- Step 1: Prepare documents (documenting): determine the most important benefits for customers when purchasing the service.
- Step 2: Deciding on the image, creating the desired image of the business in the minds of customers in the target market.
- Step 3: Differentiation, creating a difference in the business's products and services compared to the products and services of competitors. The further apart this difference is, the better.
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- Step 4: Designing, conveying the differences created to the target market.
- Step 5: Delivering, keep your promise to your potential customers.
Market positioning methods
- Positioning based on product characteristics
- Positioning based on the benefits, solutions or needs that customers can choose from
- Positioning according to specific customer use cases
- Positioning for different customer groups
- Positioning against other products on the market
- Positioning by differentiating the product.
3.3. Marketing policies to attract tourists
3.3.1 . Product policy
- According to Phillip Kotler, a product is anything that can be offered to a market for attention, acquisition, or consumption to satisfy a want or need. It can be physical objects, services, places, organizations, etc., products that bring value and benefits to people. The buyer of a product or service is the buyer of the value or benefits that the product brings to them.
- The product in the travel business is the tourism program (tour) provided to tourists. This program includes many different goods and services of many service providers such as hotels, restaurants, and tourist attractions.
entertainment
The content of product policy includes: regulations on the size of product mix, product life cycle and new product development.
Product category analysis
Businesses today do not trade in one type of product but usually include many different products and services. For the tourism industry, a tourist can use services such as food, entertainment, laundry, information, etc. Providing different products to serve the diverse needs of tourists. Businesses need to calculate the types of products and product categories that best serve the needs of tourists and gain the greatest profit compared to the smallest cost.
Size of product mix
Product mix is the set of specific product and service groups that a business offers in the market.
- Product category is a group of closely related products that may be similar in function or satisfy the same level of need or use the same distribution channel.
- The breadth of the product mix is the sum of the product categories of the business:
- The depth of the product mix is the total number of products in each category group (number of products of the products)
- The length of the product set is the total number of products in the business's product catalog.
- The degree of compatibility between products of different types, in terms of end use or the same distribution channel, or from the same production factors
Decide the product length
The length of the product line depends on the business's goals in each period. The business can shorten or lengthen the product line by adding or removing products.
The business can decide to extend above or below or extend both ways.
Downward stretching is when a business adds lower quality, cheaper products to attract customers. A business that stretches its product line downwards may be attacked by competitors at the top end and decides to counterattack at the bottom end, growth at the top end is slower than at the bottom end…
Extending upward are firms serving mid- and low-income markets that may consider entering higher-income markets due to the attractiveness of higher growth or for other reasons.
Stretching both ways means that businesses targeting the middle of the market can stretch their products to both sides.
New product development
- Developing new products is an essential requirement for business operations. Because human needs are always changing (and each product has a certain life cycle), business products are always innovating to adapt to customer needs. New product development goes through the following steps:
Building new product strategy
Idea development
Design and evaluation
Commercial feasibility analysis (feasibility study)
New product development
Check
Fully commercialize the product
3.3.2 . Pricing policy
Pricing policy is a system of viewpoints guiding the evaluation and adjustment of the evaluation of a business's products to achieve goals within a specified period of time.
- Price is the only factor that creates revenue, other factors create
expense
- Pricing policy has an influence and is organically affected by other marketing policies. It is an extremely important issue in establishing competition with other companies.
Some contents of the pricing policy:
When applying pricing policy, a business will implement the goals it pursues.
Guaranteed survival
When a company encounters difficulties, fierce competition, or changes in customer demand, it must cut prices to deal with inventory. But this measure cannot be applied in the long term.
Maximize immediate profits
Maximize immediate profits so that the company can quickly break even when current demand is high, unit product cost is high, unit product cost is low, not too high, high initial price does not attract more competitors.
Maximize immediate income
This policy allows companies to increase market share and increase profits in the long run.
Maximize consumption to lead market share
With this policy, the company will set low selling prices based on cost reduction to reduce product prices. As consumption increases, consumption costs will be lower and long-term profits will be higher.
Conditions are favorable for underpricing
- Price sensitive market stimulates strong market growth
- Reduced production and distribution costs and accumulated production experience
- Enhance the competitiveness of enterprises in the short and long term
Maximize market skimming
The company sets high prices to skim the top of the market. Then, when consumption slows down, it reduces prices to attract the next class of price-sensitive customers.
The strategy makes sense in case:
- There are quite a few buyers with great current demand.
- The unit cost of a product when produced on a small scale is not too high.
