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Bespayeva R., doctoral
candidate PhD
Karaganda economic university of Kazpotrebsoyuz, Kazakhstan
DEVELOPMENT
OF MARKETING IN THE MANAGEMENT OF THE TOURISM INDUSTRY COMPANIES
Tourism is one of the fastest
growing industries in the world economy, uniting a number of companies engaged
in organizing recreation for travelers and providing consumers with a variety
of tourism services. Every year Kazakhstan’s tourism industry is becoming more
actively involved in the global market. However, this process is constrained by
a number of factors, including shortcomings of public policies in tourism
sector, industry’s still lagging behind its foreign counterparts, and so on.
In the
context of economic changes, a modern tourism company, as well as any
enterprise producing goods or services, is faced with many challenges, when
there is a decline of investment in the sector, deterioration of organizing
planned activities, limitation to carry out a long-term investment policy, etc.
More tourism businesses are starting to show interest in strategic management
and marketing with increasing competition, cost escalation, falling productivity and
deterioration in the quality of tourism services.
In such circumstances, a company can
not be limited to current planning and operational management of its
activities. There is a need for strategic thinking that needs to be translated
into a program of action, clarifying objectives and means of implementing
chosen path of development.
Strategic management is based on
assumption that it is impossible to predict long-term trends with sufficient
precision, thus, strategic management is defined as a management technology
under conditions of greater instability of environmental factors and their
uncertainties in time.
Strategic
planning and management at an enterprise in modern conditions includes
foresight, planning, coordination, organization, development and management
decisions, monitoring and evaluation that also involves senior management of
organization to identify preferred directions of development, giving a
competitive advantage and organization of means for achieving these goals through
relevant strategies by making changes in organization.
Features of
the tourism industry, which specializes in providing clients with a certain set
of services, bring additional complexity in the sphere of strategic marketing,
planning and management.
Managing tourism is specific and
different from activities of other industries; at first glance it may seem that
management of tourism enterprises is based on the same base as management of
any company.
The challenge of tourism management
is to uncover general trends and patterns of its development, and to find its
specific features. Features of the tourism industry result from specific
properties of services provided by tourism enterprises and organizations.
It is
necessary to define the specifics of tourism services and its impact on
management of tourism companies. Accordingly, it should be identified how and
in what direction to form and develop management tools to properly solve those
specific problems that are typical for tourism enterprises.
Consider the
features of tourism; the first one contains a complexity of interactions
between its constituent elements. Major tourism enterprises are created only in
densely populated areas; they are typical for the tourism industry. Most of the
tourism enterprises are small-sized. There are a lot of tourism enterprises and
organizations that in one way or another have to fit into a single regional
management system, where the aim is to ensure long-term viability and
competitiveness in the market [1].
Another
feature of tourism as a management object can be described as a form of
difficult objectives. Due to the fact that tourism organization has no
measurable goals, it is impossible to objectively evaluate its productivity and
success. This is a probabilistic nature of processes taking place in tourism
industry. This means that it is rather difficult to accurately predict all
phenomena and processes occurring in tourism (political situation has changed,
climatic conditions have worsened, system of taxation has changed (got
complicated), etc.) [2].
Strong
influence from the side of the interested customers is also a feature of
tourism. Travel companies are working with a large number of interested parties
(responsive groups of consumers) that have a strong impact on organization.
Moreover, individual interest groups have their own interests. Tourism
organization can quickly balance the interests between different groups
involved in the service, if its activities are guided by generally accepted
norms, priorities and perceptions of values and has wide-ranging
objectives for further development of a region.
Central
feature of tourism is specificity of tourism product, its inseparability from
the source of formation. Goods in their material forms exist independently from
their manufacturer, a tourism service, as a commodity, is inseparable from the
source of its creation. As for implementation of a tourism product, personal
aspect is enhanced, the process of providing tourism services can be automated
to a far lesser extent than, in particular, process of producing goods. It is
highly unlikely to predict a tourist’s behavior; it depends not only on
objective circumstances, but also on subjective factors. Human resource
management and regulation of interpersonal relations are paid attention in
tourism management. This applies to the work of tourism companies and
organizations whose services are in direct contact with people.
