Marketing in the Tourism Service Industry - Case Study Example

Individual Report Name Institutional Affiliation Executive Summary Marketing in the tourism service industry is an important component to both the consumer and the producer. However, its success depends on the effective application of marketing tools relevant to the attributes of the organization and the characteristics of the target market. With an appropriate segmentation of the potential clients, it becomes easier for the lodge to tailor their service to match the needs of the guest. Contributing to the report is the case of a Spicy villa eco-lodge whose location and responsibility attracts multiple participants and potential risks to the business. The importance of the case to the discussion is its abilities to clearly identify the importance of service industry marketing models in the precise service provision procedures. Table of Contents Contents Executive Summary 1 Table of Contents 3 Contents 3 Introduction 5 Marketing in the service industry is an imperative area to consider following its impacts on the target consumer. According to Gürbüz, Albayrak and Alaybeyoğlu (2014), marketing is a process involving the performance of activities such as planning, pricing, promotion, and distribution of goods, services and ideas with an aim of satisfying the consumer and the entrepreneur. Focusing on the tourism sector, eco-lodges are one of the competitive businesses where the management needs to apply active marketing strategies to gain a competitive advantage. By definition, they include accommodation facilities built close to or within a natural environment with the sole purpose of attracting eco-tourists. Therefore, appropriate marketing of the service available in a particular eco-lodge depends on the nature of the destination (Kim, Palakurthi and Hancer, 2012). The essay reports on the Spicy-Villa eco-lodges examining its target market and segmentation criteria, identifying and describing its perceived risks, its abilities to capitalise on key search, experience and credence attributes on the market mix components and provides a recommendation on mitigating the potential risks. 5 Target Market Description and Segmentation Criteria 5 Key Types of Perceived Risks 7 Managing Search, Experience and Credence Attributes 8 Recommendation to alleviate Perceived Risks 10 Conclusion 10 References 11 Individual Report Introduction Marketing in the service industry is an imperative area to consider following its impacts on the target consumer. According to Gürbüz, Albayrak and Alaybeyoğlu (2014), marketing is a process involving the performance of activities such as planning, pricing, promotion, and distribution of goods, services and ideas with an aim of satisfying the consumer and the entrepreneur. Focusing on the tourism sector, eco-lodges are one of the competitive businesses where the management needs to apply active marketing strategies to gain a competitive advantage. By definition, they include accommodation facilities built close to or within a natural environment with the sole purpose of attracting eco-tourists. Therefore, appropriate marketing of the service available in a particular eco-lodge depends on the nature of the destination (Kim, Palakurthi and Hancer, 2012). The essay reports on the Spicy-Villa eco-lodges examining its target market and segmentation criteria, identifying and describing its perceived risks, its abilities to capitalise on key search, experience and credence attributes on the market mix components and provides a recommendation on mitigating the potential risks. Target Market Description and Segmentation Criteria Based on Mackoy and Osland (2004), lodges pick a specific design that aligns with the nature of the location to attract eco-tourists. Mackoy and Osland (2004) mentions the salient attributes as the most significant in formulating the design, especially in influencing the consumer decision. Moreover, it is these attributes that describe the type of target market relevant to their preference and the tailoring of the services to meet the consumers’ needs. Mackoy and Osland (2004) emphasize the importance of identifying and examining attributes as a means to characterize the target market. Focusing on Spicy Villas Eco-lodges (2017), the first characteristic of the destination is the simplicity of its infrastructure supporting the eco-friendly environment by constructing using natural materials. There is also the surrounding natural feature which includes a mountain providing amazing views. The features identify a potential consumer who values nature and actively participates in environmental sustainability. Mackoy and Osland (2004) refer to these targeted customers as dedicated eco-tourists who travel with a mission to engage in a nature-based form of tourism. The natural settings appeal to the eco-tourists who are eager to learn more about it and contribute towards its sustainability. Eco-lodges address a variety of participants including the consumer and the society. According to Kim, Palakurthi and Hancer (2012), the aforementioned groups