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Example Marketing Essay
Write a marketing plan for an EU destination (excluding the United Kingdom) aimed at penetrating a market that that is not currently the main market for the destination.
Marketing Portugal to the North American market
Portugal is a major tourist destination in Europe, with the capital of Lisbon attracting more tourists than any other European city aside from Barcelona and other tourist areas in the country such as the Algarve and Porto also attracting significant numbers of tourists. However, the tourist industry is still dominated by British, Spanish and German tourists, who make up the majority of the tourists in the country thanks to the prevalence of low cost airlines in Europe (Portugal.org, 2009). This is in spite of the fact that Portugal has around 220 days of sunshine each year, some of the best golf courses in the world, and a unique culture and gastronomy. As such, this piece aims to develop a marketing plan to attract more tourists from North America, specifically the United States and Canada, to visit Portugal. This will be achieved via an analysis of the nature of the environment around the Portuguese tourist industry the rationale for focusing on North America and the specific offerings and competitive advantage possessed by Portugal. These analyses will be used to create a marketing plan, including strategies, tactics and control mechanisms. The marketing plan will utilise available secondary data, as well as identifying and applying any relevant theories.
The business environment and the risks, threats and opportunities facing the country
Tourism is now of significant importance to the economy of Portugal, with the service sector now having surpassed manufacturing and agriculture as a key source of income for the country (Portugal.org, 2009). This growth in importance in Portugal has been mirrored in a significant overall growth in the market for tourism around the world, which offers many countries the chance to capitalise on their natural resources. However, thus far Portugal has been unable to truly harness these opportunities, as it faces significant challenges in opening up its appeal to a wider demographic segment. This is because Portugal is largely characterised as being purely a beach destination, giving the country limited competitive standing in the global market (Yasin et al, 2004).
Another critical issue in the business environment is the drive towards environmental quality and the sustainable development of tourism. This is placing increasing pressure on countries to preserve their natural capital and balance growth with the potential impacts of tourism (Videira et al, 2006). As such, any attempt by Portugal to develop its tourism industry into more areas will need to consider the environmental impacts, and the effects which this will have on the country’s standing as a tourist destination. In addition to this, the global tourism market has faced downward pressure from issues such as SARS and international terrorism, making it difficult to attract tourists from a wide range of markets. This has further increased the demands for quality management and product differentiation; as well as significant market diversification. Costa (2004) argues that this increases the demands on human resources in the industry, and that significant training and development is needed to ensure that Portugal meets the expectations of tourists in the future.
Rationale for the selection of the market chosen as the focus for expansion
The main rationale for choosing the North American market is that tourism plays a vital economic role in Portugal, due to its geographical location and the favourable weather conditions it experiences (Soukiazis and Proença, 2008). As such, the economic success and growth of the country is strongly linked to the overall growth in per capita income from tourism, which will help bring the Portuguese economy up to the level of its EU peers. However, Soukiazis and Proença (2008) argue that tourism can only be use to stimulate economic growth if the supply characteristics can be improved to bring in a wider range of more affluent tourists.
This implies that any expansion of the country to attract other tourists should focus on major markets, where the population is sufficiently affluent to make an incremental contribution. As a result, North America is a natural choice due to the high levels of per capita income enjoyed by the United States and Canada. In addition, the fact that tourists from North America would need to take a fairly expensive transatlantic flight to reach the destination means that they are likely to stay longer and spend more in the country to maximise their experience. This will make them more valuable than many European tourists who use budget airlines and stay in cheap lodgings for short breaks. In addition, Lisbon has transatlantic connections with many major US cities, and English is widely spoken as a second language in Portugal, making it easier for North American tourists to visit and enjoy the country (Portugal Economic Studies, 2007).
Products and services offered by the country, and their relevance to the selected market
Portugal has significant products and services on offer, many of which are quite unique in Europe. The country has consistently high levels of sunshine, offering beach holidays, but also has a well preserved rural atmosphere and natural beauty, which will appeal to people from major North American cities eager to see some traditional European culture. In addition, Portugal has many natural thermal baths and medicinal spring, which makes it an attractive destination for tourism for health purposes (Portugal,org, 2009). This could also appeal to older people in North America or those who are concerned by recent health issues such as obesity and wish to improve their health. Finally, the climate in the Algarve region has led to the development of high quality golfing holidays, which is a key service for people looking for a relaxing sporting holiday (Correia et al, 2006). Indeed, the country is ranked as one of the premier golfing destinations in the world (Portugal.org, 2009).
The country’s competencies and sources of competitive advantage
A’guas et al (2000) carried out a portfolio analysis of Portugal to determine the factors which give it competitiveness and attractiveness as a tourist destination. The results of this study indicated that the country’s main advantage comes from its climate and high quality beaches, indicating that the country is primarily seen as a venue for beach holidays, and this is its main source of competitive advantage. However, correlation and multiple linear regression analyses were also used to examine the contingent nature of many of these factors. This analysis indicated that Portugal’s position as a major destination for beach holidays was also supported by its status as a more rural and less developed holiday destination, with a culture and cuisine which had not yet been subverted by the tourism industry, giving Portugual a more unique source of advantage to exploit, and also to protect (A’guas, 2000).
