Service Marketing and Public Relations in the Aviation Industry

School of Distance Education

Bharathiar University, Coimbatore - 641 046

Service Marketing and Public Relations in the

Aviation Industry

BBA

Airline & Airport Management

(Annual Pattern)

IIIrd Year

Paper No. 15

Author: Tapan Panda

Copyright © 2014, Bharathiar University

All Rights Reserved

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Page No.

UNIT I

Lesson 1 Service Marketing 7

Lesson 2 Market Segmentation and Marketing Mix Decisions 24

UNIT II

Lesson 3 Marketing of Hospitality 43

Lesson 4 Positioning and Differentiation Strategies 75

UNIT III

Lesson 5 Public Relations in Aviation 101

Lesson 6 Handling the Media 109

UNIT IV

Lesson 7 Crisis Management at Airports 129

Lesson 8 PR: The Role during Crisis 138

UNIT V

Lesson 9 Strategies of Successful PR Personnel 151

Lesson 10 PR: Planning and Prioritization 163

Model Question Paper 171

CONTENTS

SERVICE MARKETING AND PUBLIC RELATIONS IN THE AVIATION INDUSTRY

SYLLABUS

UNIT I

Services Marketing – Meaning – Nature of Services – Types and Importance – Relationship Marketing –

Mission, Strategy, Elements of Design, Marketing Plan Market Segmentation – Marketing Mix Decisions –

Unique Features of Developing, Pricing, Promoting and Distributing Services.

UNIT II

Marketing of Hospitality – Perspective of Tourism, Hotel and Travel Services – Airlines, Railway, Passenger

and Goods Transport – Leisure Services. Positioning and Differentiations Strategies, Quality of Service Industries

-Achievement and Maintenance, Customer Support Service.

UNIT III

Public Relations – An essential in Aviation – Issues in PR: Airport Operators, Air Operators, Security Requisites

of a Good PR professional – Challenges: Accessibility, Integrity of Information and Neutrality Handling the

media – Types and Role of Media Handling – Do’s and Don’ts in Media Handling – Preparation for Elective

Media Handling – Electronic Media

UNIT IV

Public Relations and Crisis Management at Airports – Crisis at an Airport – Preparing for a Crisis – Managing

the Crisis – PR: The Role during Crisis – Four Steps Public Relations Process, Defining PR Problems, Planning

And Programming, Taking Action And Communicating.

UNIT V

Strategies for a successful PR personnel – Successful PR of an Organization: Strategy – Alternatives and

Choices in Communication – PR Planning and Prioritization, Evaluating The Program, Elements of Public

Relations, Human Relations, Empathy, Persuasion, Dialogue, Objectives Of Public Relations.

5Service Marketing

UNIT I

6 Service Marketing and Public Relations in the Aviation Industry

7Service MarketingLESSON

1 SERVICE MARKETING

CONTENTS 1.0 Aims and Objectives

1.1 Introduction

1.2 Meaning

1.3 Nature of Services

1.4 Types and Importance

1.5 Relationship Marketing – Mission and Strategy

1.5.1 Acquiring New Customers vs. Retaining Old Customers

1.6 Elements of Design

1.7 Marketing Plan

1.7.1 Characteristics of a Good Marketing Plan

1.7.2 Designing an Overall Marketing Plan

1.8 Let us Sum up

1.9 Lesson End Activity

1.10 Keywords

1.11 Questions for Discussion

1.12 Suggested Readings

1.0 AIMS AND OBJECTIVES After studying this lesson, you should be able to:

Discuss the meaning and nature of service marketing

Discuss the types and importance of service marketing

Explain relationship marketing and elements of design

Describe marketing plan

1.1 INTRODUCTION Most of the marketing literature and books are dominated with examples of business practices of manufacturing and product marketing companies. This is due to rapid application of marketing concepts to product marketing and domination of manufacturing and product marketing in business across the world. However, the service sector has come to stay as one of the key drivers of modern economic systems. While, consumer affluence is propelled by increase in income level, and generation of wealth across majority of industrialized nations, it has also contributed towards growth in services. The service economy contributed more than half of the gross domestic product (GDP) in many of the developed nations. Even in developing


countries like India and China, services have emerged as a key sector fuelling growth and success for business houses. Many of the successful manufacturing companies like Tata, Birlas and Reliance have entered into the service business.

The service sector has become more competitive and is posing more challenges to marketing managers to apply marketing principles and strategies to achieve success in the service sector. Deregulation, economic liberalization and rising expectations of consumers have made managers to apply managerial skills, practices and strategies to satisfy customers. In this lesson, we will learn about the meaning of services; nature of services; types and importance of service marketing. Further we will discuss about relationship marketing – mission, strategy and elements of design, and know about marketing plan.