- High initial price does not attract more competitors
- High price makes premium product
Take the lead in product quality
This will lead to a high quality high price strategy. The high price ensures that the company covers all costs such as: research and development, high quality products. The company's products are not only high quality but also unique in product quality.
- Determine price range: Tourism businesses can apply one of the following basic price ranges:
Closed price range: minimum and maximum price limit Open price range: is the limit between maximum and minimum
Flexible price range: only specify a certain price.
3.3.3. Distribution policy
Nowadays, in production and business, most manufacturers do not directly sell their products to end consumers but often distribute through intermediaries. Therefore, in addition to focusing on product policies, businesses must also pay attention to their policies on distribution and transportation of goods.
Distribution is the economic, organizational and technical processes to manage and transport goods from the place of production to consumers to achieve high economic efficiency.
Distribution is the act of bringing to consumers the products they need at the time, duration, quality, type, and desire. In other words, it is the measures to implement the direction and techniques to bring products and services to the final customers.
Contents of distribution policy
The goal of distribution policy is a set of boundary directions
solutions to bring products into different product consumption channels. To satisfy the highest level of tourism demand, expand the company's business market and ensure increased business efficiency. According to Phillip Kotler, distribution channels need to ensure the following 5 service criteria:
- Batch size: is the number of product units that the marketing channel allows a customer to buy in one batch. The smaller the batch size, the higher the level of service assurance that the distribution channel ensures, and the larger the batch size, the lower the level of service assurance that the distribution channel ensures.
- Waiting time: is the average time that customers of the channel have to wait to receive goods. Customers usually prefer channels that deliver goods quickly and without errors. The faster the service, the greater the level of assurance required.
- Convenient location: create convenient conditions for customers to easily buy products. Convenient location is extremely important because most travel businesses in Vietnam are small and medium sized, often using direct distribution channels, convenient location helps customers easily find products.
- Product variety: represents the breadth of assortment that the channel ensures. Customers often prefer a wide variety so they can choose more.
- Support services: are additional services that the channel performs (credit, home delivery...).
Channel objectives vary depending on product characteristics, ensuring the consumption of many products and services with good quality at low cost, achieving high efficiency in business, collecting market information to grasp customer needs.
Basis for building distribution policy
To build distribution channels requires satisfying many different requirements to achieve the business's goals. Therefore, when building a distribution policy, it is necessary to consider all aspects of tourism product distribution. The following bases need to be considered when building a distribution policy:
- Customer characteristics: number, geographical dispersion, buying behaviors, sensitivities and different buying methods.
- Product characteristics: products of travel businesses are service products, the characteristics of service products will greatly affect the construction of distribution channels.
- Based on the types of intermediaries, their readiness, strengths and weaknesses.
- Competitive characteristics: with today's increasingly difficult competitive environment, distribution channels must be built to ensure the highest level of service at the lowest cost.
- Business characteristics: build channels that are suitable for the business's financial situation, service portfolio, past distribution channels and current marketing policies of the business.
- Environmental characteristics: consider both the business environment and the social environment, economic conditions, legal regulations and constraints of environmental factors.
Product distribution channels in tourism
Most of the distribution channels are done through travel companies including travel agents which is called the product distribution channel system in tourism.
The tourism product distribution channel system is a service organization system that creates convenient points of sale or product access for tourists, outside the location where the product production and consumption process takes place.
Each type of distribution channel is different for each specific market and the development of the distribution channel system must be suitable to the basis and conditions of the market.
- Zero-level distribution channel (direct distribution channel): the manufacturer sells directly to the final consumer.
- Indirect multi-level distribution channel: the process of buying and selling products of a travel agency is authorized to other travel agencies as agents.
consumption or as a travel agency sending guests.
Individual market
Tourism products
Tourist
Tour Operator
Retail agent
Diagram 1.2: Structure of tourism product distribution channel
Distribution channel management
Once the distribution channel has been selected, the important issue is to know how to manage the channel. Channel management focuses on the day-to-day operations of distribution and motivating channel members to work long-term, solving problems of product, price, promotion through the distribution channel and evaluating the performance of members.
3.3.4. Promotion policy
Promotion policy is one of the four main stages in the marketing-mix that businesses can use to impact the target market.
Promotion activities take on the task of communicating to their existing or potential target customers.
Promotion policy helps businesses build their image in target markets, thereby convincing them to buy the business's products.
Businesses use different tools to achieve the best results in the process of communicating to customers to stimulate their purchase process. The application of this policy depends on the characteristics of each business:
- Characteristics of target market segment