Tourism Internationally and its Significance to the Global Economy
Tourism and travel industry has become one of the most dynamic area of business today. According to the findings of the International Tourism Organization in 2008, thirteen economies worldwide directly depended on the development of the tourism industry and growth of the number of tourists visiting the country. 2012 was a landmark year for the entire industry since the international tourist flow exceeded one billion visitors. Moreover, numerous reports of international research agencies manifest that specific tourist oriented economies have been rescued from the repercussions of the international economic recession 2008-2012, especially due to inflow of tourists in the countries. For some Caribbean, Oceania, and Indian Ocean countries, tourism and travel industry has become a salvation, according to the statistics provided by the International Tourism Organization in 2012. The most frequently visited countries are France, followed jointly by Spain and the United States of America. The international NGO group in the industry is reported to have exceeded 4% in 2013.
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The Objective of the Paper
The objective of this paper is to analyze the role of common marketing strategies and approaches elaborated by the scholars and commentators and practically applied by tourist and travel operators internationally and to make conclusions regarding their efficiency. In particular, the paper is focused on the evaluation of practical significance of the marketing mix and integrated communicational paradigm approaches.
Targeted Company Profile
The company that has been subjected to our analysis in this paper is the Travel Company. Its brand Travel Tours is considered to be one of the most successful international travel operators. The company is headquartered in California, the United States of America, and is reported to conduct its commercial activities in more than 200 countries worldwide.
The aim of this part of the paper is to explicate the most important marketing issues in travel and tourism sectors of economy and to analyze their impact on the market and environments of the Travel Company.
Having analyzed the roots of this course, and available empirical evidence collected by the International Tourism Organization, it has become evident that the most utilized models of marketing in the segments of the economy are the so-called relationships, marketing, societal marketing and branding. Under the first concept, the company seeks to establish close contact and cooperation with the customers in order to obtain customer’s loyalty on a permanent basis. As part of the practice is concerned, the annual statements of the company precisely indicate that 81% of the company clients are the returning customers, who decided to use the services of the company after previous positive experience.
As far as that some societal aspect is concerned, it should be particularly highlighted that in accordance with the academic postulates of this doctrine and the practical standards, the reviewed company invests significantly into the development and cultivation of sustainable tourism area. The core aspect of this theory is that while the travels are made, the local economies, the local environments, both ecological and technical as well as their welfare of the local inhabitants are enhanced and no detrimental impact is made on that visited country. Therefore, nonfinancial aspect is to be also highlighted when that tourism and travel operations are underway.
The advent of technological era has substantially changed the patterns the business is practiced nowadays. Most importantly, the role of branding is actively cultivated in the modern world. While in the recent time branding was regarded as one of the main commercial strategies aimed at the increase of the revenues of the company, nowadays it is considered among the fundamental pillars of business composition. In other words it is impossible to build the company, especially in so densely saturated industry as tourism and travel, without the creation of effective branding awareness raising campaign.
The main objective is to analyze the government sectors that directly and indirectly affect the demand for travel and tourism products and services. The popular practical opinion is that all of these factors are of particular volatile nature. In other words, tourism has seasonal nature and it is likely to be easily foreseen by the analytical department of the tourist company, although this theoretical statement is being routinely challenged by the group of scholars and the practitioners. Overall, the following factors can be considered the ones that exercise different forms of effect on the demand formulation on the market of tourism and travelling services.
The first thought that that is internally and holistically connected with the demand formation is financial stability of the customers and general state of financial welfare internationally and domestically. In other words, the demand is likely to be low when the customers have difficulties in terms of their financial capacity. Therefore, assuming that’s a global economic downturn is reported to be taking place, the analysts of the company can predict that the sales will go down.
The second factor that’s equal to what affects the formulation of the demands in the customers loyalty, which is dictated by the previous positive or negative experience. If the client is reported to have positive history of cooperation with the discussed business unit, then it can be expected that next time he decides to travel the company in question will be contracted. Negative experience of cooperation exercises completely adverse effect. Therefore, it is vitally important to establish the links of loyalty and permanent mutual agreement between the client and the company. In order to achieve this, the company must provide services to the client in the most effective way, meeting all these requirements and addressing all the remarks outlined by the clients.
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The principle of market segmentation has been marked as one of the most fundamental pillars which the entire industry is based on. This opinion is shared unanimously by the theoretical communities and supported by the practicing colleagues. In accordance with the theoretical postulates of the segmentation, the market, as an isolated business model is artificially divided into several areas which are mutually interdependent, but at the same time different. This classification is made on the basis of specifically outlined criteria, which is necessary in order to distinguish different models from each other.
