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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

T.S.-6 Tourism Marketing Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions given in the Assignments. These Sample Answers/Solutions are prepared by Private Teacher/Tutors/Auhtors for the help and Guidance of the student to get an idea of how he/she can answer the Questions of the Assignments. We do not claim 100% Accuracy of these sample Answers as these are based on the knowledge and cabability of Private Teacher/Tutor. Sample answers may be seen as the Guide/Help Book for the reference to prepare the answers of the Question given in the assignment. As these solutions and answers are prepared by the private teacher/tutor so the chances of error or mistake cannot be denied. Any Omission or Error is highly regretted though every care has been taken while preparing these Sample Answers/Solutions. Please consult your own Teacher/Tutor before you prepare a Particular Answer & for uptodate and exact information, data and solution. Student should must read and refer the official study material provided by the university. PART - I Q. 1. Describe the 4Ps of Marketing Mix. As the Marketing Manager of a Low-cost airline company, devise a marketing strategy for your airline given the present scenario of global economic slowdown and rising competition. Ans. The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place. However, nowadays, the marketing mix increasingly includes several other Ps like Packaging, Positioning, People and even Politics as vital mix elements. These variables are ● Product ● Price ● Place ● Promotions Marketing mix is mainly of two types. ● Product marketing mix - Comprised of Product, price, place and promotions. This marketing mix is mainly used in case of Tangible goods. ● Service marketing mix - The service marketing mix has three further variables included which are people, physical evidence and process. They are discussed in detail in the article on service marketing mix. The term marketing mix was first coined by Neil H Borden back in 1964 in his article "The concept of marketing mix". Several strategic analysts over the years believe that the marketing mix can make or break the firm. Having the right marketing mix at the start of the marketing plan is absolutely essential. Over time the concept of marketing mix has provided a steady platform for the launch of a new product or business. The marketing mix is characterized by four different but equally important variables. These variables are never constant and may be changed over time. However, a change in one of the variables may cause a change in all the other variables as well. The variables are as follows: 1) Product - The first thing you need, if you want to start a business, is a product. Therefore Product is also the first variable in the marketing mix. Product decisions are the first decisions you need to take before making any marketing plan. A product can be divided into three parts. The core product, the augmented product and the tertiary product. Before deciding on the product component there are some questions which you need to ask yourself. Every tourist is different. Every tourist feels attracted by different tourist destinations, likes to engage in different activities while on vacation, makes use of different entertainment facilities and complains about different aspects of their vacation. While all tourists are different, some are more similar to each other than others: many people enjoy culture tourism, many tourists like to ski during their winter holiday and many tourists require entertainment facilities for children at the destination. Acknowledging that every tourist is different and that tourism industry cannot possibly cater for each individual separately forms the basis of market segmentation.

