The four Ps of the tourism industry

December 28, 2020 6:50 AM

The four Ps of tourism—product, price, place and promotion—can be developed in myriad ways

The tourism business will turn more hypercompetitive post the pandemic.The tourism business will turn more hypercompetitive post the pandemic.

By Vidya Hattangadi

One of my PhD students had chosen the topic titled ‘Marketing Strategies for Tourism Industry in Maharashtra’. She gave workable strategies in which corporates can donate towards CSR for maintenance and repair of Chhatrapati Shivaji’s forts and heritage structures in Maharashtra. The companies that she collected responses from were ready to donate for the heritage of Maharashtra, but required correspondence from the Maharashtra Tourism Development Corporation (MTDC) stating their plan of action and timeline for implementation. It’s past seven years; the MTDC has not worked on the proposal.

The reason for this article is that MTDC and all companies wanted to know the four Ps of tourism in detail. How do we explain the four Ps of tourism? Is tourism tangible or intangible creation? The most accepted definition is provided by the UN World Tourism Organization (UNWTO): “Tourism comprises the activities of persons travelling to another place outside their usual environment for not more than one consecutive year for leisure, business and other purposes.”

In humans, there is a natural curiosity to know different places, the culture, and the desire to travel is inborn. People keep travelling for a number of reasons. Travelling activities will never stop; so, tourism activities will increase in the future more and more, especially with the development of transportation systems and information technology. Nevertheless, tourism is a multifaceted industry that involves numerous stakeholders, right from the government of a nation, hospitality stakeholders, and the natural environmental factors themselves—each contributing to either for growth or downfall.

Let’s understand the four Ps of tourism.

Product: This is the first element of the marketing mix. Tourism as a product differs from other products due to its large canvas. It covers a range of elements such as accommodation, food and beverages, transportation, scenic beauty, historical importance of the place, geographical state, and spiritual appeal. The fact is a destination gains importance from a customer’s perspective. Not everything is tangible in it; it is a mix of tangible and intangible elements. The destination is ‘product’ in tourism. From a marketing mix point of view, since tourism business is all about the experience of the ‘tourist’, it requires to be handled differently. I personally feel, as a traveller, that as a product each destination is complex in nature. Its packaging matters.

Price: In tourism, price is the amount of money a customer pays for a package. Whether the package is highly priced, properly priced or is low priced is decided by the experience of the tourist. The pricing should be based on the offering made, the accommodation standard, food standard, transportation standard, recreation and the aspirations to be met with. Some destinations are expensively priced while others are modestly priced. Tourism products are rarely identical. This is because locations differ and also because of the people and the components that make up the experience provided to a traveller. We see very diverse pricing strategies. For most tourism businesses setting prices are market-based. It is driven by what competitors with similar products and services charge within a given market. Let me clarify, in tourism, price competitiveness is not price-driven, it is product-driven. It also depends on seasonality element because tourism business is seasonal in nature.

Place: In tourism, distribution aspect is tricky. The link between tourism suppliers and the customers is known as the distribution system. In terms of definition, distribution is concerned with making the product available to the customer. It includes various activities undertaken to make the product accessible and available to target customers. Tourism being a service product—and here the customers need to be transported to various destinations (point of sale)—its channels are tourist operators, agents, wholesalers and ITOs (inbound tour operators). For the distribution channels in tourism, understanding the distribution systems, recommended rates of commission, and the roles of various booking agents matter.

Retailers provide customers with an accessible destinations; either online or as a shop-front by booking travel products. They sell products to customers. Wholesalers are businesses that will sell product through established retail distribution channels both at the shop-front and online on the behalf of the service provider. They also sell individual product elements and link them to shape packages. The role of the intermediary has been an important element at all stages experienced by the tourism sector. Technology has played a pivotal role in the growth of the travel industry.

Promotion: In tourism, it refers to informing the customers about the existence of a destination, staying arrangements, pricing, facilities provided, entertainment factors, etc. The promotional activity consists of educating, persuading and reminding the customers about the product. A variety of media vehicles are available and being used by the tourism industry. Meetings, Incentives, Conferences/Conventions and Exhibitions (MICE) are a form of tourism.

The capital city of India, New Delhi, has been a favourite MICE destination for quite some time. The numerous charms of the city vary from ancient monuments to excellent shopping options, making the business meetings and conferences here an absolute pleasure. The Ashok, New Delhi, has been hosting meetings and conventions on the international scale for more than four decades. Spread over 16,435 sq-ft, the pillar-less Convention Hall at The Ashok is a favourite venue for top businessmen and government officials. Other business meeting venues of the capital are the Habitat World Convention Centre and the Vigyan Bhawan.

The tourism business will turn more hypercompetitive post the pandemic. Tourist businesses will require adaptable and workable marketing strategies. The world is well-connected today. In true sense, sky is the limit for the growth of the tourism sector. The four Ps can be developed manifold and can be mixed and merged beyond imagination.

The author is a management thinker and blogger

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