Western Australia Destination Marketing - Case Study Example

RUNNING HEAD: Destination Marketing Western Australia Destination Marketing Report Name: Course: Tutor: 3rd May, 2011 Table of Contents Western Australia Destination Marketing Report 1 Executive Summary 2 1.0 Introduction 3 2.0 Western Australia as a Tourist Destination 4 3.0 Destination Marketing Organization: Discover West Holidays 8 4.0 Effective Communication to the key Destination Market Segments 11 5.0 Critical Segments to Market in Future (2 Years) 13 6.0 Conclusion 14 7.0 References 14 Executive Summary This is a report on Western Australia as a tourist destination. Due to changes in the world like in technology and changes in consumer tastes and needs, all that have led to globalization, developments have been made in the tourism industry and this has resulted in a lot of competition. So many tourist sites have been discovered, new ideas have led to the development of new tourist activities and most tourist attraction destinations provide almost similar activities. The need to survive in the tourism industry has led to improvement in provision of services so that more tourists can be attracted to a specific destination. Because of that, tourists have so many destinations with good services and attraction sites and features to visit. Western Australia is one of those tourist destinations that fight to remain competitive in the tourism industry market. It faces competition from around the world as well as from other regions in Australia as described in the report. This report has described its common features, its key market segments, the organization responsible for its marketing, its effectiveness in its role, and a proposal of what should be done to market the destination appropriately in the future. 1.0 Introduction Tourist activities take place in destinations and for this reason, destinations form the pillar of tourism. In any business, managers or businessmen have to know their competitors, how they can improve the business to have a high competitive advantage or maintain the one already obtained. In order to do this, SWOT analysis has to be conducted or any analysis that can enable it identify the threats, opportunities, strengths and weaknesses. One of the threats in tourism destinations is the existence of substitute products and rival places. Middleton, Fyall, Morgan and Ranchhod indicate that travelers have too much of destinations to choose from because of availability of substitute products and rival places. It means that tourism destination markets are so many with the same products offered, causing high competition in the industry (2009). For tourist destinations to attract tourists and remain operating in the tourism industry, they have to find effective ways to market the destinations. Marketing is the process of creating value to the chosen consumers of a company, and industry or an enterprise. Value is created by meeting customers’ needs therefore a firm or an industry must define itself by the benefits it provides the customer and not the products. Destination marketing is concerned with selling of places. It means showing what the places have got in general, what it has that other competitors do not have, the benefits of tourists visiting the place rather than the competitor and any other marketing activity that creates value to the tourist (Silk & Harvard Business School, 2006). This paper is a destination marketing report based on Western Australia marketed by ‘Discover West Holidays’. The report shows the segments Discover West Holidays has covered in its marketing and how effective it has communicated the relevant market segments. Recommendation on the way forward is also given. 2.0 Western Australia as a Tourist Destination Western Australia is one of Australia’s regions distinguished by Perth (the world most remote capital city), its large proportions and sparse population. It has various tourism attraction sites. The region has spectacular coastline dotted with wild remote beaches and dramatic inland landscapes. There are dramatic gorges and waterfalls, rugged plains, the most ancient rocks in the world and isolated beaches on the northern part of the region. The southern part has large areas of springtime wild flowers, blossoming green karri forests and white sand beaches and turquoise waters. The region also has wildlife watching as a tourist activity with birdlife, whale, seals and dolphin as the major activities. Perth, a cosmopolitan city, also offers Western Australia much in terms of gastronomic experience. The city is recognized for its gourmet foods and wines ranked among the best in the country and its southwest region that offers the gastronomic experience mentioned above. Eerie ghost towns, mysterious rock formations and the red interior make its inland very rich (Ashworth, Turner & Egger, 2004). The region has a coastline of 12 000 km, in which most of the best beaches in Australia lie. It has Broome, Kimberley, Ningaloo Reef, Rottnest Island, Busselton, Monkey Mia, Perth, Margaret River, Pilbara and Fremantle as the most popular tourist destinations (Discover West Holidays, 2011). Major tourist activities in the region include; eco tourism, beach holidays, adventure, city escapes, wild flowers, honeymoons, wine tourism, fishing, diving, romantic getaways, Aboroginal culture and snorkeling (Discover West Holidays, 2011). All these plus others not included but present, make Western Australia a tourist attraction destination (Australian Government, 2011). Below is the map of the region. (Obtained from: Tourism Research Australia, 