TOURISM SECTOR

It is Indias vastness that challenges the imagination: the sub-continent, 3200km (2000 miles) from the mountain fastness of the Himalayas in the north to the tropical lushness of Kerala in the south, is home to one sixth of the worlds population, a diverse culture and an intoxicatingly richhistory.

The most frequently visited part of India is the Golden Triangle Delhi and the magnificent monuments of Agra and Jaipur, a legacy of centuries of Muslim rule but there is much besides. The unfairly maligned great cities of Mumbai and Kolkata (Calcutta) have a bustling, colourful charm, while the holy city of Varanasi or the awe-inspiring temples of Tamil Nadu are worthy objects of pilgrimage. For those who prefer more sybaritic pleasures, the palm-fringed beaches of Goa have a European charm all of their own.

Hinduism is practiced by 85 per cent of Indians, the religious rites and red-letter days woven into the fabric of everyday life ritual washing in the Ganges and the ear-splitting celebrations of the festival of Ganesh and the inequalities of the caste system are there for all to see.

One of the fascinations of India is the juxtaposition of old and new; centuries of history from the pre-historic Indus civilization to the British Raj rub shoulders with the computer age; and Bangalore's Silicon Valley is as much a part of the world's largest democracy as the remotest village is.Richard Hopton.SWOT Analysis.Strengths Indias geographical location, a culmination of deserts, forests, mountains, and beaches.A wealth of archeological sites and historical monuments.Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for the industry.Weaknesses Lack of adequate infrastructure. The airlines in India, for example, are inefficient and do not provide basic facilities at airports. The road condition in India is very bad.No proper marketing of Indias tourism abroad. Foreigners still think of India is one of poverty, superstition, and diseases. The case of plague in Surat in 1994 led to decrease of 36% in arrival of foreign tourists in India.Opportunities More proactive role from the government of India in terms of framing policies.Allowing entry of more multinational companies into the country giving us a global perspective.Growth of domestic tourism. The advantage here is that domestic tourism and international tourism can be segregated easily owing to the different in the period of holidays.Threats Political turbulence within India in Kashmir and Gujarat has also reduced tourist traffic.Aggressive strategies adopted by other countries like Australia, Singapore in promoting tourism.Basis of Segmentation.1. Holiday: Mass market, Individual market, and Popular market.2. Demand: Primary, Secondary, and Opportunity.3. Geography: International, according to regions, etc.4. Psychology: Lifestyle, Personal motive, and Knowledge.5. Demography: Age, Sex, and religion.6. Socioeconomic: Rich, poor, rural, urban, literate, illiterate.7. Purpose: Business travel, Cultural Tourism, and common interest convention.8. Age: Teens, kids, youth and senior citizen.Another method of classifying users of tourism services is on the basis of the frequency of usage of services.Non-users: They are not interested in using the services. They lack the willingness, desire and ability (income and leisure time).Potential Users: They are also called the prospects or the prospective users. They have the willingness but the marketing resources have not been used optimally to influence their impulse. They bear the efficacy and the marketing professionals are supposed to capitalize on their potentials by using creative promotional measures.Actual Users: They are already using the services generated by the tourist organizations.Occasional Users: They have not formatted the habit of traveling.Habitual Travelers: They have formed a habit of avail of the services regularly.The variety of users makes it essential that professionals study and understand their changing behavioral profile. This would simplify the task of creating and stimulating demand. The marketing decisions cannot be creative and proactive unless an in-depth knowledge of the users is known.The individual specific behavior in the marketplace is affected by internal factors such as needs, motivation, perception and attitudes as well as by external factors such as family, social groups, culture, and economic and business influences. While studying the behavioral profile the study of lifestyles is most important.Thus it can be said that arriving at sound marketing decision cannot be possible unless a sound marketing plan and optimal marketing resources are developed.Positioning the Product.The world is literally full of travel products. Not only the travelers offer a huge variety of destinations, they also have many hotels, airlines, car rental companies attractions ad other travel products from which to choose.The perception of the consumer for a particular product is a critical variable in the marketing process, one that has a great influence on purchasing decisions, especially decisions among similar products.Service Marketing Triangle.Company (MTDC, SOTC, ITDC, etc.)

Enabling Promises Making Promises

Providers

Customers(Travel Agents,Hoteliers, etc.)

