India As A Tourist Destination Tourism Essay

The term ‘marketing’ has a very important meaning in the area such as retailing, branding and other similar areas such as event marketing. On the other hand, marketing in tourism and hospitality sectors are still legging comparing with the other areas. In this paper, different elements of tourism marketing will be explained with the help of understanding the concepts of marketing theory and research within tourism and hospitality sectors (Williams, 2006). Tourism is broadly defined as a business activity which is connected with providing accommodation, service and entertainment for people who are visiting a place for pleasure, recreation, leisure, business and so on (Chaudhary, 2010). It becomes an integral part of today’s lifestyle. Hence, tourism marketing is also one of the important sectors where more effort and concern has been given to increase the standard of tourism all over. The reason behind this new trend is due to the increase of cross-cultural activities and due to the passion of people for visiting new destination. Also, the volume of tourism activity and the value is increasing compare to holiday destinations. This creates an inconsistency between tourism demand and supply, thereby creating under-utilized tourism capacity (Kaynak & Kucukemiroglu, 1993).

Position: Scope and the Objective of the study

This paper discuss about the different marketing concepts which are used in tourism marketing and their application to generate different marketing strategy. In this paper, India has been chosen as the holiday destination. Hence all the research and analyze has been done to identified different marketing strategies to increase and promote Indian tourism all over.

Scope and Objectives:

The objectives of this research are as follows:

To study the theoretical framework for marketing in tourism and the concept of marketing strategy in the tourism industry this includes: PEST analysis, marketing mix, segmentation, targeting and positioning.

Conduct surveys and analyze India as a holiday destination and compare it with other holiday destination

To explore the perception of India as tourist destination

Global Tourism Industry

Today’s era, the tourism Industry is booming all over the world. Tourism has become one the significant ingredient of mankind. A new tourism industry is rising which is driven by new consumers, new technologies, new ideas and new management techniques (Poon, 1993). The opportunities in the tourism industry are increasing with time and it is considered that at the end of 21st century, the tourism industry will generate more than 500 million employments whole over the world which will results in the increase of GDP by the tourism industry upto 15% (LCS Parking, 2012). Emerge of special marketing concepts including special tourist segments where the special segment refers to the “the provision of customized leisure and recreational experiences driven by specific interests of individuals and groups” (Sung, 2004) increases the number of tourists all over. According to the UNWTO World Tourism Barometer, despite of economic crisis in some of the major outbound markets around world, the total number of international tourists travel between the January to April 2012 is more than 285 million which indicates a growth of 5.4% compare to the last year (UNWTO, 2012).

The main consideration of the World Tourism Organisation (WTO) is to provide with the best possible facilities and service for a distinct and specific need of the tourists (Sung H. H., 2004) and ensure benefits for consumers, business, local people and the environment. To provide the best facilities there is an immense change in the Tourism Industry (World Travel & Tourism Council, 2012). The infrastructure and accommodation is one of the key sectors of the tourist industry. Even the advanced and sophisticated communication technology helps the actual and potential tourists all over with their expectations, personalities, and ever-changing needs (Pyo, Uysal, & Chang, 2002).

Expected Result of the study

Literature Review

A General Overview of Tourism

What is Tourism Marketing?

A product can be ‘idea, goods, or service’. Since the tourism industry is primarily a serviced-based industry, the main products provided by tourism business are recreational experiences and hospitality. This are intangible products and much more difficult to market than the tangible product. The intangible nature of services makes quality control difficult but crucial. It also makes it more difficult for potential customers to evaluate and compare service offerings (Chaudhary, Indroduction to Tourism Marketing, 2012). In addition, instead of moving the product to the consumer, the customer must travel to the product (area/community). Travels forms a significant portion of time and money spent in association with tourism experiences and is a major factor in people’s decisions on whether or not to visit a place (Vukonic, 1983).

Tourism marketing or the marketing in relation to tourism means the process of achieving voluntary exchange between:

Tourist who want to appreciate/ experience product and service.

Organisations which put together and offer the product and service.

The WTO defines tourism marketing as a “management philosophy that in the light of tourism demands makes it possible through research, forecasting, and selection to place tourism product on the market most in line with the organization’s purpose for greater benefits”.

Nature of Tourism Marketing

Marketing is different perspectives that provide an understanding of the nature of marketing and tourism marketing (Panda, 2009).

Marketing is an activity:

Marketing is explained as an activity that is carried by a marketer to give its offer to customers. For example, marketing of a tour packages involves assembling the package, promoting it, and arrange it for sales. The focus in this perspective is to make the activity cost-effective and efficient.

