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Tourism Products and Product Systems of Travel Agencies



PART 2: RESEARCH CONTENT AND RESULTS

CHAPTER 1: THEORETICAL BASIS OF THE RESEARCH PROBLEM

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1.1. Basic theoretical issues on tourism business

1.1.1. Concept of travel

Tourism Products and Product Systems of Travel Agencies

Nowadays, there are many different concepts about travel. In the research content of this topic, I would like to present the following two concepts:

According to the general concept of travel, “Travel is the movement of people from one place to another”. According to this way of referring, tourism activities include travel elements, but not all travel activities are tourism.

According to the Vietnamese concept, "Travel is just a business field in the tourism industry, travel includes activities of organizing and arranging travel programs for customers".

1.1.2. Basic concepts of travel business

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According to the Vietnam National Administration of Tourism (VNAT - travel management regulations dated April 29, 1995): “Tour operators business is the implementation of market research activities, establishment of package or partial tour programs, advertising and selling these programs directly or indirectly through intermediaries or representative offices, organizing program implementation and tour guiding. Travel businesses are of course allowed to organize a network of travel agents”.

1.1.3. Concept of travel business

According to Circular No. 715/TCDL dated July 9, 1994, it can be understood that "A travel business is a legal entity with independent accounting established for the purpose of making a profit by signing tourism contracts and organizing the implementation of tourism programs sold to tourists".

1.1.4. Classification of travel businesses

According to the classification of the General Department of Tourism, travel businesses include 2 types: International travel businesses and domestic travel businesses.

- International travel business: Is a business responsible for building and selling

Package or partial tour programs according to customer's request to directly

Attracting tourists to Vietnam and bringing Vietnamese citizens and foreigners residing in Vietnam to travel. Implementing tourism programs that have been sold or signed contracts to entrust parts and packages to domestic travel businesses.

- Domestic travel business enterprise: Is an enterprise responsible for building, selling and organizing the implementation of domestic travel programs, accepting authorization to implement services and travel programs for foreign guests brought to Vietnam by international travel businesses.

1.1.5. Functions and tasks of travel businesses

1.1.5.1. Functions of travel agencies

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In terms of its field of operation, travel agencies must perform the function of intermediary services, organize the production of tourism programs and exploit other tourism programs. For this function, travel agencies are the bridge between tourism supply and demand, between tourists and suppliers of tourism activities as determined by the characteristics of tourism products and tourism business. As for the production function, travel agencies build package tourism programs to serve the needs of customers. In addition to the above two functions, travel agencies also exploit services to meet the needs of customers such as accommodation, food and beverage, and transportation.

1.1.5.2. Duties of travel agencies

Travel agencies perform the tasks of organizing intermediary activities and organizing package tours, directly organizing package tours for customers:

- Organizing intermediary activities, selling and consuming products of tourism service providers. The system of points of sale and travel agents forms a distribution network of products of tourism service providers. On that basis, shortening or eliminating the distance between tourists and tourism businesses.

- Organize package tours, these programs aim to link tourism products such as transportation, accommodation, entertainment... into a perfect unified product that meets all the needs of tourists. Tourism programs

will eliminate the difficulties and concerns of tourists, and at the same time give them peace of mind.

believe in the success of the trip.

- Organize the provision of individual services to customers on the existing technical infrastructure system to ensure serving all customer needs from the first to the last stage.

(Source: http://voer.edu.vn/m/doanh-nghiep-lu-hanh-va-su-hinh-thanh-hoat-dong-kinh-doanh/262c5ae3)

1.1.6. Tourism products and product systems of travel agencies

1.1.6.1. Concept of tourism products

According to the World Tourism Organization (UNWTO), "Tourism products are a special type of product made up of many types of services and goods with the basic purpose of satisfying the consumption needs of tourists during their travel."