To ensure
stable demand for tourism products and services it is offered to apply a
combination of the two strategies - minimization of costs strategy and
differentiation strategy, by which it can achieve greater competitiveness.
The price is
an important point when choosing a route for standard tour programs for foreign
and Kazakh tourists. Therefore, the strategy of minimizing costs should be
followed to attract more tourists by standard tour programs. But in order not
to limit the market by several customer segments, it is appropriate to use
differentiation strategy that allows the company to gain a competitive
advantage through a variety of routes, developing exclusive programs for
visiting cultural and historical sites of the republic, it will attract more
tourist groups. Also, the combination of these two strategies will help the
company gain a firm foothold in the market, to achieve fame in the wider range
of consumers, and consequently to increase profits constantly.
Also a
feature of tourism as a management object of control can be expressed in the
complexity of tourism services. Tourism service is everything that a tourist
takes into account or what he or she uses while traveling. Therefore, tourism
service is made for tourists from the whole range of services (both tangible
and intangible) that are tourism-specific products.
A feature as
seasonality should be emphasized, i.e. dependence of volume of tourism
services, primarily, on climatic conditions. In solving the problems of
management in tourism, this phenomenon must be taken into account by managers
of tourism enterprises as demand fluctuations may significantly affect
conditions of functioning of the entire tourism industry [3].
Managers of tourism business should
understand that the tourism industry as a management object is nothing like
other industries.
Seven distinctive features specific
to manage any tourism company can be identified:
1. Inability to storage. Places in a
hotel or on an airplane can not be stored for the purpose of selling them in
the future. Therefore, managers need to make an effort to stimulate the demand
for these services in the short term.
2. Intangibility of services. There
no dimensional values to evaluate a tourism product: it is impossible to have
an idea about the quality of the product prior to its purchase and use. In this
connection, a company's image on the market and the image of its products
(services) are important to consumers.
3. Exposure to seasonal
fluctuations. Marketing activities of travel companies will vary during peak
season and off-season. In the off-season, additional measures to stimulate demand
are needed: low prices, a variety of additional services, variation of
different types of tourism.
4. Significant static character,
attachment to a particular place.
5. Discrepancy between the time of
sale of tourism services and consumption. Tourism products are purchased weeks
or months prior to their consumption. In this case, a big role is played by
printed promotional products, which provide visual information about the
tourism product being purchased and allow creating a sense of benefits that can
be derived from its use in the future.
6. Dispersal of consumers and
producers in tourism market. Information activities and advertising on a
broader level are important.
7. Buyer overcomes the distance
separating him or her from the product and the place of consumption, and not
vice versa.
Although the general algorithm of the strategic management process is
universal for enterprises of all sectors, considered features of tourism
industry and travel companies have an impact on almost all of its stages.
Strategic management cycle of a travel company
consists of the following stages:
-
strategic
analysis of internal and external environment;
-
definition
of organization mission and development of long-term and short-term goals;
-
strategy
development;
-
strategy
implementation;
-
assessment
of strategy effectiveness and correction of preceding stages.
As globalization and computer
technology continue to advance, production process of goods and services is
greatly accelerated, tourism product life cycle is rapidly declining. If the
tourism industry shall succeed in terms of high-speed changes, the range will
have to be changed at the same pace or even be one step ahead. This is
facilitated by modern information technologies playing the role of a
constructive factor.
The tourism
market coverage with various tourism services, intense competition of travel
companies for consumer preferences, ability of entrepreneurs to independently set goals,
strategies, management structures necessitated the use of marketing in tourism.
As globalization and computer
technology continue to advance, production process of goods and services is
greatly accelerated, tourism product life cycle is rapidly declining. Today, tourism management must take into account
that modern consumer is a competent, a well-informed consumer. Development of
information technology, the Internet and the media broke the monopoly of
producers on completeness of information: quality, price, variety of goods and
services became available to interested consumers. Therefore, in strategic
business planning it is insufficient to rely only on service (product) and
volume.
The
philosophy of business process management should be changed in modern
conditions of rapidly developing scientific and technological progress and
competition. Getting past objective phenomena when doing business is
impossible.
The main
strategic objective of a tourism company in these circumstances is to build a
business based on new model of commercial success, in which the factors of
accelerating changes play a positive role. This model of tourism management is
based on level of company’s relationships with customers and market value of a
tourism product. Such an approach inevitably at different times will suit all
participants of tourism market, who want to be financially stable and
professionally continue their business.
