Chapter 10 Setting up the sale.
When you have completed this chapter, you should be able to:
* Give reasons why travel suppliers and intermediaries need to provide information about travel products through persuasive communication.
* Identify the three components of the communications mix.
* List the guidelines for creating an advertising message.
* Evaluate the advantages and disadvantages of different advertising media.
* Outline the methods used to evaluate advertising campaigns.
* Develop a strategy for a public relations campaign using a variety of public relations tools.
* Distinguish between trade and consumer sales promotion methods.
When a travel company introduces a new product, it must make travel customers aware of the product and its benefits. It must also make certain that those who sell the new product are aware of its features and how they will benefit travel customers. To communicate this information, the company uses three primary promotional techniques: advertising, public relations, and sales promotion. These three activities are part of the communications mix and are intended to communicate information about products that will either meet expressed demand or create new demand for a product by convincing potential customers of its value. Since the market for any travel product can change quickly, travel companies must be able to adjust their communications mix to reflect current sales and revenue needs. When evaluating the balance of the communications mix, marketing specialists consider the following:
* The type of customer to be reached.
* The geographic location of the customers.
* The communications mix of competing companies.
This chapter examines how each element in the communications mix contributes to the sale of travel products.
Do you know which airline is "something special in the air," which car rental agency says "We try harder," and which hotel offers to "leave the light on for you"? Advertising is such a common element of our daily life that few of us give much thought to what makes a particular advertisement appealing or effective. Advertisers, on the other hand, carefully research how to convey information to the public in a way that will elicit the desired response--in most cases, the purchase of a product. The purpose of advertising, according to the American Marketing Association, is threefold:
* To give customers information.
* To develop positive attitudes toward products.
* To encourage the sale of products.
However powerful advertising may be, it does not close sales. Rather, the goal of advertising by the travel industry is to motivate a potential customer to contact a travel supplier or intermediary for information about a travel product. It also prepares the customer to purchase it electronically or receive the personal selling message. That message is the focus of the next chapter.
Steps of the Advertising Process
Travel advertising takes many forms, from expensive network television advertising by major travel suppliers to Yellow Pages listings placed by small, family-owned resorts. Regardless of the audience, medium used, or budget, however, the basic process of advertising remains the same.
Selecting the Audience. Before an advertiser can create a message or select an advertising medium, it must target an audience. Trade advertising is designed to communicate information to the various members of travel distribution channels, especially between suppliers and travel agents and/or tour operators. Consumer advertising, on the other hand, focuses directly on customers who buy travel products. Because these two audiences have very different needs for information, advertising messages directed toward them will differ considerably.
Trade advertising attempts to stimulate demand for a company's product and encourage sales by appealing to travel intermediaries, based on the benefits the product will provide to travel customers. This advertising usually contains details about the product, including suggestions for presenting the product to the general public and descriptions of how the intermediary will benefit from selling the product. This strategy is based on the assumption that if intermediaries know the product well and are convinced of its benefits, their knowledge and enthusiasm will make the personal sales process more effective.
Regardless of how well informed travel intermediaries are, the success of travel sales depends on the attitudes of the general public. For this reason, most travel advertising is directed toward prospective travel customers. Consumer advertising often makes a more emotional appeal than does trade advertising, focusing attention on how travel products can meet the needs and desires of travel customers. Often, it targets specific types of prospective customers, for example, frequent business travelers, skiers, or travelers to a specific destination. Suppliers must be careful to match their products with potential buyers.
Because these appeals are made through mass media, the cost of consumer advertising can be extremely high. As a result, travel suppliers often spend 5 percent of their overall revenues on advertising. Some tour operators and other intermediaries who rely heavily on costly brochures, catalogs, and television advertising spend as much as 15 percent of revenues on advertising.
With small profit margins, intermediaries like travel agents or tour operators cannot afford to bear the total cost of a large-scale print or electronic advertising campaign. For this reason, the travel industry has developed a system of cooperative advertising, whereby a travel agency and a supplier (or another intermediary) jointly sponsor an advertisement. Cooperative advertising is particularly popular in the print media because of the ease with which both sponsoring organizations can be featured. A cruise line, for example, may provide a complete newspaper advertisement, to which an intermediary's name, phone, and fax number or e-mail address may easily be added. Intermediaries can also add their names and contact information to radio and television advertisements prepared by suppliers. Some cooperative advertising may emphasize a particular travel destination; for example, the Detroit Metropolitan Convention and Visitors Bureau and Northwest Airlines (whose hub is in Detroit) may jointly promote Detroit as a tourist destination.
Creating the Advertising Message. Having selected the target audience whose needs can be met by their products, advertisers must decide what the advertising message should say. Creating the message is the heart of the advertising process, since the message must make prospective customers aware that they have a need for travel products and that certain products will best fill those needs. The more specific the target audience, the more focused the advertising message can be. But how does an advertiser determine what message will appeal to its target audience?
Consumer research, a component of the market research discussed in Chapter 3, analyzes consumer preferences, buying patterns, and the influence of various forms of advertising on the public. This research can be done by the supplier's research department or by specialized market research organizations, which provide advertisers with detailed profiles of their intended audiences. These profiles can be used to determine what information is relevant to a given customer and create a message that will address the target market's specific needs and interests.
Once a target audience profile has been established, the advertiser can then decide on the intended purpose of the message. An advertising message may be intended to:
* Inform customers about unique features, new locations, or improved or enhanced services.
