Marketing in Travel & Tourism

This document provides insights into marketing strategies and positioning in the travel and tourism industry. It discusses the principles of segmentation, target marketing strategies, and the importance of positioning. The case study of Contiki, a tour operator company, is used to illustrate these concepts.

Marketing in Travel &
Tourism

Table of Contents
INTRODUCTION...........................................................................................................................3
Segmentation of Contiki .............................................................................................................3
Target marketing strategies and strategy adopted by Contiki......................................................4
Principles of positioning and importance of positioning.............................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Marketing is the means by which the organization communicates, connects and engages with
their target customers and meeting their needs in a profitable manner. Contiki is a tour operator
company and is the subsidiary of The Travel Corporation. It was founded in 1962 by John
Anderson. In the further report light will be put on principles of segmentation, targeting and
positioning of Contiki.
Segmentation of Contiki
Market segmentation is the process of dividing the target customers into smaller groups,
segments based on similar needs, lifestyle, common interests, etc. market segmentation should
have these following features : it should be measurable, accessible, substantial, competitive
(Dolnicar, Grün. and Leisch, 2018). For the company to reach their ad campaign or marketing
message, travelling schemes etc to right audience, segmentation is important and if not optimized
properly Contiki might end up with lots of wastes advertising dollars. Market segmentation by
tour and travel businesses are done based on :
Geographic Segmentation : tourist needs differ as per geographic regions. Therefore, to
market the tour packages and other travelling schemes, the company must understand the needs,
attitudes, desires of the people. The segmentation of market is done by considering factors like
tourist's place of origin. Tourist of different places are brought up with different cultures, and
they have different behaviours therefore this factor plays an important role.
Demographic Segmentation : The market is segmented by taking into consideration
tourist's age, gender, marital status, ethnicity, religion, income, education, family members etc.
Advantage company gets from this segmentation is information is relatively easily accessible and
low-cost to obtain. Tours and travels companies generally makes the segments based on age,
income level and family members.
Psycho graphic Segmentation : Groups in this segmentation are according to tourist's
lifestyle like their activities, interests, opinion and values. If the company is targeting tourists for
adventure sports their market will be tough and strong adventure seekers. As the people are
young therefore belong to low budget group. So the company should segment their market with
an idea that among certain categories of tourists they should try to find some similarity.

Behaviouralist Segmentation: Segmentation is done based on tourist's behaviour
towards travelling. Marketing decision is sound when the company makes an in-depth study of
the tourist's behaviour with the aim to satisfy their needs and objectives (Liu. and et.al., 2019).
Contiki has segmented its market based on demographic and psycho graphic.
Demographic segmentation of Contiki- Demographic segmentation is marketing a product
after considering these variables like age, gender, education, income, occupation. This
segmentation plays an important role in determining whether the travel scheme can be mass
marketed or designed for specific clients. The company has segmented their customers based on
the age group of 18 to 35 which means they have targeted the youth. There is no boundation on
the gender both male and female customers are there. They make the group size of upto 53
people.
Psycho graphic segmentation of Contiki – Division of group is done based on tourist's
lifestyle, interests, personality traits etc. Contiki segments the tourists who have interest in
cultural, natural and adventure places and also who like to know about different festivals and
events. Contiki as a marketer tries to identify tourists who are adventurous, self-made, socialite,
aspires or innovator types because they are the ones who are most likely to purchase the tour
packages.
Target marketing strategies and strategy adopted by Contiki
After segmenting the tourist based on demographic and psycho graphic segments now the
company have to make a choice whether they will focus on one segment or few segments or
mass market their packages and travel message. The choice that company makes determine their
marketing mix and positioning plank. There are various target marketing strategies used by the
organizations such as:
Undifferentiated Marketing : In this marketing strategy, the same message is sent to everyone.
This marketing strategy is mainly used by the large company having generalized products like
soaps and other groceries products. The company uses one marketing mix for the whole market.
It saves production and marketing costs. This strategy is not considered blissful in tourism as
tourists come from different cultures and have different interests some may like to adventure
more while some want the packages of leisure and comfort.