PromisesService marketing is unique in many ways in the travel and tourism industry. There are 3 players in the transaction process:Company: A travel and tourism company listens to the customers and evolves/develops the travel/tour package and it communicates the attractiveness and the utility of that very tour package directly to the customers. The company makes promises to the customers.The company in the Tourism Sector can be the Central Government, the State Tourism Corporations, Tour Operators such as SOTC, ITDC, etc. the company carries out External Marketing as well as Internal Marketing.External Marketing: It makes promises to the customers, for e.g. the Malaysian governments advertisement Malaysia, Truly Asia that promises a veritable cultural paradise to the customer.Internal Marketing: The Company enables the providers to fulfill the promises made by it to the customers. For example, the Malaysian Government maintains the local transportation within the country, maintains the tourist spots such as KL Towers, etc.Providers: They are a travel companys internal customers constituting employees and agents. The company does internal marketing with the providers educating and motivating them about the idea of the particular tour package that they can offer to their customers. This is done to enable the providers to effectively carry out the survive transportation process. The providers make provisions for office space, accessibility and connectivity. The company enables promises to be kept by this infrastructure association.The Providers include all the entities that finally fulfill the Companys promise to the Customers. They undertake Interactive Marketing, because they are in touch with the final customer. Thus in the case of the Malaysian government, this would include the transportation providers (Malaysian Airlines, Air India, Local Bus transportation, Local Trains in Kuala Lumpur, Car and two-wheeler rentals), the different hotels within Malaysia, souvenir outlets at tourist areas, tourist spots (KL Towers, Twin Towers, etc.), restaurants (KFC Joints, Mary Brown, Pizza Hut), etc.Customer (Travelers): The customers are the reasons that the Travel Company exists and for whom the company has designed the traveling and touring package as well as setup the infrastructure facilities and spent money on employee developments programs. Here the providers are the only ones who interact with the customers, like the travel agents interact with the customers and not with the company. The agents perform interactive marketing that is on time, all time, every-time. This is the most crucial of service marketing in the travel and tourism sectors. Those agents have the responsibility of keeping promises made and enabled by the company. The providers (agents) are responsible for the perceived quality level of the service transaction. This underlines the uniqueness of service marketing.MARKETING MIXPRODUCT PRODUCT LEVELSIn planning its market offering, the marketer needs to think through five levels of product. Each level adds to the customer value, and the five constitute a customer value hierarchy.The levels of the product that the travel and tourism industry offers to its customers are as follows:1) Core productThe core product offered by Travel and Tourism industry is the destination. It is core because the main aim of the tourist is the destination where he has to reach or go.2) Basic productThe basic products offered by Travel and Tourism industry are ticket booking, transport, sight seeing, hotel booking.3) Expected productThese are the products that the customer expects the organization to offer. These are impeccable services, seat availability on needed time as it is critical to business travelers, accurate information, quick check in for the senior manger of the company, authentic information, information about various packages, different routes leading to a particular destination. 4) Augmented productThese are the products that are offered by the companies to distinguish itself from others. These products become expected products in the future. Those are flat beds in business class, Wi-Fi connection in hotels, customized meals on board, tele checking 8hrs booking in hotels, hotels providing laptops on request, internet access as complimentary for the corporate packages.5) Potential productsThese are the future products that the companies will offer to its customers. These can be underwater tourism, hovercraft for traveling. Also Virgin Atlantic airlines are thinking of adding a casino and a shopping mall in the airline.PRODUCT WIDTH AND PRODUCT LINEProduct width of the product mix refers to how many different product lines the company carries. The width of the product mix refers to how many variants are offered of each product in the product line.The product length is the total number in the product lines.RATERThe well-known concept of five-quality dimension RATER, we hereby relate them to 7s of Travel and Tourism. So what do we mean by 7s Travel and Tourism Industry and what is its significance in relation to RATER.1) RELIABILITY - Suchna - InformationThe way and the kind of information, which is provided, by any Travel and Tourism organization to its customers is the parameter of judging the Reliability of that organization. Why do we make such a statement? To explain that let us take an example of Travel agency. The various services provided by agency includes Planning Itinerates, Ticketing, Working out travel routes , Providing information on Destinations ,Arranging visas, Making stay reservations. Here information plays a very dynamic role. Let us assume that the customer comes for booking a ticket. It is very important on the part of the service provider (travel agency) to give accurate information on all types of flight available, their fairs, and new schemes going on which would in turn help customers to choose most suitable product for their traveling. Such repeated and accurate information creates of a reliable organization. I.e. in future the customer would trust the organization for any information.2) ASSURANCE - Suraksha - SafetyIt is one of the prime factors considered when talking about this sector. A safe travel is the top priority of any traveler. Thus it is very important for Travel and Tourism organization to consider the safety of the tour package. The safe travel will in turn ensure the customers traveler.3) TANGIBLES - Swagat Suvidha Safai.These are the backstage elements, which help in a great way for the customers to evaluate the service. When we talk about tangible product in Travel and Tourism the 1st would include a) SwagatIt means warm welcome. Everyone loves a warm welcome. It really gives a good start to the whole holiday. Thus keeping this tangible factor in mind the tourism agencies for example Thomas cook always keeps in mind the Swagat of their traveler. One good example of such is in this package of Thomas cook from Mumbai to Goa, wherein they give a welcome drink to travelers and provide them with a fruit platter and famous cashew nuts of Goa.b) SuvidhaIt means facility. Today if you talk top any business traveler they want to be pampered silly from flat beds in business class to Wi-Fi in hotels customize the needs. These are the kind of facilities they expect. Thus if a Travel and Tourism organization is able to provide all such demanding facilities then it adds value to its travel products and makes the product hike from standard quality level to superior quality level.c) SafaiIt means cleanliness. Hygiene is also an important factor of a travel package. Clean hotel rooms and lobby create a spik and span impression of the package and add to the quality level.4) EMPHATY - Sahyog Cooperation.A famous quote from Stephen Cowe book goes like this Seek to understand and then to understood is very important. Thus thes that we relate to empathy is sahyog i.e. co-operation i.e. listen to the customers understand them and co-operate with them to come down to a solution this factor creates a very positive impression in the minds of the customers and helps the service to get a tag of its excellent service quality.5) RESPONSIVENESS-Sanrachna Information.This is the last element in the concept of RATER. It is related to the lasts i.e. Sanrachna which means infrastructure. Why do we relate4 infrastructure to responsiveness is because how flexible is the infrastructure of Travel and Tourism organization affects the service responsiveness. For example if you plan and book a Qualis car to travel from place A to place B and if the car breaks down then how fast can you respond by replacing it with a new car shows the flexibility of the infrastructure i.e. the no of cars.COMPLAINT HANDLINGNo matter how well prepared you are there is always the potential for something to go wrong. The way you and your personnel handle complaints can be the determining factor in turning a "disaster" into a "success." Tourism & More offers the following ideas on handling complaints: 1. Listen. When a visitor is angry or upset allows the person to know that he/she is being heard. Prepare your personnel to listen and to handle each complaint as if it were the most important part of their day. 2. Understand. Make sure personnel have a full understanding of the complaint. Prior to responding to the complaint they need to determine the exact nature of the complaint. Personnel should try to focus in on the main context of the complaint, and not be diverted by side issues. 3. Take Action. The visitor should see that he/she matters, and that you seriously consider their complaint. Make sure the upset visitor knows exactly what can or cannot be done, and what he/she may expect as a form of recompense. If the problem cannot be solved, immediately tell the visitor approximately how long it will take to find a solution. Often something as simple as an inexpensive complimentary gift or some special attention from the manager or boss can turn a negative situation into a positive one. 4. Learn. Every complaint and/or complainer provides a the tourist professional with a learning experience. Have your personnel share with colleagues what things went wrong, and the steps they took to correct the situation. Keep records of past complaints, not only for in-house training purposes, but also as a guide of future problems to prevent. DEALING WITH DIFFICULT PEOPLE Here are some suggestions to help your staff cope with the angry guest.

1Do not fight to win every battle. Often it is easier to simply say, "Yes Sir/Mam you are right. Very few angry visitors are willing to listen to your side of the story.

2.Take the angry person out of a public area. Whenever an angry person decides to do battle in front of other "guests" you lose. Invite the person into a private room, offer him/her a drink and then listen.

3. Make sure that you know that the angry person knows that you will deal with the issue at that moment. Your credibility with an angry tourist is very low; telling him/her that you will get to the problem will only make the visitor even angrier. Start the repair process at that moment. Let the visitor see that you are doing something.

4. Use the person's right name and title. If the angry visitor introduces him/herself as "Dr. Smith" don't say Mr. or Ms. Smith and don't use a first name unless given permission. The misuse of names or titles only adds fuel to an already explosive situation.5. Make sure that the person addressing the problem is competent to solve it. If a member of your staff cannot solve a problem, then turning to someone who can help, is doing something. Never just shrug one's shoulders and say "sorry!"

