Marketing is an essential part of running a business. New and existing tourism businesses need to undertake some basic marketing initiatives to be successful. The best hotel, tour or attraction in the world will not succeed without a planned approach to marketing.
This page features essential marketing information for all tourism businesses. Use the bookmarks below to navigate quickly to the section you require.
A marketing plan establishes a direction for your business. It identifies a marketing budget, seats out a media and promotion timetable and how you will review the success (or otherwise) of your marketing efforts.
The basic elements of a marketing plan are:
Overview
Business Description
Mission statement
SWOT Analysis
Strengths, Weaknesses, Opportunities and Threats
Positioning
Positioning statement – what is my competitive advantage?
Consumer profile – who are my customers?
Marketing Mix ( the 6 P’s ) Product or service Place or distribution Promotion or selling Price Packaging Partnerships
Monitoring
Review performance of as part of your Business Plan.
Positioning means designing your product to suit your target market. Before you do this you need to know who your customers are. How you position your product will be determined by the customers you are targeting. Market research is most helpful in analysing potential target market segments. An important consideration when positioning your product is how you are going to reach your customers.
Your choice of distribution channels is an important element in positioning your product because it is through these channels that your customers will get the first impression of your product. You need to establish within your target markets a perception about your product that will differentiate it from that of your competitors. The name of your company, along with the price of your product, the design of the brochure, photography and advertisements will establish and reinforce your unique position in the mind of your customer.
Your competitive advantage is what makes your product more appealing than those of your competitors. It may be something unique you have to offer, it may be superior service or extra value included in the price you charge.
You probably have a general idea of what your product or service will be. You will need to establish a clear idea of the components of your business and the level of service or standards you intend to provide. It helps to identify the special features or benefits of your business, i.e. your competitive advantage, and to build your product or service around these.
In order to gain maximum exposure for your product in your target market, you should consider all the different types of distribution channels that are available to you.
Promotion represents all of the communications and means of letting people know about your business.
Promotion includes:
Advertising
Public relations
Publicity
Direct marketing
Online (Website) and E-Marketing
Trade and Consumer shows
Word of mouth
A promotional mix specifies how much attention to pay to each subcategory and how much money to budget for each item. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, positioning or competitive retaliation.
Promotion can be through brochures, trade displays or editorial in print media such as magazines generated from familiarisation visits. Make the most of cost-effective promotional opportunities such as public relations, word of mouth and web and e-marketing.
Even the most appealing product requires some form of promotion in order to maximise sales and financial return. Advertising can help raise awareness of a product and create an appealing product image.
Advertising covers any communication that is paid for, from cinema commercials, radio and Internet adverts through to print media, television and billboards. It can reach a large audience at once and the same message can be repeated many times.
Creating the right message
The advertisement should convey the following important information to the potential customer:
Introduce a particular product/service
Explain the product or service
Demonstrate its unique selling points
Provide an indication of price
Indicate where the product is available/ distributed for sale
Advertising in the tourism industry
Advertising in the tourism industry is somewhat different to other industries. A holiday is an intangible product that the consumer can’t see or touch before they buy. Often the customer will pay for the product before experiencing it.
With this in mind, advertising priorities should consider:
Who would find your product most appealing?
What are the potential customers’ needs and desires?
What creative methods can be utilised to generate interest in a particular product?
Leaflets/Flyers
Either distributed by hand, in letterboxes or inserted in publications
Print advertising
Placed in local, regional or national newspapers, ethnic publications, trade and tourist magazines, journals or newsletters and magazines relevant to your target market.
Canvassing
By way of sales visits/sales calls
Radio Advertising
Placed locally or regionally
Wholesaler Programs
Promotional costs for such programs are shared and therefore less expensive.
They can also reach a wider audience.
Sponsorship
Consider sponsoring local community events which attract large crowds and significant media coverage. Participating in such events can improve business exposure.