* Establish, reinforce, or change attitudes about a product, destination, or company.
* Persuade customers to try a new product or to switch from another supplier's product.
* Elicit response by offering incentives to those who inquire about travel products and services.
Two other factors affect the content of the advertising message: the prospective customer's perception of benefits and the role of psychological factors in buying decisions. Clearly, travel needs and desires differ among individuals within a target audience; they may even differ from one time to another for the same individual. Nevertheless, advertisers use their research profiles to highlight those aspects of the product that each group is most likely to regard as a benefit and respond to quickly. The same airline, for example, may advertise its hourly service to major cities in Forbes magazine, but focus on its nonstop service to the Caribbean in Travel and Leisure magazine. Even when the supplier remains the same, advertising messages can change to suit different intended audiences based on the characteristics of the product that is offered.
Understanding the psychology that underlies purchasing patterns (as discussed in Chapter 7) is important when developing an advertising message. Research has repeatedly shown, for instance, that customers are usually motivated by the idea of a bargain, by familiar product names, and by positive images they have of products or destinations. The psychological factors that enter into the creation of an apparent bargain affects the prices used in advertising. Products are rarely priced at an even $100.00; instead, they are more likely to be priced at $99.95. Even though the price difference is insignificant, customers often choose the product with the lower price. Other psychological factors that enter into the creation of an advertising message include the appeal of products that will impress friends and acquaintances, the appearance and/or endorsement of celebrities, and the use of language and artwork that reflect the latest trends.
Combining all these elements and emphases into a compelling advertising message is not an easy task. For this reason, many travel professionals who are responsible for their company's advertising turn to advertising agencies for assistance in the development of creative and effective advertisements. Certain guidelines, however, should be followed by anyone writing an advertising message:
* Make the message clear, direct, and concise.
* Be sure the product's benefits are clearly described.
* Call for specific action by the customers.
* Use current product information.
* Use only high-quality photos and artwork.
* Know what legal restraints affect advertising.
Selecting and Scheduling Media
Once the basic message has been determined, an advertiser must decide which media will reach the target market most effectively. The advertiser evaluates six primary avenues to find the one with the highest likelihood of achieving the marketing goals:
* Print--newspapers, magazines.
* Broadcast--radio and television (often cable TV).
* Direct-mail marketing, including fax and broadcast e-mail.
* Out-of-home--billboards and signs on buses and taxis.
* Directories, including the Yellow Pages.
* Internet Web sites.
How does an advertiser select from among these different media? The following factors help determine the best medium for the situation:
* Level of coverage (reaching customers).
* Selectivity (reaches target market).
* Consumer acceptance.
* Reproduction quality.
* Cost per customer contact.
Each medium has its own particular strengths, making it capable of meeting certain advertising requirements. Each also has disadvantages that must be considered in light of the objectives of the advertising program. In general, however, the cost of placing an advertisement increases as the level of coverage by the medium increases.
Newspapers and Magazines. Most print advertisements for travel products appear in newspapers and magazines. Typically, they account for about half of all travel and tourism advertising expenditures.
About 75 percent of the people in the United States look at a newspaper each day. Because newspapers appeal to such a wide audience, they are a potentially important avenue for any travel supplier or intermediary. Major national and international travel suppliers, such as airlines and car rental companies, advertise regularly in the New York Times, USA Today, the Washington Post, the Los Angeles Times and many other major daily papers with circulations in excess of one million. Local travel companies and small suppliers usually advertise in smaller-circulation dailies, local weekly papers, or the travel sections of large-newspaper Sunday editions. Compared with other media, newspapers have several advantages:
* Wide readership.
* Frequency of publication.
* Low cost, particularly in small newspapers.
* Good geographic segmentation, based on readership profile.
* Short lead time (prior to publication), allowing flexibility for late changes, updates, and additions.
* Good response options via printed coupon, toll-free numbers, e-mail, or Web sites.
Advertisers must also bear in mind the disadvantages of newspapers:
* Waste circulation--Newspapers reach many readers who are not potential customers.
* Short life--There is little or no repeat exposure.
* Little retention--Newspapers are often scanned rather than read.
* Unpredictable print quality--This is especially true for color ads.
General-circulation magazines, such as Time and Newsweek, attract many of the same travel advertisers as do the major newspapers. Many travel advertisers also place advertisements in smaller specialty magazines, such as Travel and Leisure and Travel/Holiday, whose readers are already predisposed to travel. Magazines offer travel advertisers several advantages:
* Large circulation.
* Excellent print and color quality.
* Regional and subject specialization.
* Good psychographic segmentation possibilities.
* Association with prestigious publications.
* Extra reach owing to many secondary readers.
Magazines have certain disadvantages as well:
* Long production lead time (up to two months).
* High production costs, especially for color advertising.
* Less frequent schedule of publication than newspapers.
* More difficult to revise, update, etc.
Radio and Television. Radio and television reach more homes than any other advertising medium. Radios are found in 99 percent of all homes in America; the figure is only slightly lower for television, at 98 percent. In both media, advertisers rely on creativity and repetition to help their message reach potential customers.
With a few exceptions, a radio advertisement reaches a relatively small geographic area. Yet many travel advertisers find the specificity of radio attractive--for example, when an airline wishes to advertise new service between two cities. The different station programming formats (e.g., classic, rock, country, easy listening) attract different types of audiences, allowing advertisers to further define their target audiences. The advantages of radio include:
* Geographic, psychographic, and demographic selectivity.