Following
problems are immediately found in implementation of this approach:
-
changing
internal management structure;
-
establishing
a client base, its constant expansion and analysis;
-
precise
definition of content and volume of tourism product and services being
marketed;
-
inclusion of
customer, consumer in creating the value of a tourism product, which he will
really appreciate.
Addressing
these issues requires qualified personnel, trained in the art of communication
with a client and the art of selling tourism services. Currently, there are
effective techniques that allow acquiring the necessary skills and ability to
communicate with clients. Knowledge of communication technologies and sales
allow to provide consumer preferences of customers and to establish a stable
system of relations with them.
This system, in turn, will give new impetus to
purposeful development of tourism products and services of a company, and their
sale is guaranteed. Travel companies orienting their activities on development
of close relations with customers should identify their clients, their
particular segment on tourism market in the process of strategic management. The
more accurate identification of customer’s type, formation of company’s client
base, the more productive relations with them.
A tourism product of tourism company level includes
many different services (booking, visa, airline and train tickets, etc.), which
are offered to a wide range of consumers. A consumer can purchase or not
purchase a particular tourism product, for example, if he or she is not
satisfied with the price, does not like the attitude of staff, is not convinced
by information booklet, does not like the company's office. If a tourism
company works with its customers, is focused on a certain type of customer, it
must rebuild its internal business process management structure.
Quality of service and service culture are the most
powerful weapon in the competitive activity on international tourism market.
Consumer-oriented means studying not productive
capacities, but requirements of the market and developing plans to meet them.
In the sector of tourism industry hospitality for the whole staff of tourism
facilities is a professional requirement. The pillars of hospitality are
dignity, respect, courtesy and professionalism.
Psychological climate of interaction of tourists with
the staff and considering psychological aspects of perception of services by a
tourist, technology of their delivery are important when organizing technology
of service. This means that personal interests of tourists, mental attitude
towards them are put at the forefront.
The main criterion of quality of tours and service
programs is the interest of tourists. The important thing is that each tour is
consistent with the interests of those tourists, for whom it was designed, that
they enjoyed the service program and the tours are in demand.
In such a company there will be a unit to work with
clients, analysis department and others. The main direction in business
strategy in this case would be selection criteria for expansion of the typology
of its customers and expanding the range of coverage of consumer market segments.
Expansion of customer typology and building business based on relationships
with them both in form and content differs significantly from expansion of
assortment policy of the tourism company.
If a tourism product and element wise technology of
its production were at the center of business process in a number of tourism
companies, currently some progressive companies are using a management formula:
customer - his/her needs - business. Consumer properties of tourism products,
technology of their production may change, but commercial success of the
company will remain as long as there is a consumer of these products. More
important is the question of pricing the tourism products and providing
customers with a special cost of service and a range of value-added services
whether or not within vacation package.
If the tourism industry shall succeed in terms of
high-speed changes, the range will have to be changed at the same pace or even
be one step ahead. People’s notions of best leisure activities are constantly
changing, fashion of prestigious destinations changes, new resort areas emerge,
new clients come with new requests.
If to analyze a tourism product
offered to a consumer by different companies today, it will be very alike and
there is a not much difference.
A successful tourism company, of
course, seeks to provide a variety of services to as many customers as
possible. This pattern of commercial success is typical for the majority of
companies in modern tourism market. Success depends on service (product, goods)
and volume. In connection with this approach, many travel companies are trying
to diversify its range of services to satisfy as many customer needs as
possible.
With development of tourism market,
presence (or absence) of the organization’s trade name (brand) well-known among
customers is becoming a significant factor in formation of consumer
preferences.
A well-known brand offers tourism
organization a number of competitive advantages: reducing the cost of
marketing, purchasing a certain degree of impact on the organization
(marketers), establishing higher prices than its competitors, easier
implementation of expansion strategy of brand, protection in the face of fierce
price competition, strengthening of corporate image, simplification of market
promotion of new tourism products and services and ensuring loyalty among
consumers and intermediaries.
Modern competitive conditions require
tourism industry organizations to further differentiate the products and
services sold under a specific trade name taking into account specific
requirements of individual customer groups.
