Marketing Challenges in Small Tourism Enterprises


By

Surendra Kumar
Reader
Rajasthan College of Engineering for Women
Jaipur

Sunayana
Lecturer
Government Engineering College
Jhalawar
 


Introduction

This research sought to identify marketing challenges in micro, small & medium Tourism Enterprises. Tourism businesses are predominantly focussed on running their business and providing a quality service to their customers. "Tourism is usually described as a highly decentralised industry consisting of enterprises different in size, location, functions, type of organisation, range of services provided and methods used to market and sell them"(Bjork Peter). "Tourism denotes temporary short-term movements of people to destinations outside the places they normally live and work" (Meidan Arthur). A list of factors creating challenges in marketing of MSMTEs in an entirely different dimension. The traditional marketing with its marketing mix have for long been the dominating marketing strategy, where focus have been on placing the product at the best place with the best possible price. Information was gathered from site visits and interviews with operators and enterprise managers. The outcomes will be of interest to micro, small & medium tourism enterprises, tourism operators and enterprise managers.

Objectives of Study

Main objectives of this study is to-

- Identify critical factors creating challenge in marketing of micro, small & medium tourism enterprises, based on published literature and case studies.

- Examine case studies of management practices that have contributed to identify the success of marketing practices for tourism attractions.

- Identify a set of factors that contribute to success in achieving viable marketing goals.

Information was gathered from site visits and interviews with operators and enterprise managers. The outcomes will be of interest to MSMTEs and tourism operators in the tourism sector for marketing purposes. The project aims focus on the operational side of marketing tourism. However, these two factors manifest throughout the description of what makes a successful marketing tourism enterprise.

Methodology

Success factors were identified based on a review of published research and observations during site visits by in the project and ranking and refinement discussions with operators and tourism enterprise managers. For sampling we use a convenience sample results when the more convenient elementary units are chosen from a population for observation. A range of factors were identified in the literature and subsequently were expanded as a result of site visits and interviews. More than half the success factors identified were marketing operation related. This perhaps reflects that generic information relating to tourism business operations has not catered to the specific requirements of micro, small & medium tourism enterprise's marketing.

Development of critical success factors list

An initial list of factors was devised by the help of academic literature and the expertise of some operators' tourism. The list derived from the literature was used as the basis for interviews with tourism enterprise managers and other operators. To ascertain the character and breadth of existing published knowledge relating to marketing of MSMTEs and how this related to the issues identified in the critical success factors devised, large number of tourism marketing related references was analysed for themed content. A text search using key words enabled us to conduct successful & comfortable interviews with all selected operators and tourism enterprise managers. This provided an indication of the proportion of publications represented by each success factor.

Site visits and interviews

A series of site visits and interviews with operators and tourism enterprise managers was conducted over a five to six month period in 2008 across three famous tourist places of Rajasthan (Ajmer, Jaipur and Udaipur). Specific sites included a range of heritage places from the chosen cites. Interviews were used to develop and refine the key success factor list based on the practical experience of a range of managers and tourism operators. An element of validation was inherent in this process where the most recent version of the developing list was used in successive interviews with operators and enterprise managers. The success factor list was further validated by circulating the revised list back to the managers previously interviewed, requesting further comment.

Key Findings

Critical Success Factors

Key success factors identified from the literature and in discussion with operators and managers of micro, small & medium tourism enterprises were as follows. They are in no specific order of importance but reflect a logical approach to the sequence of steps required for setting up a successful tourism marketing operation for Micro Small & Medium tourism enterprises.

Responsible Tourism

Responsible tourism is treating others the way they wish to be treated. The trick lies in listening to the locals, listening to visitors and creating the opportunities that connect top-down and grassroots efforts. Travel agents, travel providers and travellers are the principal players. Travellers and locals are seeking ways of building constituencies with the shared goal of making tourism more responsible. Says noted author and activist Deborah McLaren: "Responsible tourism is based on ethics and human rights. It also means support for community-based travellers' programs, including home stays, guest cottages, ethno-museums, and educational programs that bring tourist dollars directly into communities." In responsible tourism basically stakeholders take responsibility in destinations to make a better form or forms of tourism. It is more like an ethical movement that calls on the conscience of tourism stakeholders to assume their responsibilities of taking the right choices and steps towards making destinations better places to visit and live. (Goodwin 2002).

