8 P’s of Travel Industry

8 P’s of TRAVEL INDUSTRY

PRODUCT ELEMENTS

BENEFIT	MEANING	WITH RESPECT TO THE TRAVEL AND TOURISM INDUSTRY
1. CORE BENEFIT	The fundamental benefit or service that the customer is buying	Traveling
2 BASIC PRODUCT	Basic, functional attributes	Ticketing, hotel reservation
3 EXPECTED PRODUCT	Set of attributes/conditions the buyer normally expects	Customer friendliness, good food
4 AUGMENTED PRODUCT	That meets the customers desires beyond expectations	Prompt services, comfortable and convenient trip, spectacular sights, music
5 POTENTIAL PRODUCT	The possible evolution to distinguish the offer	Totally customized tour packages, A grade service at every stage

The services a product offers consist of three levels.

The first level is that of the basic service package which includes core service, facilitating services and supporting services. In the case of the travel and tourism industry, the core services would include traveling, ticketing, hotel reservations, food services etc.

The second level is that of an augmented service offering where accessibility, interaction and customer participation is given equal importance in delivering the service product.

Accessibility of Service

-	N umber and skills of personnel
-	Working hours and time used in performing various tasks
-	Location of service outlet
-	Exterior and interior of service outlet
-	Infrastructure, hardware, documentation
-	The number and knowledge of consumers simultaneously involved in the process

Interaction with service organization

-	Interactive communication between employees and customers
-	Interactions with the physical and technical resources of the organization needed in the service production process
-	Interaction with other customers involved in the process.

Customer Participation

-	How well is the customer aware about the process of service delivery and his or her role
-	How well is the customer prepared to share information
-	How well is the customer willing to share information or use the service equipment

The third level is that of the market communication of the service offering as in its absence the augmentation service package does not have any relevance to the customer.

PLACE

Because of intangibility (from production to sales) of services, they cannot be stored, transported and inventoried. Hence traditional distribution channels available for product marketing like wholesalers and other intermediaries cannot be used. Even the retailing cannot be an independent activity. Similarly, because of the inseparability, i.e., in case of services production cannot be separated from selling, services must be created and sold at the same time.

These two characteristics make the channel very short and direct. Most services are distributed through direct sales. At best one agent or middleman can be added to it, like in the case of insurance, travel agency, courier service, etc.

So we see that there is a little controversy regarding the distribution of services. There is one school, which says that since the service cannot be separated from the producer of the service, direct selling sales channel are the only method of distribution available for services. The advantage of direct selling is that the service can be offered to the customer at a lower cost. The other school partially disagrees with this theory and suggests that it is possible to have intermediaries but the channel of distribution would be rather short and simple as compared to tangible goods.

 PROCESS

The importance of process management is that it assures service availability and consistent quality. Without sound process management, balancing service demand with service supply is extremely difficult. Service cannot be inventoried; therefore, it becomes essential to find out ways and means to handle peak load to optimize different customer needs with varied expertise levels within the service organization.

In marketing management, operations management has been recognized as an integral function. In manufacturing sector, for example, logistics in distribution are vital to satisfy customer needs. Similarly, in services sector, where there is no tangible product, the operations management is vital to deliver satisfaction because here the operations management would decide how the process of service delivery would function, or in other words, the interactive experience that would deliver the service benefits to the consumers.

Shostack gave a much-simplified version and described the 'process' in three stages. First, a process can be broken down in logical steps to facilitate analysis and control. Second, there are more than one available options of processes in which output may differ. Finally, each system includes the concept of deviation or tolerance standards in recognition that the processes are 'real time' phenomena that do not conform perfectly to any model or description, but function within a norm.

One can observe how changes in complexity and divergence influence their market position. For managers in service industries, taking a structural approach can help increase their control over some of the critical elements of the service system management. Therefore, for marketers in service industries, process design may be a tool that can substantially increase their impact and role in marketing their services.

PRODUCTIVITIY /QUALITY

Productivity in services refers to how you transform the inputs into outputs, which are valued by the customer. Quality refers to the degree to which the service satisfies the customer by meeting their wants and expectations. Productivity and quality need to be omnipresent for the industry to complete its service obligations aptly. Only if your firm is productive and the quality meets the requirements of the customers can your performance be graded as excellent.

Here are five key things to consider when developing the performance strategy for your business.

Have you found a way to fit marketing into your schedule?

Do you keep track of both your long and short-term projects (including marketing projects), and review that list daily?

Do you have a way of combating procrastination and delay?

Do you maintain the highest standards of integrity and excellence?

Are you continually working to improve your skills in all areas of your business?

In a service organization, employees are essentially the contact personnel with the customer. Therefore an employee plays an important role in the marketing operations of a service organization.

According to him, "the internal marketing concept states that the internal market of employees is best motivated for service-mindedness and customer-oriented performance by an active marketing like approach where a variety of activities are used internally in an active, marketing like and coordinated way." The starting point in internal marketing is that the employees are the first internal market for the organization.

