Chapter 7: Building

a Marketing Plan
CCHTM 2110:
ENTREPRENEURSHIP IN
TOURISM AND HOSPITALITY
 MODULE 7:
Building a Marketing Plan
Learning Objectives:
At the end of this chapter, you should be able to:
1 recognize how organizations identify customers and their wants and
needs;
2.comprehend marketing decisions based on the combination of
product, price, promotion, and distribution elements;
3.learn how marketing is carried out by a tourism and hospitality
organization to meet the requirements of domestic and international
market, within the bounds of internal and external environment;
4.apply key frameworks and methods and develop analytical skills to
solve marketing problems; and
5.provide your proposed enterprise with a creative and workable
marketing framework.
INTRODUCTION
The tourism industry's contribution to the world can be vividly
seen and felt in the economy of a country engaged in this
business. It generates foreign exchange, provides employment
opportunities, and generates a source of income and revenue
for both the private and public sectors. The tourism and
hospitality industry is so dynamic that both the supply side and
demand side provide a complex range of exchange between
products and services based on the discriminating
requirements of tourists and visitors.
Consumer Behavior. For starting
entrepreneurs, knowing the
market is one of the first steps to
take for the business to prosper. A
business that is aware of its
customers' needs and wants will
be able to provide customer
satisfaction. A satisfied customer is
a guarantee of future engagement
to a repeat customer and a referral
to others.
Motivation is the inspiration or reason that triggers a person to
take action to address a need. If a business can efficiently
identify the cause of an individual's decision or choice, then the
company has a competitive advantage over its rivals. Foremost
among the ideas that motivate people to take action is because
of their needs. Needs are often referred to as the trigger to an
individual's motivating action. A man in need of sustenance
would compel him to work for food. An old business adage
states that when trying to come up with a business, a person
must "think of a need and fill it." It is important to know the
needs of the customers and how to properly satisfy them.
Steps in Marketing Planning Process

A marketing plan is a document that

outlines and records the marketing
activities based on the corporate
objective of a firm. A marketing plan
serves many purposes other than
defining the marketing objectives. It
serves as a basis to define the budget
required to implement the marketing
objectives and enable a process to
monitor the expected output as
compared to the actual.
An integrated marketing planning process may be carried
through the following:
1. The goals and objectives of the whole organization must be
reflected in a marketing plan. A marketing plan must be
aligned to the vision, mission, and objectives of the
organization.
2. Review and analyze the current status of the company and
identify the opportunities. At this stage, the portfolio,
competitor, segmentation, and SWOT analyses are done to
support the forecasting part of this step.
3. Set marketing goals and objectives derived from the results in the
previous steps.
4. Establish the marketing strategy. Determine the target market and
apply the selected market positioning accordingly. At this stage,
identify the target market/s and create the market positioning to gain
a competitive advantage. The marketing strategy of a business
determines the target customers and how service value will be
provided to these customers.
5. The business, through its marketing team, will develop a marketing
program that will provide said value to customers. The marketing
program consists of the marketing mix or the set of marketing tools
that the business will use in applying the marketing strategy.
6. Develop and select an action plan to get the desired outcome. Through the
marketing mix (4 Ps for goods/7 Ps for services) the business creates the
product and makes it accessible to customers at a fair amount.
7. Address the resources required to implement the action plans and
strategies to meet the objectives. Ensure that the marketing objectives were
achieved in the required time with the allocated funds and resoles requested.
8. Companies must be able to communicate and convince their customers to
purchase the products using different marketing activities. Communicate the
plan internally and externally to ensure participation in the implementation
process.
9. The company must be able to put together the marketing tools into an all-
inclusive marketing program intended to convey and deliver the product
value to the target market.
A. Market Research
Research in tourism is very important since it provides the information
needed by companies to provide service quality based on customers'
expectations and perception of services. For the tourism industry, tourism
research covers both market research and marketing research.

In business plans, market research is used to determine external

information that should be considered when designing the marketing plan.
The data from the research should adequately contribute in preparing the
right strategies that will be reflected in market plan.
Stages in Research Process
The first step involves the identification of the problem. It is at this step
where the objectives are determined and formulated. The next is to find and
scan for available resources. Searches may involve looking for available
primary and secondary data that can be utilized. The third step is to select a
research method or design. This step would set the structure on how and
where the research would proceed. In the fourth step, the data would then
be collected. The data collected might be prone to error if the collection
procedure is not properly administered. The fifth step is to analyze the data
collected. Data should be processed and analyzed using the right tools to
extract information. The last is to present the report to the management or
users of the findings to formulate the right strategies or make decisions.
Methodology/Sampling/Research Errors
The methods to be used when conducting research may depend on the
type of information needed. One must evaluate if the data needed requires
new information or if the existing data would already suffice. It is also
important to note that the cost of undertaking the research would be
affected depending on the type of information sought. Furthermore, the
method of research yields different types of data. Although both quantitative
and qualitative research is useful in tourism and hospitality, the type of
information desired may determine the right method to use.