Marketing is an economic process:

Marketing generates revenues directly through transactions and indirectly through its multiplier effect and employment generation. Here efforts are made to maximize economic benefits. Tourism marketing in its initial phase focused on economic benefits.

Marketing is a social process:

Marketing as a social process involves interaction and relationship between participants coming from different walks of life and society. The social process make host-guest relationship an important part of tourism marketing. Right to travel and pro-poor tourism have developed in response to the different social process.

Marketing in managerial process

Marketing is considered to be a business function that undertakes all managerial functions of planning, organizing, directing and controlling to carry out different activities.

Overall, marketing can be combined together. It can be the economic, social, managerial process and activity at the same time. However, its different natures may dominate at different times.

Process of Tourism Marketing

Tourism marketing is a cycle process that begins with the understanding of drives, needs, wants and demands of tourists who are satisfied through suitable offers by entering into an exchange process with the marketers. The feedback of exchange is used by both the parties for the future relations. The different elements of a cyclic process give an insight of tourism marketing.

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Fig: Tourism Marketing Process

Understanding Needs, Drives, Wants and Demands of Tourists

It is very important to know the tourist behavior as it will helps in delivering desired satisfaction. This begins with the identification of their needs, drives, want and demands.

Need:

Need is the felt gap between the existing and the desired state. Need motivates a person to act when it reaches the threshold level and it can be both physical and psychological. Marketers identify the need of people that direct their tourism behavior and offers alternatives to satisfy their needs. Maslow’s framework can be used to understand these needs. It divides the human needs into five categories of physical, safety, love and esteem and self-actualization. Tourists need a minimum acceptable level of food and accommodation at a place before travel. Safety need is reflected in the form of tourists’ need for law and order. That makes tourists avoid places of war, terrorism and conflicts. Need for love is the acceptance of tourists in the host society. In most of the cases, tourists prefer open societies than closed one. Esteem needs are tourists’ expectation that the host society would understand their importance and recognize the same. Lastly, self-actualization is undertaking trips that always been dreamt.

Drive:

Drive is the force created by needs. Unsatisfied needs create tension that drives the consumers to look for solutions. These solutions take the form of specific products. Buyers search for the best solution for their needs. The stimuli present in the environment give direction to drive.

Want:

Want is an expression of need in the specific form. Want are the thing which someone like but not really necessary. The need of recreation, leisure people generally tend to go for holiday. Marketers fit into the want framework other by redesigning offers or by assisting buyers in learning about new forms of product, services or idea.

Demand:

Demand is want accompanied by the purchasing power. It decides if the buyer has enough money to purchase. Demand changes with prices, substitutes, marketing efforts, inflation levels,

income, etc. Demand can be created by building the purchasing power. For instance, when the demand for air travel has gone up than companies has introduced budget airlines.

Growth of Tourism Marketing

Tourism marketing evolved with the growth of tourism. The concept of tourism is very old, but its modern organized form started in the eighteenth century. Earlier, travel was undertaken for business and religious purpose. Tourism as a full- fledged a full- fledged business did not exist. Its marketing started with the first organized tours offered by Thomas Cook in 1841.

Evolution of Tourism Marketing:

Tourism marketing and its orientation has changed with the growth of tourism. Internationally, tourism came of age in 1950 and since then has seen a continuous change in the approach towards its development (Wang & Pizam, 1998). The stages of tourism development and the corresponding marketing approaches are discussed below.

Boosterism approach in the 1950s:

It was the beginning of modern tourism and the emphasis was on boosting the tourism activity. This approach was based on the following assumptions towards tourism.

Tourism is inherently good and should be developed.

Cultural and natural resources should be exploited for tourism develop

Economic Planning approaches in 1960s:

As a result of the efforts of the earlier phases, the economic potential of tourism was well understood and new assumptions towards tourism were as follows.

Tourism is like any other industry.

Tourism can be used to create jobs, earn foreign exchange, and improve terms of trade, encourage regional development, and overcome economic disparities.

Physical and spatial approach in the 1970s and the 1980s:

The earlier approaches resulted in the massive growth in the massive growth of tourism. Mass tourism was not without consequences and its negative impacts on environment became visible and well known. This changed the earlier assumption of it being inherently good and harmless and new assumptions were formed. These were as follows.

Tourism is a resource user. It exploits and destroys the natural resources used as tourism attractions.

There has to be an ecological basis for its development to preserve the natural resources and tourism attractions.

Tourism development can be geographically distributed to reduce the impacts.

Community approach in 1990s:

As tourism continued to developed, their social impacts were noticed. Particularly the local communication felt alienated. There were inconvenienced by the growth of mass tourism and were not in a position to decide on tourism development. As a result, tourism was opposed. It led to the focus on the following assumptions.

