Marketing Strategies For Hopsitality And Tourism Industry
The hospitality and tourism industry is one of the world’s prevalent industries and also the most fragmented with large number of small business. The contribution of hospitality and tourism industry to GDP can be measured in the terms of the revenue generated by tourists (Bardgett 2000). The industry promotes international understanding and gives support to local handicrafts and cultural activities. It is a very important section of a nation’s economy, particularly in terms of its involvement in the direction of earnings through foreign exchange, production of extra wages and creation of job opportunities. The high flood of foreign tourist traffic has increased demand for certain economic production and distribution activities. The hospitality and tourism industry in today’s date is one of the most diverse, exciting, challenging and important industries in any part of the world. It offers career opportunities that are dynamic in nature.
A very essential quality in this industry is to possess a driving interest towards one’s customer service and a strong sense of professionalism. And not just that what one also needs to know is that, what tourism is, keeping in mind the economic, environmental, social and cultural impacts on it. One needs to know its relationship with other industries, the roles and responsibilities that the organization carries as a whole and as well as of individual staffs.
1.1 Marketing of tourism and hospitality industry
Marketing is a delicate combination of art and science (Mahoney, 2005). It is described by Kotle as a management procedure accountable for recognizing, expecting and pleasing client necessities gainfully.
An enormous variety of misconceptions are rampant about marketing, the most widespread is its misunderstanding next to selling and advertising. If one looks closely these are nothing more, but types of endorsement or promotion and hence being only a part of marketing. Marketing includes of much more, such as product/service development, place, pricing etc. It requires information about those attracted in what you are offering, such as their likes, where they buy and their limits of expenditure.
1.2 SWOT/ TOWS Analysis
Another important aspect that follows strategic formulation is the evaluation of the adopted measures and one of the best ways to do so is by using both SWOT followed by the TOWS analysis. TOWS Analysis is a modified form of SWOT which is used as a standard business analytical tool. The alphabets in both TOWS and SWOT are representation of the words Strengths, Weaknesses, Opportunities and Threats.
The analysis of the external environment (threats and opportunities), and internal environment (weaknesses and strengths),can help one realise beneficial techniques that can be made use of by the entire organization, a department or a team. Apart from this, SWOT/TOWS analysis can also be used to come up with a course of action, a marketing campaign, or even evaluate ones skills and experiences. (Warnell, 1995)
Identifying Strategic Options: As mentioned earlier SWOT or TOWS analysis helps to draw a better judgement of the strategic choices that are present and since “strategy” is the art of determining how one can “win” in business; it is a very important step in the evaluation of any organization or industry.
This process of evaluation helps us find answers to questions that further help us explore our strengths, weaknesses, opportunities and threats.
Strategic Discussion
Through the use of marketing strategy an organization can concentrate its limited resources in the best manner possible so as to increase the profits and be at an advantage as compared to the other organizations. The main goal behind every marketing strategy should be customer satisfaction. The selected marketing strategies are dependent on a variety of components, such as quality, innovation, brand building, marketing expansion, focus, product development, social responsibility, etc.
On similar grounds if we talk about Ryanair we can very well see that how the airline completely stands out as a special business from the point of view of the corporate culture it follows. Despite of being an airline it earns through the sale of complimentary products and services that it offers it customers on and off the plane. The company is well liked by its customers for its low cost and admired by its employees for the high salary it gives them. So hence alongside pleasing its customers which is very essential for any business it is also focusing on keeping its staff happy, content and loyal which is an equally important strategy very well thought of. Apart from that the airline makes use of secondary airports rather than primary ones which in turn helps in reducing the expenditure costs leading to higher benefit or profit margins.
And hence it can be seen that the chosen organization is doing very well as far as selection and implementation of its marketing strategies is concerned. This comment can be substantiated by the results of PEST analysis and SWOT/TOWS analysis.
PEST analysis of Ryanair
SWOT /TOWS ANALYSIS FOR RYAN AIR
Strengths
Weaknesses
Low airport charges
High service performance
A uniform fleet: low maintenance cost
Poor customer service
Long distance between airports and destinations.
