HOTO7004 Tourism Digital Distribution Strategies Assignment Sample
1. Digital distribution environment
1.1 Target Market
Distribution channels and the consumer purchasing behavior are seen to vary from market to market as it helps in understanding the structure of the distribution system. Thus, understanding the structure of the distribution system is necessary to meet the target market along with managing a trade show. The travel distribution system is considered to be complex for managing the independent businesses (Tiagoet al. 2021).
The tourism and hospitality industry is considered as very fragile industry in terms of retaining their customers (Tiago et al. 2021). However, pleasure markets are significantly expanding with the advancements of technology and modernization. The hospitality and tourism industry must align their services with the preferences of the customers. It is noted that in the tourism industry the most reliable target market is the pleasure market. The reason behind it is that more than 60% of travelers from different parts of the world engaged in different pleasure activities such as seeing wildlife, meeting friends and others. The others customers travel for business purpose or making business (Sofronov, 2019).
By considering the diversity of the requirements of customers,it is important for the organization to recognize different activities of pleasure within the targeted customers to be efficient and accurate in providing services. With the help of this, the organization would be able to maintain sustainable relationship with potential customers.
Most of the companies in hospitality and tourism industry have their potential customersfrom different regions across the world. Therefore, it is essential for the companies to segment their markets. The pleasure market is considered as the most reliable target markets in the tourism industry therefore, it is important to breakdown the market segments into small markets for the specific requirements and needs of customers. For example, the market segments in pleasure markets include, travelers, customers who have passion for wildlife, or excursion, sporting activity, visitors and others (Çınaret al. 2020). This breakdown of market segmentation of target customers will help the company to better services to the customers as per their requirements.
The market segmentation helps the companies to divide the customer market into different groups in order to communicate with them easily and provide services according to their requirements. Every traveler is different thus, the tourism industry is not able to satisfy the needs of every individual customers.
Market segmentation helps the firms to understand the particular demand of the customers and helps to allocate expenses of markets with great efficient (Çınaret al. 2020). In addition, different market segmentation helps to build marketing strategy in order to target the particular market segment.
| Segment | |
| Demographic | Target customers of age group from 25 and above
Young customers travel more for business purpose or other purposes Target the customers who are financially independent and travel frequently |
| Psychographic | The customers who have to travel for business purpose and the customers who love to travel and have passion for wildlife or excursions |
| Geographic | Customers from different parts of the world |
| Behavior | Who travel frequently and have passion for different pleasure activities |
The above-mentioned table shows that the tourism market segmentation can be divided into several categories include Geographic, Demographic, Psychographic and Behavior.
The chosen market segment for this study is demographic and this segmentation is conducted by considering the age, gender, ethnicity, marital status, income, occupation and others. Many companies in tourism and hospitality industry target the customers who have passion for pleasure activities such as, visiting friends, relatives, passion for wildlife, excursion and others. The purpose of their travel is to fulfill their passion or attend any event, meet friends and relatives and others (Sofronov, 2019).
It has been noted that the target customers tend to carry less luggage on journey and focus on receiving better services with advance technology. Most of this targeted customersbook hotels and tickets by using technologies and prefer the Computer Reservation System for reservation of hotels and cars (Kenton, 2021).
The distribution channels are seen to facilitate the link with the customers with the businesses. The businesses are seen to manage the distribution of the products and services of the tourism industry (Happ and Ivancsó-Horváth, 2018). The distribution strategy is seen to have a method of disseminating goods or services for managing the end users.
Engaging the new customers are needed for building brand along with facilitating awareness and access for increasing connectivity for facilitating financial transactions. The target market also helps in determining significant factors about the services and factors (Kenton, 2021).
Choosing a target market helps in having better understanding for managing current and potential customer base. The marketing persona is a document that helps in understanding the demographic function that helps in managing the gender, job title, business size and team size for managing the challenges. Thus, building an audience persona also helps in analyzing the habits of the customers and values.
A target audience is known to be the intended audience that helps in analyzing the price, place along with making better reach to the target audience (Pencarelli, 2020). The tourism industry is going to develop policies for adopting the digital age along with it is said to be necessary to evolve digital technology ecosystem along with facilitating better opportunities.
1.2 Digital distribution
The digital distribution channels help the industry to link the customers with their business. The tourism and hospitality industry distributed their services and products by intermediaries for many years however, the advancements of technology help this industry to bring significant changes in their service process.