Listings and displays
Includes advertisements in telephone or business directories and cinema advertising
Cooperative Advertising
Cooperative advertising and promotion with your local, regional or industry association will help your message get wider distribution and because there are more businesses involved it will also cost less.
E-Marketing
Tourism Victoria, in partnership with other state tourism organisations through the Australian Tourism Data Warehouse (ATDW), has produced a series of online marketing tutorials for tourism operators. The Online Marketing E-kit covers everything from the basics of developing a good web site to advanced topics like search engine marketing and online product.
Brochures are an important means of conveying your image and message to potential customers. Brochures need to be easy to read with an eye-catching heading, a simple message, and easy-to-read print.
There are some basic decisions that need to be made early in the brochure production process. e.g:
What do you want your brochure to do?
Who is the brochure aimed at?
What size/style should it be?
What is your budget?
How many do I need?
Your brochure should be consistent with other brochures in the industry. These are usually either A4 in size (210mm x 297mm) or DL (210mm x 100mm). Both these sizes fit standard size envelopes.
What to include in a Brochure
Be sure that you include:
Tour details - the number of days, departure dates, the itinerary, departure or pick-up points, start and finish times
Booking conditions
Contact details for bookings (phone/fax numbers, email and web addresses)
Validity dates of the brochure
Tariffs or tours prices - this section should include discounts for pensioners, students, etc. and list what is and is not included in the price
Alternative booking agencies
Room on the back of the brochure for a travel agents stamp (if you are distributing to retail outlets)
A map is useful, particularly if you are intending to promote your product overseas or interstate. Maps should show the location of your product in relation to Victoria or Australia.
When drafting the copy (or words) of your brochure make sure you do not include any unacceptable (illegal) clauses or misleading information. There has been an increase in the number of legal actions bought against operators for loss of enjoyment or deceptive and misleading advertising. It is essential to honestly represent your product/service in promotional material. If in doubt, seek legal advice.
The impact of your brochure will be dependent on effective distribution. You must consider who you want to distribute your brochure to and have a system in place to update stocks as required.
Brochure Distribution
Potential distribution points include:
Personal delivery to other attractions and facilities
Display at your own facility, information centres and accommodation facilities
Availability at transport terminals including airport, rail and coach operations
Inclusion in local/regional information kits
Direct mail to former and potential customers, related government departments and travel media
Handouts at seminars, conferences and official functions
Appropriate travel shows, caravan and camping shows, specialist markets i.e. farmers markets etc
You have just completed your marketing plan and one of your aims is to achieve positive media coverage in the next 12 months. How do you achieve publicity? What do you need to do for media to take note of your business/product/service?
Tourism Victoria provides a Media Guide geared to help you understand what the media is, how it works and how you can better promote your product, service or event through a variety of media channels.
To be successful in the marketplace, a product must be priced accurately and competitively. This requires a clear understanding of the individual costs of all product components and their impact on total product price.
Factors Influencing Pricing
Seasonality: Fluctuations in business between high and low seasons.
Operating costs: Includes general overheads, promotion and labour costs which can vary, depending on business peaks and troughs.
Competition: This influences the maximum price for which a product can be sold.
Demand: Generated by existing and potential customers.
Important points to consider when setting your prices are:
The total costs involved in getting the product or service to the market
Required profit margins
Price sensitivity of target markets
Commission levels and other distribution costs
Allowance for any taxes that are applicable
The research and statistical information that is available
Competitor analysis and competitive advantage
Market and image perception of the product and the region
The image of the business
The perceived value of the product
The quality of the product
Distribution Channels
Expanding the number of distribution channels selling a product can improve sales and profitability. Establishing a business link with sales intermediaries does involve some costs. These costs are commonly known as commission and are classified as a distribution cost.
Who’s who in the distribution process?
Retailer / Travel Agent
Either based in Australia or overseas and commonly known as a retail travel agent.
Wholesaler
Either based in Australia or overseas, wholesalers provide retailers with travel packages comprising of two or more products supplied by different operators.