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Smith (1956) introduces the concept of market segmentation as a strategy. He states (p. 6) that "Market segmentation consists of viewing a heterogeneous market (one characterized by divergent demand) as a number of smaller homogeneous markets". When segmenting a market, groups of individuals are developed which are similar with respect to some personal characteristic. The particular personal characteristic with respect to which similarity is explored is the segmentation criterion or segmentation base. Segmentation criteria / bases can be socio-demographics (for instance, old versus young tourists), behavioral variables (skiers versus sightseers) or psychographic variables (tourists motivated by rest and relation versus those motivated by action and challenges). Market segmentation can be applied by any unit operating in tourism industry: hotels, travel agencies, tourist attractions, restaurants, and local charities. In this chapter, a tourism destination is the entity for which market segmentation is conducted. Market segmentation is a strategy any entity in the tourism industry can use to strengthen their competitive advantage by selecting the most suitable subgroup of tourists to specialize on and target. A wide variety of alternative techniques can be used to identify or construct segments. Approaches range from simple commonsense segmentations (where tourists are split on the basis of a predefined personal characteristic) to multidimensional data-driven approaches where a set of tourist characteristics is used as the basis for grouping. Once tourists are grouped using the correct and most suitable analytical techniques the resulting segmentation solution has to be assessed by the users (tourism managers) who will not only evaluate the segmentation solution per se but also the fit of potentially interesting segments with the strengths of the tourism destination. Tourism managers can benefit from market segmentation by using it actively as a method of market structure analysis. In doing so, they can gain valuable insight into the market and specific sections of the market and identify the most promising strategy to gain competitive advantage. Typically such a strategy will not only require market segmentation, but also product positioning. Both approaches will have to be evaluated in view of competitors' segmentation and positioning choices to be successful. Segmentation solutions should be computed regularly to ensure that current market structure is captured. ● What product are you selling? ● What would be the quality of your product? ● Which features are different from the market? ● What is the USP of the product? Whether the product will be branded as sub brand or completely new? What are the secondary products which can be sold along with primary (Warranty, services) Based on these questions, several product decisions have to be made. These product decisions will in turn affect the other variables of the marketing mix. For example - You launch a car with is to have the highest quality. Thus the pricing, promotions and placing would have to be altered accordingly. Thus as long as you dont know your product, you cannot decide any other variable of the marketing mix. However, if the product features are not fitting in the marketing mix, you can alter the product such that it finds a place for itself in the marketing mix. 2) Pricing - Pricing of a product depends on a lot of different variables and hence it is constantly updated. Major consideration in pricing is the costing of the product, the advertising and marketing expenses, any price fluctuations in the market, distribution costs etc. Many of these factors can change separately. Thus the pricing has to be such that it can bear the brunt of changes for a certain period of time. However, if all these variables change, then the pricing of a product has to be increased and decreased accordingly. Along with the above factors, there are also other things which have to be taken in consideration when deciding on a pricing strategy. Competition can be the best example. Similarly, pricing also affects the targeting and positioning of a product. Pricing is used for sales promotions in the form of trade discounts. Thus based on these factors there are several pricing strategies, one of which is implemented for the marketing mix. 3) Place - Place refers to the distribution channel of a product. If a product is a consumer product, it needs to be available as far and wide as possible. On the other hand, if the product is a Premium consumer product, it will be available only in select stores. Similarly, if the product is a business product, you need a team who interacts with businesses and makes the product available to them. Thus the place where the product is distributed, depends on the product and pricing decisions, as well as any STP decisions taken by a firm. Distribution has a huge affect on the profitability of a product. Consider a FMCG company which has national distribution for its product. An increase in petrol rates by 10 Rs will in fact bring about drastic changes in the profitability of the company. Thus supply chain and logistics decisions are considered as very important costing decisions of the firm. The firm needs to have a full proof logistics and supply chain plan for its distribution.

