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Developing a Tourism Product
Process of Developing a Tourism Product
The process of developing a tourism product involves the following steps (Libosada & Bosangit, 2007):
A. Product Identification – It involves determining what an area or business has to offer. Some areas have
several attractions/products. Classify these as either existing or potential products and then prioritize
what should be given attention in terms of development and marketing.
B. Market Study – It involves conducting a thorough study to determine whether there is a possible
market that can visit the area. It also involves obtaining historical figures on market arrivals in the
general area where the potential product is located. In this stage, it is important to include domestic
market aside from the foreign market in the study since there are usually more domestic travelers
than visitors from other countries.
C. Product-Market Matching – Based on the market profile generated from the market study, match
what type of traveler will be most appropriate for a tourism product. For instance, if the product is a
waterfall that requires some trekking, then the market profile should be young to middle-aged.
D. Product/Activity Prioritization – If there are numerous potential tourism products in an area or in a
business, prioritize which should be developed and marketed first where efforts and focus will be
directed.
E. Initial (Test) Marketing – While a product is being developed, it is important to conduct initial
marketing or creating awareness for such product. The reason is that the growth period of a new
tourism product is quite long, especially if the target market are foreigners. This can be done through
publicity or networking with potential suppliers. Test marketing is done on a product to determine the
reaction of the test market. Based on the feedback, a product could either be modified to maximize
potential revenue or canceled to minimize potential losses.
F. Product Testing – The usual form of testing a new tourism product is through an activity familiarization
tour. Such tour would involve possible client suppliers, the media, and other personalities who can
provide good comment or feedback on the new product.
G. Full Launch and Marketing – This involves full effort in reaching out to both clients and intermediaries.
Marketing is usually an expensive undertaking, thus every opportunity to generate free publicity and
positive market feedback must be utilized to reach out to a wider market.
Marketing in Tourism
In relation to tourism, marketing is a management philosophy which, in the light of tourist demand, makes it
possible through research, forecasting, and selection to place tourism products on the market in line with an
organization’s purpose for the greatest benefit. This definition suggests three (3) things (Cruz, 2013):
It shows that marketing balances the needs of tourists with the needs of an organization or
destination. This can be explained by the development of an appropriate marketing orientation.
It highlights tourism research that leads to the selection of tourism demand. The concept of market
segmentation is useful in this area.
The concept of the product life cycle is useful to stress the proper placement of tourism products on
the market and to suggest the suitable marketing policy and strategies to be applied.
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Marketing Orientation
Developing a philosophy or orientation to guide marketing efforts is necessary before taking on a program to
market tourism in general or a specific tourism product or service. Below are the different marketing
orientations (Cruz, 2013):
Product orientation highlights the products or services that are available. This is successful when there
is a surplus of demand over supply. This means that a destination that offers the best product will get
the tourists.
Consumer orientation places the needs and wants of the tourists on the top in the mind of the
marketer who seeks to provide a product or service that will satisfy those needs and wants. This
orientation is used when there is more supply than demand.
Societal orientation focuses on the satisfaction of tourist needs and wants while respecting the long-
term interests of the community.
Whichever marketing orientation is applied, it is essential that any marketing effort has an agreed upon
philosophy to guide the further development and marketing efforts of any destination/business.
Market Segmentation
Market segmentation is a universally accepted way of analyzing demand. It is the grouping together of people
with similar needs and wants for the purpose of serving the market better. The following are the four (4)
criteria that have been developed by which a market segment can be constructed (Cruz, 2013):
Socioeconomic/Demographic Segmentation – It includes criteria such as age, education, gender,
income, family size, occupation, social class, and the like, which are the most commonly used because
of the ease of collecting data and such data are easy to understand and apply. Although, with the
changing nature of society, it is impossible to rely solely on demographic data when devising a
marketing strategy.
Product-Related Segmentation – It includes variables such as recreation activity, equipment type,
brand loyalty, benefit expectation, length of stay, and transportation and experience preferences. The
main advantage of this is that the information gained is directly related to a particular product being
offered.
Psychographic Segmentation – It includes variables such as personality traits, lifestyle, attitudes,
interests, opinions, and motivations. Although expensive and difficult, this technique is useful in
extensively-developed markets to supply information gained from simpler analysis.
Geographic Segmentation – It includes criteria such as region, market area, city size, and population
density. Destinations use geographically-based studies to identify primary, secondary, and even
tertiary markets. It is also used to determine the extent of promotion efforts by a
business/destination.
After identifying the market segments, it is important to select which segments a business/destination would
like to attract and serve. This decision is made only after analyzing which market segment will bring the
greatest benefit to a business/destination. The segment chosen becomes the target market.
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Product Life Cycle
The concept of the product life cycle is helpful as an additional guide on what strategies should be used on
choosing, attracting, and serving target markets. It suggests that a product/service moves through distinct
stages. These stages are as follows (Lim, 2012):
Discovery – It involves the conduct of research and development of a product/service.
Launch – It is the stage when a product/service is fully launched and the number of tourists, as well as
sales, increases.
Stagnation – It is the stage wherein growth slows down, demand levels off, and environmental
degradation begins to be obvious.
Decline – It is the final stage wherein sales begin to fall.