The developments of several applications, digital devices such as, mobile, laptop, tablets help to offer a variety of possibilities in tourism industry (Leiet al. 2019). The stages in the chain of distribution in travel and tourism industry are including Principals, retailers, customers and wholesalers and aggregators. The principals of digital distribution are including the activities such as, accommodation providers, attraction of travelers, transport and ancillary services such as event tickets, insurance, hiring of car and others.
The development of Global Distribution System (GDS) provided by the companies of tourism industry help them to increase their service powers. The Global Distribution System refers to a network, which is operated by the company, and this network helps to enable the automated transactions between the travel agencies and the travel service providers i.e. hotels, airlines and others (Nobar and Rostamzadeh, 2018). The modern GDS allows the customers to book rooms of hotel and other activities.
A hotel distribution strategy is a plan of action for selling rooms along with handling the variety of channels. Mixes of direct channels are seen to be at the hotel’s website that is seen to be handling the Global Distribution System (GDS) for handling the wholesalers.
The distribution channels that hotels can use and can go for investing a significant bearing on the revenue management strategy (Adeola and Evans, 2019). A hotel’s website is said to be the only online distribution channel that is seen to generate direct sales along with paying commission to a third party.
1.3 Digital distribution- channel evaluation
A mix of direct channels is integrated of hotel’s website, which are included of direct and indirect channels. With the hotel industry, a distribution channel refers to a chain of intermediaries that are known to be managing service passesthat reaches the customer.
A distribution channel is known to be facilitating strategic changes for managing products, promotion and price (FERNANDO, 2021). Using digital distribution channel manager is seen to be facilitating ability to speed up the process that is associated with managing channels. A distribution channel is known to be a route that helps in producing that helps in reaching the consumer. The important concepts are:
- Two way process: the distribution channels do not carry goods to customers and who are also seen to allow the flow of cash back. A distribution channel is also known to be the one way for managing the finance and stock of business (Putraet al. 2018).
- Varying length: the length of the distribution channel is also seen to be depending on the number of steps though which the product is seen to pass before it reaches to the customers.
- Complexity: It is said to be a complex distribution channel for ensuring the business to run smoothly.
- Multiple channels: Based on the business strategy, the number of the distribution channel for handling the channels. It is also seen to have more ways for producing service to the customers. Sometimes, multiple distributions can become so overwhelming that errors creep into each channel.
- Dilution: A rule of thumb is said to be more steps that are related to handle the distribution channel. Each person or business is seen to have the way that has a requirement of managing profits.
The main distribution channels that have affected the hotel business are direct distribution channel and indirect distribution channels. A direct distribution channel is known to be the business that sells directly to customer. Indirect distribution is included of channels is related to manage the customer reach (Sotiriadis, 2017). There are seen to have several advantages of using direct distribution, which are:
- Cutting out the cost is needed for handling third part distribution (FERNANDO, 2021).
- One of the major advantages of using direct distribution channels for the hotel industry is that the direct channels are possessed by the company and has entire control over its service process to customers (Goryushkina et al. 2019). In addition, it helps the company to improve and maintain consistency in their service provision.
- With the help of direct distribution channels the companies are able to derive feedback directly from customers and get to know more about their expectation and requirements.
- It can be said that with the help of direct distribution channels the confidentiality of companies and customers can be maintained effectively which is essential for the hotel industry (Goryushkina et al. 2019).
- Distinguishing the competition is needed for managing impactful interactions with the customers (Bu, Parkinson, and Thaichon, 2020).
- Potentially it gets produced for customers for handling the distribution channels.
- It also helps in building relationships with the customers for managing the face to face interactions. (Leiet al. 2019).
- It also makes the customers to conduct mass producing
In the hotel and tourism industry,technology is transforming the ways of marketing strategies. The distribution channels that have a great impact on the hotel business are the direct and indirect distribution channels.
The distribution channels that hotel industry use are including websites, OTA, GDS, wholesalers, Destination Market Organizations (DMO), tour operators and others. The direct distribution channel for booking hotel is the website of that hotel and it provides opportunity to communicate with the customers directly and offer the unique services of hotels (Leiet al. 2019).
On the other hand, the indirect distribution channels such as, OTA, GDS, tour operators and others who work as intermediaries to connect the customers with the travel suppliers. They allow the customers to book tickets, rooms, cars, cruise and others. GDS provides connection with the multiple travel agencies and help the customers to listing the upgrades across the networks (Diecket al.2018).
Along with having large number of advantages, there are seen to have several disadvantages of the direct distribution channels, which are:
- The main challenge in the hotel industry with direct distribution channels is that the company has to bear all the financial risks and during expansion, the company must mobilize the required capital for storing proliferation, development of new service, improving service quality and advertising of hotels (Martin-Fuentes and Mellinas, 2018).