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4) Promotions - Promotions in the marketing mix includes the complete integrated marketing communications which in turn includes ATL and BTL advertising as well as sales promotions. Promotions are dependent a lot on the product and pricing decision. What is the budget for marketing and advertising? What stage is the product in? If the product is completely new in the market, it needs brand / product awareness promotions, whereas if the product is already existing then it will need brand recall promotions. Promotions also decide the segmentation targeting and positioning of the product. The right kind of promotions affect all the other three variables - the product, price and place. If the promotions are effective, you might have to increase distribution points, you might get to increase the price because of the rising brand equity of the product, and the profitability might support you in launching even more products. However, the budget required for extensive promotions is also high. Promotions is considered as marketing expenses and the same needs to be taken in consideration while deciding the costing of the product. PART- II Q. 1. Taking India as the base country, how would you define international and domestic tourists? Discuss the characteristics of major international source markets for India. Ans. Tourism in India has shown a phenomenal growth in the past decade. One of the reasons is that the Ministry of tourism, India has realized the immense potential of tourism in India during vacations. India travel tourism has grown rapidly with a great influx of tourists from all across the globe who have been irresistibly attracted to the rich culture, heritage, and incredible natural beauty of India. India tourism with its foggy hill stations, captivating beaches, historical monuments, golden deserts, serene backwaters, pilgrimage sites, rich wildlife, and colourful fairs capture the heart of every tourist. In addition, a variety of festivals, lively markets, vibrant lifestyle, and traditional Indian hospitality, will make your experience as an India tourist truly unforgettable and fantastic. Travel through the lovely Indian states and discover closely the resplendent colors and rich cultural locales of this incredible land. Our India tourism guide provides you a glimpse of travel and tourism in India, India tourism information about south India tourism, north India tourism, and all the major tourist destinations, and tourism services of India. The supply of tourism services is characterized primarily by the cross-border movement of consumers -- i.e. the consumer coming to the supplier, rather than the opposite as is the case with many other services. Tourism is actually composed, at least partially, of a signficant number of services sectors; as a result, its full economic impact is often not clearly defined within national statistics. Tourism is also a highly "perishable" commodity, in the sense that unsold airline seats, hotel rooms, etc. have no residual value. The industry is highly infrastructure dependent, and relies upon various transport services to deliver clients. Immigration and entry/exit control regulations have a direct influence on the supply on international tourism services. Important challenges facing the industry include environmental and infrastructure problems, as well as rapid technological change. The Tourism sector of Indian economy is at present experiencing a huge growth. The Tourism sector of Indian economy has become one of the major industrial sectors under the Indian economy. The tourism industry earns foreign exchanges worth ` 21,828 crore. Previous year the growth rate of the tourism sector of Indian economy was recorded as 17.3% The growth in the tourism industry is due to the rise in the arrival of more and more foreign tourists and the increase in the number of domestic tourists. Tourists from Africa, Australia, Lain America, Europe, Southeast Asia, etc are visiting India and their are growing by the thousands every year. Indian Tourism offers a potpourri of different cultures, traditions, festivals, and places of interest. There are a lot of options for the tourists. India is a country with rich cultural and traditional diversity. This aspect is even reflected in its tourism. The different parts of the country offers wide variety of interesting places to visit. While the international tourism is experiencing a decelerated growth, the Indian counterpart is not affected. India represents one of the most potential tourism markets in the world. Tourism today is the most vibrant tertiary activity and a multi-billion industry in India. Traditionally known largely for its historical and cultural dimensions, tourism today is highlighted for its immense business opportunities. With its lucrative linkages with transport, hotel industry etc., the potential and performance of India's tourism industry needs to be gauged in terms of its socio-economic magnitudes. The tourist numbers and activities in India seem to suggest more of an optimistic scenario. Q. 2. Discuss the role and importance of National Tourist Organisations in the marketing of their respective destinations. Ans. The organisations involved in the development of tourism at the Centre are Ministry of Tourism, Indian Institute of Tourism and Travel Management, National Council for Hotel Management and Catering Technology, India