Sampling is a method employed to get a representative number of

people from the target population that can provide the most accurate result.
There are different types of sampling methods applied based on the
requirements of the research being conducted.
Methodology/Sampling/Research Errors
Market research, if not planned carefully, might be prone to error and
may yield unreliable results. The most common errors encountered when
conducting research include insufficient information details/sets of
information collected, unreliable data due to inefficient collection, erroneous
tabulation, and improper analysis are done; insufficient number of samples
used, and errors in interpretations.

Effective Use of Marketing Research

The value of research is often neglected and unappreciated. It should be
noted that market research is among the most important steps to consider
when building a new business or operating an existing firm. It helps a
business stand on a solid foundation and saves significant funds by avoiding
costly mistakes.
B. Industry Analysis
Like any other business entity, the tourism and hospitality businesses
transact, respond, or interact with the external environment. Any changes or
situations arising in their external environment may affect the businesses at
different levels. Due to this, it is important to study the external environment.
Studying and analyzing the external environment may be called in other
terms like industry analysis, environmental scanning, horizon scanning,
macro-environmental analysis, or external strategic management audit.

In the preparation of business plans, it is essential to also understand the

nature and situation of the industry to be able to anticipate possible issues
and concerns that will be dealt with when the business has started.
External Environment Analysis

1. PESTLE
In the analysis of the external environment, many models can be used. The
most popular of which is to categorize these external factors or influences
into categories. There are several variations in using the external factor
analysis. Some proponents are using the acronym STEP using only the Social,
Technological, Economic, and Political influences as categories. The more
popular form of external analysis is PESTEL in which legal influences are
included. This book considered the five broad categories of external forces
discussed by Fred David (2011). The categories include Economic forces,
Social forces (including cultural, demographic, and natural environment),
Political forces including legal and government), Technological forces, and
Competitive forces.
2. PORTER
Competitive Analysis PORTER's Framework. A firm
that intends to engage in business in a particular
industry must first learn and understand the
situation, level of competition, or the business
climate prevailing in that industry. In this way, the
firm will be able to position itself strategically in
the industry and take advantage of the
opportunities and avoid threats. One of the most
widely used models to analyze the competitive
level of industry is known as Porter's Five Force
Model. His framework is used to analyze the type
and degree of competition within an industry. The
result of the analysis will be used as the basis for
formulating strategies.
As explained by the proponent of the model, he
mentioned that five competitive forces determine
the extent of competition in an industry. Learning
the strengths and characteristics of these forces
will help the managers and decision-makers to
develop competitive strategies for the firm. The
following are the forces:
1. rivalry among competing businesses/firms;
2. potential of new entrants to the industry;
3. potential of substitute products;
4. bargaining power of suppliers; and
5. power of customers.
C. Identification of the Target Market
The common mistake of new businesses or even those who are not
familiar with marketing is that they always assume that everyone is a
customer of their business. If the output is provided, customers will come in
and buy the products that they offer. This mindset leads to a waste of
resources and disorientation of the objectives of the business. To avoid this,
simple steps and factors can be considered to determine the most profitable
segment of the market fit for the business. Customer analysis can be the first
step to take which includes an assessment of the overall market. Afterward,
an in-depth study of customer needs, characteristics, and behavior should be
done.
D. Marketing Mix
The next step for a business after identifying its target market is to
develop its marketing mix. The traditional understanding of marketing mix is
that it is composed of 4Ps which include product, place, promotion, and
price. These are the main variables when preparing a marketing plan.

Products refer to the actual goods and services offered by a business. It is

focused on the discussion of the details and characteristics including quality,
accessories, packaging, branding, product lines, and support services. Place
refers to the details of the distribution of the products. This element also
involves an explanation about outlet location, transportation, storage,
intermediaries, and managing the channels of distribution.
D. Marketing Mix
The next step for a business after identifying its target market is to
develop its marketing mix. The traditional understanding of marketing mix is
that it is composed of four Ps which include product, place, promotion, and
price. These are the main variables when preparing a marketing plan.

 Products refer to the actual goods and services offered by a business.