6. Rather than getting angry, try to think of something comical. For example, imagine what this person would look like angry in his/her underwear, and then laugh to yourself.PART II1 Don't be defensive. Try to understand that people on vacation are often a bit irrational. Instead of reacting in a negative way, coolly ask how you can make their situation better2 In a like manner, never argue, but rather apologize. Once the apology is made the upset/difficult person is more willing to listen. Win by losing! 3 In a like manner, never argue, but rather apologize. Once the apology is made the upset/difficult person is more willing to listen. Win by losing! 1. Dress in a professional manner. It is amazing how much more respect a well dressed functionary receives. It is a lot easier to deal with a difficult person when dressed in a suit rather than in jeans. PRICE MIX.In pricing decisions, the product or the service mix of the tourist organization is important. They have to set prices in line with the quality of services to be made available to the customers and the type of customers they are targeting. Pricing decisions are influenced by internal factors like pricing policy of the company, and external factors like the destination itself. They are required to think in favor of discounting price. These may include discounts for cash payments, seasonal discounts, trade discounts etc. But while offering the discounts, it is not to be forgotten that it may also create image problem since some of the value sensitive tourists may doubt the quality.PROMOTION MIX.Creation of awareness has a far-reaching impact. The tourist organizations bear the responsibility of informing, persuading and sensing the potential tourists in a right fashion. The marketers need to use the various components of promotion optimally so that they succeed in increasing the number of habitual users. Promotion helps in maximizing the duration of stay, frequency of visit by offering new tourist products in the same country to areas, which have remained untapped or partially tapped. The various dimensions of tourism promotion are as follows:Advertising: Advertisement gives important information to the actual and potential tourists. Its coverage is wide. Advertising is aimed at the public to create awareness of the travel offers available on a resort and its attractions to influence their business decisions. Intangibility can be compensated with the help of visual exposure of scenes and events. We can project hotel bedrooms, well-arranged restaurants and cafeterias, swimming pools etc. Publicity: It focuses attention on strengthening the public relations measures by developing a rapport with media people and getting their personalized support in publicizing the business. It helps in projecting the positive image of tourist organizations since the prospects trust on the news items publicized by the media people. The publicity program include regular publicity stories and photographs to the newspapers, travel editors, contact with magazines on stories etc. advertising is a part of publicity.Sales promotions: Sales promotion measures are the short-term activities seeking to boost sales at peak demand periods to ensure that the firms obtain its market share and are used to help launch a new product or support an ailing or modified one. The tool of sales promotions is designed to appeal particularly to those customers who are price-sensitive. There are a number of techniques to promote sale and the tourist professional need to use them in the face of their requirements vis--vis the emerging trends in the business. Eg. In the tourism industry, a travel company offers give-aways to their clients, such as flight bags, wallets for tickets, Foreign Exchange (Forex) and covers of passport. The hotels offer a number of facilities like shoe shine clothes, first aid sewing kits, shower caps and shampoo. Further, the VIP clients also get fruits and flowers in their rooms.Word-of-mouth Promotion: Most communication about tourism takes place by word-of-mouth information, which in a true sense is word-of-recommendation. In the tourism industry it is found that the word-of-mouth promoters play the role of a hidden sales force, which help the process of selling. The high magnitude of effectiveness of this tool of promotion is due to high credibility of the channel, especially in the eyes of the potential tourists. The sensitivity of this tool makes it clear that tourist organizations need to concentrate on the quality of services they promise and offer. The marketers or the tourist organizations need to keep their eyes open, identify the vocal persons or the opinion leaders and take a special care of them so that they keep on moving the process of stimulating and creating demand.Personal Selling: Personal Selling is based on the personal skill of an individual. The travel and hotel business depend considerably on the personal selling. The development of travel and tourism has been possible due to well-educated and trained sales personnel. The development of tourism business has been influenced by the services rendered by the travel agents and travel guides since they work as information carriers. Personal selling is the personal presentation of a tangible product or intangible services or ideas to the customers. It is important to mention that in the tourism industry, the personnel who attend tourists form an essential ingredient of the product, such as sales personnel are found responsible for dealing with customers behind the counter, the resort representatives cater to the need of tourists when they reach the destination etc. all of them play a vital role in ensuring that the tourism products satisfy the tourists. The phrase- the customer is always right applies specifically to the tourism industry. No reduction in price would compensate for impolite and indecent travel guide, a solvent waiter and a surly or a haughty coach driver. These facts are testimony to the proposition that the travel business is linked with the performance and behavior of sales personnel or travel staff.Telemarketing: It is a method of selling in which a professionally sound telemarketer markets the business. The quality of technology and the communicative ability of the telemarketers determine the magnitude of success of this component. In tourism, the travel agents, offices of airways, receptionist, and secretaries cant work efficiently if the telephonic services are not up to the mark. Also recruiting a person considered to be professionally sound, personally-committed sales personnel having an in-built creativity, innovation and imagination is very important.Exhibitions The participants include state and national tourism promotion boards, travel agents and tour operators, airlines, car rentals, cruise liners, holiday financiers, technology providers, hotels and resorts, education institutions in the field of hospitality and tourism. Over the years the participation of foreign tourism promotion boards like the Dubai Tourism and the Mauritius Tourism, etc has increased in order to aggressively promote their respective countries.PLACE MIX.Most tour operators sell their services through travel agents, however some deal directly with the consumers and eliminate middlemen. For example, Thomas Cook has its own branches situated throughout the country so they are easily accessible. The customer, in the travel and tourism industry, has to go to the service provider. Hence strategic locations are very important for Thomas Cook. Other companies may also utilize more than one method of distribution. Location: Transport also plays a major role in the tourism industry. It makes the destinations accessible to people from around the world. Also, in the case of tangible products in tourism such as souvenirs and cuisine, transportation becomes a major logistical component.EXTENDED 3 PS OF MARKETINGPEOPLELike other industries, the tourism industry depends substantially on management of human resources. The tourism industry is an amalgam of the services of a lot of people and hence this industry cannot work efficiently if the travel agents, tour operators and travel guides lack world class professional excellence. Of course the offices of travel agents depends on the new technology but after all employees and the other staff contribute significantly to the process. The travel guides need professional excellence since the projection of a positive image regarding a destination in particular requires their due cooperation, failing which even the world class services offered by the travel agents are found meaningless. The tour operators also need to manage human resources efficiently.