2011) 2.1 Western Australia Key Market Segments Western Australian market is divided into five regions. Each region has its own tourist attraction activities, sites and other attractions. The regions are; Australia’s coral coast Australia’s South West Australia’s North West Experience Perth and Australia’s Golden Outback (Australian Government, 2011) In 2009/10 year, a total of $6.6 billion was spent by tourists and 54% were by domestic overnight tourists. The region is mostly visited by domestic tourists. From a total of 17.4 million tourists that visited the state, 68% were domestic day visitors. From the details in 2009/10 summary report, Western Australia just like other Australian regions is visited by domestic day tourists, domestic night tourists and international tourists. This is another approach taken for market segmentation. If domestic day visitors already cover 68%, the remaining 32% is covered by international and domestic night tourists making domestic tourism the most dominant. Additionally, 68% already make it dominant even without the domestic night tourists. The regional tourism profile report also indicates that 43.1 million nights were spent in the region and 51% of them comprised domestic overnight visitors. Figures of total number of tourists that visited the region also indicate a total of 11,922 million domestic day visitors, 4,814 million domestic overnight and 684 million international visitors (Tourism Research Australia, 2011). 2.2 Other Segments of Tourism There are several other segments of the tourism market. From the definition of market segmentation; the process of grouping people based on their needs, characteristics and wants for a business or organization to accurately serve and communicate with these formed groups, the people grouped together can be tourists or tourism providers (VisionLink Consulting, 2002). A market segment for tourism providers can be, accommodation hotels, leisure activity beaches, site seeing attractions and so on. Considering the consumers, segmentation is vast. Tourists have different tastes and aims for visiting a destination. Their tastes may determine the class of hotels they want to stay in, the kind of activities they want to participate in and the services they would like to be offered. This may then classify tourists as either middle class, high class or low class forming a market segment. Their activities such as leisure, business, personal businesses and so many others, form another segment. According to Poel, Masurel and Nijkamp (n.d), there are four types of tourist markets. These are; the business market, VFR market, the pleasure market and other personal business markets. These markets are grouped based on the primary activities and secondary that each group does. Western Australia also has several market segments some of which have been described above. Western Australia VFR Travelers VFR travelers are those who travel for the purpose of visiting friends and/or relatives. There are different views about this group of tourists. Some authors are of the view that they are not recognized as important yet they are while others are of the view that even if they were recognized and included in the marketing plan, they would not bring much payoff. According to Lehto, Morrison & O’Leary (2001) and Backer (2008), their expenditures differ based on their purpose of visit, their place of stay and the destinations they visit. Most of them according to Crouch (2004) combine visiting friends and relatives with their shopping trips. Crouch also notes that a group of VFRs (that visit the Gold coast, Sunshine Coast and South Coast NSWand Perth) is considered to be of low income, they are considered to travel only when schools are closed and are not expected to travel by air unless coming from Tasmania (Crouch, 2004). Because of all these reasons, it is very unlikely to obtain high performance payoffs if destination marketers were to expend marketing resources on them. Backer in (2008) also explains that the most common mode of communication for this group of tourists is word of mouth. In a 2010 published paper, Backer explains that this group of tourists is assumed to contribute very little to the tourism industry as well as the local economies. The reasons behind this assumption are; the factors that influence their choices, their characteristics and behaviors, their motivations and little research about VFRs. Information about this group of tourists in Western Australia indicates that it is considered important among groups visiting Australia. Studies about VFRs, their trends and their contribution in Western Australian tourism industry indicate that this group is given much attention just like other tourist groups. (X5)’s compiled data about the trends of VFR travel into and out of Western Australia is one of such studies. Information indicates that VFR characteristics are monitored. In 1996-2006 for example, the number of VFRs travelling into Western Australia exceeded the number of those leaving for the same purpose to other countries each year (ABS, 2008). Current information on VFR statistics indicates that the group’s market decreased by -18.5% in 2010 but was flexible in 2009 (RTWA, 2011). It is also the second largest group of international visitors to tourists visiting for holidays (TRA, 2011). 3.0 Destination Marketing Organization: Discover West Holidays Western Australian region has so many destination marketers such as ‘Australia’ (Tourism Australia, 2011), ‘Discover West Holidays’, (Discover West Holidays, 2011) (‘Lonely Planet’ (Lonely Planet, 2011), ‘Tourism Western Australia (Tourism Western Australia, 2011)’, among so many others. Only one will be discussed in this section and that is ‘Discover west Holidays’. 