- In the case of direct distribution channels in the hotel industry, the hotels hardly enjoy expertise in the local markets. In the time of expansion in another country or regions the companies are not able to use their previous business formats to meet the local requirements (Goryushkina, et al. 2019). Therefore, the indirect distribution channels can help to expand and run the business in another country or region.
- Direct distribution is also seen to limit the amount of product that can be delivered based on managing size of business.
Distribution channel for hotels is known to be approaching the aggressive sales along with handling the distribution purpose. In the competitive business world it is important to have an effective distribute channel, which can help the company to, streamlined the booking process for the customers and enhance the reputation of the hotels. Having a better distribution channel for hotels are needed for enhancing the reputation among the guests and users (Bu, Parkinson, and Thaichon, 2020).
Thus, it is also seen to have a requirement of better management for handling the online distribution channels. An effective management of distribution channel for hotels is seen to have a requirement of reviewing and optimizing the hotel on the internet. Within a hotel industry, the distribution channel also refers to a chain of intermediaries that is seen to pass for handling the customer reach.
Distribution is also seen to play an important role to increase the value of the service. Distribution channel for lodgings is an approach as of now acknowledged by most of the inns for a forceful deals and dissemination reason.
The matter of the truth is that the extreme objective of the inns are to form way better visibility on all dissemination channels so that clients can discover them effortlessly and book a room (Bu, Parkinson, and Thaichon, 2020). It is seen to have a better distribution channel for enhancing the reputation for handling online distribution channels.
2. Implications for loyalty
2.1 Loyalty of the customers
Loyalty of customers can be described as the way the customers receive positive experience from the organization (Rather and Sharma, 2017). It is important for the company to build customer loyalty by providing better service experience to the customers.
The company can implement customer loyalty strategies to retain the customers. It is considered as the act of selecting one company over others and it is possible only when the company is able to attain the requirements of customers. Building loyalty with the customers is seen to be directly related with exceeding customer expectations. It is seen to be useful for satisfying a guest to the hospitality industry along with helping the customers to facilitate the growth to get conducted.
Customer loyalty is also known to be developing strategies for handling new customers for retaining the current list of guests. The importance of customer’s loyalty in tourism and hospitality industry is also seen to be facilitating effectiveness in marketing technology in tourism. Increasing loyalty also helps in conducting development to the industry along with facilitating revenue to conducting growth (Martínez-Gonzálezand Álvarez-Albelo, 2021).
It can be said that loyalty in the hotel industry is one of the key components of its success in the intense competitive market. In order to foster the customer’s loyalty the companies focus to meet the customer’s satisfaction by providing better services to the visitors from booking hotels to entire service process (Yusof et al. 2017).
It has been found that most of the hotels focus on value instead of price in order to retain and attract guests. In the hospitality industry expectation of guests is higher than any other sectors. In order to meet the customers’ satisfaction technology play a vital role and help to stay connected with customers. Creating customer’s loyalty is connected with fulfilling the expectation of customers.
Loyalty programs help hotels to achieve valuable insight into the profile of customers. ‘Customer Relationship Management’ (CRM) can be considered as the most efficient tool which help the companies to interact with customers and better anticipate their requirements (Goryushkina, et al. 2019). In addition, it also helps to develop profitable sales and build customers loyalty at the same time.
Customer satisfaction also plays an important role within the business. Managing the competitive business environment also helps in attracting new customers to manage the environment.
Three important qualities of customer service center are related to 3 P’s, which are professionalism, patience, and a “people-first” attitude. In recent decades, Global tourism is seen to make growth significantly that is seen to provide benefit for facilitating technological advancement that has made things easier for managing the shifting environmental conditions along with facilitating technological innovations (Ferreira, Sousa, and Gonçalves, 2019). The importance of customer loyalty in tourism and hospitality industry is seen to affect the marketing technology in tourism.
Different types of values determine the loyalty of customers with the help of which the company maintains the customer loyalty. The companies of hotel and tourism industry are required to value the local customers. By building relationship with the local customers,the company can increase profitability. In addition, the presence of the company in social media also helps them to know about the perceptions of customers (Ferreira, Sousa, and Gonçalves, 2019).
Different types of values the customer loyalty creates such as satisfied customers, loyal customers, loyalty programs and others. Companies are seen to be finding new ways for finding alternatives that is seen to be useful for encouraging companies for turning away the services. Creating loyal customers are seen to be useful for managing the tour that is seen to be useful for handling the travel industry (Chambers, 2020).