In the management of people, the related organizations are required to think in favour of developing an ongoing training program so that we find a close relation between the development of technologies and the quality of personnel who are supposed to operate and maintain the same. They need a lot of credentials to fulfill the expectations of the customers. The organization has to make the environmental conditions conducive and focus has to be laid on the incentives to the employees for energizing the process of performance orientation. Employee orientation requires due weightage to efficiency generation, value-orientation and perfection.In the tourism industry the travel agents and the travel guides are the two most important people who speak a lot about the industry. Hence it is imperative that they have to be at their best at all times. Travel guides especially, are expected to have a lot of patience, good sense of humour, tact to transform the occasional tourists into habitual ones, thorough knowledge of the places, linguistic skills etc.The Government plays an important role in providing the right kind of people for this industry. As such there are a lot of Govt. and Pvt. Institutes which offer training for the same.. The training courses run by the Institutes are designed to suit the needs of the various target groups. PEOPLE - in service marketing includes EMPLOYEES OTHER CUSTOMERSEMPLOYEES They are the representatives of the company. Their performance can create a positive as well as negative impact of the service process and the image of the company. Keeping people factor healthy is one of the prime concerns of the company. When we talk about people in travel and tourism industry, they are really crucial part as at every stage they play a role of the service provider on the stage of service encounter also known as moment of truth. SERVICE ENCONTER The so-called stage service encounter or moment of truth is the element of interaction between those providing services and the customers. The instances of service encounter in travel and tourism industry are In the ticket booking process when the customer calls the service provider that is the front line staff in order to book the tickets is the first service encounter incidence. Its the moment of truth where, there is one to one interaction between the service provider who is booking the ticket and the customer who wants the ticket booked. This interaction takes place on the phone. In the itinerary planning process the service encounter takes place when the customer visits the travel and tourism agency to purchase a holiday package and meets the travel manager. When the customer is experiencing the holiday package there are numerous service encounters that he goes through and one of them is his constant interaction with the tourist guides.These were some examples of service encounter.This stage is a very crucial one where in the provider has to perform at the optimum level in order to avoid the customer from having the experience of credence quality.CREDECE QUALITYIs the quality, which is difficult to evaluate, and when you ask the customer the question on how was the service? He usually gives vague answers like it was ok, I dont know.A very important concept in people is the service profit chain. In the service profit chain the first step is to keep the internal customers happy and satisfied the internal customer being the employees. To keep them following point have to be taken care of Work place design Job design Employee selection and development Employees rewards and recognition Tools for serving customers.These aspects in turn lead to employee satisfaction, which would result in to employee retention and productivity, this would result in providing value services and that would yield customer satisfaction. Which would lead to customer loyalty and finally revenue growth and profitability through referral and repeat business.PROCESSIt is the way of undertaking transaction supplying information and providing services on a way, which is acceptable to the consumer and the effective to the organization. Now to make this definition of process true, it is necessary for the organization which provides services to recognize the critical moments in the entire process which makes the service acceptable or not acceptable to the customer depending on the zone of tolerance and effective or not effective to the organization. Further to realize what are the critical moments in the considered process a concept of blue printing is introduced.PHYSICAL EVIDENCEIt is a very important factor for the travel and tourism industry. This marketing p is important in 2 distinct ways:1) as the environment in which the sales takes place 2) the environment where the product is consumedExplanation of the first casewhen the purchasing of the product is taking place, however the customer cannot be sure whether they will enjoy the product or not. In the mean time their expectations and emotions are influenced by factors like layout of the room, the furniture, noise level, temperature, lights and other factors like the brochure of the company. In case of customers who by electronically the appearance of the website is the physical evidence.Explanation of the second case In the travel industry where the product is being experienced s particularly important in securing repeat business thus extensive facitilities that prove to be physical evidence are provided to lure and woo the customer The tangibles include flat beds in business class, Wi-Fi connection in hotels, customized meals on board, tele checking 8hrs booking in hotels, hotels providing laptops on request, internet access as complimentary for the corporate packages.The critical incidences in this process are Understanding the customers needs and expectations from the holiday or business tour which ever he or she is opting for Making an apt travel plan and route adhering to the requirements of the customerExecution of the planned itinerary is the most critical one. As a company has committed some thing and this is the time when the customer is actually experiencing the entire product and if any one of the commitments dont materialize then the zone of tolerance is affected and lot as it is already low because the customer on a tour whether leisure or business expects perfection.CHARACTERISTICS OF TOURISM INDUSTRY InflexibilityThe tourism industry is highly inflexible in terms of capacity. The number of beds in a hotel or seats on a flight is fixed so it is not possible to meet sudden upsurges in demand similarly restaurants tables, hotels beds and flights seats remain empty and unused in periods of low demand. Inventory / PerishabilityIt is related to the fact that travel products are intended to be consumed as they are produced. For example, an airline has seats to sell on each flight; a hotel has rooms to sell for each night. If the airline is not able to sell all its seats on its flight, or a hotel is not able to sell its rooms for the night then the opportunity to sell the product is lost forever. Service sector cannot keep inventory like products. To overcome this problem, the travel industry has come up with various marketing strategies. One is to overbook. An airline overbooks its seats to a certain extent in anticipation that even though certain customers do not turn up but the flight will be fully seated. Another strategy is multiple distributions. For example a customer can buy an airline ticket from an airline, tour operator or from a travel agent. The chances of perishability are reduced. If the tourist cannot visit the place, the opportunity is lost. Hence, this becomes one of its important characteristics. InconsistencyA general norm is that in Travel and Tourism industry the product or the package of the tourism can be standardized i.e. for example of 2 days 3 night in so and so hotel, but the actual experience of consuming this package is highly inconsistent. We hear a lot of travel stories which becomes a portrayal of a lot of bad experiences for example the tourist guide may not be good, the hotels lodging and boarding was bad etc. Therefore there is high level of inconsistency prevailing. IntangibilityTravel products cannot be touched as they include flight experience on an airplane, cruise on an ocean liner, a nights rest in a hotel, view of the mountains, a visit to a museum, a good time in a night club and much more. These products are experiences. Once they have taken place they can only be recalled and relished. The tangible products on an airplane, a bed in a hotel, food in a restaurant are used to create the experience but these are not what the customer is seeking. The customer wants intangible experience like pleasure, excitement, relaxation, etc. The tangible products that are purchased provide the access to intangibles. InseparabilityMost travel products are produced and consumed at the same place and at the same time. This is the opposite of the tangible products, which are produced at a different place and time and consumed at a different place and time. In contrast, most travel products are sold first and then, then simultaneously produced and consumed. For example, an airline passenger consumes the flight as it is being produced, and a hotel guest uses a hotel room as it is being made available for the nights sleep. Thus there is simultaneous consumption and production. This creates certain interdependence between suppliers and customers as the interaction between the supplier and customer takes place on the suppliers premises. The interaction shapes the travel experience. For example, the customers could not take the cruise home with them; in fact they have to leave their home. Fixed locationTourism destinations are fixed locations so effort must be taken in communicating the facility to the potential consumer. Relatively large financial InvestmentsEvery modern tourist establishment and facility requires large investment, frequently over a long time scale. This means that the level of risk and the rate of return are critically important to tourism management. People-orientedTourism Services are high contact services, as people interact with people at virtually EVERY stage of the way. Tourism services are very people-oriented services, and the service people are plenty and have high contact with the consumers. The consumer interacts with a myriad of service people starting from when he books his ticket and throughout the course of his holiday.HOUSING SECTOR ( CONSTRUCTION )PEST Analysis of Construction IndustryPEST refers to all political, economic, social