Marketing Analysis in Travel and Tourism: TUI's Strategic Approach

This report provides a comprehensive analysis of marketing principles and their application within the travel and tourism industry, using TUI as a case study. It begins by defining core marketing concepts relevant to the sector and examines the impact of the marketing environment on individual travelers, tourism businesses, and destinations. The report then delves into factors influencing consumer motivation and demand, followed by an exploration of market segmentation strategies. Furthermore, it highlights the importance of strategic marketing planning and market research, along with the influence of marketing on society. The report also covers issues within the marketing mix, emphasizing the significance of service sector elements and the concept of a total tourism business. Finally, it examines the nature and importance of the promotional mix, including an integrated promotional campaign. The report provides insights into how TUI employs these strategies to enhance its market position, particularly concerning its Central America Summer 2020 holiday packages.

Marketing in Travel and Tourism
Table of Contents
INTRODUCTION......................................................................................................................3

L O 1...........................................................................................................................................4
ARTICLE..............................................................................................................................4
1.1 Core marketing Concepts for travel and tourism sector..................................................4
1.2 Impact of marketing environment on individual travel, tourism business and tourist
destinations............................................................................................................................5
1.3 Factors affecting consumer motivation and demand in travel and tourism sector..........6
1.4) Principles of market segmentation.................................................................................6
L O 2...........................................................................................................................................7
2.1) Importance of strategic marketing planning...................................................................7
2.2) Importance of market research.......................................................................................8
2.3) Influence of marketing on society..................................................................................9
L O 3.........................................................................................................................................10
3.1) Issues in marketing mix................................................................................................11
3.2) Importance of service sector elements.........................................................................12
Services -.............................................................................................................................12
3.3) Concept of total tourism business................................................................................13
L O 4.........................................................................................................................................13
4.1) Nature and importance of promotional mix.................................................................13
4.2) Integrated promotional campaign.................................................................................14
CONCLUSION........................................................................................................................16
REFERENCES.........................................................................................................................16
INTRODUCTION
Hospitality industry is a major part of Travel and Tourism industry. There are various
companies that are operating in the sector that are having a common aim of providing all the
required products and services to the visitors. Tourism industry is divided into various
components. It includes lodging operations of Hotels, Resorts, services of transportation like
aeroplane, ships etc. The industry also involves operations related with food and beverage,

retail stores etc. TUI is a subsidiary of TUI group. It belongs to hospitality industry
(Moutinho, L. and Vargas-Sanchez, A. 2018). It was founded in year 1923 in Germany. The
group offers various products like package holidays, travel, cruise lines, hotels etc. TUI is
headquartered in England, UK. It offers services of travel agency. Product team of the firm is
working on Central America Summer 2020 holidays to Mexico and Costa Rica. The Report
will describe concepts of marketing, in tourism industry, role of marketing in travel and
tourism and impact of marketing on people living in society, importance of conducting
market research etc. Importance of elements of service sector, concept of total tourism etc. It
will also explain importance of marketing mix with reference to new product.
TASK 1

L O 1
ARTICLE
1.1 Core marketing Concepts for travel and tourism sector.
Marketing can be defined as a process where the organizations focus on building and
managing relationships with their customers and managing such relationships formed.
Marketing was earlier considered only in the aspect of goods and services produced but
recently, the concept is becoming increasingly popular in tourism sector as well. Here, the
marketers try to attract their customers by giving them exciting travel packages (Buhalis and
Foerste, 2015). Travel and tourism being a global market, it is very essential that the companies
adopt all the marketing practices attracting maximum number of customers. The core activity of
marketers is the identification of the needs and desires of the customers and at TUI, this is done
excellently by targeting existing and potential customers.
Market Orientation is responsibility of the managers in creating and supplying those products
that fits the customers needs in the best possible way. After the marketers have designed a
product according to the customer's requirements; they have to identify the target market and
make the customers aware of the product that they have brought in the market. Developing
excellent relations with the customers is another core marketing concept which is applicable in
tourism industry as well ((Vellas, 2016)). TUI has been able to achieve this by building a
customer base of 27 million customers.
TUI has been able to bring a revolution in the advertising trends of tourism and travel industry
and by launching their own airways, cruises etc.; they have not only brought diversification in
their present business but also reduced the mediator's cost. For e.g. : While introducing their
own aircraft, the tag line they used for advertising was ' We intend to create a new category of
flying — a holiday airline category.' This was used to make their customers aware of the fact
that the aircraft launched by them is exclusively for the holiday purpose and hence would be
way more interesting than normal airlines (Oromendía, Paz and Rufín, 2015).

