Information Communication Technology in the marketing of New York City Tourism

2142 words (9 pages) Essay in Marketing

23/09/19 Marketing Reference this

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Title: Information Communication Technology in the marketing of New York City Tourism

Introduction

 

The intensive use of Information and Communication Technology (ICT) in marketing makes the organization innovative. It helps them perceive that the usage of ICT breaks down the barriers to innovation and speeds up the process that makes them more efficient. In the tourism sector, ICT has brought transformation globally since the 1980s (Buhalis and Law, 2008).

Over the last two decades, companies have been modifying their business models and rearranging their organizational strategies in order to develop productivity (Achrol and Kotler, 1999; Prasad et al., 2001; Trim, 2002). Consumer is considered to be the most essential element of a market-oriented business strategy (Schulze et al., 2001). The internal strategic elements of an organization consists of ICT, relationships and knowledge (Gronroos, 2000; Ravald and Gronroos, 1996; Vorchies et al., 1999). To help boost a consumer’s process of value creation, an organization must be able to properly manage the marketing and innovation strategies for achieving success (Achrol and Kotler, 1999; Badaracco, 1991; Webster, 1992). By innovation, product innovation is a fundamental aspect in the process of value creation (Han et al., 1998; Weerawardena, 2003). Thus, it is pointed by Froehle et al., (2000) and; Schilling and Hill (1998) that innovation or upgradation of a product improves a firm’s competency and it assures the increase in consumer’s satisfaction and loyalty (Atuahene-Gima, 1996a, b; Vorchies. et al., 1999). However, product innovation is not that simple and a company requires to pay equal attention to other aspects such as; product launch time and market requirements while managing the process of product innovation. In addition, total integration of marketing with the process of product innovation is recognized as the most significant (Leenders and Wierenga, 2002; Li and Calantone, 1998). Here, ICT plays a major role in the success of new product development (NPD) processes (Vilaseca-Requena, Torrent-Sellens and Jiménez-Zarco, 2007).

The revolutionary use of ICT in the marketing function has been one of the most beneficiary as it proves to be advantageous in terms of competition for growing their outcomes (Bond and Houston, 2003; Prasad et al., 2001; Roberts, 2000; Tatikonda and Stock, 2003; Tzokas and Saren, 1997). ICT is also used for acquiring and generating market information. It is considered reliable when learning about environment as it helps the organization gain latest and pertinent data quickly, easily and cheaply (Argyres, 1999; Tzokas and Saren, 1997).

Market Segmentation

Segmentation is considered as one of the most significant marketing management objectives (Kotler and Keller, 2006). Marketers need to identify and review various group of consumers who differ in their needs as well as preferences and select more than one market segments to target (Kotler and Keller, 2006). The benefit(s) of an organization’s market offering must be established and communicated for each target segment.

According to Kotler and Keller (2006) market segmentation is useful when segments are rated favorably on five key criteria. Segments have to be measurable, substantial, accessible, differentiable, and actionable.

ICT, and especially the internet, has played an essential role in transforming the ways companies indulge into marketing (Chaffey et al., 2006). According to Chaffey et al., (2006), marketing with the help of internet is highly interactive, intelligent, individualized, integrated, and independent of location than conventional marketing. In addition to that, ICTs also empower the consumers to identify, customize and purchase tourism products as well as support the globalization of the tourism industry (Buhalis and Law, 2008).

e-WOM

According to Litvin et al., electronic word of mouth (e-WOM) is defined as, “all informal communications directed at consumers through Internet-based technology related to the usage or characteristics of particular goods and services, or their sellers. This includes communication between producers and consumers as well as those between consumers themselves.” (Litvin et al., 2008, p. 461)

Word-of-mouth is regarded as an important source of information especially in the hospitality and tourism sector because of the intangible nature of their products which is difficult to evaluate prior to their consumption (Litvin et al., 2008). The online interpersonal influence (Senecal and Nantel, 2004) or eWOM is the digital, the large-scale, anonymous, ephemeral nature of the internet which induces new ways of capturing, analyzing, interpreting, and managing online WOM (Litvin et al., 2008).

In simple words, WOM allows consumers to share information and opinions influence other potential consumers whether or not to consume specific products, brands, and services (Hawkins, Best and Coney, 2004). The reason why consumers spread WOM is due to the affective elements such as, satisfaction, pleasure, and sadness motivates them to wish to share their experiences with others (Ditcher, 1966; Neelamegham and Jain, 1999; Nyer, 1997). Further, many people find sharing their post-trip experiences as joys of travel.

The concept of eWOM arises with the increasing use of Internet technologies among the travelers for seeking information about the destinations as well as conducting transactions online.The internet has introduced various platforms which enables the providers as well as consumers to share information and opinions both from Business to Consumer, and from Consumer to Consumer.

In the hospitality sector, managers must pay attention to the importance of influence online reviews have on potential tourists in order to promote their destination. O’Connor (2010), one of the numerous authors (Kim and Park, 2017; Sotiriadis, 2017; Wu et al., 2017) suggest that mangers can monitor the common causes of travelers’ satisfaction and dissatisfaction and work with them to re-create their brand image in a better way. On the other hand, Ladhari and Michaud (2015) recommends that the hotel companies can work with social media specialists who observe online postings and discussion boards to manage the organization’s brand image who can respond with retaliation to the negative information conveyed by users.

 

Use of social media in hospitality management

Strategy –social media and electronic word-of-mouth as a part of overall marketing strategy.