and technological factors affecting any industry. The objective of PEST analysis is to objectively study the environmental factors facing a firm, company or an industry. The external environment affects the company in many different manner and unlike internal environment it cannot be influenced much. Political FactorsThe political factors affecting the construction and housing industry mostly consists of documentations and permits that has to be obtained during the various phases of construction of a structure and its sale. Building Commencement Certificate: Construction of a building or any such structure cannot take place unless and until the builder or the company secures a commencement certificate from the authority, in case of Mumbai it is the BMC who gives IOD&CC- Intimation of Disapproval & Commencement Certificate. Floor Space Index (FSI): FSI is basically a ratio, which determines how tall can buildings or a structure can be constructed on a particular plot. The local authority issues it. Occupation Certificate: After the completion of construction work of a building, the builder or the company has to secure an Occupation Certificate without which the flats in the building cannot be occupied for residential or commercial purposes. Brihan Mumbai Corporation [BMC] Developing Plans: BMCs developing plans form the most basic criteria in selecting a site. These developing plans chart out pre-defined areas, which the BMC has already allocated for certain purposes. E.g. In a given area, some land is reserved for plantation/farming, some piece is kept for industrial establishments like the MIDC area and the other one reserved for residential purposes. So the Builder finds out the type of land, which is suitable for his purpose, i.e.; if he wants to build up a residential complex, then he has to do so in the area reserved for residential purposes; as per the BMCs developing plans. CRZ (Coastal Recovery Zone): According to this rule a builder cannot carry out any construction within the radius of half kilometer from sea. TDR (Transfer of Development Right): This right is available to a builder for utilizing the additional FSI. Normally TDR is given by the local Municipal Authority who acquires the portion of land of builders either for the purpose of constructing road or for making gardens. Others: Apart from the above mentioned points there is also tax exemption that is given for the construction of building on the land having area of more than 1 acre. Economic Factors Fluctuations in prices of inputs: Many builders tend to stop work when the prices of inputs like cement, iron etc goes up so as to wait for the time when they expect the prices will come down. This result in unnecessary delay in the work and the cost of wasting time would actually be more than the increase in price. Changes in demand: Changes in demand due to factors like changes in disposable income of prospective buyers and inflation. Also with the easy availability of housing loans and tax exemption on loans the demand for houses is rising. Future Growth & Resale Value: Any project must be located in an area that if not fully developed must at least be on the way. This is because people prefer those areas having high resale value and will fetch them a good amount of gain. Stamp Duty & Registration: Payments of Stamp duty followed by the registration of the agreement are two important acts when one enters into an agreement with a developer/seller. With the decrease in the stamp duty by 50% it is considered as a good sign for Construction Sector.Social Factors Credibility of the company/firm: People dont know what kind of materials has been used in the construction of a building or a structure. Credibility of a builder or the company plays an important role in convincing the buyer to buy the house and be sure of the quality of construction work done. A low credibility or image can lead to poor financial performance. A good image is not just built in a day, it takes years of servicing the society through following high standards of work in the process of construction and sale. Perceived Image of the property developed: A flat in a so-called posh area may cost much more than a one in a not so posh area. This factor can also determine the success of failure of a project. A flat is selected on the basis of infrastructure facilities like water availability, transport facilities, nearness to schools, colleges, hospitals, shopping complexes, leisure centers, etc. Building Facilities: The builders may offer buildings that have swimming pools, health-clubs, gyms & parks. Technical FactorsDue to technical nature of the construction process, the technical environment keeps on changing everyday. There are developments in techniques used, materials used and various other such aspects of the construction business. A few of such developments are as follows Pre-structured Concrete Blocks: These are blocks of concrete, which are made in the factories according to the dimensions of the building or structure to be built. It is just like a jigsaw puzzle where these blocks are put together using a huge crane and joined together using mortar by workers. This enables quick completion of work and also economies of scale. Mixture of Cement and Sand: nowadays in order to save time the constructor can order the mixture of sand and cement directly from the suppliers as against the traditional way of ordering cement and sand separately and then filtering them and then mixing it. Other Equipments: other modern machines that are used in construction are the use of huge drilling type of machines to dig the ground, which was before done by workers.7 Ps of marketing mix:PRODUCT:In marketing product refers to the totality of the offering.In Construction industry the total product includes services offered by the contractor in the support of the core product i.e. physical product. For the construction industry products are :Physical: houses, public and commercial facilities infrastructure & building products.Service: expertise consultancy & designPersons and reputation: eg hafeez contractorIdeas and proposals: urban regeneration, regional development and competitionsEssentials: water gas electricity telecommunication, transport facilitiesHighly desirable: schools, hospitals, shopping complexes, leisure centersDesirables: environmentally secure, adaptable.Product offerings can be explained through the total product concept which consists of core product, formal product and augmented product. In the Housing industry:The core product consists of : permanent accommodation / living space. The format product consists of : locations, utilities, electricity, brand name, availability of schools and hospitals nearby.The augmented product consists of : security available clean environment, amenities.PLACE:Product has to reach the ultimate buyer so the company works with its intermediaries to bring to bring their product to the market. Marketing channels perform work of moving goods from the producer to the consumer.In the housing and the construction industry construction cannot be transferred but here intermediaries transfer information of distinct places about the availability of accommodation so that not having any idea about these constructions get to know about it. In this industry distribution is done through real estate agents, who acts as connecting tool between the consumer and the provider.PRICE:Agreeing the price for a piece of work seals the relationship between contractor and the client. It is the central feature, and reflects the value placed on the relationship.Prices is based on the combination of:What the market expectsWhat the client can afford The nature of competition in the sector What the contractor can afford to work forAny specific factors concerning the particular job e.g. location material usedWhat is being agreed and paid for- whether completion of a bldg or wider process offered supported by maintenance, pre sale and after care agreements?Pricing considerations For housing an construction industry there are many considerations:Capital projects & bldg activities are priced so that variable costs- the costs incurred as a result of gaining the work-are covered. Ideally the price also makes a contribution to the fixed costs of the contracted org. It is also necessary to consider charges incurred by the contractors as the result of having to underwrite the project from inception to delivery & from the need to acquire any specialists equipment and expertise necessary. Building products are priced so that an individual perception of quality value and service are at a level that the size and nature of the can sustain. it is also increasingly common to find differentiate pricing approaches as competitors seek real and perceived price advantages.PEOPLE:The people in housing and construction industry can be divided into groups: Those who develop the product They consists of location hunters architect builders. They are required to have technical skills of geological mapping soil testing building designs and so on. The possessions of this skills is of utmost importance because building cannot be constructed on all types of land. Also materials use to build houses in different regions because of climatic differences. E.g. in England most houses are builds of woods whereas wood is not a viable portion in the tropical area. Builders who do the final construction consists of civil engineers skilled and unskilled labor Those who market the productThese consists of marketing people who may or may not have civil engineering background but certainly have the skills of understanding the customer as a well as the product. The marketer uses all the tools that help to overcome the unique characteristics the service industry. It includes the construction of a sample flat, which will break the tangibility factor intensive advertising to overcome the perishability factor and so on.PROCESS:Service Company can design a superior delivery process. Because of heavy initial, capital investment, long gestation period and a speculative tendency (irregular demand) housing and construction industry works other peoples money i.e. construction begins with advance booking and then customers are suppose to pay installments most of the payment is made after the product has been handed over this strongly experiences intangibility aspect of this industry. In this industry tangible industry is supported by services in which the services offered enhance the client appeal for the product this relates to all aspects of the building and civil engineering where