Chapter- 9 STRATEGIC MARKETING PLANNING FOR THE TOURISM INDUSTRY OF JAMMU AND KASHMIR

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1 Chapter- 9 STRATEGIC MARKETING PLANNING FOR THE TOURISM INDUSTRY OF JAMMU AND KASHMIR This chapter presents a new approach to strategic marketing planning for the effective functioning of tourism industry, which emphasizes on the quality, efficiency and effectiveness in the marketing process. A framework has been presented which shows tourism marketers how to analyze their market places and how to develop their target customer segments. The main aim of the chapter is to demonstrate a simple framework which is just a first step towards the perceptiveness of tourism industry and to exploit the potential of the industry. The purpose of presenting this framework is to attain a systematic way of development of tourism sector in a sustainable way. However, a lot is yet to be taken up for the systematic model structure of strategic marketing planning for the policy correction towards the sustainable development of the industry Introduction Keeping in view the importance of tourism industry in Jammu and Kashmir it is necessary to follow-up a strategic marketing planning in order to exploit the potential of the industry. To the best of the knowledge this method has not been used to evaluate the marketing planning for Jammu and Kashmir tourism industry so for. This effort will contributes to the existing literature by extending this framework to the tourism industry and to highlight possible ways of strategic planning for the industry so as to make it more sustainable for future Marketing and Tourism: An Overview Marketing is a social and marginal process by which individuals and groups obtain what they need through creating and exchanging products and value with others. Further, marketing for hospitality and tourism, defines marketing as to design a product /service combination that provides a real value to targeted customers, motivates purchase and fulfills genuine customer needs. (Kotler et al., 1999). Marketing involves much more, including product/service development, place (location and destination), and pricing. It requires information about people, especially those interested in what you have to offer (your market ). Such as what they like, where they buy and how much they spend. Its role is to match the right product or services with the right market or audience.

2 According to the American Marketing Association, marketing is the process of planning and executing the concepts, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Simply stated it is creating and promoting a product (ideas, goods and services) that satisfies a customer s need or desire and is available at a desirable price and place. Modern marketing is a way of doing business, heavily based on the marketing concept which holds that business and organizations should: 1. Design their products/services to meet customer needs and wants; 2. Focus on those people most likely to buy their product rather than the entire mass market; and 3. Develop marketing efforts that fit into their overall business objectives. By adopting these concepts we will not only provide customers with better products, but also avoid wasting valuable time and money developing and promoting a product or service. Tourism marketing is research-based, analytic, goal oriented, strategic and directed. In brief, marketing is all those activities in getting goods and services from the producer or supplier to the user. Tourism features a negotiation between two forces, a supply-side and a demand-side (Murphy, 1985). The supply-side is the travel and tourism industry, which seeks to stimulate demand for products and services. The demand-side represents consumer travelers, who seek travel products and services to meet certain needs. Marketing is an exchange process between the two forces. The tourism and the supply factors: the supply factor is mix of destinations, facilities and service can be divided into five broad types: 1. Attractions: These may be natural (flora, fauna) or manmade. 2. Transport: Tourism growth is closely related to the supply and extent of development in transport systems.

3 3. Accommodation: A critical component of the supply factor, accommodation can be further divided into commercial sector (hotels, guest houses, holiday camps) and private residences. 4. Support and auxiliary services: Cover a large array of supporting services such as shops, restaurants, banks and medical centers. 5. Physical and Communication Infrastructure: To make available the facilities mentioned above, the infrastructural requirements needed are covered under this head. Examples are roads, airports, electricity, sewage disposal etc., these are generally provided by government because of high capital Marketing Strategy for the Tourism Industry As tourism is a highly competitive industry, the traveler has a wide range of choice and looks for good value for money. The lack of quality infrastructure, uncompetitive rates, indifferent and poor product quality, difficulty in getting access to information, untrained service providers have an enormously negative effect on the competitiveness of the tourism product. For all these it is necessary for tourism industry to formulate marketing strategies which should include the overall business objectives, a business/community profile market identification (segmentation), the marketing objectives for each segment; the best combination of the 4Ps (Product, Price, Place, Promotion ) for each segment; an implementation plan, the marketing budget and a method for evaluation and change. The marketing strategy, or mix, should be viewed as a package of offerings designed to attract and serve the customer or visitor. Tourism business and communities should develop both external and internal marketing strategy for different target markets. The basic objective of tourism marketing strategy is to match organizations or firms strength with the market opportunities. The basic steps in the tourism marketing strategy are: 1. Definition of the needs of the potential tourists and their possible destinations. 2. Segmenting the market according to the type of need the firms want to satisfy. 3. Defining the environmental constraints and competitive scene. 4. Formulating marketing objectives and allocating the tourism product.