Poor relationship with staffs
Opportunities
Threats
Credit crunch: People switch to low cost airlines
More countries joining Schengen States
Depreciation of US dollars: planes are now cheaper
Customers are price sensitive
Increase in oil prices
Other airlines are reducing costs
Increase in air traffic control charges
Growth of other substitutes
TOWS MATRIX
(Weihrich 1982)
Internal Elements
Organisational strengths
Organisational weaknesses
Strategic options
Strategic options
External Elements
Environmental opportunities (and risks)
SO
S2 + O2
Routes expansion
S3 + O3
Order new planes
WO
W3 + O1
Jobs security for staffs
Environmental threats
ST
S1 + T1
Continue to cut fares
S2 + T3, T5
Increase frequency of popular routes
WT
W1, W3 + T3
Focus on staff training
W2 + T5
Reduce cost of airport transfers
From both of the above shown methods of evaluations it can be seen that credit crunch which generally considered as a big threat is grabbed as a seemingly big opportunity by Ryanair, for it attracts its customers by the focus it keeps on the ‘reduced cost price’. And this as can be seen is used by Ryanair as a mean to earn profit.
The SWOT table above gives us a brief yet a very indepth summary of not just the internal but also the external analysis of the airlines with highlights of the firm’s strengths and weaknesses so as opportunities and threats. Based on SWOT, a number of strategic options can be suggested to Ryanair in the form of a TOWS matrix, such as route expansion, ordering new planes and hence increasing frequency of popular routes, focusing on the staff training, which in turn will act towards attracting more customers, offering its staff job security, it can go on further in reducing its prices(which has so far really worked wonder for the airlines).
Hence through our evaluations we can see that no doubt Ryanair seems to be doing wondrous work as far as marketing strategies are concerned but there are still a lot many more ways in which it can increase the overall turnover even more, such is the wonder of using apt and multiple marketing strategies.
3.0 Implementation of a strategy using tactics
The concept of the marketing is based on the premise that the firms should determine consumer wants and needs before designing products and services. Hospitality and tourism industry brings together the latest developments in the global operations using contemporary management principles (Borden, 2001).
3.1 Marketing Strategy
The marketing strategy, ought to be viewed as a cover up of support planned to be a magnet as well as provide the customer or visitor (Naik, 2003). There are various types of strategies that come into play such as competitive strategy, market and resource based strategy, quality and innovation, growth strategies. It is now necessary that one of these have to be used at a time but generally combinations of these are used to achieve optimum results.
3.1.1 External Mix – It consists of the 7P’s as well as the external environment. The marketing mix can be controlled by the firm whereas the external environment cannot be. Every industry tries to develop marketing strategies utilizing marketing mix that will establish sustainable competitive advantages leading to long term growth and profitability (Brian, 2003; Zeithaml, Bitner, & Gremler, 2003).
Product: The product of the marketing mix includes the tangible goods and all of the services that accompany that good to produce the final service or product. More than products it is the various services that make the industry stand ahead of others.
Talking about Ryanair, it is doing seemingly well as far as the ‘product ‘ aspect is concerned, for its air service and hospitality are no doubt loved by the customers due to the low cost price and well trained and well paid staff.
Price: price is the value placed on the service or a product. The tourism and hospitality sector should establish their pricing based on the companies objectives and the target market. One cannot have high fee structures for low-fare airlines. Secondly it is very important to base the prices on the complete cost of production, delivering, promoting as well as managing the services provided. Price doesn’t comprise of only the tangible benefits but also the intangible benefits like satisfaction.
Ryanair seems to be doing really well as far as the price of its service is concerned for its customer no doubt love the airlines for it low air fare prices.
Place: This aspect of the strategy includes the distribution and logistics of producing a product or service and making it available to the final customer. The location of the hotels, restaurants, etc is determined by considering the cost of the resources such as labor, raw material and real estate. In addition it is important to have access to proper transportation. So therefore the first and the most important element to be considered is the location of the hotel or the restaurant. Places away from the central city must be avoided as they would not attract tourists who would want to explore the main city/ town area.
The place aspect here could not be incorporated as this is an airline that we are talking about, but still we can for sure bring to light the cost expenditure that the airline is saving by the use of secondary airports rather than the use of the main or primary ones.
Promotion: It provides customers with precise and apt information to assist them decide whether to visit. It represents the various aspects of marketing communication, that is, the communication the information about the product with the goal to generate a positive customer response. The information provided by the company should be of significance and sensible use to the likely or existing guest and also precise because only satisfied customer would want to come again and use the same services.