structure the marketing strategy of the eco-lodges with the main theme being an environmental concern. Examining the features of Spicy Villa eco-lodge, it is evident that they not only provide accommodation services but are also responsible for the local environment and the community (Spicy Villas Eco-lodges, 2017). Concerning their responsibility to the community, the lodge sets up the project in collaboration with the neighbouring communities and encourages the guests to participate either through charity donations or volunteerism. Therefore, owing to the particular responsibility of Spicy villa eco-lodge, their target market is philanthropists with skills relative to the available projects namely, teaching and medicine. The categorization of eco-tourists includes their particular interest in engaging in the tourism activity as well as the performance of the planning process. Based on the planning process, Mackoy and Osland (2004) provide two groups of independent and group travellers. The case of Spicy villa eco-lodge attracts both the independent and group travellers since the nature of the projects and the volunteer opportunities are open to both individual and group participants. The importance in either group of the target consumer is their willingness to engage in these projects in fulfilment of their course to the locals and the environment. The characteristics of the consumer influence the segmentation criteria employed by an eco-tourism destination. According to Sumanapala, Perera, Kotagama and Silva (2015), exploring the characteristics of the visitors especially their demography, trip characteristics and preferences, and motivation to the destination provides vital knowledge in developing excellent segmentation model. Common factors that determine segmentation include age, income, the level of education, and the relation of travellers. However, Sumanapala et al. (2015) argue that the current ecotourism business captures a broad spectrum of activities facilitating both expenditure and luxury needs. Such is the case of the Spicy Villa eco-lodge, where according to their target market; a psychographic form of segmentation proves suitable (Spicy Villas Eco-lodges, 2017). The model accounts for the variation of consumers’ personal traits, interest, attitudes, and lifestyle. Moreover, it encourages the participation of a larger group by promoting different motivation factors (Sumanapala et al. 2015). An example of the relevance of psychographic segmentation in Spicy villa eco-lodge includes the different tours identifying motivation factors such as animals, nature adventures, and cultural experience. Key Types of Perceived Risks Identification of Risk Description of Risk Financial and economic cost According to Eagles, McCool, Haynes, Phillips and United Nations Environment Programme (2002), the rise in demand for these destinations interprets to increased needs for facilitation which may result in hiked prices. Social concerns The close proximity of the lodge to the community possess the risk of security. Moreover, there is the possibility of hostility from the locals resisting cultural changes possible through the interaction of the tourist with their population (Eagles et al. 2002). Environmental risks The Spicy Villa sits close to mountains therefore; the climatic features of the areas may negatively impact the visitors depending on their health and allergies. Moreover, the location of the destination introduces a risk of natural hazards such as floods, avalanches, and storms. Conversely, the use of these services by the consumer includes a risk of contributing to environmental degradation (Eagles et al. 2002). Lack of infrastructure, planning and marketing. Based on Asmamaw and Verma (2013), the absence of well-developed infrastructure, marketing and planning strategies leads to unfulfilled tourism potential. Therefore, the consumer may face the risks of engaging in an unfulfilling exercise that does not satisfy their motives. Managing Search, Experience and Credence Attributes Marketing through the model of marketing mix model involves the integration of factors that meet the consumer needs. Based on Gürbüz et al. (2014), the paradigm identifies marketing tools such as product, price, promotion, and place. Similarly, Khan (2014) identifies marketing mix as a concept of marketing utilised in reaching the desired state in the target market. According to Khan (2014), the components of the market mix include the people, process and physical environment which are an advancement of the earlier four P model. The extended elements are relevant in service delivery, especially regarding the eco-lodges. Product classification includes the categories of search, experience and credence (Girard and Dion, 2010). The three classes influence consumer perception and direct the decision by the service providers. Concerning the search products, Spicy Villa eco-lodge could develop an interactive website where the consumer gets to evaluate the particular services. The website will facilitate interactions of persons which influence a positive perception of