the creation of [particular facility is supported by the project and environment management, client liaison and specialist consultancy services and sometimes through maintain refurbishment upgrading and facilities management services and for public project sometimes also for general services to wider community.PHISICAL EVIDENCE:A service industry can develop a more attractive service environment where a service can be delivered. In the housing and the construction, sample houses photographs and posters of previous achievement can be displayed in construction offices or those can be shown to the customers when they come foe enquiry gets attracted to it. The need to place the client need rather than the contractor expertise at the core of all activities Attention to all aspects of project design and inception, and the development of presales services and activities the service aspects of work in progress and after sales activities. Attention to quality and durability of the project when complete. Acknowledgement that presentation is as important as technological expertise. Continuous attention to service, service extension and service development Taking the truly enlightened view of the needs wants and demands of the clients and commissioner of work the pressure on contractors and consultants and understanding them Total enduring impact of activities on the particular environment and location in which it takes place.PROMOTION:The construction industry is concerned with following forms of production:The promotion of its capabilities and expertise to client and potential clientThe promotion of its finished products to the community and society at largeThe promotion of professionals within the industry to each other promoting specific general and continuing inter relationships and confidence between architecture, contractor quality surveyor planner other consultant civil engineers and sub contractors.The promotion of general confidence, public sympathy and support for activities.The overall purpose of promotion is:Promotion activities of the construction industry can be divided in following:Primary promotion Direct sales:This is targeted at clients potential clients and other capable of using the distinct expertise on offer. It involves opening up client face to face contact with those commission work and inviting tenders and presenting the distinct expertise on offer in the clients best interest. Targeted direct market:If this is to be effective it requires knowing who the people with influence are promotional material, brochures, and achievements can then be arranged and presented and if necessary specially prepare on client or sector specific basis.Secondary promotion General advertising:General advertising especially in the trade press to ensure continuing general awareness. From time to time some construction companies have engaged in television and radio ads. Logo design and reinforcement:Billboards, hoardings and perimeter fences. Attendance at trade, professional and regional fairs and exhibitOther efforts include: Speculative designs and proposals TenderingTertiary promotion Positive media coverageit is in various forms e.g. Contractors places the hoardings at side of the finished bldg stating completed six months ahead of schedule General positive pubic relations:the current activity that comes under this hading at present includes general support for schools, colleges and universities and contribution to the general amenities to communitiesMarketing:Marketing the Construction industry forms a very crucial part. A good awareness level is required for your product to be successful. Marketing under this sector is done through various mediums such as: Advertisements in newspapers and magazines, television and radio and also through e-mails and websites Sole selling agencies: These are agencies that are given the contract of marketing the product who are responsible for the sale of the product. Hoardings: These hoardings are put up at the site and contact numbers are given. Hoardings are also put up at railways, roadways and on BST buses, etc. Marketing through Estate agents: These estate agents also called as consultants act as middlemen between the customer and the builder. They are provided with brochures and site maps.Target market:The target market i.e. determining the customer are based on the following considerations:1. Locality: The region where the building is constructed and the type of crowd it will attract will have varied expectations. E.g. whether its in the suburbs or south Mumbai2. Income group and family size: Depending on the budget of the customer, a particular income group people will be given specific type of amenities. In a country like India, every product is formed after taking into consideration the family size. E.g. carsOccupation: There are colonies and societies set up for people from the same occupation also employed by the same company e.g. Indian oil nagar at Andheri (west) and Railway quarters for the railway-employed people.3. Religion, races and social class: There are societies for people from a particular caste e.g. Parsi colony at andheri (west)Service encounter:The total number of interactions between the service provider and the customer is known as the service encounter. These interactions are called as the moments of truth. Construction is a secondary service sector unit but is gaining much importance now. In this way, people (customer) coming directly in contact with service provider are very low.The moments of truth here are during:1. When the estate agent, who acts as a middleman, fixes a meeting between the service provider (builder) and the customer (buyer). This is the first meeting/ interaction where negotiation takes place.2. The final meeting when the deal is finalized between the builder and the buyer to fulfill all the formalities.This falls under low direct contact service.Service quality: RATERThe 5 dimensions of quality can be explained as follows:RELIABILITYReliability under construction would mean if the builder gives timely possession to the buyers and fulfills all his commitments.ASSURANCECredibility: This is the trust developed by the builder, the goodwill that he has attained since so many years. E.g. Raheja builders , people know that if they go to Rahejas they wont be cheated. The trustworthiness is maintained since years.Security: Strong foundation of building earthing, proper indicators on towers as a safety measure, the building exterior paint to be stain resistant.Courtesy: Respect your customers and their suggestions. Be friendly and understand their complains.Competence: the personnel have to be knowledgeable in their concerned fields so that any issue raised on them will sort out as soon as possible.TANGIBILITYIn construction, major quality dimension is the tangibility. Facilities provided are the tangible factors such as e.g. a builder shows a furnished flat he gives good fittings & fixtures, furniture, aqua-guard, intercom facility, elevators, etc. the most important tangible factor is the locality of the building.EMPATHYAccess: The customer should be able to easily access any information regarding our product. The ways to access can be the site office present at the site itself, websites, some organizations also have the facility of call centers, etc.Communication: Listening to the customers needs and communicating in an easy language.Understanding: To understand their needs and make changes according to their necessity.RESPONSIVENESSWillingness to provide prompt service. There are people appointed in large organizations for handling queries of the customer.Complain handling:In Construction, there is a standard way of handling complains, the customer has to give his complain in writing to the builder that can be before possession or after possession and within 7 days action is taken. This also shows after sales service given by the constructors.The procedure to lodge these complains can be explained as follows:Screening and logging:The date the problem occurred; a description of the problem, and any other information should be formally being given in writing to the builder Investigating:After the builder receives the complain, he gathers facts about the problem and investigates on the issue.Acknowledging:Let the customer know that the matter is receiving attention and how long it will take to resolve the issue.Formulating a solution:While formulating a solution, the important criteria to consider include the warranty obligations, customers expectation, and the cost versus benefit of alternative solution. Here, within 7 days appropriate action is taken after considering these important criterias.On person within the organization has the ultimate authority and responsibility for customer relations.When a customer complains they expect 3 things:1. Outcome fairness: In construction, if the builder fails to construct the building within the mentioned period, then he has to give his customers a compensation in the form of providing housing facility to them for the remaining period. e.g. if the construction of the building is delayed by 6 months then he has to provide the buyers with housing facility for 6 months.2. Procedural fairness: Here, the builder takes the responsibility to solve the complain within 7 days of receiving it in writing.3. Interactional fairness: The builder listens to the problem of the buyer and tries to resolve it. Listening plays a very important role in communication. It is always considered here that the Customer is always RIGHTAIRLINE SECTORIndia occupies an eminent position in the civil aviation sector with a large fleet of aircrafts. In all, 56 airlines are operating scheduled air services to and through India and 22 foreign airlines are flying over Indian Territory. There are over 450 airports and 1091 registered aircraft in the country. In addition to the three public sector airlines Air India, Indian Airlines, Alliance Air - there are three private operators -Jet Airways, Sahara India Airlines & Air Deccan. There are also 41 non-scheduled air transport operators. Additionally 34 applicants have been granted NOC by the Ministry of Civil Aviation for setting up non-scheduled air transport operation. Estimates show that the domestic and international passenger traffic in India is projected to grow annually at 12.5% and 7% respectively over the next decade. By the year 2005, Indian airports are likely to handle 60mn international passengers and 300,000 tons of domestic and 1.2mn tons of international cargo.PEST Analysis: The Indian Airline IndustryPolitical Factors