Local community control on tourism development in the area is needed.

Need for balanced development of tourism and search for alternatives to ‘mass’ tourism.

Social impact of tourism on a community and their attitudes toward tourism should be understood.

Sustainable approach in the 1990s:

Large-scale tourism development forced tourism planners to think of tourism development in a more holistic manner where the economic, environmental, and socio-cultural issues could be balanced. The concept of sustainable tourism was adopted for this purpose.

The assumption for this approach is that a suitable balance must be established between environmental, economic, and socio-cultural dimensions of tourism development to ensure its long-term sustainability. Marketing orientation too becomes socio- environmental to balance the interests of tourism, marketers and the environment (Verbeek, Bargeman, & Mommaas, 2011).

Marketing Concepts for Tourism

The marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than the competitors do. Under the marketing concept, customer focus and value are the two important paths to sales and profit. Hence, the marketing concepts depend on the determining the needs and wants of target markets and delivering the desired satisfactions more effectively than competitors do (Kotler, Armstrong, Wong, & Saunders, 2008).

Different marketing concepts are used in tourism industry are as discussed below.

PEST Analysis in Tourism Market

It is important to know about the market environment first for any marketers. In tourism this competition is fiercer, since the competition is almost in the destination of various states as well as countries. Market environment refers to the constitute forces which exist in the environment and influence the customer decision making. For scanning the tourism-marketing environment in India, the PEST (Political, Economic, Social and Technological)

Political Environment: Political environment influence tourism marketing through pressure groups, policies, rules and regulations, and legislation (Bennett & Strydom, 2001).

Pressure Group: These groups in society use political influence for the furtherance of certain issues. Green groups work for ecotourism, consumer group for tourist protection, cultural groups for protection of heritage and culture, industry groups for reduction of taxes and so on. These try to influence law-making bodies to create a suitable mechanism to address their concern.

Law and Policies: The government regulates tourism with the help of laws that govern its different sector. The government creates policies as guidelines to provide direction for the development of tourism. For instance, the Tourist Policy 2002 guides tourism growth in India.

Rules and Regulations: Rules regarding land allocation for hotels and tourism development, tax concessions, permits, registrations of tour operators and travel agents, open sky, budget airlines, and tourism police gives a direction for tourism growth.

Economic Environment: The general economic environment of a country influences any economic activity.

Growth of new sector: Growth of new sectors, such as information technology (IT), travel and tourism, retails and banking has given jobs to young people. This income is finding its outlet in recreation, including travel and hospitality.

Growth of economy: Growth of new sectors lead to growth of economy.

Easy availability of foreign exchange: Increase of foreign tourism leads in increase of foreign exchange.

Social Environment: The social environment decides buying patterns of the tourists and the response of the society to tourism. The socio-cultural environment of a place decides the holiday choices regarding the type of destination, activities, duration of holiday, expenditure pattern and so on.

Group behavior: Indians are group oriented. This makes group travel acceptable and likable. The reference group in framing opinions is also very important.

Lifestyle changes: Globalizations has changed the lifestyle of people. People take tours frequently for a change and rejuvenations.

Technological Environment: Technology has completely altered the way the tourism business is conducted.

Transportation: Transportation technology has given faster and better vehicles to facilitate the movement of tourists to far off places.

Information and communication Technology (ICT): Major changes have been introduced by information and communications technologies in tourism. Internet and online distribution systems have been improved.

Marketing Mix in Tourism Market

Tourism Product

Tourism product is a mix of tangible and intangible elements. Kotler (1984) conceptualizes ‘product’ as “anything that can be offered to a market for attention, acquisition, use, or consumption that, might satisfy a want or need. It includes physical objects, service, persons, places, organization and ideas”. This takes the concept of product beyond physical objects and can very well include tourism.

Medlik and Middleton (1973) conceptualize tourism product as a bundle of activities, services and benefits that constitute the entire tourism experience. The bundle consists of five components: destination attractions, destination facilities, accessibility, images and price. According to Smith (1994) a tourism product consists of five elements in a series of concentric circles. The core is tangible and more controllable by management but the outward progression marks more intangible elements and greater consumer participations. The tourism product is a synergistic combination of these elements. These elements are as follows.

The physical plan: This is the core of a tourism product where the main attraction is produced. It can be natural such as landscape or waterfall, or facilities such as conference hall, theme park, hotel, etc.

Service: Service refers to the performance of specific tasks required to meet the need of tourism. A hotel needs management, front desk operation, housekeeping, maintenance, and food and beverage provisions to function as a hotel.