1.2 MEANING In this section we will define ‘service’ and try to understand the meaning of services. It is very difficult to find out the exact difference between products and services in today’s context as what is being offered to consumers as a product is well supported by a bundle of services, during and after the product is purchased and consumed. Above this level, there is a great service provider in the form of government and governmental departments affecting all aspects of our life. Private non-profit sectors like non-governmental agencies, religious and educational institutions, foundations, hospitals are also a part of the social sector. Business sectors include airlines, financial services, banks, insurance and merchant banking organizations; law firms, management and process consultants, entertainment companies, hotels and hospital industries constitute another sector of services.

There are growing sectors like retail, telephony and Internet service provider companies, business process and knowledge process outsourcing companies, e-service providers who are termed as emerging service sectors. A set of service providers developing and providing services to companies, business houses and manufacturing sectors are called ‘business service provider’, and those providing services to individual customers are called ‘consumer service providers’. However, a product, which is offered to business or individual customers, is always accompanied by services. A complete product offer is a combination of product and accompanying services. It is very difficult to separate a company as a pure product or service company in today’s economy.

A service is defined as any activity or benefit that one player offers to another in an exchange process, which is essentially intangible and does not result in ownership of anything. Its production may or may not be tied to a physical product. Many manufacturers, distributors and retailers offer value added services to differentiate their offer from others. There are many pure service firms who use Internet and e-commerce technology to reach customers.

1.3 NATURE OF SERVICES A pure service has a set of distinctive characteristics that differentiate them from pure goods or product manufacturing companies in ways having implications for marketing. These characteristics include intangibility, inseparability, variability, perishability and inability to own a service.

1. Intangibility: A pure service is difficult to assess through any of the physical senses. It is a bundle of abstractions, which cannot be assessed before it is owned. A potential customer can physically examine all the alternative products in the market before making a choice. He can use criteria like packaging, aesthetic

9Service Marketing

appearances, taste and smell before making a choice. Many of the benefit claims made in advertising can be evaluated before making the purchase decision. Pure services do not have any tangible properties, which can be used as evaluative criteria by consumers before making a brand choice.

The intangible characteristics that define services include reliability, care and empathy. Attentive behaviour of serving staff can be verified only after the service is purchased and during consumption. Measurement of service quality is comparatively difficult in pure service cases. Products in the store have tangible, standardized, physical elements through which they can be evaluated. In contrast to this, benchmarks for services are embedded in customer’s mind and have to do with the service provider’s image. Today products are evaluated by comparing with associated services. Hotels are standardized with star facilities like five star, three star due to a combination of tangible and intangible factors like location, facilities, number of people serving per room, the physical ambience and other associated tangible factors. The presence of tangible components helps customers to evaluate hotels and restaurants on the basis of evident visibility. There are less tangible services like life insurance where visibility does not augment the service evaluation.

Intangibility implies lack of physical evidence, which brings uncertainty in the minds of consumers while making a decision. So, an important task of any service marketer is to create physical evidence to reduce uncertainty level in consumer’s mind. Developing good physical evidence and building a strong brand can augment the tangibility component of a service. Pure goods and pure services move in the opposite direction in terms of the general approach to tangibility. While a service marketer tries to augment the service with tangible physical evidence, the product marketer augments the tangible product with intangible services like after sales service, warranty and guarantee schemes to enrich the customer experience.

2. Inseparability: Services cannot be separated from the source. The production and consumption of goods are two separate activities. Companies produce goods in their manufacturing facilities and distribute them at retailer’s point for consumption. Products can be separated from the source of manufacturing. Product marketing companies can achieve economies of scale through centralized production and can have centralized quality management programs. The marketer can market the product and the consumer can consume it at their convenient time. So production and consumption are two separate issues in product marketing. Quite contrary to this, the consumption of services is inseparable from its source of production. In order to realize the benefits of services, the producer and the consumer must meet and interact at the time of consumption. Both must normally meet at a convenient time when the producer can pass on the benefit to consumers. In personal care services, the consumer must be present during the entire production process e.g. a patient has to be there while a surgeon is performing a surgery. Inseparability happens in both the cases when the service is provided by a human being or by a machine. The services of a machine can only be realized when the consumers interact with the machine. Due to changes in information technology, it is possible to geographically separate the producer and the consumer of a service e.g. a banking service is possible through Internet, ATM, kiosks and mobile or tele-banking facilities due to low level of personal contact.

Inseparability has its own marketing implications. In a manufactured good consumption process, the product can be produced, distributed, inventoried at retailer point and can be consumed after procurement and stored for consumption.


Inseparability causes a modification to the service consumption process. They are generally sold first, then produced and consumed simultaneously. While the method of producing a good is of little relevance to the consumer, production process of services is critical for customer satisfaction. In the goods marketing, they are not part of the production process and they are satisfied if the product meets their expectations. In the services marketing, since the consumer is a part of the production process, the process is as important as the end service. So in some instances, a small change in the quality level of the production process may totally destroy the value of the service.