Differentiated marketing or multi-segment marketing : In this strategy two or more well-
defined segments are served and marketing mix for each segment is developed. This strategy
involves additional promotion, production, specialized product design, costs etc. The company
should compare the benefit and costs to those of undifferentiated targeting before using this
strategy (Camilleri, 2018).
Focus or concentrated targeting : In this marketing strategy company targets one segment with
a single marketing mix. The company understands the need and motives of the people of the
specific segment and designs specialized marketing mix. The company adopting this strategy
believes that concentrating resources and meeting the needs of specific segment is more
profitable than allotting resources over separate segment. So the best way is to serve other
segments along with concentrated ones (Biddle, 2017).
Customized marketing : This strategy is adopted when the target customer has a strong position
and control in the market. The company develops separate marketing mix for each customer.
Sometimes company also discuss the requirements from the customers and accordingly
marketing strategy is developed.
Target marketing strategy adopted by Contiki is the combination of differentiated and
concentrate target marketing strategy. As the target customers of Contiki are the youth which
are in the age brackets of 18 to 35 and are more energy and adventure oriented. Therefore,
marketing strategy will not be developed for the entire tourist population but only for the people
between the above age group. One sensible strategy is one which targets small, less attractive
segment rather than the same segment that all other are choosing. Sometimes Contiki targets the
tourist who loves natural places and sightseeing and not cater to adventure events so in this way
they go for concentrated target marketing. So the package will be according to these objectives,
the hotels, transportation all will be decided keeping in mind the interest of the tourist, the places
of natural beauty and sightseeing.
Principles of positioning and importance of positioning.
It is the place or the position of the brand n the minds of their customers in comparison to
the company's competitor. Analysis is done of the brand to know the position in the minds
through perceptual map. These are diagrammatic representation of customers perspectives on the
brand (Iyer. and et.al., 2019). Contiki defines positioning as contemporary creative

communications. It defines these principles for positioning: unique selling proposition in which
the company offers something special, risk reversal in which company differentiate its brand
from the competitor, inordinal value in which the firm offers their customers the right deal and
the last is providing the customers with clear, concise and complete information so that they can't
question.
Importance of positioning in success of the organization
Market differentiation – Creative positioning by the company, it makes the brand stand
out in the market and also in the minds of the customers. If Contiki offers their customers with
unique selling propositions then they may ingrain in the minds of the target audience.
Pricing strategy is justified – If Contiki is offering high price travel packages then it is justified
by the positioning of the brand by the map.
Competitive advantage – Through positioning the organization can tactfully and
strategically highlights the core values, strengths and attributes of the brand. Contiki by
positioning their brand accomplish their objective of increasing number of tours, increased
market share, attracting new set of tourists and ultimately making profits and giving customer
satisfaction.
Makes the brand more creative – As there are more players in the market offering similar
services to the same target audience but Contiki adopts positioning strategy to as the brand is
adorned with the tag of creative brand.
Positioning map of Contiki
Positioning is choosing the image you want your product to have in minds of the target
audience. This map allows the organization to compare their service with that of competitors. In
case of travel organization perceptual maps are created to probe images that tourists have of
different places of attraction. It may also be used by the travel companies to know about their
preferences.

As Contiki targets youth which are in the age brackets of 18 to 35 therefore its
positioning is in the quadrants of extreme adventure and online self-service. It is positioned in
this quadrant as youth prefers extreme adventure and sometimes they go for online self-service
as they have low budget. As Contiki provide online self-service it helped them in reducing
customer service costs, increased their customer services leading to increased revenue from new
segment.
CONCLUSION
It can be concluded that the tour operator company, Contiki segments their target
audience based on demographic and psycho graphic segmentation. It adopts the differentiated
and concentrated target marketing strategies and follows certain principles of positioning.
Positioning has some importance in the success of the organization in terms of market
differentiation, competitive advantage etc. The positioning of the Contiki comes in the extreme
adventure and online self-service quadrant.

REFERENCES
Books and journals
Biddle, I., 2017. Target Marketing: Gaining customer details to maximise marketing
strategies. Busidate.25(4). p.10.
Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Dolnicar, S., Grün, B. and Leisch, F., 2018. Market segmentation analysis: Understanding it,
doing it, and making it useful (p. 324). Springer Nature.
Iyer, P. and et.al., 2019. Market orientation, positioning strategy and brand
performance. Industrial Marketing Management.81.pp.16-29.
Liu, J. and et.al., 2019. Market segmentation: A multiple criteria approach combining preference
analysis and segmentation decision. Omega. 83. pp.1-13.
Online
Sherwood, P., 2018. How Travel Companies Can Nail Market Segmentation. [Online]. Accessed
through<https://www.gravitatedesign.com/blog/tourism-market-segmentation-101/>