Further to this, Foreign Affairs journal (2008) also supports the mild climate; high quality beaches; and the distinctive Portuguese cuisine as key competencies of the tourism industry in Portugal. This is supported by the fact that Lisbon is a major destination for cruise ships, which provides additional indirect tourism from the passengers taking said cruises. In addition to this, Portugal’s per capita GDP growth has not kept pace with the rest of the European Union, and is now less than two thirds of the average value for the EU-27 group (Background Notes on Countries of the World, 2008). This acts to make services and some goods cheaper for tourists when compared to other tourist destinations such as Spain, France and Italy, and this has supported significant growth in the tourism sector in Portugal, which in 2008 was much higher than neighbouring Spain (Foreign Affairs, 2008).
Aims and objectives for the plan and the setting of future objectives
In spite of the competitive advantage possessed by Portugal, Ramos et al (2000) argues that Portugal’s tourist sector is lacking in clear strategies on issues such as differentiation and market positioning, making it difficult for the country to appeal to specific market segments. This is largely due to dependence on the climate and environmental factors to attract tourists; excessive levels of governmental control; a lack of experience in reaching new markets; and too much dependence on central EU funds for making investments (Ramos et al, 2000). This implies that Portugal is struggling with the first stages of the AIDA marketing model, in that it is failing to obtain the attention or interest of its key market segments (Ferrell and Hartline, 2005). As such, one of the key objectives of the plan must be to obtain a good understanding of the North American market and its key customer segments, and develop differentiated offerings which will appeal to said segments and attract tourists. This will allow Portugal to obtain more attention and interest from the North American market, which is a key part of the consumer decision making process.
Indeed, the evidence indicates that the AIDA model is more appropriate than the other theories for the consumer decision making process, such as the SIVA model (Dev and Schultz, 2005), when considering tourists. This is because tourists are likely to only consider destinations which have attracted their attention, hence product focused models are less likely to succeed. This explains why many destination based tourist marketing advertisements simply focus on putting the destination in people’s minds, rather than attempting to get them to make a decision to visit (Blumberg, 2005). This implies that the main aim of the plan should be increasing the level of attention and interest in Portugal. This can be supported by marketing highlighting the range of facilities Portugal offers, the prices for goods in the country relative to those in North America, and the ease of access on direct transatlantic flights. Future objectives can then be focused on increasing the absolute volume of tourists coming from North America.
Action plan-strategies and tactics for sales, advertising and promotion strategies
Given that this marketing plan is simply aimed at penetrating the North American market, and not attempting to dominate it, it is clear that care should be taken to ensure that the promotion is not too aggressive, and establishes Portugal in a positive light, as an aggressive marketing style in inappropriate for destination marketing (Blumberg, 2005). As such, strategies and tactics for sales should be based on developing relationships with US based travel agents and airlines and incentivising them to promote Portugal as an alternative destination to other major holiday destinations, whilst not being too aggressive. This could be supported by negotiating discounted deals with hotels and accommodation for transatlantic passengers to increase their cost advantages.
This promotional strategy can be reinforced by an advertising strategy which attempts to get North American tourists to consider Portugal as a viable holiday destination, perhaps through comparisons with other destinations. For example, a comparison could be made between the flight time from New York to California and to Portugal, which should be roughly similar. Favourable climate and sunshine comparisons could also be made with Caribbean destinations, which often experience tropical storms and hence may have less sunshine in some months. Ultimately, the aim of the advertising and promotion strategies will be to get people to consider Portugal as a desirable holiday destination, similar to the other mainstream North American destinations, and also provide discounts which will encourage them to make the decision to visit. This will be supported by the relationships with travel agents.
Marketing control – plans for evaluation and feedback
The main consideration when developing the marketing control plans is that, as Portugal is a relatively new destination for most North American tourists, they will may little expectations of their trips, and hence the marketing plan needs to develop positive and realistic expectations of the destination (Blumberg, 2005). These expectations can be understood through the use of marketing surveys which ask tourists what their expectations were before visiting the country and how their visit lived up to these destinations. This will provide feedback for increasing advertising focus in the areas where expectations were exceeded, and toning down the advertising in areas where it was felt that expectations were not completely fulfilled. The control method could include a short survey distributed to passengers waiting to board their return flights from the airport, however care should be taken not to impose this on the passengers who may be tired.
Another critical aspect of marketing control for destination marketing is that the destination marketing will be carried out by a central body which does not have much involvement in managing the destination itself, in terms of the accommodation, facilities and services (Blumberg, 2005). As such, a key part of the marketing control should involve regular communication between the marketing body and the providers of services to ensure that service providers are aware of the nature of the marketing communications and the marketers are aware of the limitations of the service providers, and hence do not make excessive claims.
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