To realize its potential in services marketing, a firm must realize its potential in internal marketing - the attraction, development, motivation and retention of qualified employee-customer through need-meeting job-products. Internal marketing paves the way for external marketing of services.

The companies that practise internal marketing most effectively will

compete aggressively for talent market share,

offer a vision that brings purpose and meaning to the workplace,

equip people with the skills and knowledge to perform their service roles excellently,

bring people together to benefit from the fruits of team play,

leverage the freedom factor,

nurture achievement through measurement and rewards, and

base job-product design decisions on research.

PROMOTION AND EDUCATION

It is now established that there are clear differences in information usage between goods and services. First, the difference is that consumers of services are less likely to purchase without information than those of goods. Second, the consumer of services will prefer personal sources over impersonal sources of information. And third, the basic characteristics of services have implications for communication strategy. George and Berry keeping in view the intangibility of services, proposed that in the case of services a customer is buying the performance of the service personnel and therefore the advertising in service industries should not only restrict itself to encouraging consumption, but also it should encourage employees to perform well. They proposed the following six basic guidelines to help design effective advertising programmes.

The advertising should have positive effects on contact personnel. . It should capitalize on the word of mouth.

It should provide tangible clues to the customers.

It should make the service offering easily understood.

It should contribute to the continuity.

It should promise only what is possible.

Here are five key things to consider when developing the promotional strategy for your business:

Are you networking enough? For many service businesses, networking is the key promotional technique. Join organizations; get to know people; get involved; keep in touch with people; do what you can to help them; be visible in your community.

Do you have a good, solid marketing letter that highlights your benefits and moves people to take action? This one inexpensive marketing tool is one of the most powerful when written properly.

Do you do personal PR such as speaking and writing? Again, these don't take much money but pay big dividends. Speak at Rotary, your Chamber of Commerce, at business associations and alumni groups. Write for your local paper; the trade journal of your industry, or even for someone else's newsletter. You can use the reprints later for credibility.

Are you mailing to people on your list? This is an absolute must. Don't let people forget who you are and how you can help them. From two to six times a year send clients and prospects a newsletter or other type of keep-in-touch mailing.

Do you have a Web Site? You should. It doesn't take a lot of money to create a web page and even less to post it. This is a powerful media that can serve as a combination direct mail piece, brochure and newsletter. Given the price of entry, it's crazy not to have one.

Glynn Shostack once observed, "A physical object is self defining; a service is not" and therefore the marketing task in service industries is "defining for the service what the service cannot define for itself."

Though a customer cannot see a service, but definitely he can see various tangible clues of the service offer like facilities, communication material, objects, employees, other customers, price, etc. On the basis of his perceptions on the tangible clues, the customer makes the purchase decision. These clues might be both intended and unintended ones and, therefore, managing evidence is integral to the service marketing mix. Shostack even observed that the management of evidence comes first for service marketers.

The argument here is that the physical environment, facilities and atmosphere; give enough physical evidence to help shape customer perceptions. Many service marketers have neglected this aspect while the others gave due emphasis to issues like exterior of buildings, office furniture, layout, colour 0.£ interiors, and even carry-bags, tickets, cash memos, labels, etc. The advocators of public relations have even coined a specific term called 'corporate identity' and suggested that such tools can create a visual identity that the public as customers can recognize. The corporate identity media can successfully contribute towards the marketing objectives provided they are attractive, distinctive and memorable.

PRICE AND OTHER USER COSTS

Pricing is yet another variable of the marketing mix. A particular product or service is acceptable to the customer at a particular price and if the price is increased, it is likely that the same product or service might become less acceptable to the customer. The other issue, which is related to pricing, is that of perceptions about quality. Generally, to most customers, high price means high quality. However, some customers don't need the highest quality at the maximum price. Detergents are one such example where average quality detergents at moderate prices are market leaders.

Service pricing follows the principles and practices of pricing of goods and, therefore, they are either cost based or market based.

Within these categories prices may be profit oriented, government controlled, competitive or customer oriented. However, the characteristics of services do influence the pricing and, therefore, different methods of pricing are to be followed.

There are some basic guidelines for pricing of services. These guidelines may help in developing an appreciation of the framework for service pricing.

1. For services, the pricing strategy should be such that demand fluctuations are successfully handled. Since services are perishable, they cannot be inventoried. In such a situation pricing strategy should be such that it should encourage the customers to delay their use of services till the period of low demand.

2. Service prices should be based on costs so as to take into account the cost of tangible clues of intangible services. To the first time users of services the "services offer-package" is less understood if it is primarily dominated by intangibles. Therefore, the tangible and material content of the service product should be integrated in the 'service-offer package', which has definite cost implications.

3. The service pricing should be such a to provide value addition and quality indication to the customers. In situations of "homogeneous" services, the pricing strategy may be market oriented or customer oriented. But in heterogeneous services, the price may be used as a quality indicator.

4. The pricing strategy should be such as to cope-up with the degree of competition operating within a certain geographic and time zone. Services are inseparable from the person who provides them and the service providers have both geographic and time limits or markets, which can be served by them.