It is focused on the discussion of the details and characteristics including
quality, accessories, packaging, branding, product lines, and support
services. Place refers to the details of the distribution of the products. This
element also involves an explanation about outlet location, transportation,
storage, intermediaries, and managing the channels of distribution.
The Marketing Mix
Market Skimming Pricing
A pricing approach in which the producer sets a high introductory price
to attract buyers with a strong desire for the product and the resources
to buy it, and then gradually reduces the price to attract the next and
subsequent layers of the market. An example
Advantage:
1. Higher Return on Investment
2. It Helps Create and Maintain Your Brand Image
3. It Segments the Market
Disadvantage
Price Skimming Attracts Competitors
Penetration pricing is a strategy used by businesses to attract
customers to a new product or service by offering a lower price
initially.
Psychological pricing, as a phrase on its own, describes the business
practice of setting prices lower than a whole number. Ex 99 is
cheaper than 100
Cost-plus pricing, also known as markup pricing, involves calculating
total costs, then applying a markup percentage to those costs to reach an
asking price. Retail brands aim for a 30 - 50% profit margin.
Loss leader pricing is a marketing strategy that prices products lower
than the cost to produce them in order to attract new customers or to
sell additional products to customers. Companies typically use loss
leader pricing when they are entering new markets or attempting to
increase market share.
Promotion
 Promotion involves the activities undertaken to push the
product. Among the steps include forming the program for
salespeople, advertising and publicity strategies, sales fro motion,
and web-based promotion.
 Price is the amount of money paid to a business in exchange for
goods and services. The focus of the discussion is on price structure,
level, terms of payments, discounts, and allowances.
 The additional three Ps in the service marketing mix include people, physical
evidence, and process.
 People refer to human resources that are part of the delivery of service. The
attitude, behavior, and characteristics of those who participated in the delivery of
service influence the customer's appreciation of the service product.
 Physical evidence refers to tangible indicators or representations of the service
rendered. It may also refer to the physical environment or services cape where the
service was delivered. Physical evidence may include important indicators where
the quality of service may be associated such as brochures, business cards,
signage's, equipment, uniforms, facilities, equipment, and others.
 Lastly, process refers to how the service was delivered. The process involves
procedures, flow, guidelines, and mechanisms followed or observed in performing
the service.
E. Marketing and New Media
Tourism and hospitality are always a recipient of the application of
advanced technology. The latest robotics, software applications, and
technological breakthroughs in science and health are applied to aid in more
efficient and effective service. Technology is also extensively used by the
industry in marketing to reach out to a greater number of tourists. The
industry recognizes the importance of adopting new methods in promoting
tourism products to keep up with the changing styles of the different markets.
Below are some of the marketing activities that businesses can consider.
1. Public Relations
One of the commonly used activities of any organization in the tourisms
& industry to maintain. A good relationship and image with other
organizations, members of the community, civil society, government entities,
and stakeholders within the organization is called public relations (PR). PR is
often equated to publicity, which refers to the attention or interest created
through multimedia. Public relations is broader in scope and has publicity as
one of its components. The roles of PR are mainly to a favorable impression
to the public, manage negative publicity, and improve the effectiveness of
other components of the marketing mix. The functions of PR may include the
following: establish a corporate brand or image, enhance customer relations,
maintain government relations, handle communication in crisis management,
run internal communications, and reinforce marketing mix.
2. Direct Marketing and Direct Response Advertising
Direct marketing is a business model that conducts business in a way
that the producer of the product sells directly to the consumer. All the key
functions of the business such as product development, promotion of the
product, selling, and distribution are done by the business.

Direct response advertising is one component of direct marketing; This

form of advertising utilizes different forms of media including mails/ emails,
direct response television, websites, and telephones. Responses from
customers can easily be achieved since contact details from the utilized media
are included.
3. Personal Selling and Word of Mouth
Personal selling is an individualized form of presenting a product to a customer
to generate a sale. This method may cost greater than the traditional means of
utilizing mass communication strategies although this method may achieve better
opportunities to sell the products. Aside from the main objective of generating sales,
personal selling is undertaken for the following purposes: gather market intelligence,
establish relationship marketing, upselling, link with decision-makers and influencers,
locate new customers, and others.

Word of mouth is one form of advertising that resulted from the experience of a
customer. This form of communication can either positively or negatively affect the
business which depends on the satisfaction of the customer. This can be
recommendations or insights from family members, friends, colleagues, or people of
influence about their experiences with certain products and services. Feedbacks are
very important considerations especially for service-oriented businesses since these
have major effects in different areas of the business.
4. Internet Marketing

