Tourism Marketing I: Goods and Services, the Characteristics of Services, Services Marketing, Types of Tourism Services, the Tourism Marketing Environment, Strategic Planning and the Marketing Process, Organising Marketing, Service Quality and the Gap Model, Marketing Research, Segmentation, Targeting and Positioning, Relationship Marketing and the Familiarisation Trip
1. Goods and services, the characteristics of services, and services marketing
A good is a physical object that can be seen, touched, stored, transported and owned; a service is an act, performance or experience offered by one party to another that is essentially intangible and does not result in ownership. Most products lie on a continuum between the two: a restaurant meal combines a tangible dish with the intangible service of cooking and serving it, and a holiday is almost entirely intangible. Services marketing is the adaptation of marketing to that intangibility. It is needed because the traditional four Ps, designed for goods, cannot by themselves manage an experience that is produced in the customer's presence by people, and it is significant in tourism because nearly everything a tourist buys, transport, rooms, meals, guiding, entertainment, is a service.
| Characteristic of services | Meaning | Marketing response in tourism |
|---|---|---|
| Intangibility | Cannot be seen, felt or tried before purchase | Make it tangible: photographs, brochures, reviews, the physical setting, guarantees, brand |
| Inseparability | Produced and consumed at the same time, usually with the customer present and taking part | Select and train front-line staff; manage other customers; design the guest's role |
| Heterogeneity (variability) | Quality varies with who delivers it, when and where | Standard operating procedures, training, service blueprints and quality monitoring |
| Perishability | Cannot be stored; unsold capacity is lost | Demand management: differential pricing, yield management, reservations, off-peak promotion |
| Lack of ownership | The customer buys access or use, not the thing itself | Emphasise the experience, memories and membership benefits |
2. Types of tourism services, the tourism marketing environment, and strategic planning
Tourism services are of several types: transport services (air, rail, road, water); accommodation services; food and beverage services; attraction and entertainment services (sites, parks, events); intermediary services (travel agents, tour operators, online platforms); destination services (information, guiding, local transport); and ancillary services (insurance, foreign exchange, visa facilitation, shopping). The marketing environment in which they are sold has two layers. The micro-environment is close to the firm: the organisation itself, its suppliers, its intermediaries, its customers, its competitors and its publics (media, government, local community). The macro-environment is the wider set of forces analysed as PESTLE, political, economic, social, technological, legal and environmental, such as visa policy, exchange rates, demographic change, online booking, consumer law and climate change. A SWOT analysis combines the internal strengths and weaknesses with the external opportunities and threats.
| Strategic tool | What it offers |
|---|---|
| The marketing process | Mission and objectives → situation analysis (environment, SWOT, market research) → segmentation, targeting and positioning → the marketing mix → implementation → evaluation and control, feeding back into the next plan |
| Ansoff's product–market matrix | Market penetration (existing products in existing markets), market development (existing products to new markets), product development (new products for existing markets) and diversification (new products in new markets) |
| BCG growth–share matrix | Stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share) and dogs (low growth, low share), used to balance a portfolio of products or markets |
Organising and implementing marketing in a tourism organisation means choosing a structure and making the plan happen. Marketing departments are organised by function (advertising, sales, research, digital), by geography (regional sales offices, overseas representation), by product (a manager for each brand, circuit or hotel), or by market (corporate, leisure, MICE, travel trade), often in a matrix. A national tourism organisation such as India's Ministry of Tourism markets through its overseas India Tourism offices, campaigns such as Incredible India, trade fairs and familiarisation trips, and support to the states and industry. Implementation depends on budgets, timetables, responsibility for each action, coordination with sales and operations, and a culture in which every employee sees himself as part of marketing, since in services the staff are the product.
