Essential Knowledge

TOURISM PROMOTIONS

WHAT IS PROMOTIONS?

Promotions has been defined as the coordination of all seller-initiated efforts to

set up channels of information and persuasion to sell goods and services or promote
an idea (Belch & Belch 2008). All marketing communications techniques seek to
inform, create awareness, attempt to persuade, and reinforce buying behavior of
customers (Shoemaker et al. 2007). Various strategies are thought of and
implemented by the seller to ensure that the tourism product or service is made known
to its possible target market. These strategies seek not just to inform people but more
importantly to persuade people to buy the product. The end goal of any promotional
activity is to close the sale.

In my more than twenty years of marketing experience, I have learned that it is

not enough for people to know that your product or service exists. They have to Ike it
enough to buy it. They have to be highly satisfied with the use of the product or the
service, enough to buy it over and over again. Lastly, they have to be extremely
satisfied with it enough to tell others about it.

ADVERTISING

Advertising is defined as any paid form of non-personal communication about

an organization, product, service, or idea by an identified sponsor (Belch & Belch
2008). It is mass communication that is paid for (Shoemaker et al. 2007). It can reach
the largest number of prospects very quickly. Advertising covers the various messages
consumers receive from tele-vision, radio, newspapers, magazines, billboards, transit
displays, and even online. Online options include banner advertising, skyscraper ads,
pay per click, etc.

In the hospitality industry, advertising is viewed as a way to create and maintain

awareness of the company, property, or destination (Shoemaker et al. 2007).
However, not all tourism products and services would benefit from advertising. A
careful assessment of one's resources and objectives needs to be done before
deciding on using advertising as a tool for promotions. Big properties such as hotels,
fast food chains, and country destinations may benefit from a carefully planned
advertising strategy.

Objectives of Advertising

An advertising objective is a specific communication task to be accomplished

with a specific target audience during a specific period of time (Kotler et a1. 2010).
Advertising can be classified based on its objectives: (1) to inform, (2) to persuade,
and (3) to remind.
 Informative advertising is used when introducing a new product or to build up
primary demand for the product. Companies . employ aggressive tools to ensure that
a new product creates excitement and demand within its target market.

Persuasive advertising is used when competition is stiff. Companies rely on

persuasive advertising to be able to keep its market share.

Reminder advertising is very important for products that have reached the
maturity stage. Products attempt to maintain market position even if they are already
top of mind.

Types of Advertising Execution

For advertising to achieve its objectives of differentiation, tangibilizing the

product, and having positive effects on employees and customers, Kotler et al. (2010)
present different execution styles, as follows:

1. Slice of Life — shows how people use the product in a normal setting.
2. Lifestyle — shows how product fits with one way of life.
3. Fantasy — creates a "wonder" world around the product or its use.
4. Mood or image — builds positive images or moods around the product such as
beauty, love, fun, and serenity.
5. Musical - uses simple but catchy music effectively through product jingles or songs.
6. Personality - creates a character that represents the product such as Jollibee, the
friendly Bee.
7. Technical expertise - reveals the company's expertise with the product or service.
8. Scientific evidence - presents research or scientific evidence that the brand is better
than competing brands.
9. Testimonial evidence - features a highly credible person such as a celebrity
endorsing the product.

The Use of Celebrity Endorsers

Celebrity endorsement plays an important role in helping products become

more tangible and create differentiation (Rodriguez 2008). The use of celebrity
endorsers becomes a preferred strategy for promoting a product or service because
the celebrity lends his credibility to the product, helps attract attention, provides a
persuasive message, and targets the audience based on the celebrity's demographic
profile. Roll (2010) elucidates the following three main aspects to consider in choosing
a celebrity endorser:

1. Attractiveness of the celebrity to create a positive impact on the product.

2. Credibility of the celebrity expressed through expertise and trustworthiness.
3. Meaning transfer between brand and celebrity which refers to the compatibility of
brand and celebrity in terms of identity, personality, market positioning, and lifestyle.