Hospitality: Consumers expect ‘enhanced service’ or something extra. Hospitality is that extra provided over professional service.

Freedom of choice: It refers to the necessity that the traveler has some acceptable range of options for a satisfactory experience.

Involvement: This is participation by consumers in some degree in the delivery of service. Tourism is known to be a participative activity.

Hegarty (1992) explain tourism product through the following components.

Environment: It is the raw material of tourism that gives a tourist destination its particular appeal. It has natural, cultural, and social elements.

Activities: These are based on and derived from the environment. Foe example, trekking, rafting, sightseeing and so on.

Accommodation: A tourist must have a place to sleep and eat

Transport: There must be ways of getting around the destination.

Services: There are various services that support tourism such as information, health, booking and customs.

Infrastructure: Tourism cannot work without basic infrastructure like roads, airports, telecommunication and medical support.

Destination Life Cycle and Tourism Area Life Cycle:

The concept of life cycle is applied to destination as TALC (Tourism Area Life Cycle) or DLC (Destination Life Cycle). It is defined as stages a destination goes through, from exploration to involvement, development, consolidation, stagnation, rejuvenation, or decline (Howie, 2003).

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Fig: Tourism Area Life Cycle

Butler (1980) proposed the tourism area life cycle model of a tourist destination that identifies the stage of exploration, development, consolidation, stagnation, and decline.

Exploration: This is the beginning of the destination for tourist activities. At this stage the destination is relatively unknown and visitors initially come in small numbers restricted by lack of access, facilities and local knowledge.

Development: The destination see development of amenities as more people discover them and word spreads about the attraction.

Stagnation: Tourists arrivals grow rapidly some theoretical carrying capacity which involves social and environmental limits. The rise of ‘exploration’ to ‘stagnation’ often happens very rapidly, as implied by the exponential nature of growth curve.

Decline or Rejuvenation: A destination would decline if it follows trajectories C, D, and E as shown in the above Figure. This will happen if the very attractions that created the destination are lost. However, it may continues to draw some tourists with increased consumption and unsustainable development but not for very long.

Tourism pricing:

Price is the momentary value decided for exchange of goods and services between the buyers and sellers. Both parties want maximum benefits from this exchange.

Factors Influence Tourism Pricing

Tourism pricing is influenced by a large number of factors relating to supply, demand and the environment. The cumulative effect decides the final price.

Supply-side Factors: Supply of tourism services is characterised by perish-ability, geographical restrictions, and domination by intangibles, and with consumption that takes place instantly with production. All this affects pricing. The specific supply-related factors affecting prices are discussed below.

Perishable: Tourism services tend to perish if not consumed. For example, if a place has a carrying capacity for 5,000 tourists per day, it will host 35,000 in a week. It cannot host all tourists in one day. Hence, tourism services are to be consumed as and when produced. To bear the cost of maintaining supplies throughout the year, the prices may fluctuate.

Intangible: Tourism Services are dominated by intangibles and putting a momentary value for these is very difficult. Intangibility is used by the hotels to price rooms differently depending upon various factors. For example, room facing sea will be perceived differently from the one facing a road.

Geographically restricted operations: All tourism services come defined with geographical constraints. For example, a diner’s clientele can get services at a particular place only where the diner is placed. Tourists can enjoy a national park only after getting there. This limits the potential of the restaurant and the park only to the people who get there.

Fixed Capacity: Tourism supplies have a fixed capacity. In tourism, supplies are limited; hence prices tend to rise in relation to demand. For example, in a hotel double room cannot accommodate more than two people.

Substitutes: Availability of substitutes increase total supplies and tourists shift to different options for reasons such as higher prices, non-availability, and so on. For example, paying guest accommodation is being a substitute for storage of hotel rooms. However, all components of tourism cannot have relevant substitutes.

Costs: Costs decide the minimum level of revenue to be charged from the buyers. But if the costs are high because of inefficiencies of production, prices too are unreasonably high. Cost of tour packages are often not in the hands of marketers, when most of the components are bought from other suppliers. Both fixed cost and variable costs are accounted for pricing. Actively-based costing (ABC) is used to calculate costs in tourism.

Competition: Competition in the market increases supplies, reduce inefficiencies and bring down prices.

Demand-side Factor: Tourists’ option about services affects demand as well perception of price. The specific demand-related factors affecting prices are discussed below:

Value Perception: Value perception of price is subjective and varies among and within market segment. It also varies with time and location.

Level of Demand: The level of demand impacts prices. High demand leads to high prices as tourists compete among themselves for the experience.

Demand Pattern: Tourism demand often marked by seasonal fluctuations with majority of tourists travelling during the tour season for the best experience. As a result, demand exceeds capacity in peak period and facilities remain underused in the off season. Prices are adjusted to the match the demand pattern and also to influence demand to balance it with supply.