1.1.6.2. Basic characteristics of specificity

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Tourism products mainly satisfy the secondary needs of tourists. Although during the trip they have to satisfy special needs. Therefore, the demand for tourism is only raised when people have free time and high income. People will travel more if income increases and vice versa, they will cut back if income decreases, including 4 characteristics of that service:

- Intangibility: Tourism products are essentially intangible. In fact, it is more of a travel experience than a specific product. Although there are goods in the composition of tourism products. However, tourism products are not specific, so they are easily copied and imitated (tour programs, reception room decoration, etc.). Differentiating competitive products is more difficult than in the commodity business.

- Heterogeneity: Because tourism products are mainly services, customers cannot check the quality of the product before buying, making it difficult to choose a product. Therefore, advertising in tourism is very important.

- Simultaneity between production and consumption: The consumption of tourism products occurs at the same time and place of production. Therefore, tourism products cannot be brought to customers, but customers must go to the place where the tourism products are produced.

- Perishability and non-storability: Tourism products are mainly services such as transportation services, accommodation services, food services, etc. Therefore, tourism products basically cannot be stocked or stored and are very perishable.

(Source: http://www.hbsoft.vn/download/NghiepVuKhachSan.pdf)

1.1.6.3. Product system of travel business

1.1.6.3.1. Intermediary services

Travel agencies become an important link in the distribution channel of service products of suppliers. Travel agencies sell the products of these suppliers directly or indirectly to tourists.

Intermediary services and products mainly provided by travel agents include:

- Register and sell tickets for all types of transportation: airplanes, trains, cars...

- Car rental broker

- Register to book and sell travel programs

- Register for reservations in hotels

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- Other intermediary brokerage services

These types of intermediary services are provided by suppliers acting as direct product suppliers to travel agencies, who then resell them to customers as direct product suppliers.

Travel agencies play an important role in the consumption of services for suppliers, being an indispensable bridge between service providers and customers. In addition to selling customers the individual services of suppliers, travel agencies also link them together to create their own completely new products, which are package tours.

1.1.6.3.2. Package tour program

Package tours are very diverse in types depending on different classification criteria. This is a typical product, mandatory by law and the most basic in the product system of a travel business. A package tour is a tour program that links and increases the value of all the main services of different suppliers at a determined price.

It is sold to customers to satisfy all three main needs during the trip.

The components that make up the content of a package tour program include:

- Transportation service: This service is identified as the most important component of the package tour program. In the tour program, depending on the specific conditions, the appropriate means of transportation are used to meet the requirements of the trip. Characteristics of means of transportation such as type, class, station, port, airport, reputation of the carrier are also important factors for travel businesses to select means of transportation for their programs.

- Accommodation service: this service meets the needs of guests to sleep and rest, helping guests regain their strength after long trips. This is also an indispensable component of the package tour program. Depending on the specific conditions, choose a temporary accommodation for the program, types of accommodation facilities, types of beds, etc.

- Food and beverage services: including meals, dining places, menus, and other beverages

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- Sightseeing and entertainment services: this is an important factor to meet the expectations of tourists at the destination. Depending on the specific conditions, the travel agency chooses the objects of sightseeing and the types of entertainment in the program.

- Operation and guidance: this is the component participating in the process of building a tourism program, implementing the program to satisfy the needs of tourists and increase the value of individual services. It includes organizing, informing, checking, ...

Thus, the elements that make up a package tour program are the products of the supplier and some additional products and services of the travel company itself, which are linked together by the travel company to create a complete product sold to tourists.

(Source: http://vforum.vn/diendan/showthread.php?92499-He-thong-san-pham-cua-doanh-nghiep-lu-khach)

1.1.7. Tourists and tourist classification

1.1.7.1. Concept of tourists

Some concepts of tourists by researchers:

According to Austrian economist Jozep Stemder, “Tourists are special people who stay at will outside their usual place of residence to satisfy high-class needs without pursuing economic goals.”

According to British economist Olgilvi, “To become a tourist, two conditions are required: first, you must be away from home for less than a year; second, you must use the money you earn elsewhere.”