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Tourism Development Corporation Limited, Indian Institute of Skiing and Mountaineering and National Institute of Water Sports. The Ministry of Tourism is responsible for formulation and implementation of policies and programmes for the development of tourism within the country and for attracting foreign tourists to India by way of developing tourism infrastructure, publicity and promotion, dissemination of information, co-ordination and supervision of activities of various segments of industry such as hotels, travel agencies, tour operators, etc. The National Tourist Organisation (NTO) is the body responsible for the formulation and implementation of national tourist policy. It is the proper agency and instrument for the execution of the national government's responsibilities for the control, direction and promotion of tourism. All countries which are engaged in tourism have a national tourism organisation which plays a leading role in both the formulation and the implementation of the government's tourism programme. This organisation is also responsible for coordinating the different activities of all the bodies interested in tourism development. The national tourist organisation may be a full- fledged ministry, a directorate general, a department, corporation or board. There is, however, no set formula as to what constitutes the most satisfactory constitutional arrangement for the national tourism body. Tourism ranks as a full ministry in some countries with the minister enjoying a cabinet rank. Another arrangement in many countries is for tourism to share a minister with information or with arts, sports, culture or commerce. Yet other possibilities include attaching the tourism office to the presidency of the council, putting it in the charge of an official of the rank of a deputy-secretary with an occasional voice in the council of ministers. In others, it has the semi-autonomous status of a corporation and functions not as an organ of the government but, rather as a professional body outside it. It will be apparent that the arrangement and the Constitution for the national tourist organisation vary widely. It depends on factors like political structure of the country, the level of economic development, potential value of tourism to the economy, the level of tourism development and also, availability of capital for tourism development including infrastructural developments. The main activities of an NTO in general, are the tourism promotion of the destination mainly in national level, to create and communicate images and messages from a destination to prospective visitors, mainly through tourism fairs, advertising, public relations and printing materials (brochures, leaflets etc.), study tours with journalists/foreign tour operators, etc. In some cases they deal with the development of tourism product in different areas of their destination. Essentially, the role of a NTO in the marketing of the country as a touristic destination is to attract visitors foreign/ domestic, through the main forms of promotion mix, increasing the awareness of tourists, influence their decisions and implementing different marketing strategies which can improve the image of the destination. Also, according to Chandra & Menezes (2001) some other NTO tasks might be to research the emerging markets, to develop the market intelligence, to forecast demand, to identify markets and segments having the best potential, to provide destination information to interested parties, to monitor tourist/visitor satisfaction etc. Some NTO-s, like that of Great Britain, France, Greece etc., have established their branches abroad, mainly in the potential markets aiming at making a direct marketing, influencing better in the decision-making process of the costumers. Q. 3. Tourism is a complex activity that requires experiences and understanding of global, national, regional and local marketing situation". Justify the above statement. Ans. Tourism has emerged as an instrument for employment generation, poverty alleviation and sustainable human development. During 2003-2004, direct employment in the tourism sector was estimated to be 21.54 million. Tourism also promotes national integration and international understanding and gives support to local handicrafts and cultural activities. Tourism in India has grown substantially over the last three decades. Foreign tourist arrivals in India recorded an increase of 13.2 per cent during the year 2005 as compared to the year 2004. India's share in the world tourism market during the year 2005 was 0.49 per cent, as against 0.44 per cent in 2004. Foreign exchange earnings during the year 2005 were Rs.25,172 crores as against Rs.21,828 crores in 2004. Tourism can be defined as the temporary movement of people outside their normal place of work and residence, together with the activities undertaken during their stay at those destinations and the facilities created to cater for visiting tourists. Tourism is distinguishable from travel undertaken in the past by its mass character, and is now not a luxury only for the upper classes. Tourism is a luxury, with most people in the developed world and increasing numbers of people living in developing countries engaging in tourism at some time in their lives. Tourism is accepted and accustomed, and has become a good indicator of economic status and is considered necessary for good health and personal being. Tourism is a productive activity that encompasses human behavior, use of resources, and interaction with other people, economies and environments. It involves physical movement of tourists to locations other than their normal place