In India, one can never over-look the political factors which influence each and every industry existing in the country. Like it or not, the political interference has to be present everywhere. Given below are a few of the political factors with respect to the airline industry: The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country. Overall Indias recent political environment has been largely unstable due to international events & continued tension with Pakistan. The recent Gujarat riots & the governments inability to control the situation have also led to an increase in the instability of the political arena. The most significant political event however has been September 11. The events occurring on September had special significance for the airline industry since airplanes were involved. The immediate results were a huge drop in air traffic due to safety & security concerns of the people. International airlines are greatly affected by trade relations that their country has with others. Unless governments of the two countries trade with each other, there could be restrictions of flying into particular area leading to a loss of potential air traffic (e.g. Pakistan & India) Another aspect is that in countries with high corruption levels like India, bribes have to be paid for every permit & license required. Therefore constant liasoning with the minister & other government official is necessary. Economic FactorsBusiness cycles have a wide reaching impact on the airline industry. During recession, airline is considered a luxury & therefore spending on air travel is cut which leads to reduce prices. During prosperity phase people indulge themselves in travel & prices increase. The loss of income for airlines led to higher operational costs not only due to low demand but also due to higher insurance costs, which increased after the WTC bombing. This prompted the industry to lay off employees, which further fuelled the recession as spending decreased due to the rise in unemployment. Social FactorsThe changing travel habits of people have very wide implications for the airline industry. In a country like India, there are people from varied income groups. The airlines have to recognize these individuals and should serve them accordingly. Air India needs to focus on their clientele which are mostly low income clients & their habits in order to keep them satisfied. The destination, kind of food etc all has to be chosen carefully in accordance with the tastes of their major clientele. Especially, since India is a land of extremes there are people from various religions and castes and every individual travelling by the airline would expect customization to the greatest possible extent. For e.g. A Jain would be satisfied with the service only if he is served jain food and it should be kept in mind that the customers next to him are also jain or at least vegetarian.Another good example would be the case of South West Airlines which occupies a solid position in the minds of the US air travelers as a reliable and convenient, fun, low fare, and no frills airline. The major element of its success was the augmented marketing mix which it used very effectively. What South West did was it made the environment inside the plane very consumer friendly. The crew neither has any uniform nor does it serve any lavish foods, which indirectly reduces the costs and makes the consumers feel comfortable.Technological FactorsThe increasing use of the Internet has provided many opportunities to airlines. For e.g. Air Sahara has introduced a service through the internet, wherein the unoccupied seats are auctioned one week prior to the departure. Air India also provides many internet based services to its customer such as online ticket booking, updated flight information & handling of customer complaints. USTDA (US trade & development association) is funding a feasibility study and workshops for the Airports Authority of India as part of a long-term effort to promote Indian aviation infrastructure. The Authority is developing modern communication, navigation, surveillance, and air traffic management systems for India's aviation sector that will help the country meet the expected growth and demand for air passenger and cargo service over the next decade.A proposal for restructuring the existing airports at Delhi, Mumbai, Chennai and Kolkata through long-term lease to make them world class is under consideration. This will help in attracting investments in improving the infrastructure and services at these airports. Setting up of new international airports at Bangalore, Hyderabad and Goa with private sector participation is also envisaged.A good example of the impact of technology would be that of AAI, wherein with the help of technology it has converted its obsolete and unused hangars into profit centers. AAI is now leasing these hangars to international airlines and is earning huge profits out of it. AAI has also tried to utilize space that was previously wasted installing a lamination machine to laminate the luggage of travelers. This activity earns AAI a lot of revenue. Segmentation: The Airline IndustryMost airlines use a very traditional segmentation strategy, dividing passengers into business travelers and economy travelers (mostly leisure travelers). The common strategy is to squeeze as much profit as possible from business class passengers who are attracted by superior services and corresponding high prices and, at the same time, to try and fill the rest of the seats and ensure growth by attracting economy class passengers with lower fares.Business passengers They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium servce. Today business passengers account for approximately 48% of passengers, and these 48% contribute 66% of airlines' revenue. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges. Airlines can choose from a multitude of premium services to offer to business travelers. Some of these extras range from seats equipped with faxes and telephones, to gambling machines, showers, massage services and suit ironing services in the recently introduced arrival lounges. Business passengers believe it is worth extra money if they can save time and arrive looking fresh for an important meeting. Business passengers will avoid transit flights even if a longer flight could save them money. But amongst other perks, flexible reservation services are probably the most important to them. Reservations for business trips are often made just a couple of days in advance. A no penalty cancellation policy is also very important to business passengers.The best way to reach business travelers is through printed advertising. Business news media, such as "The Economist" or "The Wall Street Journal" are some of the best publications through which airlines can reach business travelers. Many airlines design special promotional programs that target corporate bookers and meeting planners, who are responsible for business trips reservations. Frequent flyer programs are an added bonus for business passengers.Leisure Travelers They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight. Despite lower margins provided by this segment, leisure travelers are very important to an airline's bottom line. Part of the reason is that technological progress in the area of tele-conferencing and increased use of the internet for business communications is expected to reduce the number of business travelers. Thus, airlines are counting on the leisure segment to provide further growth. By improving services and reducing prices for economy class passengers, airlines risk that some business passengers will switch to economy class. On the other hand, if an airline focuses on business class passengers, it risks losing its economy class passengers to another airline. Since business class passengers are not many, a company relying mostly on business travelers will often end up flying half-empty planes, losing the potential revenue generated by lower priced economy seats. On the other hand, few airlines catering solely to economy class passengers can be successful because a low fare carrier must fill the entire plane if it is to generate revenue from its low-margin operations.This kind of segmentation serves airlines well enough when implemented within one company. It would be very difficult for any single airline to target just one of these two segments - business or leisure - successfully. INTANGIBILITYIntangible services are difficult to sell because they cannot be produced and displayed ahead of time. They are therefore harder to communicate to prospective customers. It means that services are high in credence qualities whereas goods are high in search qualities. Marketers of services can reduce these risks by stressing tangible cues that will convey reassurance and quality to the prospective customers. These tangible cues range from the firm's physical facilities to the appearance and demeanor of its staff to the letterhead on its stationery to its logo.In the airline industry transportation is the core product. Since it is intangible in nature a service company can distinguish itself from its competitors by providing several tangible clues like: Food / Beverages Newspapers Movies Music Staff uniforms- Air Indias staffs always wears a printed blue sari. Logos - Air India's centaur is the logo and maharaja is the mascot. Colour and design - Jet airways have blue colour tickets. Seats and cushions Audio / Video facilities for work or pleasure Fax, laptops, etc. Baggage retrieval Flight bookingsINSEPARABILITYMany services require customers to participate in creating the service product. In the airline industry, it is very important for the company to consider the customers as a part of the company in order to serve them better. The inseparability of services leads to: Customer being co-producer; Often customer being co-consumers with other customers and; Customer travelling to the point of service production.All the above three problems are face by the service marketer in the airline industry. So the service marketer has to think of ways in which he can satisfy his consumers in an efficient manner. In the airline industry, the customer has to be physically present in the service factory. Hence, he is coming in direct contact with the service provider as well as other customers of the airline. INCONSISTENCYDifferent front-line personnel have different abilities. Even the same service provider has good days and bad days or may be less focused at different times of day. Services are performances, often involving the cooperation and skill of several individuals, and are therefore unlikely to be same every time. This potential variability of service quality raises the risk faced by the consumer. The service provider must find ways to reduce the perceived risk due to variability. One method is to design services to be as uniform as possible - by training personnel to follow closely defined procedures, or by automating as many aspects of the services as possible.E.g.: most airlines include online booking resulting in a standardized procedure & fewer mistakes due to human errors. A second way to deal with perceived risk from variability is to provide satisfaction guarantees or other assurances that the customer will not be stuck with a bad result.Another way of reducing inconsistency in airlines is the standardization of in-flight procedures for example the security instructions given at the beginning of the flight. INVENTORYService businesses cannot normally stockpile their output, because the time bound nature of service delivery makes it impossible to inventory the finished goods. For example, the potential income from an empty seat of an airline flight is lost forever once the flight takes off. Conversely, when demand for service exceeds supply, the excess business may be lost. If someone cannot get a seat on one flight another carrier gets the business or the trip is cancelled or postponed. The inventory for airline industry is mainly the food and the aircrafts spares and parts. Airlines face the problem of inventory mainly due to irregular demand patterns. The Services Marketing TriangleThe services marketing triangle shows the three interlinked groups that work together to develop, promote and deliver services. These key players are labeled on the vertex of the triangle shown below.COMPANY