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PERSONAL SELLING

Sales representatives are the company's link to customers. The salesperson

represents the business to its customers. Whatever impression and image the
salesperson has is the image that the clients form in their minds about the company
he represents. Personal selling can be defined as the person-to-person
communication between a salesperson and a prospective customer in which the
needs are met in exchange for money or resources.

Sales representatives are an integral part of the success of the tourism and hospitality,
industry, Kotler et (2010) outline the primary tasks sales professionals perform for their
companies as follows:

1. Prospecting. The sales professional is tasked to look into potential customers or

"prospects." A good and active database should be maintained as well as networking
skills to ensure that there is a steady flow of new customers coming into the business.
Some sales personnel are pirated from competitors already have a relationship with
customers availing of services from competition.

2. Targeting. Sales professionals need to determine how to prioritize limited time and
resources to tap customers from their list of prospects.

3. Communicating. A constant stream of communication should flow from customer to

client and vice versa. Sales personnel need to find ways and means to keep in touch
with clients. This can be done through giving information about new products and
services or generating new business from clients.

4. Selling. Sales personnel are trained to do product presentations, negotiations,

overcoming objections, and closing the sale. This is the core of what the salesperson
does for the company.

5. Servicing. Salespersons should not remain as order takers. Instead, they should
shift to becoming customer consultants—helping clients solve problems and rendering
technical/expert assistance.

6. Information Gathering. Sales representatives assist the company in gathering

intelligence information such as what competition is doing or what the company's
needs are. They also suggest innovations based on market demands.

7. Allocating. When there are product shortages or over-bookings, sales people as-
sist in deciding which clients to prioritize based on past and future business
engagements.

Selecting Sales Strategies

1. Prevent erosion of key accounts. Key accounts are your clients that sustain your
company. These accounts should be managed well, given the proper attention and
further cultivated for more frequent consumption and upselling. Salespersons should

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be trained how these key accounts can be kept and prevented from switching to
competitors.

2. Grow key accounts. Growing key accounts means adding more companies into
this key segment of the market. Cultivate secondary or marginal accounts with high
potential to become key accounts.

3. Grow selected marginal accounts. Marginal accounts can provide the company
with the much needed extra sales and revenue when demand from key accounts is
low. Choose marginal accounts that can be cultivated to provide additional
consumption.

4. Eliminate selected marginal accounts. Some marginal accounts may not be

yielding any revenue for the company even after several attempts to make it grow.
Know when to drop accounts so that time and resources allotted for said accounts can
be channeled to other accounts.

5. Retain selected marginal accounts with lower-cost sales support. Maintain

marginal accounts that take less time and resources to service. That way, these
accounts can produce marginal sales without much effort and budget provided.

6. Obtain new business from selected prospects. Business development should

always be prioritized. New business from existing accounts as well as promising
prospects can be beneficial to the growth of the company.

Steps of the Sales Process

1. Prospecting and Qualifying Prospects

The sales process begins with identifying prospective customers using a variety
of sources. Prospects start out as leads; these may come from people who have been
referred by your current clients, clients of your competitors, new users, data-bases,
and inquiries. These leads are then qualified to determine whether investing time and
resources in acquiring the customer will be profitable.

Cold calling and sales blitzes are also effective ways of prospecting and
qualifying prospects. Cold calls are done by doing sales calls or visits to different busi-
ness categories in the hope of generating business. The term cold call means the
salesperson does not have any prior business dealings with the company and does
not know anyone from the company. Cold calling is an essential part of the sales
process. Every salesperson should know how to make cold calls correctly in order to
acquire a steady flow of new customers. A sales blitz is carried out by a group of sales
people who conduct a large number of company visits over a short period of time to
target a specific business category, geographical area or organizational type (Hsu et
al. 2008).

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2. Pre-approach

The pre-approach phase is the stage wherein the salesperson seeks to under-
stand the business opportunities that the prospects can provide the company. It is the
stage where the salesperson makes himself familiar with the business of the company
and what the company's needs are in order to ensure that there is a fit between what
the company needs and what the salesperson is selling.

