emergence of the idea of creating new or improving existing product to its exit of the market due to the exhaustion of its ability to satisfy the corresponding need.
All products, like people, grow, flourish and decline. Tourist products, which are strongly influenced by fashion trends and changes of tastes must always keep pace with changes in demand.
Did you know that hotels and restaurants are recommended to update their external appearance and their interior every 5-7 years?
PRICE
Price considers not only monetary terms, it is an integrated part of product’s positioning. It provides indirect information about the nature, quality and competitive features of the product. Prices are influenced by three main factors:
- Market or demand – the price should be determined according to the type of visitors you want to attract.
- Competition – the price is determined according to the availability, access and competition.
- Costs – the prices should be set in line with the cost. These costs vary depending from the size of the tourist SMEs, but typically consist of: costs for construction, repair and maintenance; wages (often the largest expense in the tourism business), costs for research and product development, distribution and promotional expenses, and others.
How to choose the right price? Once you have evaluated the three main factors, you can determine your price doing the following:
- Determine the minimum price you should receive to cover your costs;
- Set the upper limit or the maximum price, taking into account the competition, costs and expectations of guests.
- Select a price in the middle between these two.
PLACEMENT
A tourist company can have a good product with suitable price, but it has to take care of how to make it accessible to the client. There are four methods to place the products to the end users:
- In place of consumption: the traveler is located near the tourist company. The customer arrives “at the door” to make a reservation or purchase a voucher.
- By direct advertising in the country / region where the user is located, for example via the Internet sites. Tourists are increasingly booking their holidays and trips from home or office computer. IT is a crucial tool allowing small tourist organizations to seize the opportunity for direct advertising to customers where they are located.
- By intermediaries such as travel agencies and / or tour operators – in most cases, small companies providing services for accommodation and food, rural regional products do not participate in the package offers of mass tourism, but there is a possibility that some of these products are distributed through brochures of specialist tour operators (e.g. wineries for wine tourism).
- By local intermediaries (destination managers) in the region, where the relevant hotel / restaurant is located – mainly done through tourist information centers (TICs). TICs are a good option for small tourist businesses to promote and distribute their products.
PROMOTION
The most popular promotion type is an advertisement. In essence, it is a paid form of impersonal communication through media.
The main functions of advertising are to:
- Promote the company’s products
- Stimulate demand
- Counter the advertising of competitors
- Increase sales.
A typical advertising campaign has the following stages:
- Determination of the advertising purpose;
- Create advertising platform;
- Determination of the advertising budget;
- Creation of an advertising message;
- Ad campaign;
- Evaluation of effectiveness.
Nowadays, online promotion and marketing on the Internet is among the most used resources, whereas traditional forms of advertising are already in the stage of decline. It has the following characteristics:
- Allowing small and newly established companies to reach consumers worldwide;
- Increasing the speed at which marketing activities are carried out at a much lower price than traditional marketing;
- Providing new methods and tools to measure the effectiveness of marketing activities and allowing for the monitoring customer behavior, so as to bring the necessary adjustments to the company’s approach;
- Allowing personalization;
- Allowing businesses to provide web-based services to its clients and partners 24 hours a day, 7 days a week.
The Internet facilitates a dialogue between sellers and buyers. Internet offers the largest variety of promotional tools. It includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising (including web banner advertising), and mobile advertising. Like other advertising media, online advertising frequently involves both a publisher, who integrates advertisements into its online content, and an advertiser, who provides the advertisements to be displayed on the publisher’s content. Other potential participants include advertising agencies who help generate and place the ad copy, an ad server which technologically delivers the ad and tracks statistics, and advertising affiliates who do independent promotional work for the advertiser.
According the delivery methods there are ten different online advertising practices:
- Display advertising
- Web banner advertising
- Frame ad (traditional banner)
- Pop-ups/ pop-unders
- Floating ad
- Expanding ad
- Trick banners
- Web banner advertising
- Interstitials
- Text ads
- Search engine marketing (SEM)
- Search engine optimization (SEO)
- Sponsored search
- Social media marketing
- Mobile advertising
- Email advertising
- Chat advertising
- Online classified advertising
- Adware
- Affiliate marketing
- Content Marketing
Many common online advertising practices are controversial and increasingly subject to regulations in the different countries.
The manager/ owner of a small hotel/ restaurant can select one or more of the following forms:
– Frame ad or web banner advertising – a visual element with advertising content appearing within the website of the media for advertising. A banner can be updated continuously and is flexible in its structure and content.
– Multimedia Advertising – using classical forms of advertising – video and audio clips, relying on the advantages of the Internet as a channel. Relies entirely on the willingness of the consumer to see/ hear advertising because it is only activated when clicked (download).
– Text advertising – advertising through text containing hyperlinks to the advertiser’s website. Often underestimated by advertisers, although its effectiveness in a good location, by quality content and clever messages is very high.
– Mini-site/ interstitial page – created for a specific advertising campaign; this is usually a web page with static maximum 4-5 links. Used to promote individual products and services offered by the same advertiser. The corporate website of a tourist company contains a database with the entire product range and the mini site or the interstitial page advertises a particular product at a particular time. Such advertising aims at product promotion on the market and at increasing its sales.
– Email Marketing – using e-mails to reach the target groups, even to a specific user. It is personalized communication between advertiser and client.
A successful and affordable form of advertising on the Internet is the development of a joint website with companies, organisations and representatives of the tourism industry in your region. Sometimes advertising your tourist destination through a well-developed joint website brings more guests and impact than by your own Internet page.
Problems in selling products on the Internet
Various strategies are used to attract guests to buy online. However, there are some principles for successful online advertisement that should be followed. Frequent mistakes are: Poor design; selection of a bad text format; too many ads; using too many effects; lack of personal data / connectivity methods; inappropriate arrangement of the information; too much fluff product that does not excite buyers; low speed opening, difficult navigation – those are among others the main barriers for the successful online advertising and marketing.
How to avoid such problems?
Before you start your own site, sit back and think about its vision and the impression you would like to make; think about the way to provide information to customers.
The presentation of information is a very important element in selling online.
Every detail must be thought out and the best way of ordering should be chosen!
Do not forget the actual contact details!
If you point out any e-mail address, do not forget to check it regularly and reply to possible requests!
And, last but not least, the other elements of the marketing mix, which are crucial for the tourist product/ service:
People, Physical evidence, Process:
- People – this is the team/ personnel delivering the product/ service;
- Physical evidence or facilities – the tangible evidence to confirm that the product can be delivered and used (e.g. hotel building, interior, equipment, furniture, etc .);
- Process – the way services are provided as a set of activities.
When examining the potential for a new business or product, a SWOT analysis can help to determine the likely risks and rewards. SWOT analysis, which stands for Strengths, Weaknesses, Opportunities and Threats, is an analytical framework that can help a company in facing its greatest challenges and finding its most promising new markets. The SWOT analysis has been the first and foremost step in the development of a successful product. It contains analysis of existing product according to its:
- Strengths – or which are the strongest advantages of a product/ service;
- Weaknesses – or which are the weakest disadvantages of the product/ service;
- Opportunities – what opportunities are available for the success of the product/ service;
- Threats – or what risks could endanger the product/ service.
This project has been funded with support from the European Commission.