1.2 Impact of marketing environment on individual travel, tourism business and tourist
destinations.
Marketing environment of any industry can be analysed by evaluating the two types of markets
i.e. Micro environment and Macro environment. In tourism sector also, it can be done by
analysing both the environments. Micro environment involves those factors that are directly
linked to the business and can affect its success chart. This includes intermediaries, suppliers,
competitors and customers etc. Intermediaries are those firms acting as middlemen, helping in
the growth of the company in different manner (Camilleri, 2018.). For e.g. — TUI resold
Disneyland Paris Holiday package in exchange for the company Euro Disney S.C.A. Similarly,
importance of customers can also be understood by the different categorization of the packages
sold by TUI as per the different requirements of the customers.
Macro environment involves those factors that indirectly influence the working environment of
the company. Market trends, demographic, political structure, society, culture etc. are a few
factors of micro environment. E.g. — TUI was the first company to open New Generation Shop
in 2013; where they integrated their stores with technology where the customers can virtually
experience how their trip is going to be before booking packages (Xiang, Magnini and
Fesenmaier, 2015). All of these factors collectively has helped the company in increasing their
turnover and profitability.
An individual traveller is affected by the marketing environment as it helps them in evaluating
the various options available to them and selecting the one which is the best suitable for them.
This has increased their satisfaction level which they derive by spending their money.
Tourism business is also affected as a new technique devised by one competitor forces other
companies operating in that industry. This helps in overall development of the entire tourism
industry thus improving their practices which enhances the services provided to the customers
(D'Amore, 2019).
TUI is currently planning Central America Summer 2020 Holiday package which includes the
destination Mexico and Costa Rica. The reason for selecting Mexico and Costa Rica is that
them being categorized as hot destinations where a lot of travellers intend to go but the
packages available are not attractive enough. Thus, the marketing environment involves study
of hot destinations which are targetted by the companies so that more customers can be
targeted.
1.3 Factors affecting consumer motivation and demand in travel and tourism sector.

The most important factor influencing the services and packages provided in any industry is the
buying behaviour of the customers. There are various categories of buying behaviours i.e.
complex buying behaviour, variety seeking buying behaviour, habitual behaviour etc. TUI
designs packages accordingly satisfying and meeting different customer needs (Buhalis and
Foerste, 2015).
The decision process of consumer involves 5 steps that are : need recognition, researching the
information, evaluating alternatives, purchasing of the service and lastly post purchase
behaviour of buyer. All the needs of customers can be ultimately linked to the Maslow's
Motivational Theory and TUI targets those in Belonging phase or Self Actualization phase
where the customers have already satisfied their basic needs and now they are motivated to
meet their luxuries needs or spend on their family and loved ones.
The satisfaction level of customers is the major factor in determining their buying behaviour
and the factors that motivate any consumer before making a decision to buy. Also, the value
that a customer derives from the services received is a huge factor in determining the
motivational level of the customers (Vellas, 2016). There are extrinsic as well as intrinsic
motivational factors affecting a potential customer. TUI; by identifying those needs and
targeting the customers accordingly by preparing those plans and packages that will satisfy the
multi facets of customer's requirement has built an excellent customer base in 180 different
regions across the globe. Therefore, there are a variety of factors affecting a consumer's
motivational level and their buying behaviour.