The first classification which is applicable to tourism and travel industry on the principles of market segmentation is the classification on the basis of purpose. To be more exact, the convergent analytical and practical opinion is that the services that are provided within the framework of the industry can be divided into leisure tourism, recreational traveling and tourism, business traveling and tourism, educational tourism and traveling, sports traveling and tourism, and the so-called doom and dark tourism. This classification is of immense practical relevance for the business community operating in the field in general and for the reviewed business operator in particular due to the fact that the client services are determined by the field itself. To be more exact, those who have contracted the company to be provided with the services and business tourism filled, are expected to receive premium quality services than those who enter into contractual relationships under which educational tools and services are to be provided.
Another practically effective classification is the division on the monetary basis of the prospective transactions. The two losing can be either upscale, blue-chip which targets the rich customers as well as it can be for middle income and low income families. On the basis of this classification, the standards and the rules that are to be strictly addressed by the service team are elaborated and appraised to the team. This type of market segmentation has always practical importance due to the fact that on its basis due calculations are made by the team and financial predictions are carried out.
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The aim of this chapter is to analyze the importance of strategic marketing planning and to demonstrate how it is practically implemented within the frames and course of strategic development of the discussed business unit.
Strategic marketing planning is a business science that helps to address the needs of long-term planning (Lenskold, 2003). It is usually completed in a five years period. Practical and theoretical significance of this area is immense. The statistics aggregated by the national census bureau precisely indicates that the overwhelming majority of the collapsed business units were sold primarily because of their inability to meet the goals of long-term planning in accordance with the existing postulate thereof. The most vulnerable point is the company’s finance. Inability to make definite strategic decisions has led several times to financial paralysis on the discussed business unit, especially on the head of the economic constraints of the recent international economic recession 2008-2010. Therefore, the issues of strategic planning should be addressed in order to comply with the increasing financial burden imposed on the company, as well as to make it able to withstand financial storms impeding normal activity of the companies to have competitive advantage over the major competitors.
As far as the practical implementation of these four companies is concerned, it shall be outlined that the board of directors made strategically right choice in 2008 diversifying the services provided by the company. In particular, the company was divided legally into several independently operating departments, each one having its own structure, its own customers and its own area of competence. The company incurred heavy financial losses in their recreational and leisure tourism (the sales were reported to go down 55%), but the unprecedented growth was reported to take place in business and educational tourism areas and the strategic decision indeed helped the company to keep afloat, whilst the majority of the customers collapsed, due to their inability to implement the decisions of strategic importance (Wilkerson, 2003).
The objective of this task is to analyze the issues connected with market-research and the existing advantages and disadvantages of market information in tourism and travel areas. The findings of the theoretical luminaries are nowadays reported to be further corroborated by the existing empirical evidence on the subject. Overall, there is a unanimous scholarly opinion supported by the existing practice that strategic planning seeks to answer the particular set of business related questions. First, how many resources are currently available for the company. Second, how these resources can be utilized in the most effective way. Third, who are the stakeholders. Provided that all these questions have been answered correctly and fully, the objectives of strategic planning can be considered as those which have been fully accomplished.
Marketing research is a complex phenomenon. It can be defined as a popular form of creative work conducted with the aim of obtaining specific academic or business results. The main discrepancy between the business research and the academic one is that those scores conducted in academic research pursue objectives are majorly socially oriented, whereas those who practice business research are commercially-oriented analytics. The aim of strategic research in the field of tourism and traveling is multifold (Holder, 2003). First, business research in this strategic field is utilized to identify the needs of the customers and is, therefore, to adapt to the strategies utilized by the company for these particular needs. Ultimately this practice results in the increase of the revenues collected by the firm and the number of clients. This second aim of strategic business research in this field helps to identify general trends on the market, in particular the taxation policy of their jurisdictions where the company has its presence, the preferences of the international customers and the regularity with which this preferences are altering, as well as the criteria which determines these changes. However, it is undisputed that strategic research in this field is also of immense theoretical significance for the tourism and traveling communities, due to the fact that it helps to formulate scientific problems and, employing the existing and emerging research methods, to solve them successfully (Lenskold, 2003).
Practically, marketing research helps to identify the most lucrative fields where the company can operate and not to be suppressed by its major competitors. The most illustrative sample connected with this situation can be traced back to 1999, when the targeted company launched its educational tourism branch in the southern Asia, where the activity of the competitors in the field of leisure and recreational tourism was of a high density, whereas their activity in educational tourism was extremely low. Therefore a set of prompt strategic actions helped the company to establish in the region (nowadays, 16% of the entire revenues collected by the firm are attributed to the commercial activity of educational sector in South Asia region).