4 The main strategies followed by tourism firms can be classified as growth strategies or competitive strategies. Some basic marketing strategies for tourism markets are: Marketing Penetration Strategy: This strategy entails building a foothold in the market through creating a different advantage in pricing or promotion or both. Marketing Extension Strategy: This strategy entails reaching new types of tourists through modification of existing tourist products, by planning in advance launch of a new product, managing the life cycle of a tourist product. Marketing Development Strategy: The tourist firm here seeks new classes of, tourists for its products or would add salient product characteristics to the existing offer, the objective is to widen the appeal to cater to tourist segments which the firm has not been catering to add the new segments with more profitable growth segments by revamping the basic appeals used. Mclntosh et al., (1994) in their book Tourism Principles, Practices, Philosophies stresses the need for a strong orientation toward the consumer as the heart of successful tourism marketing management. In addition, it s important that management thinking be directed toward understanding the tourism product. The emphasis is on destination marketing as the basis for strategic marketing plans in the tourism market. Harrell and Frazier (1999) and Perreault and Mccarthy (1999) are of the opinion that marketing strategy consists of the following interrelated tasks: 1. Setting marketing goals; 2. Segmenting the market and selecting one or more target markets; 3. Positioning the product/service, and 4. Developing the appropriate marketing mix. Prior to addressing these tasks, a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis should be completed. In the context of tourism, the marketing goals of a tourism organization may relate to achieving a revenue goal, attracting a certain number and type of tourists to a particular destination, obtaining a certain market s share, achieving a seasonal spread of tourists etc. After determining the marketing goals, appropriate segments of the tourism market must be identified and targeted. The segment s to be targeted influence the positioning strategy

5 selected. Finally, the marketing mix, consisting of the appropriate product, price, promotion, and distribution, must be developed. Strategic marketing planning for tourism industry is a practical, intensive, idea-packed approach to marketing tourism destinations. It is a strategic marketing system that aims at stretch tourism marketing planning, estimating, monitoring and evaluation. It works as an action-oriented marketing plan to benchmark and counteract competitors with build-in performance measures and evaluations. A marketing plan should include: The overall business objectives- what you want to accomplish. An assessment of the market environment- what factors may affect your marketing efforts. A business/community profile- what resources are available. Market identification (segmentation) - the specific group or clients most interested in your product. The marketing objectives for each segment s. The marketing strategies (or mix) for different markets you target- the best combination of the 4 Ps (production, price, place, promotion) for each segment. An implementation budget- how to make it work. The marketing budget- how much you have to spend. A market for evaluation and change. While developing the marketing strategy of the tourism sector, it is important to take following points in consideration. To attain competitive marketplace of the tourism sector. To implement and support day to day operation of the tourism sector. To develop future planning and successful implementation in the tourism sector The Model Based on the above discussion on how a market strategy has to be developed to provide best services to the customers vis-a-viz to earn handsome profit out of that, a simple framework presented in Figure-1 shows how tourism marketers have to analyze their marketplace and develop a strategic marketing plan to increase sales in their customer segment.

