Internet Tourism Marketing: Potential and Constraints

Hotel Online: Ideas and Trends. July 2000. Liu, Zhenhua.

(Fourth International Conference "Tourism in Southeast Asia & Indo-China:  Development, Marketing and Sustainability June 24-26, 2000 ") 

Part 3: THE MAIN APPLICATIONS OF THE INTERNET IN TOURISM MARKETING

The Internet as a marketing media can be of great benefit to virtual all areas of marketing, from marketing research, through market segmentation, targeting and positioning, to the effective use of the marketing mix, and marketing organisation and control. The following discussion does not attempt to provide an exhaustive list of the Net's use in tourism; rather, it simply intends to exemplify its common applications in and main implications for tourism marketing.

Marketing Research

With the use of proper software such as Aurum Software's Web-Trak (and even with simple means like cookies, web forms and email feedback) it is easy to gather systematic data about all users who visited the company's web site. This information can be used to identify prospects, understand customer needs and customise resources to give greater levels of service to customers

While advances in technology has meant that it is easier and easier for companies to ascertain characteristics of the people surfing their web site, there is still concern regarding the ethics of such a procedure. This stems from the fact that people do not have a choice.

Market Targeting

In effect the consumer is "pre-screened" and shows both interest and involvement in visiting the web site.

This comment refers to the fact that consumers are actively searching for information on the product or service as opposed to being served it, like that of traditional media.

The appropriate use of user profile and surfing behaviour data can improve the effectiveness and efficiency of market segmentation and targeting. This is because the traditional approach to market segmentation is often based simplistically on geographical, demographic and economic variables while the psycho, behavioural or lifestyle data is costly to collect and difficult to measure and compare. In Internet marketing, it is easier to collect these data from potentially each and every user of the company web site, though tangible rewards such as free prize draws and free membership, are often needed to attract users to fill in web forms.

While this is being used, the question must be asked it the use of these ‘incentives’ affecting the types of people that are filling out the forms? And will this affect the results that are being collected?

It is even a great deal simpler and more effective in market targeting as the email messages and even tailor-made web-pages can reach the intended receiver with little cost. It is possible to set up 'virtual" or cyber - communities for each target market niche in the form of news-groups through which consumers with similar interest and behaviour patterns can be sent with relevant product offering and other information from the marketer. Members of such Internet communities can regularly exchange information between them and strengthen a sense of belonging.

This technique can be very effective if done correctly, however assessment must be undertaken analysing the potential dangers of negative messages orientated at destroying the brand. In addition to this if the users perceive that censorship is occurring they may well be less willing to use the site.

Product

This is especially useful in the production and marketing of package holidays. Tour operators, for example, can offer modular products or services, such as flights, rooms, tours, car hire and performances on their web sites, and allow the user to participate in the development of the specific holiday packages using a menu of options, ie., 'pick and mix" his own package.

This is one major advantage of the internet, however it is not so much that the internet has now allowed this to happen but rather meant that companies have thought about it more.

Pricing

The information exchange capacity enables firms to set and change prices in real time and also facilitates online bidding and flexible pricing. Both of these qualities of the Net are extremely useful in tourism marketing.  This way of pricing could well enhance the operator's image and profitability, as it is both an innovative marketing and sound financial approach.

This is a major benefit that has been derived from the internet. Before the internet is would have been difficult to do this due to the intervals of time within the communication process, now however because of instant and real time connections, it means that companies can try and lower the amounts of perishability. A consideration that must be taken into account though is “Are we going to damage our brand if we take part in price discounting?”

most brochures are launched 10 months in advance

This means that prices can change quickly and with low cost, a definite advantage.

Since it is unpractical to set the prices for such a great number of holidays on the bases on demand analysis or competition research, most operators simply follow a cost-plus policy with little regard to the market changes in the months to follow. Even an operator wishes to adjust its holidays prices it is a costly and cumbersome process as new price panels have to be printed and distributed to the travel agencies. With the help of a web-based reservation system, the task can be a great deal easier. A tour operator can make real-time adjustment to its thousands of holiday prices at a touch of a button in response to competition moves and demand changes. A special late-booking section can also be included in the main web site to promote 'left-over" holidays at the last minute to solve the problems of over-supply or under-demand in the package tour industry which has become a chronic issue in the UK during the last decade or so.

Enhanced capability of consumers to identity the least expensive source, regardless of supplier or location.

This is a consideration, with the potential consumers power in searching numerous sites for prices and attributes, companies must be very active in their searching approach.

Place

The uniqueness of the Internet as a means of distribution is based on the fact that it exists in "cyberspace" thus physical phenomena such as location and distance are less significant or even irrelevant.

The issue that location and distance are less important does not apply much to the adventure tourism industry. At the end of the day they still have to go to the location in order to be apart of the activity. Therefore it has to be close to where they live/ are going.

Opportunity of "disintermediation".

While this is very relevant, the majority of companies within the adventure tourism industry do not have their service associated with a travel agent due to the cost. Instead they rely on information centres within the towns/ cities in which they live. For this reason, the idea of disintermediation is less relevant.

The Travel agency will have to reinvent itself to suit the new Internet era by transforming from a travel ticket seller to a travel information manager.

For this reason, it may be easier for suppliers within the adventure tourism industry to access travel agents. Travel agents will be forced to provide thorough information therefore smaller activities such as this could also be added to the expertise.

Promotion

The Internet provides a labour-efficient and cost-effective way of distributing information almost instantaneously to millions of potential clients in the global markets. Internet promotion combines mass media's reach with the personalization inherent in two-way dialogue -previously only possible in personal selling. It can be used for corporate visibility, brand name recognition, advertising, public relations, corporate sponsorship, direct sales, sales promotion, customer support and technical assistance.

There are three main issues in the application of the Internet to tourism promotion.

First, present the promotional information on the company's web site. The Web enables more information to be transmitted to (potentially) more people cheaply, instantly and with multimedia effect. The key to achieve these benefits is a well-designed and maintained web site which is attractive, informative and interactive.

Second, promote the web site itself to increase its exposure and visitation since a company's web site has to compete in the clutter of thousands of other web sites selling similar products and services. memorable Internet address, Links "from" other web sites, Promoting the web site through the traditional media is also important

Third, use the company's web site as a platform for advertising sites or products of other businesses. Through "banners" and banner linked web pages, a company's web site can also generate revenues by becoming an advertising medium for other organisations.

* All text in red indicates quotes taken from the full text article.