The definition of international tourists was formed at the Rome Conference organized by the United Nations in 1963: “International tourists are people staying temporarily in a country and living outside their usual place of residence for 24 hours or more”.

1.1.7.2. Classification of tourists

According to the 2017 Tourism Law, tourists include domestic tourists, international tourists coming to Vietnam and tourists going abroad.

- Domestic tourists are Vietnamese citizens and foreigners residing in Vietnam.

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Nam traveled within Vietnam.

- International tourists to Vietnam (Inbound tourists) are foreigners and Vietnamese people residing abroad who come to Vietnam for tourism.

- Outbound tourists are Vietnamese citizens.

Men and foreigners residing in Vietnam traveling abroad.

1.2. Theoretical issues related to Marketing communications

1.2.1. Basic concepts

1.2.1.1. Concept of communication

“Communication is a continuous process of exchanging information, ideas, feelings... sharing skills and experiences between two or more people to increase mutual understanding, change perceptions, and adjust behaviors and attitudes to suit the development needs of individuals, groups, communities and society.”

1.2.1.2. Concept of Marketing

According to Philip Kotler [1] - a famous American marketing professor, "Marketing is a human activity aimed at satisfying needs and desires through exchange processes".

Definition of the British Institute of Marketing: “Marketing is the process of organizing and managing all business activities involved in assessing and converting consumer purchasing power into effective demand for a specific product or service, and in moving the product or service to the final consumer or user so as to achieve the expected profit for the company or user.

According to the American Marketing Association definition: "Marketing is the process of planning and executing decisions about the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational objectives" (1985).

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According to the American Marketing Association, new definitions of Marketing have been given: “Marketing is the management function of a business, the process of creating, communicating and distributing value to customers and the process of managing customer relationships in a way that ensures benefits for the business and shareholders” (2004). “Marketing is a set of activities, structures, mechanisms and processes to create, communicate and distribute things that have value for consumers, customers, partners and society at large” (2007).

1.2.2. Concept and role of Marketing communication

1.2.2.1. Concept of Marketing Communication

The concept of marketing communication according to Philip Kotler [2] , "Marketing communication is the activity of indirectly or directly communicating information about products and the business itself to customers to persuade them to trust the business as well as the product, and to buy the business's products."

And also according to the Marketing Management Textbook by Associate Professor, Dr. Nguyen Thi Minh Hoa, Master Le Quang Truc, Master Phan Thi Thanh Thuy, University of Economics [1] , "Marketing communications are the means that businesses use to inform, persuade and remind customers about the business's products and brands, directly or indirectly."

1.2.2.2. The role of marketing communications

Marketing communications are the means that businesses use to

inform, persuade and remind customers about the company's products and brands

business, either directly or indirectly. It can be said that marketing communications represent the voice of the business, through which the business can communicate and build relationships with customers. Marketing communications contribute significantly to brand equity and sales by creating brand awareness, shaping the brand image in the minds of customers, evoking positive judgments and emotions about the brand, and strengthening customer loyalty.

Today, there are many major changes in the marketing communications environment. Technology and other factors have profoundly transformed the way consumers process and process information. The rapid spread of mobile phones, tablets, and wireless Internet connections has reduced the mass media. Consumers have more and more media choices and can decide how they access information from sellers.

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Through marketing communication strategy, businesses inform potential customers about the advantages, uses, values, and benefits of their products to consumers. Therefore, marketing communication strategy helps businesses increase sales of current products, create customer awareness and preference for new products, and build a good image of the business. However, businesses need to combine communication strategy with other elements of the marketing mix to create a comprehensive effect. Communication also helps businesses promote their brands.

(Source: Marketing Management Textbook)

1.2.3. Communication process

1.2.3.1. Concept

“The communication process is the process of transmitting information from a business to consumers so that they know the features of the business’s products, services, programs, and the benefits that the business can bring to customers through its products or services. For this to be effective, the business needs a marketing communication system.”

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