6 Needs Analysis The first step in any planning effort for every organization is to articulate the general objectives. For example, the tourism industry of Jammu and Kashmir, Department of tourism may list its broad objectives for their strategic marketing planning effort like: a) Increase the number of tourist flow in the state. b) Increase the satisfaction rating of tourists visiting the state with respect to sightseeing opportunities. The accommodation segment of tourism industry of Jammu and Kashmir may begin their strategic marketing planning efforts with the following general or broad objectives: 1. Increase the guests at the specific tourist destinations. 2. Increase the number of hotel services purchased by tourists at the particular destination hotels. 3. Increase the number of repeat customers for the destination hotels. So, at this point it is important not to list the organization s goals specifically but the idea is to analyze the overall objectives to attain higher growth through a suitable marketing strategy for Jammu and Kashmir tourism industry. Figure 9.1: Strategic Marketing Planning for the Tourism Industry

7 Source: Edgell et al., (2000) This is also the time to form a group of stakeholders in the tourism industry from the various segments that have a stake in the outcome or product. Here for the tourism industry of Jammu and Kashmir it may include associates from its planning and research department, marketing and sales departments, managers of hotels and restaurants, associates from the airlines and the public transportation department, duty-free shops, managers of local tourist attractions, managers of stores that are frequented by tourists, packaged tour companies, and travel agents. Along these elements tourism industry professionals and community leaders must also be involved. It is very important to be munificent in involving all the key organizations that have the ability to affect the organization s success at accomplishing its tourism objectives. The tourist s experience from visiting destination is not only affected by the quality of the hotel he/she lives in, but also by the local transport services, local health facilities and restaurants and tourist attractions. So each of the organizations can help to strengthen the tourism industry of Jammu and Kashmir, its basic positioning and appeal as a destination and work towards the same big purpose Research and Analysis

8 This step is a critical step in the development of the marketing plan in the tourism industry. It is evident that the quality of our analysis will affect the quality of our strategy and its outcome. It is not only important to make an honest evaluation of our strengths and weaknesses but also the strengths and weaknesses of our competitors. This step of research and analysis can be evolved through the following elements: 1. Future Seeking: It involves the analysis of forecasting, that is what will be the future for the industry and for the organization or destination. For example will the number of tourists decrease when there will be unconditional changes in the valley such as, seasonal, political etc.? How are the customer s values and lifestyles changing and how will those affect the attractions they look for in a destination? What are the competitor s future plans? How are world politics and global legislation changing? What is the global economic situation projected to be? These are not the easy questions to be answered. However it is necessary to be conscious about the future of the industry and organization. 2. Internal Analysis: The internal analysis involves an internal analysis of the organization s strengths, weaknesses, opportunities and threats (SWOT). It also involves previous experiences such as; the previous sales, customers, profitability achieved by various members in a million ways to find their relationships and their trends. For example, the tourism industry of Jammu and Kashmir may find a growth in the number of tourists from a particular country, state or region. Then analyze it further, i.e. they may find that even though the total number of tourists from a specific place is smaller as compared to that region where tourists flow is larger, these tourists spend considerably more money in the host economy. This may provide an opportunity to develop a marketing plan targeted to the particular segment. 3. Marketing Audit: A marketing audit is the examination of the marketing functions such as what is the positioning of an organization or what is going on with the organization. It includes a study of the marketing objectives, current marketing plans, different activities, positioning, target markets, sales channels, media utilized, customer data being collected,

9 and comparison of the results of the marketing efforts with the budget and marketing goals. So it is important for every organization to conduct a marketing audit periodically. 4. Industry and Marketing Assessment: The industry and marketing assessment is an external analysis that examines the industry s situation and its trends. It includes sociological, technological, economic, environmental and political factors (STEEP). 5. Competitors Analysis: Competitors analysis is an analysis of an organization or destination s competitors. The analysis should chart the strengths and weaknesses of competitors, the attractions they offer and the features and benefits of their services in comparison to each other and the organization. In the case of tourism industry of Jammu and Kashmir State the Department of Tourism should develop a matrix listing the benefits tourists look for from a tour and list all organizations (service providers) and destinations that could provide them. The matrix must include competitors positioning and the identification of competitive advantages for each competitor. Perceptual maps can be used to chart competitors versus the organization on different variables like positioning, price perceptions and so on. 6. Customer Research: Customer research is a critical piece of analysis and involves learning the needs, likes and dislikes perceptions and satisfaction levels of tourists through qualitative and quantitative research methods. This step also involves primary and secondary research as well as data mining, customer segmentation and target market identification Creative Infusion Creative infusion is the third step in the strategic marketing planning for tourism industry. It suggests that after reviewing the results of the research and analysis, the stakeholder s team gets together and go through exercises that will bring out their creativity and make them think outside the box. This step is meant to complement the factual research that has been conducted with creative, out-of-box, innovative and visionary ideas that will separate the organization or destination s marketing plan from those of the competitors.