The importance of incorporating social media and e-WOM into an overall marketing strategy in the Hospitality Sector

 

Segmentation: It allows the marketers to divide (segmenting) the potential market into similar sub segments such as, lifestyle segments, benefit segments, and geographic and demographic segments. Each of these sub segments possess unique characteristics and needs, and are targeted accordingly. (Litvin et al., 2018)

The emergence of social media along with the social networks give managers the authority to segment the tourism market (Tsiotsou et al., 2012). Segmentation strategies are formed on the basis of these social networks where travelers share their preferences and interests (e.g. ecological tourism, backpacking tourism, dark tourism, etc). A concept of “socialgraphics” was proposed by Owyang (2010), which suggests that a business should segment customers and potential customers on the basis of social network. The types of social media they use, the types of social information they rely on, their degree of social influence and their level of engagement with social media, with these further classified as curating, producing, commenting, sharing and watching.

To be successful in this digital age, hotel marketers are required to facilitate their online social behavior according to these different levels of social engagement (Owyang, 2010).

Customer Relationship and Brand engagement: Ever since the “marketing concept” was formulated and adopted as the road to profitability, managers have been driven to make customer satisfaction the central goal of their marketing strategy (Litvin et al., 2018). Marketing concept states that the companies to focus on customers first and understand their needs. Since profit depends more on long-term relationships with customers than from one-off sales, building a relationship with customers has become a chief goal of marketing management (Reichheld and Teal, 1996).

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Benefits of ICT application in the Hotel industry

ICT application has many advantages in the travel and tourism sector which is validated by a large amount of studies, referring e.g. to the annihilation of the traditional barriers beforehand, such as geographical limitations and time, which by using the internet, are overcome by purchasing tourist services online and searching for information (Buhalis and Main, 1998). Because of the impact of online reviews through ICT (Electronic word-of-mouth –eWOM) about hotel consumers behavior, hotel selection factors can be larger. ICTs allow a two-way communication between the consumers and the hotel industry, which means the impact on hotel and promotion sales is growing (Buhalis and Jun, 2011). The services of hotels have improved advertising via the internet as opposed to published leaflets or catalogs. Multimedia message entices customers more. ICT’s also allow more recognition of a consumers’ profile thus offering personalized services.

Plenty of researchers acknowledge advantages that are associated with new ICT to incorporate reduction of the cost of operation for business, convenience of consumers and the fast pace of transactions completed (Parsons and Oja, 2013). It allows spreading the marketing message at a fast rate, with minimal cost. The costs of transaction for the hospitality sector enterprises are significantly reduced and any geographical barriers created by distance (through processing, distributing and accumulating proper data) are eliminated, which were vital to control processes in the business and, in that sense, a strong development for a company (Minghetti and Buhalis, 2009; Buhalis and Law, 2008; Buhalis and Song, 2003). ICT’s provide a wide array of solutions that influence the increase in efficiency levels of economic processes in the sector of marketing and sales.

The usage of ICT increases the efficiency of functioning of enterprises, because it speeds up management procedures and upgrades both the quality of economic operations performed and the efficiency in an enterprise. Since modern information technologies were introduced, better advantage of resources is at the disposal of a hotel enterprise, whereas their rapid development appoints the need for making investments and reorganizing enterprises. Information technologies alter the nature of connections between the chain links and influence the efficiency of particular economic process and as a result, this opens new possibilities for meeting customers’ needs, in terms of both the price and product (presenting the customer’s expense), promotion (constituting the form of an enterprise communication with the method and the market for providing information to consumers) or exchange (responsibility of the purchase convenience) (Kotler, 2005). Thus, e-technologies are crucial for improving the product form usefulness, also the time and place of purchase. The adaption of ICT helps and supports the value of creation processes through the merchandising solution focused on Dynamic Packaging Tool. This solution provides hotel customers a chance to design their tourist product (e.g. Service package of hotel) in relation to their individual preferences. Dynamic packaging is created from an individual consumer request, involving the ability to combine many components like type of hotel room, staying time, special wants associated with facilities in room, any food allergies and any other hotel related component in minimal time (5-20 seconds), and creates a single, fully priced package, that requires just one payment from the consumer whilst hiding the individual components separate prices (Schmeing, Cardoso and Femandes, 2006). For contemporary customers, the Internet’s importance is a key component for the source of knowledge about a product, the enterprises that do not produce any information about their offer on the virtual marker (value in the form of information) will lose their competitive position rapidly. With the development of the internet, the level of communication provided opportunities as a result of which the message created by advertising gained new functionality and hence attractiveness, which, as a result, equals effectiveness (Fedorowicz, 2009).

The new ICT has a significant impact on hotel productivity, service quality and innovation and employee satisfaction. So, they create a greater competitive advantage into hotel enterprises. Inside the corporate environment, characterized by a growing competition, ICT provides an impression of important factors responsible for permanent competitive advantage and a compelling defensive mechanism for a corporation (Buhalis and Deimezi, 2003; Strielkowski, 2012; Buhalis and Kaldis, 2008). The ICT-based competitive superiority can be accomplished by hospitality companies through maintaining effective communication with various organizational stakeholders, unique viral marketing campaigns and a large amount of other ways (Michalić, Praničević and Arnerić, 2015).

References

 

  • Vilaseca-Requena, J., Torrent-Sellens, J. and Jiménez-Zarco, A.I., 2007. ICT use in marketing as innovation success factor: Enhancing cooperation in new product development processes. European Journal of Innovation Management, 10(2), pp.268-288.
  • Atuahene-Gima, K.,1996a. “Differential potency of factors affecting innovation performance in manufacturing and service firms in Australia”, Journal of Product Innovation Management, Vol. 13, pp. 35-50.
  • Atuahene-Gima, K.,1996b. “Market orientation and innovation”, Journal of Business Research, Vol. 35, pp. 93-103.

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