A good salesperson will be able to identify how his product or service can
provide solutions to the prospect's business challenges. In order to stand out amidst
the crowd of account managers and sales executives from other tourism properties, a
good salesperson does not just offer products and services. Instead, he offers valuable
solutions and mutually beneficial partnerships.

3. Approach

The approach is when the salesperson starts to communicate with the prospect.
Professionalism and strong social skills are very important in establishing rap-port
especially for the initial meeting. The salesperson should also observe proper
etiquette, protocols, and cultural sensitivity all throughout the engagement.

4. Presentation and Demonstration

Knowing the prospect's needs and how to address his problems, and having
been given valuable official time to listen to the product offer, now is the time to deliver
an impressive product presentation. The product presentation should be customized
to the prospect and should include features, benefits, and advantages of availing the
products and services. Prospective clients would want to hear how the product offered
can match their needs more than what the competition offers. Listening to what the
client does and does not say is an important skill salespersons need to have as they
make the presentation. This will help them understand the needs of the client more
and how to address questions they may have during the negotiation phase.

5. Negotiation and Overcoming Objections

Negotiation and overcoming objections is a very challenging phase in the sales

process. This involves arriving at a mutually beneficial exchange of value (Hsu et al.
2008) between the seller and the buyer. Negotiation is the process of resolving
differences between what the buyer wants and what the seller wants to give in
exchange for what the buyer can pay for.

6. Closing the Sale

Officially closing the sale is done through a signed contract. Unfortunately, a lot
of salespersons are too afraid to ask for the sales; hence, they go back to their offices
uncertain if they have closed the sale. Closing the sale is asking the client directly or
discretely any of the following questions:

a. May I draft the contract and send it for your review?

b. Shall I call your office tomorrow and get details of the booking?

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c. Can I take your reservation now so you can avail of an extra % from the purchase
price?

7. Follow-up/Maintenance

Once the sale has been made and the service has been delivered, the
salesperson keeps the relationship going by doing follow-up activities such as a phone
call or personal visit to ensure that product and service quality was provided. Customer
satisfaction often results in repeat business and positive word of mouth. In case of
customer dissatisfaction, the follow-up call will enable feedback and may be an avenue
to address and respond to concerns and complaints. Properly addressing customer
complaints is the key to managing an irate customer.

PUBLIC RELATIONS

Public Relations (PR) is the process of creating a positive image and customer
preference through third party endorsement. This can be done using various activities
all aimed to generate a positive image through what others say about one's
establishment.

PR banks on the idea that if a credible person—not related to your business—

says something good about your product or service, then consumers may be more
certain that it is really good. Communicating to the company's public includes both its
internal and external audience. The internal audience includes employees and
investors. Employees should maintain a positive outlook for the company that they
work for. They should be the primary believers of the benefits of the company's
products. and must show excitement toward it as well as the company they represent.
Keeping good PR with investors will help maintain a positive effect for the business.
The external market, on the other hand, includes guests, potential guests, media, local
community, and the government. Maintaining good PR with this audience will —
definitely help improve the brand's image and future business dealings.

Major Public Relations Activities

Major PR activities that the establishment can pursue include the following:

1. Press/Media Relations. Mass media channels help generate publicity and aware_
ness for huge audiences. If managed well, news about the product or service can be
made available to the mass market with very minimal expense. Since it is a third_ party
endorsement, business establishments do not have control of what comes out in the
form of press release and media coverage.

2. Product Publicity. This involves efforts to introduce or publicize new products,

special events, new developments within the business through product endorsements
or mentions in various channels.

3. Corporate Communications. This covers internal and external communications

that promote understanding of the organization using tools such as newsletters,

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bulletins, and email blasts. Corporate communications address various audiences
such as employees, stockholders, and clients. Newsletters for the internal market may
include information such as new products, employee awards, and new com-pensation
benefits. Newsletters for the external market will be differently prepared to include new
promotional deals, product features, and upcoming events.

4. Lobbying. PR also includes building good relations with the public sector namely,
local government units where your business operates and legislators who may pass
bills that will have an impact—whether positive or negative—on one business.

5. Counselling. Employees involved in PR play the role of adviser with regard to public
issues that may have an effect on the company's position and image. In times of crisis,
the PR manager serves as the official spokesperson of the company.