Internal marketing External marketing making promisesenabling promises PROVIDERS

CUSTOMERS

INTERACTIVE MARKETINGKeeping PromisesServices marketing can be explained with the help of the Service Industry Triangle. There are three entities in the whole transaction process. CUSTOMERSCustomers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Individual and Institutional. Institutional customers are those corporates who need their employees and executives to fly very often. Hence they have block bookings (reserved bookings) with the airliners. COMPANY

The company is the dreamer and the offeror. The company dreams up an idea of service offering which will satisfy the customers expectation. The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, jet airways, Sahara airways etc came into being.PROVIDERSThese are finally the persons (staff) who interact with the customer. They are the ones who carry out the final transaction. This interface of the customer with the company is through the customers interaction with the employees of the company. In order to keep its promises, the company enables its employees to through setting up facilities to deliver the promises that is by setting up ticket and enquiry counters. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For eg: Yearly employee training programs and performance appraisals done by Sahara airlines. The strategic points where the provider and the customer interact are: Enquiry of the services, flight timings, routes etc.; Purchasing tickets, either from the airlines or from the travel agencies; Checking in; During boarding; On board crew; During disembarkation.In a triangle, all three sides are essential to complete the whole. For services all three marketing activities represented by the sides of the triangle are critical to success; without one of the sides in place, the triangle or the total marketing effort cannot be optimally supported.The 7 Ps of Marketing MixProduct MixGetting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking.The airline product includes of two types of services:1. on the ground services,2. In-flight services.The on-the-ground services include a convenient airport with car parking facilities, duty free' shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.Differentiating the ProductIt is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New I York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.Price MixPrice plays as much a tool of marketing as promotion plays a critical role in the marketing mix. The concept of 'fair price' is paramount. Buyers judge whether a product is fairly priced by seeing whether it represents value for money. Pricing StrategiesPremium Pricing:The airlines may set prices above the market price either to reflect the image of quality or the unique status of the product. The product features are not shared by its competitors or the company itself may enjoy a strong reputation that the 'brand image' alone is sufficient to merit a premium price.Value for Money Pricing:The intention here is to charge the average price for the product and emphasize that it represents excellent value for money at this price. This enables the airline to achieve good levels of profit on the basis of established reputation.Cheap Value Pricing:The objective here is to undercut the competition and price is used to trigger the purchase immediately. Unit profits are low, but overall profits are achieved. Air India and Indian Airlines have slashed their prices to meet the competition of private airlines so that they can consolidate their position in the market.Airlines usually practice differential pricing. There are three classes: The First Class, The Executive or Business Class and The Economy Class. Fares for each class are different since the facilities provided and the comfort and luxury level is different in each class. Seasonal fares are also fixed, fares rise during the peak holiday times.Low-cost Pricing:With the advent of the low-cost airlines in the Indian aviation industry, a different low-cost flying concept has come up. Since these low-cost airlines are trying to woo the customers by providing air travel in exceptionally low prices, a price-band kind of pricing has to be designed.In low-pricing strategies, the airlines provide very low prices for the flight tickets. Also, they prices are made cheaper by booking the tickets long before the flight date.APEX Fares:In this scheme, people are given very cheap rates only if tickets are booked atleast before the specified time period. But the draw-back here is that if the booking is cancelled, a substantial amount of money is not returned.Place MixUnderstanding what, where, why, when, and how the target market buy, is the first step in designing the marketing channel. The marketer must understand the service output levels desired by the target market and types and levels of services that the people want and expect when they purchase the service.The airline industry has adopted different distribution channels for marketing their services to their target audience. On the ground there are many ticket counters with computerized 24-hour reservation systems. They have many specially designed check-in counters for club and premiere passengers. There are two principal methods of booking seats on an airline. The first is the group of traditional method such as the phone, fax, and email. Corporates or vacationers generally approach travel agents who book the tickets form the airline & take the commission from them. The second & increasingly popular method of reservation is the online booking method. Here the customer fills in his details online & he receives an instant booking of his ticket. His payment is generally through credit card. Although not as popular in India, this booking system has achieved much success in the developed countries that travel agents are losing their jobs. An example of how distribution is carried out:The place mix of airlines consists of mainly the distribution channels. The number of destinations that an airline flies to can also contribute to its place mix.Distribution channelsThe Four methods of distribution are as following:A] Consolidation: The direct sale of tickets from airport to the passenger on the airline desk.B] Tour Operator/ Travel Agent: Customers approach travel agents or tour operators who book the tickets from the airline and take commission. E.g. SOTCC] Affiliated with companies: As the name defines, airlines gets affiliated with companies who carry all its trips with a same airline who in turn gives special discounts or offers in return.D] Direct through home leased system, e.g. phone, fax, email and also online e-booking.Promotion MixThe formulation of an ideal promotion mix is essential to inform sense and persuade the users. In the Indian perspective, we need more creative efforts because the potential users in a majority of the cases dont prefer to use air services. The business magnets, executives, politicians, actors, high spending tourists etc are some of the users of the air services. The users appears to be more conscious, aware of their rights and in a majority of the cases are found to be sophisticated and therefore the promotional efforts have to be creative. Many airlines are facing financial crunch, it is pertinent that they make optimum use of different components of promotions Advertising:Airlines need creative advertisements to promote their business. In the view of rising cost of inputs and the increasing impact of worldwide economic depression on the airlines, advertisements should be budget optimistic vis--vis optimal. The telecast media and print media are important for promoting the air business.The airlines have to make sure that whatever strategic decision they make to promote the businesses are in a position to establish an edge over competitors promotional measures. Also the airlines should keep in mind the quality and the nature of the target markets and the level of expectations.It is also essential that while advertising airlines should also keep in mind the image of our country, the scenic beauty, tourist attractions, rich cultural heritages or which would attract number of tourists. While advertising it is impact generating that one should select an opportune moment of flight is an attractive scene of take off, and so on. Airlines can also use broadcast media. The domestic flights should use radios because due to increasing access to FM. Publicity:Publicity is an important component of promotion mix. It is a process of persuasive communication. It is very instrumental in sensitizing the persuasion process provided the media people, public relations officers provide their help. Strengthening the PR activities is essential to promote airlines business. The PRO, Receptionist, Travel agents, Media people are very important people in publicizing the business. The marketing professionals can seek the cooperation of media people by organizing dinners, meetings, get together, press conference etc, also giving them small gifts and motivating them to publish news items which are in favour of airlines. Sales promotion:The sales promotion measures are meant for both the related sources channelising and using the business, such as the travel agents, tour operators and all of them who process the services and the passengers and business houses who use the services.The travel agents contribute a lot to the promotion of airlines business and therefore the need to think of them in their favour on their priority basis. In addition the tour operators, the frontline staff also must be given priority. Hence they should be offer some incentives this will motivate them to promote the product. The user also deserves incentives.The incentives may be in the form of concessional services, a small gift etc.E.g. EMIs, which allows customers to pay in installments. Word of mouthCustomer Loyalty LadderThis happens to be an important constituent of the promotion mix in which the promoters act as a hidden sales force. The satisfied groups of users, opinion leaders narrate outstanding merits or salient features of services used by them.If you travel by Air India and are satisfied with the services offered by them then it is natural that you will share your experiences with your friends relatives, they trust in you and therefore the stimulation process is on. The moment your friends and relatives get an opportunity to travel they find Air India their first choice. Ads may be ineffective, publicity may also be ineffective but word of mouth can never be ineffectivePeople MixIn the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill. Many service organizations trust their people enough to empower their front-line personnel to resolve customer problems.The airhostess in any airline come in contact with the customers in the process of providing the service, while the cock-pit crew are employees who contribute to the service product but do not come in direct contact with the customers.The physical presence and the percentage of time the customer is present reflect the customer contact and extent of contact respectively. Services with high contact are more difficult to control and manage because of the degree of variability in the quality, demand and nature of service.The service contact personnel in the airline industry is an airhostess who is expected to possess a pleasing personality with polite service handling. While on the other hand the cock pit crew, being categorized as a low contact personnel, require to possess high analytical and technical attributes. In the airline industry, there is also the ancillary service personnel, the travel agent who helps to create the service exchange but is not a part of the service.While delivering services, airlines ensure that the service is delivered as promised and this is often totally with in the control of the front-line staff. This ensures some amount of reliability. This in turn affects the degree of responsiveness sought from customers. The quality of service that the front-lone staff provides is highly depended on his/her ability to communicate their credibility. Airlines deliver caring and individualized attention to customers through their airhostesses. Empathy implies that these personnel will listen, adapt, and be flexible in delivering what individual customers need. Also the appearance of an employee are important aspects as it forms the tangible dimensions of quality along with other factors like service quality, decor etc.To start off, airlines hire the right personnel with essential requirements. They recruit the right people and develop, and train them to deliver quality service. These employees are provided with effective and sufficient support systems and are motivated in a manner, they stick to the organization. They are more treated as customers, rather than employees.Process MixThe process of airline service lays emphasis on the involvement of channels, front line staff, travel agency offices, offices of the tour operators or so form where the services flow & reach to the ultimate users. The process begins at the time of reservation goes on to the confirmation of seats. For e.g.: Computer reservation system of Indian Airlines enables any reservation request from anywhere in the world to be auctioned in minutes. The reservation facility is accessible through all-major computerized reservation system of the world.By giving details of where to book and how to book airlines help in providing quality services to the customers. They also offer concession, by not charging any cancellation charges and also giving them the option to make a change in the reservation status if he requests so on the presentation of ticket, all these facilities go a long way in increasing passenger convenience.Then facilities at the airport, the baggage handling, flight information, etc. also helps in delivering quality service and making travel a pleasure.In the aircraft the meal service, in-flight entertainment, reading material, in-flight amenities, etc. help the customers, the travelers to have an enjoyable and convenient travel.All these procedures form a part of the total process designed to deliver quality service. Airlines are making every effort to constantly redefine service procedures to enhance service satisfaction levels.Physical EvidencePhysical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. The aircraft by itself, the seating configuration meant to be comfortable and spacious, and the in-flight food provide physical evidence to the airline service. The Boeing Company and The Airbus Industry are the best commercial aircraft makers and almost all airline industries make use of one of these airlines. The seating is such that it is comfortable and there is enough leg spaceThe in-flight food is another, important aspect, a wide selection of meals is offered to the passengers. Passengers are requested to indicate their reference at the time of reservation itself. Delta Airlines has introduced new sleeper seats with electric controls for reclining lumbar support, leg rest extension, expanded seat back height for a more insulated environment etc. thus providing highly comfortable seating.Booking offices, ticket counters, etc. must be spacious and well designed with good looks. Further the air crafts must be given good exteriors and must be maintained wel1.The aircraft must have elegant interiors and must be incorporated with all basic facilities. The aircrafts must have well designed seats with more leg room especially in the business class.Domestic lounges are enhanced with good interiors and basic amenities which will make it an ideal place to conduct business, entertain or relax. The jet logo prominently displayed on each of its aircrafts, is used a cue to trigger of a reminder of the customers experience at Jet & also of all the values that jet airways stands