3.1 Discover West Holidays Marketing of Western Australia This organization’s website advertises what Western Australia has to offer the tourists based on the attractions in various destinations, their requirements like flights, car hires, tours and hotels. Tourism market segments are several and as described above, segmentation depends on the wants, needs and characteristics of tourists and tourist service providers. The major market segmentation of Discover West Holidays is based on tourist requirements. 3.1.1 The Flights section This section gives details about the type of flights and their prices. There are also other packages advertised for example, flights and hotel packages. This targets tourists who prefer efficiency and time saving to money or who consider price when selecting a service. There are sections with cheaper prices and those with packages combining services at a fair price. Different prices capture different tourists with different preferences for services based on price/income and packages combined for convenience purposes target tourists who value convenience (Discover West Holidays, 2011). 3.1.2 The Car Hire section This is a section that describes the car models, the distance to be travelled and the amount of money to be charged. Prices again cover different types of tourists and accommodate those with little or who would prefer to use little money on transport services. The models give chance to those who are luxurious and can afford to have what they want. There is also a sub section of packages which charges car hire services on the basis of number of days to be spent with the car and destination. There are packages such as three day self drive package to Margaret River, tour and cruise to Fremantle and a six day ‘all inclusive’ package to Perth. Under this section, again the promotion of Western Australia as a tourist destination provides the tourists with various services and tastes to choose from (Discover West Holidays, 2011). 3.1.3 The Hotels Section Again in this section, there are hotels in specific regions with prices of staying in each hotel indicated. There are packages offered which also give the tourists choices, either to take the package or have own transport system and stay in the hotels. There are several accommodation options and under each option, details of what the hotel offers is given including a map, services and packages (Discover West Holidays, 2011). 3.1.3 Destinations’ Section Discover West Holidays has divided the Western Australian tourism market into: Perth, South Western Australia, Broome & Kimberley and North Western Australia regions. Detailed description of each region is given with its tourist attraction activities. The section also has an overview of the major tourist attractions and activities with a detailed description of each section upon a mouse click. Major tourist attraction activities and sites covered are; Broome, Margaret River, Perth, Monkey Mia, Ningaloo Reef and Busselton. These major features described act as attraction features. They show any visitor to the website, what a major tourist attraction Western Australia is. Detailed descriptions of each region with their attraction activities aim at capturing different tastes that tourists have. Tourists who would like to experience the gourmet foods and wines, the unique arts and crafts and natural attractions would go to Swan valley in Perth and still enjoy other attractions in Perth. All the details given capture all types of tourists (Discover West Holidays, 2011). 3.1.4 Tours This section describes areas to be toured. Market is divided according to what the tourists would like. There are two major market segments in this area and these are; the touring regions and the means of transport. The touring regions are such as Esperance, Perth tours, Albany tours, Bridge town tours and several others. In Esperance tours for example, there are 14 areas to be toured. Each area has detailed information about what it has to offer, the transport system and how much the tourist will pay for the service. The other segment is the means of transport in which different types of transport systems are described for the tourists to choose from. There are coaches, safari vehicles, self drive packages, flights and holiday packages (Discover West Holidays, 2011). 3.2 Discover West Holiday Competitors There are so many competitors with substitute products, same products or places with the same tourist attraction activities. In tourism there are so many attractions and all cannot be found in one place. There has to be a unique feature or unique features that attract tourists to a place. Decision making therefore rests on the tourists but making the tourist aware of the existence of such unique feature is the work of the destination marketing organization. In the world of today, destination marketing has revealed several tourists destinations giving tourists a variety to choose from. Competition is very high and destination marketers have to find new strategies of attracting more tourists or maintaining already existing tourists who have visited the place. It means making the tourists want to come back to the same destination. Destination marketing therefore should not focus on advertising the features and services to be offered alone, but needs to also coordinate with the service providers to ensure efficient services are provided. There are several competitors to Discover West Holiday. Internationally, there are several tourist attraction regions such as Africa, Europe Asia and so on. Considering this level, Discover West Holiday would be competing for international tourists with these destinations. Considering Australia, there are several regions with tourist attractions as well as others that are in Western Australia. There are: Australian Capital Territory, South Australia, Northern Territory, Tasmania, Victoria, New South Wales and Queensland (Australian Government, 2011). Western Australian region is therefore competing for both domestic and international tourists with these destinations. 