Marketing mix in tourism the case of go asia travel

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS Nguyen Dac Quy MARKETING MIX IN TOURISM THE CASE OF GO ASIA TRAVEL MASTER OF BUSINESS ADMINISTRATION THESIS Hanoi - 2011 VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS Nguyen Dac Quy MARKETING MIX IN TOURISM THE CASE OF GO ASIA TRAVEL Major: Business Administration Code: 603405 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr Pham Quy Long Dr Nguyen Thi Phi Nga Hanoi - 2011 TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TÓM TẮT iv TABLE OF CONTENTS vi LIST OF FIGURES ix LIST OF TABLE x LIST OF ABBREVIATIONS xi INTRODUCTION Significance of The Thesis Literature Review Objective of The Study Scope of the Study Data Sources and Research Methodology Contribution of The Study Structure of The Study CHAPTER 1: THEORY BACKGROUND OF MARKETING AND MARKETING MIX IN TOURISM 1.1 CONCEPT OF MARKETING 1.2 CONCEPT OF MARKETING IN THE SERVICE IN DUSTRY 1.2.1 Product: 1.2.2 Pricing: 11 1.2.3 Promotion: 13 1.2.4 Place 17 1.2.5 People 19 1.2.6 Process 20 1.2.7 Physical Evidence 21 1.3 CONCEPT OF TOURISM 21 vi 1.4 CHARACTERISTICS OF TOURISM PRODUCTS 22 1.4.1 Inflexibility 22 1.4.2 Inventory / Perish ability 22 1.4.3 Inconsistency 23 1.4.4 Intangibility 23 1.4.5 Seasonality: peaks and troughs in demand 24 1.4.6 High fixed costs of service operations 24 1.4.7 Interdependence or inseparability of tourism products: 25 1.5 MARKETING MIX FOR TOURISM INDUSTRY 26 1.5.1 Products 26 1.5.2 Pricing 26 1.5.3 Promotion 27 1.5.4 Place 27 1.5.5 People 27 1.5.6 Process 27 1.5.7 Physical Evidence 28 1.6 ANALYZING TOOLS USED IN THIS THESIS 28 1.6.1 External environment analysis: 28 1.6.2 Internal and external environment analysis: 31 1.6.3 Interview and questionnaire 33 CHAPTER 2: MARKETING MIX IN GO ASIA TRAVEL COMPANY ANALYSIS 36 2.1 Introduction of Go Asia Travel Company 36 2.1.1 Overview of Go Asia Travel Company 36 2.1.2 Company Organization Chart 37 2.1.3 Products of Go Asia Travel Company 37 2.2 The factors influence on Marketing Activities of the company 38 2.2.1 Customer 38 2.2.2 Competitors 40 vii 2.2.3 Partnership 44 2.3 Marketing mix decisions of GAT travel 45 2.3.1 Product: 45 2.3.2 Price 52 2.3.3 Promotion 54 2.3.4 Places 59 2.3.5 People 61 2.3.6 Process 63 2.3.7 Physical evidence 64 2.4 Assessment of GAT‘ marketing activities 66 2.4.1 Positive Sides 66 2.4.2 Negative Sides 67 CHAPTER 3: RECOMMENDATION TO GO ASIA TRAVEL 69 3.1 Philosophy of GAT 69 3.2 Solutions to improve the effectiveness of marketing activities in GAT 70 REFERENCES 80 APPENDIX 82 viii LIST OF FIGURES Figure 1.1: Marketing mix 7P Figure 1.2: The element of the communication process 13 Figure 1.3: The element of the promotion mix 14 Figure 1.4: PEST Model 28 Figure 1.5: SWOT model 31 Figure 2.1: Company Organization Chart 37 Figure 3.1: Marketing mix 4Ps Error! Bookmark not defined ix LIST OF TABLE Table 1.1: Statistics of foreign tourists to Vietnam before and after WTO Event 30 Table 2.1: Competition Analysis 42 Table 2.2: Rate policy for Halong bay one day tour 54 Table 2.3: Rate of Alova Cruise on Opening Promotion 55 Table 2.4: Six steps to handling with complaints 64 Table 2.5: Specifications of Alova Halong Cruise 65 x LIST OF ABBREVIATIONS No 10 11 12 13 14 xi INTRODUCTION Significance of The Thesis People say that ―Marketing is the art of selling goods and services‖ And to have a good marketing strategy, company need to analyze themselves, competitor and the market Besides some strategic decisions like positioning, market segmentation, marketing objective… a marketing manager always has to focus on tactical decisions In my viewpoint, marketing mix is key and handbook to obtain the success in business and to be an active and practical approach Marketing mix shows that we should choose the first thing is product which need to be met the customer need and be controlled in quality (Product); answer the question how much we will sell this product, the price need to be high or low, how many factors which influence on the pricing (Price) The third question is how to bring our product to all the potential customers, how to be a famous product, how to engage the customers in communication (Promotion) You have a good product at good price; many people know about you but they feel easy and convenient to buy it (Place), and there more decisions we have make are people, process and physical evidence In almost travel companies in Vietnam, they not have a professional marketing plan for starting a company or a product They not implement full parts of marketing mix some of them under evaluate the role of product or over evaluate the role of advertising… So many companies in Vietnam have not separated marketing from the sales and marketing department Whereas, more and more foreign competitors with the position of multi-sided strength, financial, profession especially they are the master of marketing They have enough strategies, tactics and the resources to win the global market Currently, Vietnamese travel company still have some advantage in the local way but under the roadmap of WTO joining and