Solution to this problem is possible
if tourism organizations will have a method of action for each selected segment
of the target market and will be able to choose a variety of marketing programs
to create, maintain and expand strong relationships with customers, to increase
customer’s loyalty, to establish the image of tourism services offered by them.
The logic of developing market
relations in tourism industry is leading to setting and solving such problems
as the study and segmentation of tourism market, quantitative and qualitative
assessment of effectual demand for tourism services, positioning, use of means
of communication and sales promotion.
Having
chosen a new formula of tourism business focused on achieving commercial
success through development of relationships with certain types of customers
and increasing the range and quality of services, on providing them with
particular use value, a tourism company successfully implements its business
idea.
Moreover,
ensuring competitiveness of tourism company requires professionals in the
sector of tourism business with special training. A company’s work should be
placed in such a way that each of its employees is personally responsible for
their area of work. General Manager should control the work, and
his/her activity is connected with studying potential markets, maintaining and
strengthening contacts with major customers and private intermediaries. Company
management should pay more attention to market research, as the knowledge of
market is a prerequisite for the company’s success.
Therefore, the following can be considered as basic conditions / factors of
tourism company’s success:
-
attitude of
company’s employees to work in the sector of tourism as a complex production
process;
-
presence of
own technology, according to which the production process is divided into
elementary components having real implementation techniques and automation means, which contributes to
guaranteed volume of sales;
-
personal
responsibility of each individual employee of the company for a particular area
of work and availability of trained, highly skilled personnel;
-
ability to
compete (having leading position skills);
-
effective
advertising (publication of own brochures, catalogs corresponding to world
standards).
At the present time it is impossible to the effective
functioning of any company, including organizations of the tourism industry,
without the use of the basic principles and methods of marketing, which are
derived from the features of tourist marketing:
- demand management rather than encouraging it. Stimulating demand is not
a priority. Demand for tourist services is constantly increasing, and the
tourism industry to a lesser extent than other industries, depends on changes
in market conditions. For tourist marketing the most important task is the
direction of demand in the right direction;
- the accuracy and completeness of information on tourism products;
- special attention to protect the client's rights - the consumer of
tourist products;
- advisability of diversification of tourist services and greater
attention to the marketing activities in the off-season in order to reduce
dependence on the seasonal tourist organizations;
- accounting in marketing activities not only material aspects but also
psychological, spiritual and emotional state and characteristics of consumers;
- the need to coordinate marketing activities carried out by all
organizations - participants of the production of tourist services.
Thus, the basic principles of tourism marketing are as
follows:
1) Focus on achieving the final practical result of
tourist activities. Effective implementation of tourist services in the market
and the mastery of a certain share of the market;
2) Orientation Tourism Organization not momentary, and
the result of long-term strategic marketing work. This requires special
attention to forecasting research, development based on these results of new
tourist services that provide highly profitable activities of the company;
3) The use of tactics and strategy of active
adaptation to the requirements of potential customers with targeted
simultaneous effect on them.
Marketing Principles identify specific areas of
marketing activities of the tourist organization, its functions, which are
closely interlinked and, therefore, can not be one of them removed from the
system without disrupting its integrity.
Market research and forecast of its development
provides a systematic, comprehensive study of the status and trends of tourist
markets; analysis of the situation, capacity, dynamics, structure, competitors;
assess their own position in the market, as well as the definition of short-
and long-term development trends of individual segments of the tourist market,
and as a whole.
Thus, the starting positions for the selection of the
tourist strategy of the organization associated with marketing. Marketing
activity Tourism Organization is the basis for the planning of all aspects of
work and provides two areas of activity:
1) strategic Marketing (continuous needs analysis,
development of new kinds of goods and services for the recognition of consumers
and a sustainable competitive advantage of the organization) - an analytical
process that focuses on the long term;
2) operational marketing (sales organization, sales
and communications to demonstrate the distinctive qualities of tourist services
at lower costs to customers search) - an active process with short-term
planning horizon.
The main objective of operational marketing -
generated revenues from sales, ie sales service and receive orders for services
through the use of the most effective sales methods, while reducing costs. The
goal of achieving a certain sales volume is transformed into the production program
and sales program. Thus, operational marketing is the defining element that
directly affects the short-term profitability of the organization.