4.0 Effective Communication to the key Destination Market Segments Do the Segments Effectively Communicate to the Different Types of Tourists? The main reason for development of segments is to effectively communicate to a specific group which forms the segment. Segments as indicated earlier are formed from similar characteristics like tastes, purpose and so on. In tourism, there are several segments and these can be from the tourists’ side and from the tourism service provider’s side. By dividing the tourism destinations into regions, it makes it easier for the tourist to understand what the region has to offer and to decide to visit the region or not. By dividing the market based on the tourist attractions, the tourist is given the choice of selecting a destination based on what he or she wants to do and or likes rather than all that the region has to offer. A tourist can decide for example to visit Perth just for its experience as advertised, or one can go to Paspaley just because there is beach polo there and leave out the rest. Market segmentation presented by Discover West Holiday communicates to all segments of tourism market from businessmen to pleasure seekers. There are hotels and activities that can accommodate all these types of tourists. There are also services for the executive class and for other tourists with personal businesses. The main segmentation is based on key feature attractions of specific regions. Under each segment, detailed descriptions of other services offered and other attractions are given. There is no problem with Discover West Holiday website as it effectively communicates to the right people in a right manner. Active water based holidays for example, aims at 18-39 years old active males that travel as a group of friends, as a couple or even on their own. Adventure experiences aims at adventure enthusiasts and this may be in different areas, for example in fishing, wild flower experience and so many others. Relaxing water based holidays like interacting with Dolphins, water based experiences involving education, fishing, interacting with whale sharks and snorkeling, aims at attracting young families and couples There are different types of tourists and market segmentation is very broad. A market can as well be segmented based on the age of tourists that visit a destination for example in the above discussion, active water based holidays focuses on males of 18-39 years while Safaris to fishing aims at males from 25 years and above (Tourism Western Australia, 2006). So considering the types of tourists, and the description of different tourist destinations within Western Australia, the packages, and the activities in each area; Discover West Holidays has captured all types of tourists. There are several types of business tourists for example and business tourism is considered a market segment in tourism destination marketing depending on the marketing organization. The types are: business tourists who visit a destination for exhibitions, those who visit for conferences and meetings, some visit to launch products, others for incentive travel and other for training courses. Capturing these tourists does not mean the market has to be divided based on these types of tourists but their requirements have to be considered after having knowledge of their existence and their requirements. Attracting business tourism incentive travelers for example, the destination marketing organization has to sell the professional clients or organizers available, and these professional organizers have to then sell their services to the clients. The professional organizer has to show the value of the services they offer and prove to the client that they will be of benefit (Swarbrooke & Horner, 2001). This is the case with Discover West Holidays. Under Hotels section, there are advertisements of different types of hotels (the service providers). A client in need of a specific type of hotel will make inquiries having been given the knowledge of its existence in a specific place and a brief review of its services. Additionally, packages offered in various destinations within Western Australia give all the tourists a variety to choose from. 5.0 Critical Segments to Market in Future (2 Years) A destination may have all the beautiful attractions but with no knowledge of what these attractions have to offer, the consumer will not be interested. In the current world, there is high rate of changes in consumer behavior which is also brought about by changing trends, technology and changing tastes. Because of such changes, destination marketing organizations need to exploit market research in order to understand how these changes affect the attraction to the destination, and what needs to be done to attract more (Page & Connell, 2006). Discover West Holiday is competing Australian Capital Territory, South Australia, Northern Territory, Tasmania, Victoria, New South Wales and Queensland (Australian Government, 2011) for