3. Service quality and the gap model
Service quality is the degree to which a service meets or exceeds the customer's expectations; it is judged by comparing what was expected with what was perceived. A. Parasuraman, Valarie Zeithaml and Leonard Berry proposed the gap model in 1985 and the SERVQUAL instrument in 1988, which measures quality on five dimensions: tangibles (physical facilities, equipment and the appearance of staff), reliability (performing the promised service dependably and accurately), responsiveness (willingness to help and prompt service), assurance (knowledge, courtesy and the ability to inspire trust) and empathy (caring, individual attention). The five dimensions are remembered as RATER. For each attribute the guest rates expectations (E) and perceptions (P) on a scale, and the gap score is P − E: a negative score means the service fell short.
| Gap | Between | Typical cause in a hotel or tour |
|---|---|---|
| Gap 1, the knowledge (listening) gap | What customers expect and what management thinks they expect | No guest research, managers far from the front line |
| Gap 2, the standards (design) gap | Management's perceptions and the service standards it sets | Vague or missing standards, such as no target time for check-in |
| Gap 3, the delivery (performance) gap | The standards and the service actually delivered | Untrained or overworked staff, poor systems |
| Gap 4, the communication gap | The service delivered and what external communications promised | Brochures and websites that overpromise |
| Gap 5, the customer gap | Expected service and perceived service | The result of Gaps 1 to 4 together |
4. Marketing research, and segmentation, targeting and positioning
Marketing research is the systematic gathering and analysis of information for marketing decisions. Its process is to define the problem and objectives, choose the research design (exploratory, descriptive or causal), identify sources (secondary data such as arrival statistics and industry reports, and primary data from surveys, interviews, focus groups, observation and experiments), design the sample and instruments, collect and analyse the data, and report. In tourism it is used for visitor profile and satisfaction surveys at destinations, image studies, conversion studies (what share of people who asked for a brochure actually came), advertising tracking, forecasting demand and testing new products. Its methods are taught in detail with Unit IX.
| Step | Content | Tourism example |
|---|---|---|
| Segmentation | Dividing the market into groups with similar needs: geographic (country, region, city), demographic (age, income, life-cycle stage), psychographic (lifestyle, personality, values), behavioural (purpose of visit, benefits sought, usage rate, loyalty) | Honeymooners, backpackers, pilgrims, senior travellers, MICE delegates |
| Targeting | Choosing which segments to serve: undifferentiated (one offer for all), differentiated (a separate offer for each of several segments), concentrated (one niche) or micromarketing (individuals and localities) | A heritage hotel concentrating on high-spending cultural tourists |
| Positioning | Creating a distinct, valued place for the product in the target customers' minds against competitors, often shown on a perceptual map | Kerala as "God's Own Country", a green and restful destination |
5. Relationship marketing and the familiarisation trip
Relationship marketing, a term introduced by Leonard Berry in 1983, shifts the aim of marketing from winning single transactions to building long-term relationships with customers, because keeping a customer usually costs much less than finding a new one and loyal customers spend more, recommend the business and are less sensitive to price. In tourism its tools are loyalty programmes (airline frequent-flyer schemes, hotel reward programmes), customer relationship management databases that record preferences so that a returning guest's room and pillow are ready, personalised communication, service recovery that turns a complaint into loyalty, and partnerships with travel agents and corporate clients. The value of a relationship is measured as customer lifetime value, the profit a customer brings over all his future purchases.
A familiarisation trip ("fam trip") is a free or heavily subsidised trip that a destination, hotel, airline or tour operator gives to travel agents, tour operators or journalists (a "press trip") so that they experience the product and then sell or write about it. Because tourism is intangible, the intermediary who has slept in the hotel and walked the trail sells it far more convincingly than one who has only read the brochure. A fam trip is planned like a showcase tour: the right participants (active sellers in the target market), a tight itinerary showing the product's range, hotel inspections, meetings with local suppliers, and follow-up to measure the bookings that result. The Ministry of Tourism and the states host fam trips for overseas operators and media, often linked to trade marts.
Key takeaways
- Services are intangible, inseparable, heterogeneous and perishable and bring no ownership, so services marketing makes them tangible, trains the staff who produce them, standardises delivery and manages demand; almost everything a tourist buys is a service.
- Tourism services span transport, accommodation, food, attractions, intermediaries, destination and ancillary services; the micro-environment is firm, suppliers, intermediaries, customers, competitors and publics, the macro-environment PESTLE, and SWOT joins them.