Consumer Behaviour

"The success of a tourism destination is often measured in terms of growth in the visitor numbers and their expenditures" (Lew Alan). "When firms have tried to do similar things, they realize that there is a shortage of customers" (Bjork Peter) .

Value based strategic approach


To bring about lasting and substantial growth, all elements of the tourism industry need to work effectively, together. The method of value-based strategy approach includes three main aspects like-

- Value retention
Keeping tourism earnings in the country, minimizing leakages

- Value addition
Maximizing linkages within the national value chain, providing information at the Welcome Meetings about the fruit pressers, fruit sellers, local guides and craft markets,

- Value Creation
Generating new value within the sector, Encouraging tourists to encounter and engage with local people in the markets.

Business Planning & Feasibility Study

"Planning can help to sustain the destination, support the local community and at the same time contribute to the achievement of customer satisfaction" (Stephen).

- Planning Templates & Resources
This publication provides links to programs and resources that can assist with business planning.

- Tourism Businesses & developing Toolbox
Toolbox includes market analysis, industry trends and financial analysis information                                 for different types of tourism businesses.

- Cost Benefit Analysis of local Tourism Development
Development of cost-benefit analysis for local tourism development.

Agreed objectives and clear concepts

It relates to the need for clear objectives for the micro, small & medium tourism enterprises.

For tourism enterprises to be effective and successful in marketing a series of objectives are met.  The objectives include:

* Gaining public and private support through a multi-stakeholder process 
* Building a critical mass of certified businesses
* Realizing marketing and other certification benefits
* Developing revenue models that ensure sufficient long-term funding
* Building consumer demand
* Reducing competition

Financial planning for Marketing

Financial planning is a centre to the viability of the marketing tourism product. Requirements for adequate capital, access to grants and other sources of funding and the need for careful budgeting and financial planning are essential for continued success of a marketing operation. Some important factors are-


* Developing credibility through on-site audits
* Realizing marketing and other certification benefits
* Maintaining revenue models that ensure sufficient long-term funding
* Building consumer demand

Effective marketing strategies based on sound market research

An effective marketing strategy is necessary for tourism success and is highly dependent on market research and other key success factors, including objectives and clear concepts and financial planning. "The development of long-term, proactive strategies which are designed to develop the local area positively has to be the goal of marketing" (Stephen J). New, strategic marketing framework will directly affect public investment in the tourism sector. A significant amount of economic and social benefit, public intervention is essential, particularly when it comes to better market intelligence, image promotion and infrastructure development.

* Understanding of customer behaviour and expectation
* Cost effectiveness in reaching target markets
* A good understanding of our target regional products
* Clear understanding and agreement on the roles of the local tourism partnerships
* Evidence of understanding and interpretation of the tourism concepts
* Active implementation of programmes like Regional Gems, Winning Themes and Excellent Events, as set out in the Strategy for Tourism
* Totally flexible approach
* Development of reliable performance indicators

Destination and proximity to major markets and visitor flows

Several aspects were considered important including: suitable relationship to destination image and branding; adequate accessibility, visitor flows, market proximity and transport access; and proximity of other nearby businesses (clustering).

Human resource management, including paid staff and volunteers

Marketing approached typically relied heavily on volunteers and part-time staff. Many may have expertise in (or passion for) the tourism in question rather than experience in tourism services and the management of commercial ventures. A range of skills including business skills was considered ideal for success. There are specific issues associated with volunteers including training, coordination, rewards, recruitment and succession.

Planning for product differentiation, life cycles

Life cycle planning is a key asset management tool that takes into account the whole-of-life implications of acquiring, operating, maintaining and disposing of an asset. It is an integral part of strategic asset management, and enables investment and operational decisions to be made using appropriate evaluation tools and decision-making criteria. A primary technique in undertaking life cycle planning is life cycle costing – a widely used method of financial evaluation of any asset, including buildings and their components.
Objectives

Establish the total costs of an asset over its useful life

Establish a sound basis on which decisions are made (i.e. evaluating the total cost of any investment or operational decision, rather than just looking at the short-term impact, or initial capital costs)

Plan for the impact of refurbishment and maintenance

Increase the service delivery capacity or income generating power of the asset.