both domestic and international tourists. As at now, it has effectively communicated to its tourists or consumers. The organization however, needs to maintain this and even attract more consumers. As indicated above, research is important in understanding what the customer requires and then implementing strategies that meet the needs of the consumers. Major segments that the organization needs to target are the international and domestic tourists. Page & Connell propose being innovative and creative. This is very true considering the fact that almost all attractive features have been advertised and competition is still high. Discover West Holidays should: Cooperate with public and private sectors to bring resources together for marketing initiatives Take advantage of new ICTs and encourage global promotion Identify target markets and ensure sustainable marketing strategies are used and Understanding the value of different markets for example, the business market, the VFR market, pleasure and other business tourists market. This will help identify what segment contributes what value to the organization and how to invest more on that segment to get more pay-off (Page & Connell, 2006). 6.0 Conclusion There are so many tourist destinations with different tourists’ attractions and activities to offer. Australia as a nation has 8 (Western Australia, Australian Capital Territory, South Australia, Northern Territory, Tasmania, Victoria, New South Wales and Queensland) when the market segment is divided into regions. When these are subdivided into smaller tourist attraction sites or even regions within the bigger regions, the number becomes very big. Every destination has its marketers who work towards attracting tourists. This means that there is a lot of competition in this industry. The other tourist destinations around the world like China, Egypt and many other destinations also pose a threat to the destination. It only has the advantage of its unique features that can never be found in any other tourist destination. Because there is high competition and almost all unique tourist sites have been exploited, the only solution to competition is innovation and creativity. In all the strategies, sustainability has to be incorporated for continued survival. 7.0 References Australian Bureau of Statistics. (2008). Western Australian Statistical Indicators, Dec 2007: Short-Term Overseas Travel To And From Western Australia. Retrieved from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/1367.5Feature%20Article2Dec%202007?opendocument&tabname=Summary&prodno=1367.5&issue=Dec%202007&num=&view= Ashworth, S., Turner, R. and Egger, S. (2004). Western Australia. (4th Ed). Lonely Planet. Australian Government. (2011). Tourism: Regional Tourism Profiles 2009/2010. Department of Resources Energy and Tourism. Retrieved from: http://www.ret.gov.au/tourism/tra/regional/tourism/Pages/RegionalTourismProfiles2009_10.aspx Backer, E. R. (2010). VFR Travel: An Assessment of VFR versus Non-VFR Travelers. Theses. Southern Cross University ePublications@SCU Backer, E. (2008). VFR Travelers: Visiting the Destination or Visiting the Hosts? Asian Journal of Tourism and Hospitality Research. 2(1): 60-70 Crouch, G.I. (2004). Consumer Psychology Of Tourism, Hospitality And Leisure. Cambridge, MA: CABI Discover West Holidays. (2011). Western Australia. Retrieved From: http://www.discoverwest.com.au/western_australia/ Lehto, X. Y., Morrison, A. M. and O’Leary, J. T. (2001). Does the Visiting Friends and Relatives’ Typology Make a Difference? A Study of the International VFR Market to the United States. Journal of Travel Research. 40: 201-212. Lonely Planet. (2011). Western Australia. Retrieved From: http://www.lonelyplanet.com/australia/western-australia Middleton, V. T. C., Fyall, A., Morgan, M. and Ranchhod, A. (2009). Marketing in Travel and Tourism. (4th Ed). Oxford: Butterworth-Heinemann. Page, S. and Connell, J. (2006). Tourism: A Modern Synthesis. (2nd Ed). London: Cengage Learning EMEA. Poel P., Masurel, E. and Nijkamp, P. (n.d). The Importance Of Friends And Relations In Tourist Behavior: A Case Study On Heterogeneity In Surinam. Retrieved from: http://dare.ubvu.vu.nl/bitstream/1871/8934/1/20040025.pdf Research Tourism Western Australia. (2011). Quarterly Visitor Snapshot Year Ending December 2010. Silk, A. J. and Harvard Business School. (2006). What Is Marketing? Massachusetts: Harvard Business Press. Swarbrooke, J. and Horner, S. (2001). Business Travel And Tourism. Oxford: Butterworth Heinemann. Tourism Australia. (2011). Western Australia. Retrieved From: http://www.australia.com/destinations/states/wa.aspx Tourism Research Australia (TRA). (2011). Quarterly Results of the International Visitor Survey. International Visitors in Australia: December Quarter 2010. Tourism Research Australia. (2011). Western Australia: State Summary. Regional Tourism Profiles 2009/2010. Retrieved From: http://www.ret.gov.au/tourism/Documents/tra/Regional%20tourism%20profiles/WA/WA_State_FINAL.pdf Tourism Western Australia. (2006). Destination Development Strategy. Australia’s Coral Coast, Destination Development Strategy ‘An Action Plan Approach’ 2006-2016. Tourism Western Australia. (2011). Western Australia. Retrieved from: http://www.westernaustralia.com/en/Pages/Welcome_to_Western_Australia.aspx VisionLink Consulting. (2002). Market Segmentation in Tourism. Discussion Paper for Explorers of the Western Canadian Wilderness Product Club & Tourism Action Society in the Kootenays (TASK). Retrieved from: http://www.taskbc.bc.ca/documents/SegmentationDiscussionPaper_000.pdf Read More