the quick internet development, they have to survive with the extremely difficult market, encounter with the giant competitors Everything is changing very quickly, Go asia Travel and the other have to obtain the knowledge of marketing especially marketing mix with practical decisions It is, therefore, very necessary to conduct a study on Marketing Mix in Tourism, using the case of Go Asia Travel to analyze and understand more, In the physical product field, marketing mix includes Product, Price, Place and Promotion In the services field, marketing mix is expanded with additional elements: People, Process and Physical evidence In this thesis, I would study about marketing mix in tourism industry and figure out some recommendations for Go Asia Travel The study aims to gain the following significances: Theoretical aspect: contribute some recommendation to concept of marketing mix in tourism industry Asia Practical aspect: Apply theories on marketing mix in the case of Go Travel Literature Review Relating to this topic, there are some authors mentioned about this For example, the book of ―Marketing in Travel and Tourism‖ by Victor Middleton, Alan Fyall and Michael Morgan In this book, the author also write about marketing mix in tourism service for a chapter (chapter – page 136) This chapter describes all Ps tactics in specific tourism services It also mentions marketing mix in the context of marketing system The second book which talks about marketing mix is ―The portable MBA in marketing‖ by Charles Schewe and Alexander Hiam In this book, the author use whole part (part, page from 337-509) to write about applying marketing mix tactics including creating a product, manage product, pricing method, distribution function and how to promote sales Before and during the time of making this research, I have not seen any research with the particular topic of marketing mix in tourism and with the case of Go Asia Some examples of websites that use a combination of travel reviews and the booking of travel are TripAdvisor, Virtualtourist, GLOBOsapiens, IgoUgo, and Cruise Critic TripAdvisor allows travelers to view, contribute to, and edit the online travel "guide books", containing over 25 million travel reviews on more than 33,000 destinations worldwide, as of July 2009 IgoUgo offers a place to store and share trip stories, pictures, opinions, tips, and experiences Similarly, Cruise Critic is an interactive virtual community of avid and first-time cruisers who plan, research, and share their experiences online Applying this tool of promotion, GAT should focus on review management Besides the oral comment or complaint, I would talk about the other forms of feedback which is strongly related to PR There are some things to in this task: Manage review online: There are some websites working as a travel platform or forum like Tripadvisor.com, expedia.com, lonely planet…In this website each company will have an account or listing – this can be made by the property owner or by the customer Customers after using a products or service of a company, they can write a feedback to the company on this website It is very easy for customer to make a review This one can be positive or negative to a company Review management includes motivating customers to write it and handle with the positive and negative reviews The best way to receive a good review is satisfy customers Customer will spend their time to write a positive feedback for your company If they are not really impressed or not be over the expectation, they normally have no time to it for you Besides serving customer well, a company should send them a thank - you email with the link to the review‘ website Which can help remind them to support us by a review In fact, there many kinds of customers and surely many different feelings about event the same products or services But customers are always right and what they comment is what you should 76 listen to In the other way, customers can email to comment about the company‘ services These are also necessary to be responded quickly and by the sincere heart I would like to suggest some ways to handle with the customer‘ negative review At first, company should have a welcoming attitude to all the feedbacks If it is a negative one, company should response a sorry and thank – you letter In this email you should show that customers‘ feedbacks are very welcomed in your company and not explain too much, just keep it in mind and improve it Please not forget that customer‘ feedback is the best way to improve your service After improving, the next customer will prove and appreciate you more And the positive reviews will come with you very soon Please make sure that you acknowledge and response to all the reviews online In the tripadvisor.com, it is very easy for you to response to a review and it will be shown next to the customer‘s review It will help other viewers understand that we always care about what the customer said Manage review on paper The other way a company can get the customer‘ feedback is offering them feedback form to key in after the time of service used This form should