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of living. It involves consumption of goods and services provided by organizations in the process, and generate a mass productive activity, employment and income. Tourism is a highly complex productive activity. It involves the activities and interests not only of large transport undertakings, owners of tourist sites and attractions, and of various tourist services at the destination but also of all levels of government. Each of these serves the resident population and visitors. For countries delivering the tourist product it makes a significant contribution to GDP, employment, investment and FOREX earnings. It is a major catalyst for economic growth and structural change. It also diversifies employment prospects. Tourism is a complex industry that involves a wide range of businesses working at different levels - from service stations and newsagents to hotels, motels, tour operators and travel agents. Tourism is about obtaining experiences which involves a number of steps in the tourism industry chain: le need to be motivated to travel ● People need to know what their holiday options are and what different destinations offer ● Bookings need to be made for accommodation, travel, tours etc. and ● Service providers (eg. tour, transport and accommodation operators etc.) need to deliver their product. Each party in the chain contributes to the overall holiday experience of the customer. They form part of a network of wholesalers, retailers, and providers of tourism products and services that together deliver a complete travel package. If one party fails to deliver, the total travel experience of the customer could be ruined and reflect badly on all the other service providers, even if they did nothing wrong. Tourism is a 'big picture' business - understanding where your organisation fits into the network will help you to manage it successfully. Aware that there is a danger that Responsible Tourism will be undermined by businesses, communities or governments which use the rhetoric but cannot substantiate the claims. We call upon those committed to the aspirations of Responsible Tourism to challenge those who pay only lip service to the cause and we call on those who are making a difference to report their contribution in a transparent, honest and robust way so that Responsible Tourism can be identified by the consumer and expectations can be raised to the benefit of those who practise Responsible Tourism and to the detriment of those who do not. Five and a half years on from Cape Town we recognise that there has not been as much progress as we would have hoped, nor as much progress as is needed if the travel and tourism industry is to contribute its share of the action required to achieve sustainable development. Q. 4. How do Star Categories hotels formulate their marketing strategies? Ans. Hotel ratings are often used to classify hotels according to their quality. The development of the concept of hotel rating and its associated definitions display strong parallels. From the initial purpose of informing travellers on basic facilities that can be expected, the objectives of hotel rating has expanded into a focus on the hotel experience as a whole.[ Today the terms 'grading', 'rating', and 'classification' are used to generally refer to the same concept, that is to categorize hotels, mostly using stars as a symbol. Hotels are usually independently assessed, based heavily on the facilities provided, with a higher star rating indicating more luxury. Because the system is heavily weighted towards "hardware", there is criticism that such criteria are somewhat complex and also disadvantageous to smaller hotels, whose quality of accommodation can meet a certain class, but lack of one particular item of hardware (such as an elevator or an air-conditioned Coffee Shop) can prevent it reaching a higher classification. There are different classification systems, ranging from 'A' grade to 'F', Deluxe, Luxury, Superior, Tourist Class and Standard plus the more familiar and popular one star to five star rating. Classification systems of all countries are usually administered and implemented by the Government. "A hotel is a commercial establishment providing lodging, meals, and other guest services. In general, to be called a hotel, an establishment must have a minimum of six letting bedrooms, at least three of which must have attached (ensuite) private bathroom facilities. Although hotels are classified into 'Star' categories (1-Star to 5-Star), there is no standard method of assigning these ratings, and compliance with customary requirements is voluntary." Concerning the central hotel attributes, the factor "cleanliness" is in the lead, no matter whether the issue of hotel attribute importance is seen from the expectations or the dissatisfaction perspective. Friendliness and good food still account for more than five percent of the statements on expectations each. From the dissatisfaction point of view, weaknesses in the fields of room personnel, service and staff have amount to more than eight percent of the answers each. Strong differences between business travelers staying in different hotel categories can be detected both from the expectation and the disappointment perspective. The general finding concerning these differences is, that guest in lower categories are more concerned about the fundamental hotel components, whereas luxury business travelers emphasize the intangible aspects more. The conclusions drawn in prior studies on the issue of hotel attribute factor importance for the segment of the business travelers are not mirrored very well in this study. Location and reputation were not an issue at all, while price ranked rather low. The reason for this is the form of the question drawing the attention to other aspects