* Relatively low cost.
* Contact with people other media cannot reach effectively, especially in cars.
* Appeal of the human voice.
* Short production lead time, allowing last-minute changes.
The accompanying disadvantages of radio advertising are:
* It often does not receive listener's full attention.
* Visual appeal is absent.
* Competition for listeners is heavy.
* Message is not available for review by listener.
* Search and seek buttons make station switching easier.
Nationwide network television gives big-budget advertisers an opportunity to reach many people with their messages. Local television fits the needs of companies that serve a small area, and cable channels give both types of advertisers the ability to focus on a particular type of viewer. In fact, many cable systems now carry a channel devoted exclusively to travel-related content. This allows destinations and suppliers to produce television programs which are devoted to their products and services. These programs, which are a blend of documentary and promotional efforts, include frequent display of contact information, including toll-free numbers, Web sites, and e-mail addresses to encourage immediate response. These programs can also be shown as part of in-flight programing on airlines or in motor coach video systems. As an example of how television can target specific markets, a tour company offering packages to the Olympics in Sydney, Australia might advertise on ESPN, the all-sports cable channel. For travel advertisers, television offers these advantages:
* Stronger impact than that of other media (moving images with sound).
* Visual demonstration of product or destination.
* Large and/or selective audience.
* Theme linked to television program (Super-bowl, golf tournament, etc.).
The disadvantages of television should not be overlooked by prospective advertisers. They include:
* High cost of production (particularly commercials shot on location) and air time.
* Short life, with ads unavailable for review by viewer.
* Long production lead time (up to several months).
* Message usually restricted to 15, 30, or 60 seconds.
Direct-Mail Marketing. Many travel advertisers send catalogs, brochures, fliers, and other information directly to prospective customers through the mail. They can obtain mailing lists from mailing list brokers, local directories, associations, clubs, or their own listing of past customers (including those who responded to previous advertising by phoning a toll-free number or returning a coupon). Direct mail has several advantages:
* Production and mailing flexibility.
* High selectivity, offering good behavioristic segmentation.
* Ease of response as a result of reply cards, coupons, toll-free numbers, e-mail, fax, or Web sites.
* Attention drawn by creative packaging and personally addressed mail.
Direct-fax marketing is similar to direct-mail marketing except that the "address" is a telephone fax number selected from a directory or through a computer system that randomly dials phone/fax numbers. The message sent is usually limited to a few pages, which the recipient's fax machine will print.
Many organizations and companies have e-mail addresses listed in their directories (print and electronic) or Web sites. This makes it relatively easy (although tedious) to contact a large number of targeted individuals quickly through broadcast messages that are part of a database of contacts.
Out-of-Home Media. The most common forms of out-of-home media are billboards, kiosks, and the transit signs that appear on the sides of buses, streetcars, subways, and taxis. In many cases, these advertisements can reach people who are already traveling. The main advantages of out-of-home media advertising are:
* Relatively low cost.
* Repetition (travelers see signs day after day).
* Location (in prime areas or circulated via transit vehicles).
* Geographic selectivity.
* High impact achieved by good reproduction.
The disadvantages are:
* High waste coverage caused by low percentage of potential customers among those who see ads, and low attention in some markets. Message size restrictions (including the number of words for billboards).
* Long production lead time, making it difficult to change and update quickly.
Directory Advertising. Unlike other forms of advertising, directories do not impose themselves on prospective customers. People who seek information about a particular travel product often look in the Yellow Pages, travel atlases, and maps, or in a travel business directory produced by a local tourism promotion agency (often as part of a direct-response brochure), or some other group of travel businesses. Because the prospective customers are already predisposed to purchase a particular item, directory advertising often provides more specific information on the products or services offered by a travel supplier or intermediary. Directories offer excellent geographic selectivity at a relatively low cost.
Advertising on the Internet usually takes two forms. The first, and most frequent, includes promotional messages in any (or all) of the previously discussed media (print, broadcast, etc.) that direct readers or viewers to send messages to an e-mail address to request additional information, or to visit a Web site. On such sites, destinations or companies can provide high-quality pictures, video footage, music, information-request systems, reservation options, etc.
The second form of advertising involves key words that describe your destination (Example: RESORT, GOLF RESORT, UTAH GOLF, RESORT UTAH, would be key words for a golf resort located in Utah). These words are included in the directories for the "search engines" that locate information sources (often Web sites) available on the Internet. These "search engines" will find all sources of information that can be found on the Internet, based on the key words you enter. The entering of key words that locate various information sources, including Web sites, is often referred to as "surfing" the net.
The combination of all of the key words selected by individuals, companies, and organizations effectively creates an ever-expanding directory of products, services, and information resources. Thus, potential travel product consumers can access supplier Web sites through their listings (key words) in an electronic directory.
Public relations, in its broadest sense, is the process of building the goodwill of customers toward a business or product. By emphasizing the news value of various aspects of a company and its products--a job promotion, corporate support of a worthy cause, or a reception marking a new resort opening for business--travel companies can convey information of a positive nature to customers, thereby bringing attention to themselves and their products. In many cases, then, the public relations effort focuses on those organizations and travel editors, writers, and journalists who are in a position to influence public opinion via the news media.