There are solutions utilized by the practicing business community in order to complete the tasks connected with implementation of strategic planning, in particular strengths, opportunities, and threats and weaknesses analysis is widely practiced nowadays (also known as SWOT) analysis, the so-called PESTLE analysis of the company activity (political, economic, social, technical, and legal environments of the company), as well as many other tools.
The objective of this task is to analyze the impact of the customer’s activity on the targeted markets exemplified by the synergy of the clients and commercial agents operating within the tourism and travel in sector.
Practically and theoretically the intent is reported to be diagnosed into several major sectors of macroeconomic and microeconomic nature. Judging from the macroeconomic perspective, the TD of the clients and the business entities operating in this field have direct impact on the taxation policy, both domestic and international one, the gross Gross Domestic Product, and the development of social institutions within the country. In accordance with the 2012 report of the Internal Revenue Service of the United States of America, the increase of the revenues accrued by the commercial entities operating in tourism and travel segment is found to be one of the most viable base to increase the federal and state budgets of the United States of America and to utilized the aggregated funds for the benefit of the general public and for the state interests.
It should be mentioned that the promotion of societal and sustainable tourism exercises tremendous positive impact on the development of social institutions welfare, both domestically and internationally (Patterson, 2008). The convergent opinion of the commentators in this regard is that the development of educational and sustainable tourism leads to the growth of cultural interchange between the United States and its overseas partners, as well as to the intensification of the cultural links between the countries.
Having summarized these findings, it can be stated that tourism and travel segment of the international market are of tremendous financial significance to the United States and its partnering counties. Provided that the tourism and traveling policies are conducted accordingly, it is reasonable to assume that those goals are focused on strategic cultural development, and if achieved, the financial positions of the United States will be solidified.
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The objective of this task is to analyze the concept of marketing mix and to conclude how the approaches outlined by the course in the framework of these financial solutions can be applied in the discussed segment of the economy.
As far as a paradigm of marketing mix is concerned, it is necessary to highlight that in this industry, it is crucial for the corporate branding policy. First and foremost, popular practical opinion suggests that the formulation of proper pricing policy of the company is of vital importance for increasing awareness of the customers and solidification of the company brand name and brand culture (Wilkerson, 2003). To illustrate, the cultivation of brand image, extensively applying to price leveraging has been found as the most effective solution to increase its attractiveness. As a result, the name of the analyzed company has become internationally recognized and the loyalty of the clients was greatly increased. The most viable strategy in this regard has found to be seasonal vacillations of the prices. Considering the fact that the number of clients has increased, the income generated by the company exceeds the overhead expenses incurred by the company during the course of financial activity by 10%.
The aspect of product offered by the company to the market also promotes practical importance, since the services provided by the firm should not be cheap but of high quality. The observance of this condition should be permanently monitored by the company management board and its compliance is among the most fundamental values of effective company composition.
The importance of promotional activities should never be disregarded, since it greatly contributes to the construction of the firm’s image both domestically and internationally. Nowadays the company has reported to allocate 11% of its financial funds on the annual basis in order to carry out their promotional activities that have been recommended by the company sales and marketing department (Patterson, 2008).
As far as the practical implementation of total tourism product is concerned, it is necessary to highlight that the most illustrative solution elaborated by the reviewed company is the way they organize travel trips of the pilgrims from the United States of America to Santiago de Compostela, located in Spain and found to be one of the most attractive tourist destinations for the international pilgrims. Customers are provided with moves, transfer, and access to the religious sites and transfer backwards.
Integrated marketing communication is reported to be of vital importance for the implementation of the company’s branding strategy (Lenskold, 2003). Conceptually, it involves various means of commercial advertising, ranging from mass media broadcasting to Internet, all combined with the ultimate goal to reach the customer in the most effective way and to persuade him to purchase the goods offered by the company
The most effective integrated marketing communication plan should definitely involve the elements of theoretical opinions and practical evidences (Holder, 2003). Assuming that the strategies are taken, the company is highly recommended to take the following actions. First of all, the domestic markets should be substantially analyzed and conquered. Then the company can move overseas, launching its advertising campaigns and trying to obtain international recognition and international customers’ loyalty. Specific elements should be addressed in this advertising campaign, with the focus on pricing policies and distribution activities.