Environmental Factors: External environment constitutes many forces that directly or indirectly shape demand and supply factors and price.

Tax Structure: The tax structure in the form of surcharges, airport tax, luxury tax and service tax adds to the cost and the final prices. Consequently, when the service tax rate is changed, final prices changes immediately.

Market Structure: Type and level of competition in the market has a direct bearing on price. Competition can be easy or intense, negative or positive, with similar or dissimilar, government regulated of free. Less competition results in higher prices whereas the healthy competition leads to reduction of prices.

Government Policies: Marketers have to abide by government policies on price. For example, India has a dual price policy wherein foreigners pay in dollar and Indians in rupees.

Price is the momentary value of goods and services and fixing this value right is critical for the success of a firm in the market. The cost-based, buyer-based and competition-based methods are commonly used in tourism industry. Once a price-level is determined, pricing strategies are used to respond to the continuously changing environment. The strategies often used are market skimming, market penetration, price-quality combination, discount pricing, geographical pricing and differential pricing.

Tourism Promotion:

Promotion mix is the combination of different methods of promotion. Each method is suitable under different conditions and a right combination can be very powerful. Tourism promotion is persuasive communication for the target market. It follows the general rules of human communication and applies it to marketing (Jayapalan, 2001). The goal of promotion is to contribute to marketing goals but it has its specific objectives in terms of attitudes and sales behavior of the market. Promotion is carried out with the help of different methods and together these are called promotion mix.

Important Promotional Tools in Tourism

A few promotional tools, such as brochures, events and movies are more apt for tourism because of their distinct nature.

Brochures: Brochures are popular form of promotion used for direct sales. These are defined as booklets or pamphlets used for sales and promotion. This has the following advantages.

It targeted more specifically.

If retained, it will have greater reminder value.

It can also have secondary or pass-along audience.

Events: Events are organized occasions of significance. They are used to promote and highlight the tourism potential of a destination. The following and many more types of events are used for promotion tourism.

International trade fair: This fair bring large number of buyers and sellers to a place, and who are likely to spread the word about the products showcased there.

Cultural fair: Destination-specific festivals like carnival etc., brings a large number of tourists to these place.

Cultural events: Cultural events, such as film festivals, dance shows, musical events, etc., brings destination in news.

Sports events: Sports events, such as Common Wealth Games, show that tourism can be promoted in the different city in the country.

Tourism Distribution

Tourism distribution is transfer of tour and associated facilities from the suppliers to the tourists through the tourism distribution system. It delivers many benefits to the tourists. These are as follows.

Accessibility and availability: Attractions are made available conveniently by arranging transfer of tourists.

Information: Tourists get information about places, flights, trains, routes and so on.

Counseling and advice: Tourist may not be able to decide about travel destinations and plans and may ask for advice.

Arrangements: Tourists want arrangements to be mad for them so that they have minimum hassles on tour.

People in Tourism

People are an important content of tourism marketing mix. The tourism experience depends upon sellers, tourists, other service providers, residents, and tour group member. Some people understand the importance of tourism but others may not and their behaviors or encounters with the tourists might spoil the whole tour experience. Customer can look for one time encounters or relational long-term encounters. In long-term encounters, customers get attached to the service provider or brand. Long-term relations give marketers a brand-loyal market and consumers get good service. The difficulty is created in encounter with the other service providers, tour group members, and other tourists at the destination who are not directly concerned with marketing. These too have to be marketed the idea of creating a good service environment. The main focuses of the firms are discussed below.

Internal environment: The main focus of the firms remains its internal environment and it manages its employees and customers for the same.

Transactional Intervention: It is use to improve and control employee behavior. It includes building awareness, training in relationship building, behavioral flexibility and professionalism, empathy, interpersonal skills non-verbal communications and improved physical surroundings.

Customer relationship management: It implies entering into, building, maintain, and sustaining relation with customers.

Process in Tourism Marketing

Process is an important element of tourism marketing mix because of the service-intensive nature of tourism. Tourism service process or delivery of tourism service involves procedures, task schedules, mechanisms, activities, and routines by which a product or service is delivered to a customer. It is an operating system of workflow activities and their integration.

The main objectives of service delivery are to build improved, simplified, real-time, on demand, guaranteed, cost-effective service. The process of service delivery includes activities and flows, procedures, mechanisms of transfer, time and cost of transfer, and involvement of tourists in transfer.

Physical Evidence in Tourism

Physical evidence performs specific functions in tourism and form an integral part of the marketing strategy. The important functions performed by evid