- The marketing process runs from mission and analysis through STP and the mix to implementation and control; Ansoff gives penetration, market development, product development and diversification; BCG gives stars, cash cows, question marks and dogs; marketing is organised by function, geography, product or market.
- SERVQUAL (1988) measures tangibles, reliability, responsiveness, assurance and empathy (RATER) as P − E; the gap model (1985) has the knowledge, standards, delivery and communication gaps, which together produce Gap 5, the customer gap.
- Research informs every decision; segmentation is geographic, demographic, psychographic or behavioural, targeting undifferentiated, differentiated, concentrated or micro, positioning a distinct place in the mind; relationship marketing (Berry, 1983) builds lifetime value; fam trips let intermediaries and media experience the product.
Practice questions (10)
Attempt each one before opening the answer. Every explanation names the tempting wrong option as well as the right one, because that is where marks are lost.
Two guests on the same tour receive very different service because they had different guides. This illustrates which characteristic of services?
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Answer: A — Heterogeneity (variability)
Heterogeneity means quality varies with who delivers the service, when and where. Firms respond with standards, training and monitoring. Perishability is about unsold capacity, and intangibility about not being able to see the service beforehand.Which of the following are among the five dimensions of service quality measured by SERVQUAL? Select all that apply.
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Answer: A — Reliability; C — Empathy
The five dimensions are tangibles, reliability, responsiveness, assurance and empathy (RATER). Profitability and market share are business outcomes, not dimensions of quality as the customer perceives it.In the gap model of service quality, the gap between the service customers expect and the service they perceive they received is
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Answer: D — Gap 5, the customer gap
Gap 5 is the customer's own comparison of expectation and perception, and it results from the four provider gaps. Gap 1 is management's misreading of expectations, Gap 3 the failure to deliver to standard and Gap 4 overpromising.In a SERVQUAL survey of a resort, guests rate their expectation of responsiveness at 6.2 and their perception of it at 5.4 on a seven-point scale. By how many scale points do perceptions fall short of expectations?
Numerical answer — type the value.
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Answer: 0.8
The gap score is P − E = 5.4 − 6.2 = −0.8, so perceptions fall short by 0.8 points. A negative gap marks the dimension that needs attention; a positive score would mean expectations were exceeded.A tour operator that already sells Rajasthan tours to British clients starts selling a new Himalayan trekking product to the same British market. In Ansoff's matrix this is
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Answer: C — product development
A new product for an existing market is product development. Selling the Rajasthan tour to a new market such as Japan would be market development; selling more of it to the British would be penetration; a new product in a new market would be diversification.In the BCG growth–share matrix, a product with a high market share in a slow-growing market is a
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Answer: A — cash cow
Cash cows generate more cash than they need and fund stars and question marks. Stars have high share in high-growth markets, question marks low share in high-growth markets and dogs low share in low-growth markets.A free or subsidised trip given to travel agents or journalists so that they experience a destination and then sell or write about it is a
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Answer: A — familiarisation (fam) trip
A fam trip educates intermediaries and media about the product. An incentive trip rewards a company's staff or dealers; an escorted tour is a group tour with a tour manager; an excursion fare is an airline fare.Assertion (A): Hotels and airlines invest heavily in loyalty programmes. Reason (R): Retaining an existing customer usually costs much less than acquiring a new one, and loyal customers spend more and recommend the business.
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Answer: A — Both A and R are true, and R is the correct explanation of A
Both are true and R explains A: the economics of retention, the core argument of relationship marketing, is exactly what loyalty programmes exploit by rewarding repeat purchase and capturing customer data.Which of the following are psychographic bases for segmenting a tourism market? Select all that apply.
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Answer: A — Lifestyle; B — Values; C — Personality
Psychographic segmentation groups people by lifestyle, personality, values and attitudes, which is how Plog's allocentric and psychocentric travellers are defined. Age is a demographic base.A hotel's managers believe guests care most about the lobby's décor, but guests actually care most about quick check-in. In the gap model this is
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Answer: C — Gap 1, the knowledge gap between customer expectations and management's perception of them
Management has misread what guests expect, which is Gap 1; its usual cause is too little research and listening. Gap 2 would arise if management knew guests wanted fast check-in but set no standard for it.