A strong emphasis on public relations has several distinct advantages. Most public relations campaigns cost far less in the long run than do advertising campaigns. The principle is a simple one: advertising time and space must be purchased, whereas time for a television feature story or space for a travel article does not (although there are costs for production of public relations). Furthermore, the context in which information about a supplier or product appears can positively affect the potential customer's perception of that information. Advertising, being sponsored, is an effort to persuade consumers to purchase a product, and viewers or readers know it as such. But a newspaper column describing a resort in the Bahamas, for example, has an air of objectivity and credibility about it, regardless of the initial source of that information.
Some articles and news stories are long enough to provide more detailed information on a company or product than an advertisement can, making public relations an ideal companion to advertising. One objective of a public relations campaign is to create a positive image for a company and its product in the minds of prospective customers, making them more receptive to the company's advertising. In this way, good publicity can distinguish a supplier from its competition. This is particularly important in a highly competitive market.
One drawback of this unpaid publicity in the news media is that companies must relinquish control of the message content, and potentially the travel product's image, to a third party with its own separate interests in mind. The article mentioned previously about the resort in the Bahamas could end up making the resort less desirable to prospective customers, for example, if it observed that the resort shares a beach with two other properties, whereas a similar resort nearby has a private beach for the exclusive use of its guests. An astute public relations professional considers this possibility and takes steps to maximize media exposure while minimizing risks of having the message altered by the publisher.
In many cases, however, the public relations goal is simply creating a positive image of a company, its products, and its employees. For example, United Airlines' sponsorship of a golf tournament does not bring specific attention to its business-class service, but is intended instead to create goodwill in the minds of prospective customers when they read about the United Airlines' tournament, whose proceeds benefit charities. Companies using public relations for this purpose must choose carefully those organizations with which they are associated and identified.
What, then, are the basic principles underlying a successful public relations effort? Since the goal of public relations is getting information into the media, public relations professionals need to know:
* The kind of information or activities that will be considered "news."
* The people in the media organization who control the flow of news and other timely information.
* The basic techniques of public relations--that is, the means by which newsworthy information is conveyed.
A careful survey of major travel magazines and the travel sections of large newspapers gives a sense of what kinds of stories or events interest travel writers and editors. But public relations need not be limited to stories that describe the best resorts or the newest travel destination. The following list, though not exhaustive, indicates some types of information that may be of interest to the media.
* Professional certifications or degrees earned by employees.
* Staff appointments and promotions.
* Innovative products or operating procedures.
* Unusual services not offered by competitors.
* Company involvement in community service activities.
* Election to office in professional or trade organizations.
* Opening of new or renovated facilities.
* Human interest stories.
* Consumer tips.
Newsworthy events become news only when editors or producers decide that the information is of interest to their readers or viewers. For that reason, good contacts with organizations and the media are crucial to the success of any public relations professional. It is also important for media personnel to know travel professionals, because the travel industry can be a frequent source of news. When, for example, Congress began to deregulate the airline industry, reporters needed access to travel industry sources who could explain the changes in simple terms and describe their impact on specific groups of travelers and travel companies. Those travel industry sources benefitted not only by being identified in stories, but also by making new contacts with editors and reporters who could potentially convey newsworthy information to the public in the future. Public relations professionals cultivate all such contacts in the media because they are critical to the success of public relations campaigns.
Public Relations Techniques
When a travel company has newsworthy information and knows which media sources to contact, how does it convey the information to them? Public relations professionals have several basic tools for this purpose.
Press Releases. A press release is an announcement or a news article, written by or for a travel company, that objectively describes something newsworthy, such as the appearance of a celebrity, the work of an employee who has made a special contribution to the community, the introduction of an innovative product, or the introduction of airline service to a destination. Press releases should be written in a journalistic style that maximizes the news value of the particular event. Many public relations departments, particularly in large companies, employ trained journalists for precisely these reasons. Most travel professionals learn to write an effective press release in a lively but simple narrative style that covers the "five Ws": who, what, where, when, and why.
Newspapers usually prefer articles that make liberal use of quotations, focus on the human side of a story, and emphasize the local impact of the subject under discussion. A well-written article includes the name of the company and all relevant information about its products and services, presented in a way that emulates what an unbiased reporter might write. A press release, after all, is a news story, not a paid advertisement.
The purpose of a press release is to make information available to the media in a form that the media can use. Even so, travel companies should try to make the media's job as simple as possible, by including with all press releases the date when the information should be published, the name of the person who prepared the article, and the telephone number or e-mail address at which the writer can be reached for questions or more information. They should be available in digital form (on disks) so they can be incorporated in a story or article by the media.
Press Conferences. A press conference is another means of disseminating information through the media about a special occasion or event, such as a new product launch or an award. At a press conference, a company makes a presentation or an announcement to invited members of the media and then answers their questions. Often, press conferences are used to announce upcoming events, in order to increase media attention (particularly broadcast) and customer awareness and curiosity. For example, a company may hold a press conference to announce that it will be sponsoring a travel fair and to encourage area residents to attend the event.
Press conferences can be expensive, partly because the conference itself is usually supplemented by complimentary press kits that are distributed to the members of the media. These kits usually contain a printed news release prepared by the supplier's public relations staff, a fact sheet, videotapes, photographs, and other information.
Staged Events. Travel companies and organizations may also choose to plan a staged event for members of the media, invited guests, and sometimes the general public in order to increase their visibility and develop goodwill in the community. The sponsored appearance of a celebrity, the showing of travel films, performances by musical and drama groups, and the staging of a food festival are examples of events that might well be covered by local news programs.