People: This is the fifth P of the marketing mix. It is essential that one should have a good, educated and friendly employees. For an organization to have a winning edge over others it is very essential that it recruits the right staff and trains them appropriately for the delivery of the services. Based on the interactions with employs the consumers make opinions and deliver perceptions of the service that was provided to them. Hence it is of utmost importance that the staff should have apt interpersonal skills, attitude, and service knowledge to provide the best service to the consumers who are paying for it. Thus it makes it imperative to have a highly qualified staff to add that extra special touch to the services so that customers who comes once, comes always.
This, the airline has no doubt very skillfully taken care of by training it staff very well apart from paying it well too.
Process: It constitutes of the schemes used to aid the organization in the process of service deliverance. Timely and excellent quality services are not the only ingredient but the process behind the making of these services is also of importance. Both hospitality and tourism industry have behind the scenes services like kitchens, water boilers, air handling units, maintenance departments, etc. This should be ensured that a customer never come to know about the smooth or ruff running of the process. Same and equivalent services should be provided at all times.
These the airline could think of improving on as far as the benefits and services offered by the airlines to its consumers both on and off the flight.
Physical Evidence: this again is a component which gives the consumers the opportunity to make judgments about the organization. This no doubt is an essential component of the service mix as based on the sight of the service that is being provided a perceptual impact is made on the consumers about the organization and the service being provided. The organizations that claim to be energy efficient should show it to their customer the process they followed to make their building and services environment friendly. When a customer knows the process behind the delivered service they feel more at ease. For example: if a hotel does vermin-composting to make all biodegradable waste into manure, they should take the guest and children on a eco-walk and show them the pit. This will not only make a good name for the organization but also teach people how to conserve environment (Borden, 2001).
This as has been mentioned before too a number of times the airlines has focused on very well by its low cost air tickets and its well trained and well paid staff, skilled staff.
3.2 Interactive Marketing
‘Technology has necessarily altered how companies and their customers communicate, not just online but across other medium’ (Novak & Hoffman, 1997). Consequently interactive thinking needs to be at the heart of all marketing strategy and interactive channels at the heart of all marketing delivery. A company that has developed an easy to use web site with content and appropriate services to its audience is only part-way to achieving successful Internet marketing outcomes (Agrawal, Arjona & Lemmens, 2001)
This concept focuses on the ever changing trends in the field of marketing . The definition that had been given by John Deighton at Harvard, talks about interactive marketing being an ability which facilitates the organization in having one on one interaction with its customers on a continuous basis. The concept is in no way synonymous with the concept of online marketing, although there is debate that internet technology facilitates the process of interactive marketing to a great extent. The organization can with ease keep a record of all the data related to its customers, can have access to its numerous clients and consumers at the click of a mouse and can interact with them on a day to day continuous basis using the speed of the internet.
3.2.1 Objectives for Interactive Marketing Communications
An interactive marketing communications plan usually has three main goals:
(1) Use online and offline connections to steer or draw guests passage to a web site. This method is commonly referred to as traffic building.
(2) To use on-site communications to bring an effectual point to the guest which helps form customer behaviour or achieve a required marketing outcome. The message delivered on site will be based on traditional marketing communications objectives for a company’s products or services.
(3) To mix all communications methods to assist attain marketing objectives by supporting mixed-mode buying. (Novak & Hoffman, 1997).
Ryanair has made use of this strategy by making available to its customers the facility of online booking system, which is not only of convenience to its customers but also greatly reduces the extra cost price as compared to telephone booking. Though it could still go beyond online booking and explore much more options such as customer feedback, special offers, blog site etc on its website by making use of this strategy.
4.0 Conclusion
Customer satisfaction in hospitality and tourism industry is very much prejudiced by the way in which the service is delivered. It is a very important fraction of hospitality and tourism management and can be done successfully and well, with classiness and skill, if one keeps in mind the important essentials of marketing. ,This the airline seems to have taken care of in the most skilled manner possible by making use of the various above mentioned strategies.
Apart from that what also is important is the evaluation of the marketing efforts. A framework for evaluation could help in shaping which essentials are most important to evaluate. It is hardly ever probable or cost efficient to assess all elements. After this it is very important to compare results with one’s objectives and to in the end determine the needed changes in the strategic plan. This in a great way contributes towards improving the efficiency of the strategies that are being used by recognizing the present dissimilarities between real outcomes and anticipated performance. All this in turn will surely help determine the most probable and expected causes for the triumph or crash to achieve the set goals and objectives.