The value of the internet to many people at present is as important as a

basic necessity. A lot of people conduct their businesses with the aid of the
world wide web. It is for this reason that the internet is also extensively used
for the marketing and promotion of goods and services. The tourism and
hospitality industry aggressively utilizes the internet for a variety of marketing
activities. The speed, efficiency convenience, and volume of information that
the internet provides to businesses have resulted in a more robust business
climate in the tourism industry. Tourism and hospitality firms benefit from the
internet for a variety of marketing activities such as advertising, marketing
research, sales promotion, information dissemination, sales and distribution,
customer service, direct marketing, relationship marketing, and others.
F. Development of Advertising and Promotion Plan
Many people think that marketing and promotion are just
the same. Oftentimes, these words are used to mean the other.
It is the promotion that is constantly visible to the radar of
people but is just one of the elements of the marketing mix.
Primarily, the role of promotion is to influence the potential
customers of the advantages of buying the products or services
of a particular business. To see this, businesses utilize marketing
communications and promotional tools that effectively send
messages to target markets.
Marketing Promotion Tools
Marketing communication is a holistic and general term that
includes activities and interactions using the marketing mix
elements. The promotional mix is the combination of
promotional elements under the marketing communications
which include advertising, sales promotions, public relations,
personal selling, word of mouth, direct marketing, and internet
marketing. Promotion is used to create a consistent and credible
corporate or product identity for some time.
G. IMC in Tourism and Hospitality
Integrated Marketing Communication or IMC is a collection
and fusion of the corporate image and marketing
communication tools to send a consistent, credible, and
convincing message to a target audience. An IMC campaign is a
combination of marketing communication tools between
traditional and new methods to build and convey a consistent
brand image. It addresses the fragmented approach of individual
marketing tools working independently from each other.
Tourism and Hospitality Advertising
Advertising refers to a paid promotion of goods and services with the aid of
multimedia to convince or influence a target audience. In the tourism and hospitality
industry, advertising is set to influence the target audience to decide by reinforcing
and encouraging them to take action or make decisions about their travel plans or
leisure-related thoughts. Businesses in the industry extensively use images and clips in
their promotional materials that show their products.

Sales and Joint Promotion

Sales promotion refers to activities or actions of firms to increase the value of
goods and services by offering incentives for their products to be purchased. Sales
promotion is a type of marketing promotion that encourages consumers to take
action. It may also contribute to create awareness and build brand identity. Sales
promotion activities in the tourism industry do not only target consumers but also
consolidators, intermediaries, and resellers.
Sales promotion tools can be any of the following:
• Sampling - giving away of free samples
• Coupons - entitles the customer to purchase at a discounted price
• Gift Certificates - vouchers or checks that are given away or purchased by a
customer and given to others as a gift
• Premiums - products offered for free or at less cost as an incentive to buy a product
• Rewards - prizes or incentives given to loyal or regular customers of a product
• Raffles and games - prizes are given to selected customers who won either by skills
or by chances
• Joint promotion - a collaboration of two or more distinct businesses that target the
same markets to come up with an incentive program for their customers. The
businesses expect to mutually gain from this strategy. These firms may be selling
different products that complement each other or may belong to a trade organization
campaigning for a common cause. This type of partnership may be a one-time activity
or a series of campaigns.
Distribution Channel and Intermediaries

In the marketing mix, the place refers to the distribution channel of the
company. The distribution channels serve as conduits for the companies to bring
their products within customers' reach. Since the products in the tourism industry
are mostly in the form of service, the channels are used to move the customers to
the products. The distribution channels in the tourism and hospitality industry can
be of two types: direct and indirect distribution channels.
• The direct distribution channel is a method of delivering the product to the
consumer without any assistance from external intermediaries. The company
itself is responsible for the delivery of its product to the customers.
• The other type is called the indirect distribution channel. This type of channel
utilizes the assistance of an independent or external intermediary to enable the
distribution of a company's product. In the tourism and hospitality industry, the
known travel intermediaries include travel agents, tour operators, and travel
specialists.
Marketing Intermediaries
The distribution channels are also called marketing intermediaries. Aside from
the abovementioned, the internet is also considered as one of the distribution
channels. These marketing intermediaries can also widen the distribution network
capacity to reach a larger portion of the companies' target market. Although the
marketing intermediaries in the tourism industry have distinct characteristics and
functions, they all contribute to the increase in the number of customers thereby
increasing revenue.
Convention/event planners and corporate travel managers deal with
associations, corporations, organizations, and other institutions for convention
Penning and corporate travel requirements. Travel specialists work for the specific
needs of the customer in the distribution system. Lastly, with the convenience and
speed of transacting business on the internet, customers and suppliers alike are
using this engine to finalize their travel needs: Some suppliers are using the internet
to directly sell their products to customers instead of using other intermediaries.
Thank
you
In life, we are not just learning but
sometimes we also need to unlearn
ideas or principles that aren’t helping
us to grow. We need to listen, study
and evaluate our learnings everyday
because not all ideas we heard or
seen in other people fits in our
situation. Never afraid to try acquire
new ideas, to change your decisions
and LEARN again.
- Ma’am
Jinni