Because the reputation of the company and organizations depends on the quality of the staged event itself, careful planning is critical to the success of this type of public relations effort. All contingencies must be anticipated, from a celebrity's not arriving on time to a shortage of punch glasses. When properly conceived and executed, however, a special event can return a substantial measure of community goodwill and name recognition for the time and money expended. That is why special event coordinators are often hired.
Receptions. Receptions are designed for the purpose of promoting contact between travel companies and organizations and media representatives such as publishers, producers, editors, writers, and reporters. Thus, many of the same people who attend a press conference go to a reception, but the atmosphere is designed to be conducive to establishing contact between the supplier and the press, rather than conveying information. For that reason, receptions are usually held in luxury hotels or restaurants so that both the location and the complimentary food and drink will attract the media representatives, who will presumably react favorably toward the organization sponsoring the reception.
Familiarization Trips. Perhaps the most effective way to generate goodwill among the media is to make it easy for them to examine travel products firsthand. These subsidized (or all-expenses-paid) "fam trips" can, of course, be expensive to the sponsor. But the opportunity to influence the media directly can justify the cost. Convention and Visitors Bureaus, airlines opening service to a new city, and hotel chains opening a new property frequently use familiarization trips to generate publicity and awareness among the media. The return on investment in this public relations method may not be immediate or obvious. For instance, the agreement of a journalist to participate in a fam trip to a resort in Cancun does not constitute an agreement to write a favorable article about the resort. Nevertheless, media representatives do use familiarization trips as one method of evaluating travel products, and they usually pass these evaluations along to their readers or listeners.
It is important to note that fewer editors, writers, publishers, freelance journalists, and reporters are accepting free "fam trips" from travel companies and destinations. That is because accepting subsidized or all-expenses-paid trips gives the appearance (accurately or otherwise) that the fam trip invitees are being unduly influenced or "bought" by the host company or destination. Thus, many invitees pay all or most of the expense of participating in these trips.
Sales promotion is the third component of the communications mix, extending the impact of advertising to the point of sale. The way in which advertising, public relations, and sales promotion combine to form an overall communications program varies to suit a company's particular needs. In an effective program, each element of the mix enhances and supplements the other elements.
Sales promotion techniques are used to achieve four primary objectives:
* Motivating people to make an initial product purchase.
* Encouraging repeat sales.
* Maintaining overall customer loyalty.
* Maintaining product competitiveness.
Because every sales transaction involves at least two people, a buyer and a seller, sales promotion techniques can be directed at both. They provide specific, usually tangible incentives, both for the buyer to make the purchase and for the seller to close the sale. This section looks first at sales promotion strategies directed by suppliers or intermediaries toward their prospective customers, and then examines sales promotion efforts directed by suppliers toward the intermediaries who sell their products.
Customer-Oriented Sales Promotion
In a sense, customer-oriented sales promotion completes the work begun by the advertising or public relations campaign. If advertising paints the product picture with broad strokes designed to stimulate the imagination and pique the interest of prospective customers, then sales promotion attempts to stimulate action by those customers. Travel companies and organizations use several promotional strategies to encourage customers to purchase travel products.
Point-of-Purchase Displays. Most prospective customers respond positively to visual displays that picture travel products and destinations. How could a person who enters a travel agency in Detroit on a snowy winter day see a poster of a beach in the Caribbean and not think about a vacation, even if he came to make business travel plans? Most travel agencies use some or all of the following point-of-purchase displays:
* Brochures and other printed materials.
* Posters and photographs.
* Displays of handicrafts and souvenirs from travel destinations.
* Slide shows, videos, and compact discs (CDs).
Some of these materials are used for interior wall decorations or window displays; others appear in special stands and racks made especially for promotional materials. Attractive and highly visible displays of brochures, most of which are provided by travel suppliers, are prominently placed in most travel agencies. These brochures vary from a small leaflet describing a single hotel to a large catalog listing a company's entire range of products, such as those of American Express or Club Med. In most cases, the brochures are carefully designed and written and feature glossy photographs of glamorous travel products and destinations. Not only are brochures used by agents to show customers what products are available, but they have the added benefit of continuing the selling process after the customer takes them home.
Videotapes are an increasingly popular means of promoting travel destinations and products to customers. Some videos, because they are short and focused on a particular product, can be viewed by the customer at the travel agency. Others, such as videos and CDs that thoroughly examine many aspects of travel to a destination, are designed for home viewing. National tourist offices, major tour operators, and large cruise lines have led the move to this electronic sales promotion, which will become even more important in the future.
Often, a travel agency coordinates its point-of-purchase displays to emphasize a special promotion or event that is taking place. If one of its suppliers is offering a new package tour to Japan, for example, an agency may designate one week for a special promotion of the Japan tours. During that time, posters and displays will focus on Japan, videos will show customers what they would see on the tour, and agency personnel may even wear special pins or articles of clothing related to the Japanese theme. These visual displays help to create an atmosphere in which the customers will respond positively to the overall sales promotion effort.
Price Breaks and Special Discounts. In general, travel sellers find that reducing the price of a product increases its sales, all other things being equal. The art of promotional pricing is to use discounts to initially attract customers to products they will buy again at nondiscounted prices. Toward that end, suppliers often use promotional pricing to stimulate interest in a new or revitalized product or to attract new customers. Many cruise lines, for example, offer a substantial discount on the first season of cruises on a new ship.
