CHAPTER 6

CHAPTER 6

Marketing the business travel and tourism product

Marketing in business travel and tourism is a complex matter reflecting the diverse nature of the industry.

The Nature of marketing in business travel and tourism

1.      Events -  exhibition and conference

2.      Services – conference organizes and airline business class products

3.      Facilities – conference, venues and exhibition centres.

4.      Destination – cities, regions and countries

Following aspects of marketing in business travel and tourism:

·        the marketing mix – product, price, place, promotion

·        the market, notably motivators, determinants, and segmentation

·        destination marketing

·        key issues in marketing in the different sectors of business travel and tourism such as conferences and incentive travel

·        topical issues including quality and consumer satisfaction, relationship marketing and brand loyalty, strategic alliances, women business travellers, marketing research, ethical issues and technology.

1. The marketing mix and business tourism

The marketing mix consists of those variables which are controllable or heavily influenced by an organization. They are divided into the 4 Ps, namely, product, price, place and promotion.

PRODUCT

The diversity of business travel and tourism makes it difficult to generalize about the nature of the product. For example, business travellers making individual business trips will see the ‘product’ as the transport and accommodation services they use primarily, as well as the general facilities provided by the destination.

Elements of the business tourism product

• Accommodation – facilities, services , location

• Venues – conferences, exhibitions, product launches

• Destination – Support services, leisure time opportunities

• Organization – Intermediaries , supplier

• After-sales services – for example, providing exhibitors with a list of attendees after an exhibition

• Transport – To destination: can hire private car, coach, air, rail, sea, airport, railway.

                                 - within destination: private car, hire car, taxi, bus.

  
  

Like leisure tourism it could also be argued that business travel and tourism is not a product, but rather an experience. The nature of this experience will reflect, for example:

·        the elements of the product

·        the ambience of the destination and the venue

·        the personality and experience of the business traveler. 

The experience also includes three stages:

·        anticipation – before the event

·        consumption – during the event

·        remembrance – after the event.

PRICE

Price is clearly a crucial issue in any market but it is a complex matter in business travel and tourism, for the following reasons:

1.      There are direct and indirect costs for the traveller. Direct costs include, for example, fees for attending conferences or the price of an air ticket. There are also indirect costs such as the need to buy a visa when travelling to some destinations.

2.      Prices for a similar product vary dramatically around the world. Some examples taken from Business Traveller magazine will illustrate this point as follows: (a) A non-residential one-day conference for 500 people including room hire, lunch, two tea/coffee breaks and taxes, would cost £9745 in Helsinki but £19100 in Copenhagen.

Price is clearly a crucial issue in any market but it is a complex matter in business travel and tourism, for the following reasons:

3.  Destinations usually make no direct charge for entry to the resort, city or region or for use of its facilities such as beaches, parks and even the climate. Yet these elements of the destination may be a major factor in the decision to locate a conference or incentive travel package in a particular location.

4.     Some costs are compulsory, such as travel costs, while others are voluntary, like having a drink at the end of the working day.

The features of the convention centre product

- Facilities – number of rooms and capacities, audio visual equipment

- Service element – staff

- Brand identity – the name of the centre

- Guarantees or warrantees

- Location – urban or coastal, on road junction, in parkland etc

- Physical features – size form, materials

PLACE

Place or distribution is concerned with how business travelers or tourists actually purchase the products they need. There are several dimensions to this:

1.      Customers can buy whole packages such as an incentive travel package or individual elements such as air tickets, venues and accommodation.

2.      Customers can purchase products directly or make use of the services of specialist intermediaries.

As with leisure travel and tourism, the Internet is beginning to play a big role in distribution in business travel and tourism. By providing both information and an opportunity to purchase simultaneously it is blurring the distinction between two of the 4 Ps, namely, place and promotion. This leads us neatly on to the final P, promotion.

PROMOTION

To many people, promotion is synonymous with marketing; it is the visual face of marketing. However, promotion is simply one element of the marketing mix, fulfilling the function of making potential customers want to purchase a particular product.

The method of promotion in business travel and tourism

·        Advertising – print, television, radio, posters, internet

·        Press and Public relation – press release to trade journals, familiarization visits for journalists and buyers

·        Personal Selling – telephone or face to face, direct selling

·        Sales promotion – added value, discounting

·        Miscellaneous – exhibitions and trade fair, sponsorship

·        Literature – brochure, year books and directories

Advertising

Advertising, particularly in trade journals is a major weapon in the promotional armoury of many business travel and tourism organizations. As business travel and tourism is a high-spending activity, advertising tends to be glossy and colourful. To be successful, however, advertising has to:

·        be undertaken frequently to remind customers of brand names

·        be integrated with other promotional techniques.

The Internet

Just as in leisure travel, the Internet is beginning to play a growing role in business travel and tourism, both in terms of finding information and making reservations.

·        while 35 per cent of readers preferred to book travel and accommodation via the Internet, 60 per cent still preferred other means

·        only 15 per cent of readers felt that conference venue web sites offered the optimum of information for conference organizers.

Trade journals

Business travel and tourism is still a relatively small industry but it is a world in which buyers are always looking for information on new products or services. The trade journals therefore play a very important role in promoting products and allowing communication between buyers, suppliers and intermediaries.

Personal selling

In an industry based so much on interpersonal skills and trust, it is not surprising that personal selling plays a major role in promotion in business travel and tourism. The main areas for personal selling are as follows:

·        venues selling their services to buyers

·        airlines and hotels selling to buyers and intermediaries.

·        incentive travel agencies and professional conference organisers selling their services to potential clients.

Telephone and face-to-face negotiation plays a vital role in marketing in this industry.

Familiarization or educational visits

Decisions about the destination and venue of conferences, exhibitions, product launches and incentive travel packages involve purchases where the level of expenditure can run into millions of pounds. As one would expect, therefore, very few buyers make their decisions based on brochures, videos or advertisements. They must see the place and venue for themselves, check it out, ask questions and meet the people they will be working with before they decide to contract a particular venue or other service. The familiarization or educational visit, which is the name given to this process, is therefore very important in business travel and tourism.