the quality of services of the destination (Khan, 2014). Moreover, it increases service value by engaging the target market in the processes of the lodge, revealing the elements of each service and availing feedback from past clients. Through the website, advertising the physical attributes of the lodge is possible leading to more attraction of the guest. Experience products require more input by the providers since the consumer only gets to know of their attributes after purchasing or using the service (Girard and Dion, 2010). More challenging is the ability of the lodge to capitalise on credence attributes whose value comes long after the use of the service (Girard and Dion, 2010). In this case, both products identify the need to develop a good reputation and positive brand name about the services of the lodge. Therefore, Spicy villa eco-lodge should customise its credence attributes as a means to provide unique service incomparable to other lodges. Moreover, the inclusion of more community developmental projects and hosting cultural events contributes to more meaningful experiences of its target markets. Recommendation to alleviate Perceived Risks Risk elimination in the tourism industry is important in generating its positive impacts to the different shareholders and the environment. In regards to Buckley (2009), it is important to design effective risk alleviation strategies relative to the affected persons. However, the application of the recommendations requires cooperativeness of the shareholders. Therefore, in managing economic and financial risk, the introduction of park policies regulating the charges and government involvement improves on budgeting (Buckley, 2009). Concerning the social risks as well as the lack of infrastructure, the involvement of the local communities in the projects, gaining support from NGO’s, and the inclusion of technological and behavioural mechanism are active means that improve the situation (Buckley, 2009). Lastly, on managing the environmental risks, it is important to inform the potential clients of the weather conditions of the destination to prepare them early. Moreover, the application of technology is important to minimise environmental impacts resulting from the use of these areas. An example is developing waste management systems. According to Buckley (2009), the inclusion of the government helps in educating the locals on disaster management strategies limiting the gravity of a natural disaster. Conclusion Learning about the service industry marketing provides an in-depth knowledge and understanding about the activities of a company in relation to its target market. In particular, there is the important role of marketing models whose application follows the attributes of the target group and the characteristics of the service provider. More important, is the identification of categories of products and service that aligns with particular strategies by the producer to promote the value and quality of the services. Lastly, the unit captures the cycling production process, right from service development to the actual provision of the target consumers and how these customers give back to the society to maintain sustainability. References Asmamaw, D., & Verma, A. (2013). Ecotourism for environmental conservation and community livelihoods, the case of the Bale Mountain National Park, Ethiopia. Journal of Environmental Science and Water Resources, 2(8), 250-259. Buckley, R. (2009). Evaluating the net effects of ecotourism on the environment: a framework, first assessment and future research. Journal of Sustainable Tourism, 17(6), 643- 672. Eagles, P.F., McCool, S.F., Haynes, C.D., Phillips, A., & United Nations Environment Programme. (2002). Sustainable tourism in protected areas: Guidelines for planning and management, 8, 30- 39. Girard, T., & Dion, P. (2010). Validating the search, experience, and credence product classification framework. Journal of Business Research, 63(9), 1079- 1087. Gürbüz, T., Albayrak, Y. E., & Alaybeyoğlu, E. (2014). Criteria weighting and 4P's planning in marketing using a fuzzy metric distance and AHP hybrid method. International Journal of Computational Intelligence Systems, 7(sup1), 94-104. Khan, M. T. (2014). The concept of ‘marketing mix ‘and its elements (a conceptual review paper). International journal of information, business and management, 6(2), 95 Kim, Y. J., Palakurthi, R., & Hancer, M. (2012). The environmentally friendly programs in hotels and customers' intention to stay: An online survey approach. International journal of hospitality & tourism administration, 13(3), 195-214. Mackoy, R. D., & Osland, G. E. (2004). Lodge selection and satisfaction: Attributes valued by ecotourists. The Journal of Tourism Studies, 15(2), 13. Spicy Villas Eco-lodges. (2017). Welcome to Spicy villa eco-lodges. Retrieved from http://www.chiangmaiecolodges.com/ Sumanapala, H. D. P., Perera, P. K. P., Kotagama, S. W., & Silva, D. A. C. S. (2015). ECO-LODGE PATRONS'CHARACTERISTICS: THE SRI LANKAN PERSPECTIVE. International Journal of Research in Social Sciences, 5(2), 509. Read More