be managed and follow strictly by the top leaders This way to make sure that all of customer‘ comments especially the complaints must be sent to the top leaders This way to show that the customers‘ feedbacks are respected and welcomed These paper comments should be used to upload to your website and online in general Company also should have some policies related to customer‘ feedbacks even online or on the paper They can be bonus / rewarding policy to the person or a department which is mentioned on the feedback Or on the contrast, staff will be 77 punished if he or she is mentioned on the reviews with some errors or bad attitude to the customers The company should have a meeting every week just talk about the customer comments I think the company can learn and get many things from it Above all, PR is motivating others talk about you However the key factors are your services must be met or over the customer expectation and customer‘ comments must be welcomed with your sincere heart 3.2.2.3 User generated content Web GAT should make a website with more functions which allows inter – action between customer s and the company or among customers For example on Amazon.com the majority of content is prepared by administrators, but numerous user reviews of the products being sold are submitted by regular users of the site Example of chudu24.com: http://khachsan.chudu24.com/ks/893/khach-san-sofitellegend-metropole/danh-gia.html Applying SEO and social net work to promote company product Online hotel reviews are increasingly seen in the hotel industry as a key tool to monitor, measure and improve quality But another valuable use of reviews and user-generated content is the significant opportunity to increase the number of inbound website visitors, and to convert more of those visitors into buyers User generated content (UGC) has been defined as any data or media that is contributed by the users of a website - rather than being created by professional journalists and editors In the travel industry, UGC commonly includes online guest reviews, photos, videos, social networking posts, and a wide range of other digital content These pieces of content can increase website sales two ways: 78 - Indirectly: by increasing rankings in search engines, bringing more traffic to your website Directly: by increasing sales conversion rates by increasing consumer confidence ―Consumer confidence‖ is simply how much a potential customer trusts you Over the past few years, a significant shift in communications authority has taken place According to Yankelovich research, 75% of consumers not believe companies tell the truth in their advertisements Further, emarketer discovered that consumer reviews are trusted 12 times more than product descriptions by the company When making a purchase decision, people are increasingly turning to people they trust and other consumers for advice and guidance 3.2.3 Develop more channel of distribution (Place) At the moment, GAT follows some distribution channels as mentioned: Hanoi hotel agents for daily departure tours, direct Online and international travel firm for Vietnam package tours However, Hanoi day tour is always in a limited volume and revenue So GAT should focus more and more on online direct distribution and international travel firms These channels will help GAT bigger and reach their target of top 50 in 2015 of Vietnam travel company To get more ITFs, GAT should spend more time and money joining the tourism trade fairs which help GAT promote its name internationally and get the big volume of booking yearly However, joining the trade fairs is not unique way; GAT can join some B-B website like Viator.com or Getyourguide.com 79 REFERENCES Books: Al Ries (2005), Focus: The Future of Your Company Depends on It Charles Schewe and Alexander Hiam, (1998), The portable MBA in marketing Christopher H Lovelock and Jochen Wirtz, 2010, Services Marketing (7th Edition) James C Collins and Jerry I Porras, (2004) Built to last: Successful Habits of Visionary Companies, HarperCollins Publishers James C Collins and Jerry I Porras, (2001) Good to great, HarperCollins Publishers Michael E.Porter (1985), Competitive Advantage, Creating and Sustaining Superior Performance Nguyen Thị Thu Mai, 2009, Marketing điểm đến Du lịch (tourist destination marketing), Thanh Nien Publishing Philip Kotler (2008), A Framework For Marketing Management, fourth edition, Prentice Hall Publishing, 13 Philip Kotler, (2001) Kotler on marketing 10 Press Paul Temporal (2000), Branding in Asia, revised edition, Sail Wah 11 Paul Temporal , (2006 ) Asia's Star Brands 12 Kent Paul Fifield (1989), Marketing strategy, Second edition, Gillingham, Porter, M.E (1979), How competitive forces shape strategy, Harvard business Review 14 Spencer Johnson, (1998), Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life 80 15 Tony Lê Đình Tuấn, Thứ tư, 24 Tháng năm 2006, Nguyên tắc ―thắng trận‖ marketing du lịch, Vietbao 16 Victor Middleton (2009), Alan Fyall and Michael Morgan, Marketing in Travel and Tourism, The fourth edition 17 W Chan Kim and Renee Mauborgne (2005), Blue ocean strategy: How to