Quality and authenticity of products and experiences

In this tourism product development context, quality referred primarily to the quality of the experience. Quality of experience relates to the appeal, intellectual challenge and raised level of visitor interest. Experienced quality is relative to price, the expectations of visitors and comparisons with similar ventures. It therefore combines the need for quality heritage presentation with provision of quality services. Authenticity is a core value in heritage conservation and
the tourist experience. It may be defined by the relationship between the practitioner and visitor conceptions of historical accuracy combined with visitor perceived entertainment value and how they make sense of the past.

Engage cultural heritage and tourism expertise in conservation and promotion

Successful cultural heritage tourism requires a balance between commercial imperatives and the conservation of a suite of heritage values including historic, archaeological, architectural and aesthetic significance and the significance of the sites to associated communities.

Design interpretation as an integral part of the heritage tourism experience

Interpretation provides meaning and understanding for the visitor. It is a central part of the visitor experience of cultural heritage and has significant ramifications on the quality and authenticity of a cultural heritage product. Effective interpretation requires knowledge about the heritage being presented, expertise in communication and interpretive design and the ability to create an effective interpretation plan.

Recommendations

* A greater focus on financial planning and value based strategic approach within the specific context of tourism marketing is required to address some more practical aspects.

* Develop a manual Business Planning & Feasibility Study and a guide for developing and improving effective marketing strategies based on sound market research for further development of the concepts and information gathering.

* The high rate of marketing operation failure, the manual could include an initial preliminary assessment tool including the factors identified for locations seeking to develop or commercialise micro, small & medium tourism enterprises.

Future Actions

This report identifies the specific key factors associated with successful marketing of micro, small & medium tourism enterprises and highlights the gaps in knowledge available through the literature. It forms the basis for the development of guidelines for use by those seeking to develop an effective marketing strategy or improve existing operations. Further funding is required to develop material in this report into an industry friendly manual. This would provide a detailed guide for development of tourism marketing operations, currently not available to would-be operators.

References

Bjork Peter, Virtanen Henrik, What Tourism Project Managers Need to Know about Cooperation Facilitators, p. 213

Lew Alan A., Hall Colin Michael, Williams Allan M., A companion to tourism, (Malden, Mass: Blackwell Pub., 2004), p. 569

Page, Stephen J., Getz, Donald, The business of rural tourism: international perspectives

(London: International Thomson Business Press, 1997), p. 49

Meidan Arthur, The Marketing of Tourism, p. 166

Page, Stephen J., Getz, Donald, The business of rural tourism: international perspectives, p. 49

Bryman, Alan (2004). Social Research Methods. Oxford: Oxford University Press.

Friedman, Hershey H.; Lewis, Barbara Jo (1999). Dynamic pricing strategies for maximizing customer satisfaction. The National Public Accountant. Vol. 44, No. 1, pp. 8-9 + 36.

Grant, Robert M. (2005). Contemporary Strategy Analysis. Cornwall (U.K.): Blackwell.

Grönroos, Christian (2002) Service management och marknadsföring – En CRM ansats. Malmö: Liber.

Grönroos, Christian (1996). Relationship marketing: strategic and tactical implications. Management Decision. Vol. 34, No. 3, pp. 5-14.

Gummesson, Evert (2000) Qualitative Methods in Management Research. New Delhi: Sage
Publications.

Herman, Pol (2005). Evolution of strategic management: The need for new dominant designs. International Journal of Management Reviews. Vol. 7, No. 8. pp. 111-130.

Kim, W. Chan; Mauborgne, Renée (2005). Blue Ocean Strategy –How to Create Uncontested Market Space and Make the Competition Irrelevant. Harvard: Harvard Business School Press.

Kotler, Philip; Bowen, John T.; Makens James C. (2006) Marketing for Hospitality and Tourism
(Fourth Edition). New Jersey: Pearson Education Ltd.
 


Surendra Kumar
Reader
Rajasthan College of Engineering for Women
Jaipur

Sunayana
Lecturer
Government Engineering College
Jhalawar
 

Source: E-mail February 20, 2010

          

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