1.4) Principles of market segmentation.
Market segmentation -
It refers to the process of dividing the whole market into various homogeneous groups on the
basis of different factors. The main objective of the company behind market segmentation is to
utilize its resources for offering the product or service to satisfy the demand of a particular
segment of buyers. Market segmentation helps the organization to conduct marketing activities
for a particular segment. TUI may use various methods for segmenting the market for offering
summer 2020 holidays to Mexico and Costa Rica (Camilleri, 2018). These are as follows -
Geographic -
Marketer of TUI will divide the whole market of UK on the basis of geography. Under this,
firm will segment the market on the basis of various cities, region of the country.
Psychographic -
TUI will also use psychographic factors such as personality, social class of clients for offering
tour package.
Demographic -
Another important factor, company will use is demographic factors of the customers. It includes
the age, purchasing power, nationality, educational qualification, family size of the client etc.
Behavioural -
Here, the term behaviour means the perception and attitude of the clients towards the company
and its products or services. TUI will take into consideration the benefits that customer required
in the product or services, frequency of buying the tour package,
All the above methods of market segmentation will help TUI to develop marketing plan for
attracting large number of customers towards package of Summer 2020 holidays to Mexico and
Costa Rica.
TASK 2
L O 2
2.1) Importance of strategic marketing planning.
Strategic marketing planning -
It is a process that helps the firm to develop plans and strategies for marketing the
product or service and their impact in targeted segment of market. It helps to analyse current

position of the firm, potential opportunities, strengths, competitors etc (Tussyadiah, I.P. and
Sigala, 2018). TUI will use various tools for placing the firm strategically such as-
SWOT analysis -
Strengths :
 One of the major strength of TUI Group is that it is operating more than 1600 travel
agencies, airlines, approximately 380 hotels,
 Strong management team.
Weaknesses :
 Highly dependent on technology for operating the business so if, there is any
disruption then company will have to face lot of difficulties.
Opportunities :
 TUI group is having opportunity of entering into new markets that are having better
destinations.
Threats :
 Fluctuations in foreign currency may impact cost of operations negatively
(Khalilzadeh, J. and Wang, 2018).
Ansoff Matrix -
It is a tool that helps an organization to develop various strategies for future growth of
the business. Such as-
Market penetration-
TUI can sell its existing products or services in existing market of UK with the help of
strong promotional activities.
Product development -
Organization can also offer new products or services in existing market by utilizing its
existing production capacity. It should offer new products like tour package for summer
holidays in Mexico and Costa Rica.
Market development -
TUI should concentrate on new markets for offering its existing products or services
such as India etc.
Diversification -
The group can also diversify itself by offering new product or service in new markets.
For Example- TUI should focus on trips for students in various countries etc (Le, Scott, N.
and Lohmann, 2019).

2.2) Importance of market research.
Marketing research-
It refers to the process of collecting, recording and monitoring the qualitative and
quantitative information related with marketing of products or services of the company. It
helps to integrate customers, marketer and also help to define opportunities that are existing
in the environment.
Marketing Information System –
It is a system that supports the marketer of the organization in taking market related
decisions. It helps to collect, analyse and provide information to marketer of travel and
tourism companies. TUI should use Management Information System for understanding the
demands of clients, to analyse the actions of competitors and to support fast decision-making
of the marketer in respect of new package TUI will offer to targeted customers (Tung, Lee, S.
and Hudson, 2019).
Importance for Manager -
Marketing research is very important for Managers of companies that are operating in
travel and tourism companies. It helps the Manager to create strategy for entering in new
market. Also, supports in segmenting the whole market. For Example- Marketing research
will help TUI to segment the whole market to attract them to buy tour package to Central
America Summer 2020 holidays to Mexico and Costa Rica.
The process of marketing research involves analysis of opportunity, developing the
plan, collecting qualitative and quantitative data, analysis and taking action etc. Marketing
research supports the Manager to determine market trend and present demand of customers in
respect of products or services of tourism companies.
2.3) Influence of marketing on society.
Marketing activity of an organization impacts the whole society in different ways.
Every organization in travel and tourism industry is required to comply certain rules and
regulations in respect of marketing of goods and services. This helps to protect the interest of
targeted customers. For Example- TUI Have to follow regulations of Government while
conducting promotional activities for summer 2020 holidays to Mexico and Costa Rica. This
will result in promoting social responsibility such as creating employment opportunities etc.
Marketing activities of the organization will also help to develop sustainability of the
business through compliance of ethical practises for operating the business. Marketer of TUI