Suppliers often use discounts to attract the business of students, retired people, and other groups for whom price is an important consideration when making a travel purchase. Discount pricing can also help overcome sales declines during slow travel periods.
One means by which travel suppliers have increased the scope of their promotional effectiveness is by using a tie-in between the purchase of widely distributed consumer products and discounts on travel products. A tie-in of this type is a promotional agreement between a travel company and a consumer goods company. For example, an airline may offer fare discounts to people who have purchased a certain brand of camera, stereo system, or luggage.
Free Travel Products. Customers often respond positively to an offer of a free product with the initial purchase of a nondiscounted product. Major hotel chains often use this strategy, offering an additional night free to a customer who has paid for a three-night stay, for example. Suppliers of different types of travel products sometimes agree to offer tie-ins involving free products. For example, customers may qualify to receive a free weekend car rental by renting a car for three weekdays and possessing a recent boarding pass from a particular airline.
Sweepstakes, Gifts, and Prizes. Sweepstakes are a popular way to attract the attention of new customers and keep regular customers interested by giving away free prizes, often expensive ones. By law, a person need not make a purchase to enter a sweepstakes, but many companies make entry automatic upon the purchase of a travel product. British Airways, for example, once offered the chance to win a Rolls-Royce to everyone who purchased a ticket to London within a defined period of time.
Many tour operators and cruise lines offer free gifts to customers who purchase their travel products. These gifts include tote bags and luggage, audio or videotapes, travel books, coffee mugs, and miscellaneous items of clothing. Sometimes companies offer free prizes to customers who are among the first to purchase a new or promotional product.
Loyalty Marketing. Ever since American Airlines introduced its AAdvantage frequent-flier plan, loyalty marketing has been an increasingly important part of sales promotion in the travel industry (see Figure 10-1). The goal of loyalty marketing is twofold: to attract new customers for the travel company and, more important, to keep established customers coming back.
These plans have several benefits to frequent travelers, including free air travel after accumulating a certain number of miles or credits and special ground services, such as preferential check-in and exclusive airport lounges. Most frequent-flier plans now have agreements with major hotel chains, cruise lines, and car rental companies, whereby members receive discounts on hotel rooms and car rentals while they collect additional credits on their airline frequent-flier plans.
FIGURE 10-1 These types of programs offer a number of benefits, such as free air travel and preferential treatment. All these benefits are aimed at the frequent traveler, in the hopes of getting their business. This is why the programs are so popular with competing airlines. Examples of Loyalty Marketers American Airlines AAdvantage Continental Airlines One Pass United Airlines Mileage Plus
After American Airlines' promotional breakthrough, all other major U.S. carriers and many international airlines introduced frequent-flier plans of their own. Smaller domestic airlines and many foreign airlines joined forces with the major carriers to offer frequent-flier bonuses as well. Many hotel chains and car rental companies have also initiated similar programs to encourage customer loyalty in a competitive market.
Currently, some airlines are creating partnerships that allow customers to earn mileage on one airline while traveling on another. Canadian Airlines and American Airlines are an example of this strategy. In addition, airlines are banding together to create a consortium that will honor the frequent traveler points/ mileage accrued by customers on all members of the consortium. The star alliance, which includes Air Canada, Lufthansa, United, Scandinavia Air Lines, and Varig, is an example.
Finally, most frequent traveler programs offer newsletters as well as special prices and availability on their products and services and those of their partners.
Trade-Oriented Sales Promotion
For travel suppliers, an effective program of sales promotion must consider more than direct contact with customers. It should also consider the intermediaries who, in most instances, link the travel suppliers to their customers. An important part of the sales promotion strategy focuses on the intermediaries who actually sell or transfer the products and services to consumers. Trade-oriented sales sometimes are conducted for the following purposes:
* To generate enthusiasm for the supplier's products.
* To develop and maintain supplier loyalty among intermediaries.
* To provide intermediaries with materials and incentives to complete the sales process.
Suppliers direct two distinct types of sales promotions toward intermediaries. One encourages a high volume of sales by rewarding intermediaries when they reach a specific sales goal, and the other helps agents become more familiar with the travel products so they can sell them more effectively. The following discussion identifies some methods employed by travel suppliers to accomplish these two objectives.
Sales Incentives. Suppliers use several sales incentives to motivate intermediaries to sell more travel products. Suppliers may, for example, offer gifts of merchandise, tickets to concerts or other events, or free travel to intermediaries who reach supplier-set sales goals. Some car rental companies, for instance, offer intermediaries a free one-day car rental for each car rental contract they sell.
Some suppliers pay cash bonuses to intermediaries who sell a certain quantity of their products within a specified period. These bonuses may take the form of extra commissions on all products sold in excess of a certain sales volume. Or they may be overrides, which are cash payments made to the agency above the standard commission rate.
The manager of a travel agency in Denver may, for example, receive a call from the sales promotion office of a major airline that wants to increase its share of the Denver-to-Los Angeles market. The agency is asked to increase its sale of seats on the airline by a certain amount. If it succeeds, the airline will give the agency an additional commission on the extra seats sold or provide an override.
Trade Shows, Parties, and Receptions. Suppliers can use a trade show as a forum for introducing new products, informing intermediaries of changes in established product lines, and generating wide-ranging enthusiasm for their products. Many suppliers hold parties or receptions for intermediaries at these trade shows. Regardless of the specific purpose of the show or reception, these events help increase the visibility of the suppliers' products. Because intermediaries' enthusiasm is such a critical element in the total sales effort, travel suppliers have found trade shows to be a key venue for sales promotion.