10 Strategic Positioning The research and analysis and creative infusion steps set the stage to develop the organization s positioning, branding and image in the marketplace. All the elements of the research and analysis like the identification of current and future customer needs, list of the destination s attractions, competitor charting, perceptual maps, and the creative component will help us to develop a positioning for our organization or destination Marketing Plan Development Now the marketing plan development step will help in designing a separate marketing plan for each one of the target customer segments to customize its unique needs. It is also necessary here to include procedure to target both prospective and repeat customers. Each marketing plan begins with the articulation of SMART goals, SMART goals are specific, measurable, achievable, and relevant and time bound. In the Jammu and Kashmir tourism industry, a SMART goal may be to increase the number of the tourists from the particular target customer segment by 15 percent in one year. The target customer segment may be a single tourist between the age of 20 and 30 years who are looking for a cost-effective tour to the valley. A positioning statement must be developed for the particular target customer segment that agrees with the overall positioning statement of the organization or destination but that may emphasize a certain quality more than another because it meets the needs of the target customer segment better. The image of the organization or destination must also be wrapped around the positioning statement. The next step involves the development of unique strategies to achieve the goals followed by the identification of significant success factors. Every plan has tasks that are imperative for the plan to result in success. The tasks, tactics, actions, and strategies may be simple and complicated. For example, a critical success factor may be as basic as keeping the crime rate low and as involved as coordinating the activities of all the, restaurants, hotels and attractions in a destination to make sure that each reinforces the positioning and image of the destination. So, all the stakeholders in

11 the tourism industry should aim to reinforce the Jammu and Kashmir tourism industry as an outline in the positions statement and image. Another step is to define the identified elements of the marketing mix: products or services, various variables, including the development of new attractions and services, overall pricing, promotions, sales channels and strategic alliances. For a better and effective tourism marketing strategy it is important to develop a structure and blueprint to get a marketing information system that would include a data warehouse. So that the continuous marketing information should be gathered and data on customers, prospects, competitors and industry trends should be analyzed. That will help the marketers to make proper decisions based on what is happening in the marketplace. This is a critical step, as an investment in an organization s future ability to conduct research and analysis and modify its plans as it moves forward. The final step involves the development of budgets based on projects based on projected sales and costs Training, Implementation, Evaluation and Adjustment Training is a key element for the development of any business or organization. So sales, service and leadership training are critical to implement the marketing plan. Here training should include the various stakeholder organizations that want to reinforce the organization or destination s positioning and image. Such reinforcement helps the tourist experience a complete picture of the organization or destination in line with the expectations that were defined by the positioning, security, advertising word-of-mouth advertising and publicity. The next step involves the implementation of the plan that may begin by concept testing in the target market and followed by an evaluation and adjustment of the plan based on the success Concluding Remarks Tourism industry in the state is at the leading edge of development. The enchanting geographical landscape and range of ecosystems leaves a lasting impression on the tourist in the valley. So tourism should be acted as an ingredient and economic development of the state of Jammu and Kashmir for which applying synergy between tourism marketing plan and its implementation is

12 required. A better and integrated marketing communication should be used to develop tourism sector. In today s extremely competitive market place a strategy should ensure a dependable approach to offering tourism products or services to take over from competitors. Marketing strategy of tourism sector must have a clear attitude for implementing the strategy. The tourism sector should simultaneously utilize its assets and abilities in the real life scenario of the state to add value. High quality products at low price, arrangement for entertainment, development of infrastructure, security, accommodation, aggressive promotional campaign etc. are also required. Growth of the tourism industry largely depends on national and global conditions. Pricing Strategy of the tourism sector is very important for which all categories of tourists including high-income group and low income group may get the opportunity to tour. Product differentiation technique should be used to attract tourists and fulfill their demands. Tourism industry should be comprised of accumulating all courses of action for which efficiency and effectiveness in the strategic marketing is being required.