will help to meet out the demand of customers as well as the expectations of the Government
from company (Gavrilović, Z. and Maksimović, 2018).
Marketing of TUI in respect of summer 2020 holidays to Mexico and Costa Rica will
help to protect the environment. Company should focus on reducing the waste , optimum
utilization of raw material etc. All these efforts will help to protect the society of the country
in which firm is conducting the marketing activities. Organization can also determine the
changes that are happening in demands of customers for travel and tourism products and
services with the help of marketing research. Therefore, TUI should comply the rules and
regulations of Government by investing funds for sustainable marketing of the new package
that is summer 2020 holidays to Mexico and Costa Rica that company will offer to targeted
segment of customers.
TASK 3
L O 3
ARTICLE

3.1) Issues in marketing mix.
Marketing Mix -
It involves various tools, tactics and actions that an organization uses for promoting its product
or service in the market. It includes different factors such as product, price, place etc.
Product -
It is one of the most important factor of marketing mix because it helps to satisfy the need of
customers of the firm. TUI is planning to offer new product that is Central America Summer
2020 holidays to Mexico and Costa Rica. The organization will offer various benefits to the
customers that will purchase the holiday package. The package will consist of 9 nights and 10
days. It will also include the facility of staying in hotel, meal and transportation etc. TUI will
also offer the facility of guided tour to customers for visiting Mexico and Costa Rica.
Price -
Second important factor in marketing mix is the price of product or service. Price plays an
important role in getting competitive advantage over other companies. TUI can use different
pricing strategies for offering new product to the clients. Organization will have to consider
various factors while setting the price for summer 2020 holiday package. Such as competitors,
cost of offering package, bargaining power of clients etc. Under Cost plus pricing firms
consider the fixed and variable cost it will incur for offering facilities under tour package. In
case of Value based pricing, companies fixes the price of the product on the basis of perception
of targeted segment of customers.
TUI will use value based pricing for setting the price for summer 2020 holidays to Mexico and
Costa Rica. Under this, firm will charge differentiated price as compared to its competitors by
offering unique benefits in holiday package (Avraham, 2018).
Place -
It refers to the channel through which firm will provide its services to ultimate customers. It
also includes the path through which customers make payment to the company. For example-
TUI will offer the facility to the customers for booking holiday package through Viator.
Company will also take support of Musement for offering tour package to the clients.
TUI will also take support of travel agents for offering summer 2020 holiday package to
customers.
3.2) Importance of service sector elements.
Services -

It is a intangible product that is provided by an organization to the customers. And in exchange
for which customer pays the money to the provider. The service cannot be separated from
service provider. Service marketing refers to various components of the service marketing that
are used by companies to create awareness of the brand to targeted customers.
Internal marketing -
In case of internal marketing, organization treats the staff members as internal customers of the
company. Internal marketing plays an important role in integrating every aspect of travel and
tourism companies for providing valuable services to the customers (Loo, P.T. and Leung,
2018).
Interactive marketing -
It is a type of marketing strategy that supports two-way communication between organization
and customers. It is more effective in influencing the customers as compared to direct
marketing.
Elements of service plays an important role in service marketing like the location at which firm
is offering the facilities will impact the experience of clients. Strategy of pricing is also
important to gain competitive advantage over competitors. Promotional tools help to attract
buyers towards the product or service of tourism sector. All these factors determines the
success of marketing for the firm.
3.3) Concept of total tourism business.
Total tourism product -
Tourism product is designed by travel and tourism companies to provide overall satisfaction to
the clients. It refers to all tangible as well as intangible elements that are based on a particular