Familiarization Trips. The objective of familiarization trips offered to intermediaries is the same as for those designed for the media: to make it easy for participants to examine travel products firsthand, in order to produce a positive impression and generate goodwill. Intermediaries who visit destinations or properties, or experience cruises or airline service under these circumstances become more knowledgeable and familiar with the product and services and can become a more effective "sales force" for suppliers. In contrast to the media, who pay most of their own expenses for "fam trips," intermediaries' participation is usually complimentary or highly subsidized. And because fam trips are expensive, it is important to creatively and efficiently plan the participant's itinerary and carefully select who will be invited.
In the context of sales promotion, suppliers offer familiarization trips to intermediaries to increase their motivation to sell a product. Fam trips put intermediaries in a better position to describe the product to customers (because they have experienced it) and to make them aware of its features and benefits, based on their firsthand experience.
Sales Contests and Sweepstakes. Over the past few years, sales contests and sweepstakes have been used as a means of encouraging agents to sell more products. Usually the contests are simple to enter, since the completion of a certain number of bookings automatically makes the intermediary eligible to win sweepstakes prizes. The prizes may include expensive cars, vacations in exotic places, or large cash prizes, as well as a number of prizes of lesser value. Some suppliers run sweepstakes for their intermediaries in conjunction with contests aimed at travel customers. This gives them additional incentive to close the sale by encouraging customers to buy the products.
Whether directed toward the travel trade or the travel consumer, advertising, public relations, and sales promotion all have one purpose: setting up the sale of travel products. Selling, the focus of the next chapter, is the ultimate objective of the marketing process because it produces sales revenue and profit.
* The communications mix is a key element in implementing an overall marketing strategy.
* Advertising disseminates information, develops positive attitudes, and encourages customers to inquire about products.
* Trade advertising provides detailed product information for sales professionals and suggestions (usually to intermediaries) for increasing sales.
* Consumer advertising appeals directly to the needs and desires of travel customers.
* The advertising message informs, influences attitudes, persuades, and elicits responses.
* Cooperative advertising involves a supplier and an intermediary jointly sponsoring advertising.
* Consumer research, the perception of benefits, and the psychology of buying all affect the nature of advertising messages.
* All advertising media have advantages and disadvantages.
* Public relations is achieved primarily through media attention to newsworthy events.
* Information about travel products in an article or a news story usually has more credibility with consumers than does advertising.
* Companies often do not have control over how the media use public relations materials.
* Good media coverage depends on a supplier knowing what is newsworthy, whom to contact with the information, and how to convey it.
* Sales promotion efforts seek to translate customer interest into sales and produce customer loyalty.
* Customer-oriented sales promotion enhances the work begun by the advertising campaign.
* Customer-oriented sales promotions include point-of-purchase displays, price breaks and special discounts, sweepstakes, free travel products and loyalty marketing.
* Trade-oriented sales promotion provides intermediaries with information to help them sell the product and with special incentives to encourage more sales.
1. Explain the communications mix, and indicate its importance.
2. Describe the relationship between the three aspects of the communications mix.
3. Write a one-line advertising message for a specialized tour, and discuss the objectives of the message.
4. How would you select the media that should be used in an advertising campaign?
5. Why are advertising campaigns difficult to evaluate?
6. Describe the public relations tools a tour operator might use when it begins to offer tours.
7. Discuss the similarities and differences between sales promotion methods for consumers and intermediaries.
Setting Up the Sale
Name: -- Date: --
Directions: Answer these questions as you read the chapter. You will be able to use these answers to help you review the chapter.
1. What three activities make up the communications mix?
2. What are the three purposes of advertising?
3. What are the four basic steps in the process of advertising?
4. What is the difference between trade and consumer advertising?
5. How does cooperative advertising benefit both the supplier and the intermediary?
6. What are four basic goals for an advertising message?
7. Compare the advantages and disadvantages of magazine and newspaper advertising.
8. What are the advantages and disadvantages of television advertising?
9. What is direct-mail marketing?
10. How is directory advertising different from other types of advertising?
11. What are two ways to use the Internet for advertising?
12. What is the basic public relations goal?
13. What types of information do public relations professionals need to know?
14. What are five tools that can be used to improve public relations?
15. What is the difference between trade- and consumer-oriented sales promotions?
16. Describe five types of consumer-oriented sales promotions.
17. Describe four types of trade-oriented sales promotions.
Setting Up the Sale
Name: -- Date: --
ADVERTISING TO THE TRADE
Companies advertise differently to intermediaries than they do to leisure travelers, as the following advertisements demonstrate. Think about these differences as you answer the questions following each ad.
"TWA'S LAYAWAY PLAN"
Increase your commissions. Sell your clients a seven-day Hawaiian vacation starting at only $26 a month. When your clients use TWA's Getaway Credit Card, paying for a trip to Hawaii, Caribbean, Paris, or anywhere else TWA flies is no problem. Your clients can charge their airfare and even a Getaway Vacation and pay for them in easy-to-manage monthly installments. And with a TWA Getaway Credit Card as a separate line of credit, other charge cards remain open for additional vacation purchases.
Give your clients credit fast. If your clients don't already have a TWA Getaway Credit Card, it's a snap for them to obtain one. By calling TWA's exclusive number for travel agents, 1-800-821-7910, you will know whether they are approved for credit within one business day. Best of all, the TWA Getaway Credit Card is free.... Easy credit. Easy sale.