It is also seen to have a requirement for developing new ways for satisfying the customers along with promoting the connections with the customers. According to the view of Goryushkina, et al. (2019), in the era of globalization and completive market customers’ loyalty can be considered as the goals for the hotel industry. The companies are focusing to improve the performance and providing better service quality to customers to attain customers’ loyalty. Customer value management can help the companies to achieve loyalty of customers at every point and transaction.
However, it is argued by Yusof et al. (2017) that the companies can earn customers’ loyalty by being transparent and maintain good relationship with customers. It has also been useful for conducting evolvement for keeping an eye to the customers. It has also been necessary for developing insight to facilitate engagement with customers for engaging the encouraging approaches. It is seen that creating loyal customers are said to be useful by the use of right travel technology for encouraging customer loyalty.
2.2 Discussion towards boosting loyalty
Loyalty marketing is becoming an important for the tourism marketers for handling the business reasons. It also helps in making changes for conducting better promotion around the corner. Client loyalty is said to be tricky since clients are not bound by anything to stay with (Ferreira, Sousa, and Gonçalves, 2019). A steadfast client can hop to another brand for a ton of diverse reasons. Another hotel may be more available, or they may fair need to alter and attempt out a new hotel.
The importance of customer’s loyalty in tourism and hospitality industry is also seen to be facilitating effectiveness in marketing technology in tourism. Increasing loyalty also helps in conducting development to the industry along with facilitating revenue to conducting growth. Loyalty is also related to increase the purchase decisions along with handling customer’s services (Yolalet al. 2017). Customer satisfaction also plays an important role within the business.
Customer loyalty helps the tourism and hotel industry to boost up its revenue. The hotel and tourism industry is considered as most fragile industry for its inability to retain the customers.
However, with the evaluation of latest technology the hotel and tourism industry is able to attain the requirements of customers (Shamsudinet al. 2019). The latest technologyhelps to connect the service providers with their customers and help them to know about their requirements. In addition, the development of the whole industry and implementation of advanced technology help in enhancing the customer loyalty.
Social media is also said to get used for collecting feedback from the customer. It helps in understanding if the customers are satisfied with the provided service or not. The positive feedback helps in attracting new customers to the tourism sector.
The aim of facilitating customer loyalty program is related to engage customers by providing discounts or by providing special discount(Septiantoet al. 2019). From the survey, it has been found that customers are seen to be becoming less loyal. Thus it has been necessary for the businesses to integrate new ideas to improve the experience. It has also been useful for conducting evolvement for keeping an eye to the customers.
It has also been necessary for developing insight to facilitate engagement with customers for engaging the encouraging approaches. It is seen that creating loyal customers are said to be useful by the use of right travel technology for encouraging customer loyalty. Information has gotten to be a backbone of commerce victory, permitting associations to pick up understanding into how they work and what they might make strides.
By having a card that a client will swipe every time they make a buy, people will see precisely which items are most well known among the current customers (Septiantoet al. 2019). From the research, it also came to know that customers look for services that can be conducted via social media where they can have quick response.
Consumers look after having possible ways of interactions and which are also feasible. Sometimes, it has also been suggested to team up with other businesses to offer complementary services, such as providing free spa and message. It also helps in attracting certain range of customers who are more towards getting such free services. Thus, it is also needed for developing focus on building human relationships where the strategy will be developing bond with the people.
The companies in the hotel and tourism industry are required to implement the effective strategies for boosting up the customer loyalty as the effective strategy help them to attain the customers’ satisfaction. Various social media platforms allow the customers to communicate with their favorite business organization and their services, products (Shamsudinet al. 2019).Engagement with the social media platforms becomes an integral part of the promotion strategies of the business as with the help of which the company is able to reach the customers from different parts of the world.
Thus, social proof is said to be one of the best way of reinforcing brand’s authority along with conducting positive influence over the social media. Customer service is said to be the key of facilitating customer satisfaction. Thus, looking after such area is needed for enhancing loyalty approaches. Communicating the values and connecting with people in better way is considered an effective way of conducting continuous improvement. Thus, it is seen that in order to build the level of customer satisfaction, it is necessary to avoid the customer’s dissatisfaction issues.
The company also uses social media for promoting the business, it is considered as one of the effective methods for staying connected with the customers, and it helps them to generate more revenues(Septiantoet al. 2019). With the help of various social media platforms and the official website of the hotels, the customers are able to gain knowledge about the offers and services of the company.
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