Inbound Tour Operator
Based in Australia and responsible for booking the ground arrangements on behalf of an international wholesaler.
Pricing products with commissions
Each distribution channel receives a level of commission which is generally a standard rate. These commissions should be added to the nett rate to create a retail price.
Distribution channel commission
International or domestic retailers who sell directly to a customer: 10%
International or domestic wholesalers who sell to retailers, who then sell to a customer: 20%
Inbound tour operators who sell to wholesalers, who then sell to retailers, who then sell to a customer: 25-30%
Commission Breakdown
Dynamic Pricing
Dynamic pricing is a popular method of pricing in the tourist industry. Higher prices are charged during the peak season, or during special-event periods.
In the off-season, hotels may charge only the operating costs of the establishment, whereas investments and any profit are gained during the high season.
Varying Levels of Dynamic Pricing
Special Event Surcharges
Seasonal Rates
Day of the week variations
Re-negotiations based on demand
Surcharges for Ad Hoc groups + FIT on constrained days (above allocation)
In order to sell your product it must be easy to buy. Packaging can improve business and provide travellers with well-priced, attractive and convenient holiday options.
A package combines two or more products so that the purchaser is advantaged compared with buying the items separately. Core holiday components-transport, accommodation, meals, attractions, entertainment-can be carefully combined into a complete packaged experience that provides the customer with convenience or a more competitive price.
Develop relationships with the organisations that promote your product - the local tourist association, tourist information centres, RACV and Tourism Victoria.
Tourism Associations promote cooperation, successful partnerships and the exchange of industry experience. Policy, planning and tourism development enquiries can be directed to Victoria’s Regional Tourism Associations.
For a complete list of Victoria’s Regional Tourism Associations please visit the ARTN website
Accreditation is a set of industry standards established by the tourism industry to provide a model for better business practice and customer service. In other words, accreditation provides business operators with a guide or outline of industry requirements to help them plan, develop, improve and document their business practices and procedures.
Tourism Accreditation Board of Victoria Inc
The Tourism Accreditation Board of Victoria Inc (TABV) administers the accreditation program in Victoria.
TABV contact details: Address: Level 2, 10 Queen Street, Melbourne, VIC 3000
Phone: (03) 9620 4199
Email:
Website: www.atapvic.net.au
Victorian Tourism Awards
The Victorian Tourism Awards recognise and reward excellence across all sectors of the tourism and hospitality industry. The recognition and rewarding of quality and innovative businesses translates into a number of competitive advantages and benefits.
If you are you looking for financial support, advice, or education and training programs to help improve your business, the Victorian and Federal Government can assist with a range of funding and support services for all aspects of business from research and development to management and export.
Sign up and list your business on Victoria’s official consumer website, www.visitvictoria.com, one of the leading state tourism websites in Australia.
Create your own listing, complete with images, a full description, facilities, rates and maps that can be updated at any time. Tourism Victoria also offers businesses a personalised web address.
AAA Tourism, on behalf of Australia’s Auto Clubs, manages the renowned STAR Rating Scheme for the Australian accommodation industry. In addition, AAA Tourism manages Australia’s most comprehensive accommodation database and is the major publisher of online content and travel guides, available through the Auto Club websites, retail network and other selected outlets.
The Annual Victorian Tourism Conference gathers together tourism industry professionals to discuss issues at the forefront of the industry, strengthen networks and learn skills to create a more sustainable and professional tourism industry.
Tourism Alliance Victoria, Small Business Victoria, Tourism Victoria and the OAMPS Group, have combined their expertise and resources to develop an introduction into the tourism industry for new operators. Its intention is to provide a strategic insight across a range of essential business practices and improve overall business acumen and planning.
Victorian Business Centres
Victorian Business Centres offer business start-up information and referral services. They also have expert counsellors who can assist in the development of a business plan and marketing plan.
Tourism Accreditation Board of Victoria Inc