The layaway plan that can earn you money.
1. What is the purpose of this advertisement?
2. What product advantages are stressed in the ad?
3. Describe a target market that TWA would want intermediaries to pursue with the product described in this ad.
4. List three key phrases from the ad that make it effective in influencing an intermediary.
"LOW RATES GUARANTEED"
Avis's low SuperValue Plus Weekly Rates are guaranteed. Guaranteed for all rentals through this year. So you can be assured the low rates you quote your clients today are the low rates they'll get tomorrow. Guaranteed.
And that's not all we guarantee. "We'll make sure you get your commission promptly."
SuperValue Plus Rates are available on a full range of low-mileage, professionally maintained GM and other fine cars. And Avis offers your clients everything from the economical Chevrolet Spectrum to the elegant Cadillac Sedan de Ville. Low rates guaranteed, quick commissions, and a wide selection of popular cars are just a few ways the employee-owners of Avis, Inc., are trying even harder than ever to make your job easier and more rewarding.
Call 1-800-555-2212 for more information on Avis's guaranteed low SuperValue Plus Weekly Rates. Or, using your automated system, enter /SI-RC SA in your booking.
>>FOR TRAVEL AGENTS ONLY: "Meet the Fleet" rates for as little as $17 per weekend day (Call for details)<<
1. What is the purpose of this advertisement?
2. What product advantages are stressed in the ad?
3. Describe a target market that Avis would want intermediaries to pursue with the product described in this ad.
4. List three key phrases from the ad that make it effective in influencing an intermediary.
"SPACE. THE FINAL FRONTIER ON A CRUISE SHIP TOO"
Your clients will like the way we conquered space. We give them much more of it. Consider: Our first ship, SEABOURN PRIDE, is a full 440 feet long by 63 feet wide with nine decks. But our passenger list is small. Only 212. Comparably sized ships carry closer to 400. This means your clients enjoy suites--all on the outside with a 5-foot-wide viewing window. Sitting area. Large bath. And, yes, a walk-in closet. They dine when they want and with whom they want in our "open-seating" restaurant. And no gratuities are expected. Or accepted. Seabourn Cruise Line. Let your clients explore space. And all the advantages that go with it. Please send me more information....
1. What is the purpose of this advertisement?
2. What product advantages are stressed in the ad?
3. Describe a target market that Seabourn would want intermediaries to pursue with the product described in this ad.
4. List three key phrases from the ad that make it effective in influencing an intermediary.
AD AGENCY CREATIVE DIRECTOR, TRAVEL ACCOUNTS
There was the wonderful state that everyone drove through without stopping on their way to someplace else. There was the incredible country inn that couldn't get noticed by people in the big city next door. The fabulous restaurant no one believed was fabulous because it was in a shopping mall. The family ski resort with great summer activities but no summer visitors. The hotel with a view of seven other almost identical hotels. The food service corporation wading through local politics to land concessions contracts at airports.
"See? Working in advertising isn't about cute jingles, it's about being a problem solver," says Susan Daugherty, a twenty-year veteran of the business. Daugherty spent thirteen years as a writer and creative director at Earle Palmer Brown, a mid-Atlantic advertising firm, and then went on to found her nearly decade-old freelance copywriting company. "Every business has some problem ... some challenge that's standing in its way," Daugherty observes. "And often a smart, creative marketing plan can be the solution. Maybe it's finding a radio station that reaches more of the right customers ... getting a public relations story placed in an influential newspaper ... coming up with an involving promotion ... or creating a TV commercial that's so drop-dead funny or beautiful or outrageous that everyone talks about it. The secret is making sure the solution is rooted in what the customer out there really needs and wants. When you find a way to solve a true consumer problem--bingo--you've also solved your client's problem."
Marketing can also be the key when a client's product is blending into the crowd. "These days," Daugherty notes, "there are so many 'me-too' products out there. We're all buried under an avalanche of competing travel and tourism opportunities. They all look alike until one of them does an amazing advertising campaign. Suddenly, that one has a personality. They're unique. We remember them."
Thinking up that "amazing" campaign is the job of the copywriters, art directors, and creative directors who develop the ideas, words, and pictures that convey the client's message, usually under considerable deadline pressure. "You have a huge head start if you can do research to understand what's going on in consumers' minds," says Daugherty. "I love sitting behind a one-way mirror, listening to real live customers talk about what turns them on and off. I love hearing the language they use when they describe a product. I love going out and seeing consumers in action at the hotel, restaurant, tourist attraction, whatever it is. That kind of intimate understanding of consumers is what great advertising is made of, not ideas that are dreamed up in a vacuum on the fourteenth floor of an ad agency."
So what's a typical day in advertising like? "There isn't one," Daugherty claims. "You always find yourself becoming an 'instant expert' about something new. Learning everything you can about a subject you'd never even heard of the day before. It's kind of like being a psychologist, business analyst, detective, emergency room doctor, poet, and guerilla fighter all at the same time. Crazy? Sure ... but it's never boring."
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|Title Annotation:||Part Two Selling the Travel Product|
|Publication:||Marketing and Selling the Travel Product, 2nd ed.|
|Date:||Jan 1, 2000|
|Previous Article:||Chapter 9 Evaluating the travel product.|
|Next Article:||Chapter 11 Using personal selling techniques. (PART TWO Selling the travel product.|