Strategic Tourism Marketing
A strategic marketing process can be divided into three (3) elements (Cruz, 2013):
o Market Planning
The marketing planning process involves analyzing a marketplace in order to develop a strategy for a
business/destination to enter and compete in such marketplace. Marketing planning mainly involves
setting objectives (setting and communicating targets for people to achieve) and developing strategies to
meet the objectives.
o Target Market Selection
The following steps are suggested in identifying target consumers/markets (Cruz, 2013):
a. Estimate the approval of an area’s attractions. This includes the degree of tourist interest in the
area and the length of time the tourist spends visiting it.
b. Estimate the distance in both travel time and travel costs. The greater the attraction, the longer
the distance that potential tourists will travel.
c. Identify potential target markets geographically by locating the population clusters within the
maximum distance determined from the estimated travel time and appeal of the attraction.
d. Identify the actual and potential competition in the target market.
The behavioral characteristics of potential travelers are necessary for identifying target markets since
people travel for different reasons. Once the target market has been identified, it must be studied to know
why these people travel to a specific location. Research can determine the target markets that would be
best suited for a particular product and match it with those who are most likely to enjoy them and let the
tourists know that these exist though promotion.
o Marketing Mix
It is the combination of elements – product, price, promotion, and place/distribution – that interact and
complement to attain the objectives of a market plan. Like any products that are marketed, the basic
components of tourism marketing include the following four (4) P’s (Lim, 2012):
Product – A tourism product can be an attraction, an activity, a tourist facility, or a service. A
tourism product should satisfy the needs and wants of a customer. The following are the criteria
that should be met in deciding to provide a product or service (Cruz, 2013):
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– There should be a heavy demand for the product or service.
– A new product/service should suit the image of a business/destination and complement
the existing ones.
– New products/services should be offered in accordance with the available supply of
manpower, money, and natural resources.
– Any added product/service should contribute to the profit and/or growth of a
business/destination.
Price – It establishes how the market would buy a product based on its competitiveness with other
similar products. Price is the result of supply and demand. When demand exceeds supply, price
tends to increase. When supply exceeds demand, price tends to decrease. For instance, higher
prices are charged during peaks seasons and lower prices during off seasons.
Price is also influenced by competition. For instance, if the products/services of a
business/destination are similar to its competitors, then its prices should be similar to those of its
competitors. But, if its products/services are unique, it can charge more than its competitors.
Price is also related to the needs of the market segment that is served. For instance, if a destination
is perceived by the members of a market segment as serving their needs and wants, they will be
willing to pay a higher price.
Promotion – It means stimulating sales through the dissemination of information. It is one (1) of
the major tools used in marketing a tourism product. It involves devising methods of
communication that will make the greatest number of potential consumers aware of a
product/service/attraction.
Promotional planning determines the objectives or goals an organization should strive to
accomplish and the plan of action to attain these goals. It involves the following steps (Cruz, 2013):
a. Determine the objectives of promotion that are consistent with the general marketing
plan.
b. Identify the market group to which the promotion is targeted.
c. Identify the specific advertising, sales support, and public relations programs to be
organized.
d. Allocate budget to the various market segments and target groups.
e. Determine the methods to be used to control and assess the effectiveness of the
promotion.
Promotion mix is the combination of tools that convey the message to the customers. The major
types of promotional tools are as follows (Cruz, 2013):
Advertising – It refers to any form of paid-for, non-personal presentation and promotion
of ideas, products/services by a specific sponsor using some form of mass media. An
example of this includes the television advertisement of the Department of Tourism (DOT)
entitled “Sights”, which was launched in 2017 with the tagline, “Experience the
Philippines”.
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Personal Selling – It is an oral presentation to one (1) or more prospective customers on a
face-to-face basis. An example of this is when travel agents personally offer various
products/services to potential customers.
Sales Promotions – It includes activities directed toward the consumer or toward
intermediaries. Examples are displays (brochures, leaflets), shows, exhibitions,
demonstrations, and giveaways.
Public Relations – It is the presentation of ideas, goods or services about an organization
using mass media. Unlike advertising, it is not paid for. It is designed to create a favorable
image of a product/service/destination. However, since the publicity is not paid for, there
is no guarantee that it will be carried out in the media or that it will be in the form that a
company has requested. An example of this is the online news release for the opening of
Summit Hotel in Tacloban City in March 2018.
Place/Distribution – The location of a product/service can be significant (in a place with other
competing products) or insignificant (in a place where a product/service is unique and
outstanding). For instance, in coastal areas, a tourist attraction located at the beach front would
usually have a greater edge over other facilities with no beach areas.
The tourism distribution channel produces the link between the suppliers of travel services and
the consumer. This has a two-fold purpose: to make sure that potential travelers can obtain the
information they need in choosing a product/service and to make necessary reservations.
The location and the distribution channels of a product/service should be conveniently located
and accessible.
References:
Cruz, Z. L. (2013). Pirnciples of tourism: part ii. Manila: REX Book Store.
Libosada, C. M., & Bosangit, C. A. (2007). Introduction to tourism: a comprehensive guide to the travel and
tourism industry. Pasic City: Anvil Publishing, Inc.
Lim, R. D. (2012). Principles and scopes of tourism. Manila: Mindshapers Co., Inc.
DOT releases ‘Experience the Philippines’ ad. (June 2017). Retrieved from https://www.rappler.com/life-and-
style/travel/172631-department-of-tourism-experience-the-philippines-tv-commercial on 21 March
2018
Summit Hotel to open in Tacloban City. (March 2018). Retrieved from
http://www.sunstar.com.ph/tacloban/business/2018/03/15/summit-hotel-open-tacloban-city-
593700 on 21 March
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