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than by asking the typical question that is used in hotel attribute studies which directly requires importance ratings. A hotel is a business housed in real estate - it is dynamic - its market is dynamic. There are no major tenant leases. Every room has to be resold every night. Guests in the hotel's dining and meeting rooms come and go on an hourly basis. Given these circumstances, it is imperative for investors deciding to include a hotel in their portfolio to understand why they are doing so, and then make broad assumptions about future market conditions and to devise a plan to deal with those conditions. There are as many strategic reasons for buying a hotel as there are willing buyers. One may see the potential for success with a specific type of property - an all-suite hotel, a resort, a limited-service hotel - in a particular location - adjacent to a major demand generator like a theme park, and industrial park, or an airport. Another may find it advantageous to his long term strategy to have a property in a certain city or a certain part of town. Q. 8. Why do we need to segment tourism markets? Discuss some of the major basis on which tourism markets can be segmented. Ans. Tourists are not all the same, they have different pictures of their ideal vacation. Tourists are heterogeneous. Market segmentation is the strategic tool to account for heterogeneity among tourists by grouping them into market segments which include members similar to each other and dissimilar to members of other segments. Both tourism researchers and tourism industry use market segmentation widely to study opportunities for competitive advantage in the marketplace. Every tourist is different. Every tourist feels attracted by different tourist destinations, likes to engage in different activities while on vacation, makes use of different entertainment facilities and complains about different aspects of their vacation. While all tourists are different, some are more similar to each other than others: many people enjoy culture tourism, many tourists like to ski during their winter holiday and many tourists require entertainment facilities for children at the destination. Acknowledging that every tourist is different and that tourism industry cannot possibly cater for each individual separately forms the basis of market segmentation. Smith (1956) introduces the concept of market segmentation as a strategy. He states that "Market segmentation […] consists of viewing a heterogeneous market (one characterized by divergent demand) as a number of smaller homogeneous markets". When segmenting a market, groups of individuals are developed which are similar with respect to some personal characteristic. The particular personal characteristic with respect to which similarity is explored is the segmentation criterion or segmentation base. Segmentation criteria/bases can be socio-demographics (for instance, old versus young tourists), behavioral variables (skiers versus sightseers) or psychographic variables (tourists motivated by rest and relation versus those motivated by action and challenges).Market segmentation can be applied by any unit operating in tourism industry: hotels, travel agencies, tourist attractions, restaurants, and local charities. A tourism destination is the entity for which market segmentation is conducted. The benefit of market segmentation lies in a tourist destination being able to specialize on the needs of a particular group and become the best in catering for this group. In doing so the destination gains a competitive advantage because (1) competition can be reduced from the global market to tourism destinations specializing on the same segment (e.g., all ecotourism destinations), (2) efforts can be focused on improving the product in a specific way rather than trying to provide all things to people at high cost (e.g., a family destination is unlikely to need extensive nightlife options), (3) marketing efforts can be focused by developing the most effective message for the segment targeted (e.g., a sun and fun message for young tourists traveling with friends) and by communicating the message through the most effective communication channel for the segment (e.g., in national geographic or other nature magazines for eco tourists), and finally, (4) tourist experiencing a vacation at a destination that suits their special needs are likely to be more satisfied with their stay and, consequently, revisit and advertise the destination among like-minded friends. Or, as Smith stated in his seminal paper (1956): "market segmentation tends to produce depth of market position in the segments that are effectively defined and penetrated. The [organization that] employs market segmentation strived to secure one or more wedge-shaped pieced [of the market cake]."The examples above demonstrate that the expected outcome from market segmentation is competitive advantage. Consequently, the aim of the actual segmentation task is to Group tourists in the way that is of most managerial value. In order for a segment to be managerially useful a number of requirements should be fulfilled: 1. The segment should be distinct meaning that members of one segment should be as similar as possible to each other and as different as possible from other segments. 2. The segment should be reachable in order to enable destination management to communicate effectively. For instance, surf tourists are likely to read surf magazines which could be used to advertise the destination. 3. A segment should be suitable in size. This does not necessarily imply that a bigger segment is better. 4. The segment should match the strengths of the tourism destination. 5. The segment should be identifiable. While female travelers can be identified very easily, identification of those visitors who are motivated by rest and relaxation may not be as simple. ■■

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