Important Points to Remember

1. Effective public relations begins with top management. The PR head man-ages
how the product or service will be regarded by the public but it is the top management
who leads in creating good public relations. The owner or the general manager should
be at the forefront of communicating positive information to various audiences. The
employees take their cue from how the leader creates a positive impression. That is
at the core of Donald Trump's success. In one of his books, he mentions that agreeing
to be part of the television show "The Apprentice" has helped him create a positive
image of his many businesses.

2. No amount of PR can overcome a flawed product. Public relations can create a

positive image of any product but no amount of PR can overcome a bad product. There
is still no substitute for coming up with a good product. There is no shortcut to success.

SALES PROMOTIONS

Sales promotions is a direct inducement that offers an extra value or incentive

for the product to the sales force, distributors, or the ultimate consumer, With the
primary objective of creating an immediate sale (Belch & Belch 2007). It consists of
short-term incentives to encourage the purchase or sale of a product or service (Kotler
et al. 2010). It involves a variety of techniques that serves to accelerate purchase of
products or services.

The growth of sales promotions was mainly due to the changes in the marketing
environment. Belch and Belch (2007) identified the following factors:

1. Growing power of retailers

2. Declining brand loyalty
3. Increased promotional sensitivity
4. Brand proliferation
5. Fragmentation of the consumer market
6. Short term focus of the consumer market
7. Increased accountability
8. Competition
9. Clutter

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Sales promotions can be targeted to different levels of the sales process: (1)
consumer, (2) trade intermediaries, and (3) sales force. Consumer-oriented
promotional tools include samples, coupons, packages, rebates, price-offs, premiums,
contests, refunds, bonus packs, and demonstrations. Trade promotions include
allowances, free goods, cooperative advertising, contests and dealer incentives, point
of purchase displays, Sale promotions directed to sales force include bonuses,
contests, and incentives. training programs, and push money.

Kotler et al. (2010) spell out some factors to consider in setting up a sales
promotional
plan:

1. Objectives of the campaign

2. Type of market to be tapped
3. Competition
4. Cost and effectiveness of each tool

Sales Promotional Tools

1. Samples are offers of a trial amount of a product. Some samples are free, others
charge a small amount to offset its cost while inducing product trial. Sampling can also
be made to influential decision makers such as company executives and sales people
in the belief that trial will improve product knowledge, which will eventu-ally lead to a
sale.

2. Coupons are certificates that offer buyers savings when they purchase specific
products. It is used to stimulate sales of a mature product as well as promote trial of a
new product. This tool should be used carefully to avoid a price or coupon war which
detracts consumers from the intrinsic value of the product or service. Too much price
discounting may give the impression that margins are unreasonably high to begin with
and make consumers hesitate to buy at the original selling price in the future.

3. Packages involve putting together a set of complementing products to come up with

one bundle at a special price. If the products are sold separately, the total cost will be
more expensive. This helps in increasing per capita revenue and selling products that
may otherwise be unsold.

4. Premiums are goods offered either for free or at a low cost to provide incentive for
consumers to buy a product. Some establishments create novelty items that can be
brought home as a symbol of the product bought, such as a mug that goes free with
coffee.

5. Patronage rewards are bonuses in the form of cash or items of value that can be
redeemed for regular purchases made. These kinds of programs create more
frequency of purchase, positive word of mouth, and possibly larger purchases.
Starbucks year-end planner promotion is a classic example of patronage rewards. The
2014 planner, for instance, can be claimed after collecting 18 stickers from purchasing
nine regular handcrafted beverages and nine special Christmas blends within a
specified period.

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6. Point of purchase promotion includes displays and promotions that take place at the
point of sale. Some hotels display brochures of their other branches at the lobby or
front desk. Some souvenir items are positioned near the cashier for easy, random,
and impulse purchases.

7. Contests and games give consumers a chance to win something such as a trip or
cash upon purchase of products and services. Raffle entries are given to consumers
based on total amount of consumption which are then raffled off for a prize such as an
overnight stay in a hotel, a resort, etc.