Potential market research for this case study 5 6 5. References 7 2 1 . Question 1 – Marketing Research Literature Review Siegel (2011:1) states that the world’s biggest and best brands, like Apple, McDonald’s and Nikkei, did not Just create outstanding products and assumed the world would find a way to the products. They marketed their products in an effective way that created consumer demand and they continue doing so to remain the best. A destination, like any other product, in order to ‘sell’ and be a success needs to be marketed effectively to create consumer demand.
In order to be able to do effective marketing, relevant detail research is required to enable the understanding of the destination and the consumer. Jennings (2010:7) highlights the importance of tourism market research and states some of the benefits as the following: Provides information for the planning and management at the local to international level, Provides information on the social, environmental and economic impacts, Offers insights into the motivations, needs, expectations and level of satisfaction of the consumer, Highlight developmental needs of local businesses,
Generates views of the past, present and future, Offers information and data that could be used for business promotions, Allows comparisons to be made, Enables operators and governing bodies to evaluate the destination. Sexton and Bennett (1996:28) state that marketing is orientated towards the consumer. This is a fair statement since the consumer is the target for a product or business and its sustainability. Research and marketing efforts should then be and ultimately package a suitable destination that would be of interest and demand to the traveler.
The demand for traveling is driven by a lot of reasons. Some of the reasons documented by Batik (2006:23) and Merit (http://centralizes. Com) include 1 relaxation, education, business, honeymoon, health, etc. Figure 1 below shows a schematic representation of the classification of travelers. The reason for travel determines the type of destination. For example a person traveling to a city for medical reasons has different needs and expectations from a one day city excursionist. The destination marketer must understand the traveler’s perspective is in this regard.
The destination package should suit the traveler’s motives. Figurer : World Tourism Organization Classification of Travelers Source: World Tourism Organization (in Batik (2006:59) Dwyer, Forsyth & Dwyer (2010:38) cites the following variables as part of the demand drivers for a product: Product price in comparison to price of related or substitute products A destination marketer must highlight the product’s advantages over the competition or substitute products. If a substitute destination is cheaper, a traveler might opt for that option to save and channel the savings to another project.
The price factor can also be used to manage the demand. 2 Sexton et al (1996:145) mentions that price can be set low to maximize access or high to minimize access for exclusivity. The intended positioning of the destination will determine the price. Consumer’s income Income dictates expenditure. The income and expenditure patterns dictate the minimum and the maximum price limits for a destination. In the market segment of interest the income and expenditure patterns of the travelers must be understood to position and package the destination to fit the traveler’s financial standing.
Consumer’s Taste and Spending power Yeoman (2012:23) states that increases in personal prosperity, in particular financially, creates an embolden consumer that is more demanding, informed and with high expectations. For instance; demand for quality products, choice in product offering, efficient and personalized service. Understanding spending power and attractive and expected destination package. Level of marketing and promotion The level of market penetration depends on the type and level of publicity. Minority (2012:38) list types of advertising and applicable situations.
For example ‘consumer advertising, which could be used for long-term brand identity. In comparison to ‘local advertising’ which is suitable for increasing traffic at a local store. The marketing intentions will drive to operator to select the appropriate advertising method. Number of consumers in the market The bigger the market the more potential consumer there are in that market segment. Since the marketing efforts are directed to the traveler. It is important to understand the circumstances, interest and buying behavior of the customer Martin (2005:63-64). Figure 2 below shows how a person age relates to behavior and interests.
For example in life stage 4, will typically be people who are still sturdy possibly mostly at tertiary level, dependent on parents financially and any extra money is spent on entertainment. In 3 comparison to people in life stage 6 who are typically starting families, buying home and furniture. Basically they spend most of the income on money on basic needs. A destination marketer needs to consider such dynamics in a traveler’s life and accommodate as best as possible. Figure 2: Life stage model Source: Martins (2005: 64) Vim, TTS & Chant (2008, 752) suggest that a customer’s loyalty is driven by satisfaction.
A satisfied customer tends to be loyal to the product or brand. When the quality of offerings improves and customer satisfaction increases, the aggregate level of consumer spending increases (Foretell, Rust & Decamped 2010, 33). Satisfying the customer should be priority to keep a destination on demand. 4 2. Question 2 (a) – Critical discussion of chosen Market. This marketing plan is packaged for young independent travelers (Hit’s) aged between 18 to 24 years old. The objective is to attract Hit’s to holiday in Australia and possibly take up temporary ark to supplement their funds.
Figure 2 above shows segmentation by life stage. Hit’s are under life stage 5. This stage is referred to as ‘Freedom years’. According to Martins (2005,63) this age group is typically newly qualified people from tertiary. They live in rental spaces (flats, communes, etc) and expenditure is self-indulgence. Money is spent on outings, entertainment, clothing, traveling and electronic gadgets. Being a starter in the ‘earning world and with no financial savings or little efforts in that hand to mouth financially. In generally not much money will be brought into the entry (Australia) by this age group.
This target market is big on spending but financially limited, hence the need for temporary employment to supplement funds. On the good side for the Australian businesses, Hit’s can provide cheap labor. But in large numbers, the Hit’s could pose competition for Australians’ in the temporary work space. In the world that is isolating, cultural integration is crucial for information and skills exchange. This marketing plan opens up for that interaction. 3. Question 2 (b) – Alternative Markets. According to the tourism information found on the internet about Australia mm. ‘. Australia. Mom), the country has a varied product offering for tourism. Some of the offerings mentioned are adventure, coastal lifestyle, outback Journeys, sporting events, city life, etc. The product offering caters for a heterogeneous market. With such variety, any well segmented market can be catered for. For example newlyweds in the modern society have two incomes and are starting as living-in couple. This market segment is good for well packaged romantic and honeymoon oriented destinations. The rapidly growing ranks of middle-class consumers span is found in al emerging nations and is estimated at two billion people, spending a total of 5 $6. Trillion annually (http://www. Instrumentally. Com). This opens a market of spenders in other parts of the world (other than I-J) that the Australia Tourism Commission (TACT) could target for a variety of products mixes. New products for the rising middle-class could include business, education, holiday, etc. 4. Question 3 – Potential market research for this case study. This marketing plan is packaged for Hit’s with the aim to meet objectives of increasing the number of suitors to Australia and maximize benefits for the citizens from the overseas visitors.
One of the ways to measure the influx of visitors is to monitor inbound foreign traffic at points of entry such as airport. The benefit to the Australian citizens is measured by export earnings. It is important to identify and quantify the size and contribution of each market segment to each of the objectives. This would identify the range in terms of the least and the most beneficial segments. Furthermore, it would assist in determining the financial and marketing efforts needed for each segment.
With regards to the Hit’s, the following must be researched: Numbers of inbound Hit’s (for population control), Capital brought into the country (foreign income), Destination location (to manage localized over population), Possible choice of accommodation (identify benefits), Spending patterns (typical life to be lived in Australia), Choice of temporary work (to manage industry over population), Skills and experiences (potential benefits to the country) Capital on departure (Benefit to country of origin) Another area to research is the buying power and patterns at various operators that revere the overseas market within the country.