create uncontested market space and make competition irrelevant Websites: 18 www.netmba.com/strategy/pest/ www.mystrategicplan.com/resources/internal - and - external – analysis/ 19 20 www.quickmba.com/marketing/mix/ 21 www.easy – marketing – strategies.com/marketing – strategy – process.html 22 23 www.hotelmarketing.com/index.php/content/internet-marketing www.hotelmarketing.com/index.php/content/article/travel_trends_for_2012_ according_to_tripadvisor 24 www.tripadvisor.com/Attraction_Review-g293924-d2234933-Reviews- Go_Asia_Travel_Alova_Sails_Day_Tour-Hanoi.html 28 25 www.qype.co.uk/place/1857570-GAT-Travel-Go-Asia-Travel-Hanoi 26 www.agoda.com/asia/vietnam/halong/alova_halong_cruise.html 27 www.vietnamtourism.gov.vn/index.php?cat=2020 www.khachsan.chudu24.com/ks/893/khach-san-sofitel-legend- metropole/danh-gia.html 29 http://www.expedia.com/Vacation-Packages 30 http://www.getyourguide.com/en/tours/vietnam/?nid=248 31 http://www.ecotourdirectory.com/ecotourism/ 81 APPENDIX Questionnaire for GAT’ products I Your attitude to GAT’ product Question 1: The tour guide of GAT is Question 2: Alova Halong Cruise is Question 3: Tour itinerary of GAT is Question 4: The price of GAT is Question 5: Do you recommend GAT to your friends: II The potential of Eco tourism in Vietnam Question 6: Do you like ecotourism? Question 7: Have you ever joined any really eco tour in your life? Question 8: Do you know any travel company in Vietnam specializing on Eco tour? Question 9: Do you think Vietnam have potential for develop eco tourism? 82 Question 10: Do you think more and more people like eco tourism? III Personal information Name: ……………………………………………… ………………………… Nationality: ……………………………………………………………………… Age Range: Email: …………………………………………………………………………… More comments: ………………………………………………………………… Thank you for your participation People are interviewed and questioned (Listed below are only customers who are ready to provide their email address) No Name Yoon Bates Morris Limang king Michael dout Mark Sun meng Zhen xin 83 Jans ted 10 Lee 11 Tan Peng Chai woon 12 jinn 13 David 14 Jans Chan 15 Mark 16 Decy the 17 Olaf kayser 18 Low jin wei Ken 19 mochizuki 20 Michael james 21 Gunther weyer Frey theres 22 ann 23 Anna abom 24 Vincent jean 84 25 Eva dotter 26 Reda hamri 27 Lana tang 28 Denis leonard 29 David watts 30 Kenny 31 Andrea Lim 32 Ferry Mausert 33 Jeffreyson liu 34 Gavin 35 Lisa kuun 85 Sample Selection Description Sample size and criteria: I have chosen in 100 customers who join GAT tours to Halong bay and all of them are foreigners, all of gender and age range from 30 to 60 years old Data collection methodology: I have directly approached each guest to collect the information To finish my survey with 100 tourists, I have been enabled by GAT to join the tours in 12 times with 12 different groups of tourists Question design description: I have shortened questionnaire in 10 questions In the first part ―Your attitude to GAT‘ products‖, I have used only questions about P factors includes people, product, process and price In the second part, I have used questions asking for the potential of Eco tourism in Vietnam Survey and Interview Result There are 100 questionnaires and sent to 100 tourists who join the GAT‘ tours Then I have received 90 questionnaire feedbacks as below: Question 1: There are 50 people say excellent, 35 people say good and only say average for the tour guide of GAT Question 2: there are 80 people say excellent and 10 people say good at Alova Halong Cruise Question 3: There are 62 People say excellent, 13 people say good and only say bad, the rest say average for the reasonability of the tour itinerary Question 4: There are 70 people say the price is reasonable and 18 say cheap, the rest say expensive 86 Question 5: There are 70 people say they will recommend for their friends to use GAT‘services Question 6: There are 70 people say they like and 15 people say they not like to eco tourism And of them say no idea about it Question 7: There are 64 people say they have been joined a really eco tour in your life The rest say never join any eco tours Question 8: All of people say they not know any company in Vietnam who specializing in eco tours Question 9: 62 People say that Vietnam has potential to develop eco tours, 10 people said no and the rest say they not know Question 10: There are 80 people say yes and 10 say no in the question of ―do you think more and more people like eco tours‖ 87 Photos of GAT’ products Overview of Alova Halong Cruise Room on Alova Halong Cruise 88 ... research, the author tries to reach the following objectives: Review theories on Marketing mix and Marketing mix in tourism industry Apply theories on marketing mix into the practice of Go Asia Travel. .. on Marketing Mix in Tourism, using the case of Go Asia Travel to analyze and understand more, In the physical product field, marketing mix includes Product, Price, Place and Promotion In the. .. Marketing Mix in Go Asia Travel Company Analysis Chapter 3: Solutions to improve the effectiveness of marketing mix for the Go Asia Travel Company CHAPTER 1: THEORY BACKGROUND OF MARKETING AND MARKETING