In connection with the development of technological
innovation, and globalization of the tourist business of the company to achieve
and retain a competitive advantage over other organizations must necessarily
take into account the following features of the present stage of development of
society:
- benefits ceased to be strategic, they change under the influence of the
innovation process (change of service technologies, management techniques,
marketing methods and services, etc.), so to keep the competitive advantage
requires constant innovation. Dates innovation must equal or exceed the terms
of implementation of similar innovations from competitors;
- globalization of business is forcing companies to take into account
national and international interests;
- country and area organizations are considered not only as the place
where the company operates, as well as the basis for developing the strategy.
The potential of the company essentially depends on the conditions in which it
operates, and is subject to constant change.
Currently, economists have developed
many areas of the organization to achieve a competitive advantage, but the most
common are:
- strategy leading position on costs - organization striving to minimize
costs in the production and distribution of tourist services, to set lower
prices and expand its market share. Leadership in costs - an aggressive strategy
aimed at achieving production efficiency of tourist services and to ensure
strict control of all costs. This strategy requires the organization to the
optimal size, the presence of well-developed distribution network, capture a
certain share of the market, monitoring overhead and other fixed costs. The
tourist companies with this strategy there is a hierarchical management
structure, are quantitatively expressed objectives, tight control of costs,
constant investment in modern equipment and technology;
- differentiation strategy - focus on winning the championship by the
level of service, product quality, the maintenance technology, etc .; aims to
provide consumers with special (Unique Service), is a modification of the
standard. Differentiation of services on the market means the ability of an
organization to provide uniqueness and more high (compared to competitors), the
value of services to the customer in terms of quality level, the presence of
its special characteristics, distribution methods, after-sales service.
Potential basis for differentiation of services are factors that increase the
value of production services for the buyer, including the psychological
satisfaction. When differentiating the tourist services cost price increases,
but the costs are of secondary importance, as compensated, as a rule, by
setting high prices. Thus, differentiation of tourist services allows you to
avoid price competition, to operate in different markets;
- concentration strategy (focusing) - the choice of limits on the scale of
the scope of activities of the organization with the concentration of its
activities in a relatively small target group of consumers, part of the product
range, or any aspect of the activity. This strategy is based on choosing a
narrow field of competition within the industry (market niche). focus strategy
is inherent, as a rule, small organizations of the tourism industry. Experts
identify two areas of focus within the selected segment of the market the
company is trying to achieve advantages in costs or increases the
differentiation of services or carries out both. focus strategy aims at
providing advantages over competitors in a separate market segment. The basis
of the strategy is a distinct trend in the activities of the organization and
the level of staff to successfully serve a niche market. a very important role
is played by marketing activities, which boils down to the definition of the
pressing market challenges and possible solutions for the implementation of
this strategy.
- early market entry strategy means that the organization is the first to
offer the market an original tourist services. This strategy can provide a
sustainable competitive advantage, to obtain exclusive, ultra-high profits, and
promote rapid growth of the organization. First-mover advantage is based on the
fact that the organization is the first in this business in the territory or in
the new market. The main features of this competitive advantage is; use of
innovation (product, process and organizational); the presence of significant
risk; the complexity of the conservation benefits; difficulty in implementing
the plan, as there is no experience in similar conditions;
- integration strategy - to provide competitive advantage by connecting a
number of companies with the purpose of sharing resources, sharing of
experience, market development, management experience, etc. The meaning of the
integration strategy is that it helps to get higher profitability at the
relationship of organizations than in the separate control of the situation.
In practice, usually quite difficult
to identify or classify a clear strategy that uses one or another organization
of the tourism industry.
Literature:
1. Ushakov DS Strategic planning in
tourism: the manual / DS Ushakov. - Rostov n / D: Phoenix, 2007. - 285 p. -
(Higher education)
2. Quarterly VA Theory and practice of
tourism. M .: Finance and Statistics, 2003.
3. AV Lukyanenkova Strategic management of
the tourist company in Crisis: abstract dis. ... The candidate of economic
sciences: 08.00.05 / Lukyanenkova Anna Vladimirovna; [A protection Place: C.-P.
state. Univ of Economy and Finance] .- St. Petersburg, 2009.- 22 p.