3. Variability: Mass produced goods and services can be standardized and the current age is the age of standardization. But in case of services like airlines, legal advice and financial services, it is very difficult to keep the services consistent and standardized. Variability in services has an impact not only on customer satisfaction but also in the production process of services. As the customer is involved in both production and consumption process at the same time, variability has a greater impact on services marketing. It is very difficult to monitor and control services for consistency and standardization. The opportunity for pre-delivery inspection and rejection of products is possible in manufactured goods but is impossible in services.

Variability in production standards is of greatest concern to service organizations where customers constitute an important part of production process. This is true in cases of labour-intensive services. There is a higher scope for quality control in machine-based services during its production, e.g. telecommunication and mobile services can operate at a very low failure rate. The equipment-based services are less variable than human-based services. Today, interactive voice response systems and virtual representatives on Internet are providing better customer service than human operators. The variability of service output poses problems for brand building. It is easy to incorporate monitoring and quality control systems to manufacturing processes for measuring consistency in output. This consistency is the ‘brand promise’ for a manufactured product. To reduce variability in services, marketing managers should try to simplify jobs, automate jobs by substituting interactive machines in place of human service providers.

4. Perishability: Manufactured goods can be stored for future consumption whereas services cannot be stored. It is possible for the manufacturer to store and manage inventory levels to suit different market situations and demand patterns. The services in contrast neither can be stored nor can be carried forward. If few seats are lying vacant in an aeroplane, they cannot be stored or carried forward for the next trip. There are very few services with a constant demand pattern over a period of time. Many show considerable variations due to seasonal and cyclical nature of the service demand and also due to unpredictable demand patterns.

The perishable nature of service demands greater attention to demand management of a service. The service marketer will like to smoothen the troughs and crests in demand patterns and schedule production processes of services in such a way that there is an optimal consumption at the point of production and consumption of that service. The demand and supply patterns should match both in short term and long term by using pricing and promotion tools to resolve demand-supply imbalance. Airlines offer discounted fares before departure to maximize the benefits of supply by offering tickets at a low price.

5. Inability to Own Services: This characteristic of not owning a service emanates from the characteristics of intangibility and perishability. The buyers can acquire title of goods in a transaction process and continue to do so as and when they wish. On the other hand, when a service is performed, no ownership is transferred

11Service Marketing

from the seller to the buyer. The buyer is only buying the right to a service process. So there is a difference between inability to own the service and the rights a buyer may acquire to have a service carried out at some time in the future. This aspect has an implication for distribution of services. A wholesaler or a retailer cannot take a title, contrary to the case with goods. So direct distribution methods are more common and wherever intermediaries are used, they are used as co-producer or co-creator of value for the consumer.

1.4 TYPES AND IMPORTANCE Service sector constitutes an important component of our economy. The products have been classified in many ways for e.g. consumer goods and industrial goods; shopping goods, convenience goods and impulse goods; capital goods, consumables, spares and installations. It is also possible to classify services on some common bases like degree of intangibility; producer versus consumer services; the status of the service within the total product offer; extent of inseparability; the pattern of service delivery; extent of people orientation; the importance of service to the consumer; marketable versus unmarketable services and in many instances by using multiple classification methods.

1. On the Basis of Intangibility: The most differentiating factor for classifying services is the degree of intangibility. There are pure tangible goods like soap, chocolate, cigarette. There are pure services like counselling, baby care etc. There are tangible goods with accompanying services like cars, two wheelers and computers. There are hybrid services like restaurants where both product and service are important. In the same scale there are major services with accompanying minor goods and services e.g. airlines and railway services where the major service of transportation is accompanied by railway tracks, coaches and food and drinks.

2. Producer versus Consumer Services: Services are classified depending at whom the service is targeted. When the service is targeted at individuals, it is called consumer service as it is aimed for an individual’s benefit and enjoyment. When services are aimed at industries and producers, they are called producer services. In consumer services, there are no further economic benefits resulting from the consumption of the service by the individual. In producer services, when the producer purchases a service, he uses it for generating economic benefit.

3. The Status of the Service within the Total Product Offer: Many services are offered to add value to the total product offer as when a product manufacturer augments his core tangible product with additional service benefits such as after sales service. At other times, the service is sold as a separate product that customers purchase to add value to their own goods. A group of services may add value to a product more fundamentally by developing better distribution strategy or facilitating purchase.

4. Extent of Inseparability: Some services can only be offered in presence of the customer, e.g. personal care services. These services cannot be separated from consumption. Production of some services can be separated from its consumption. When the service is carried out on their possessions, rather than on their mind or body directly, the level of consumer involvement is low. The marketing of highly inseparable services demands greater attention to the production process, as there are fewer opportunities to manage and control quality.

5. The Pattern of Service Delivery: Some services are purchased only when there is a need for it. This is a one-time transaction. These are low value, impulse based, undifferentiated services, which are bought with lesser effort and search activity e.g. buying of a ready to eat meal, a taxi service. There are also services where


one off buying is not possible. This is due to the complex production process; it is difficult to supply the services as and when the demand arises, e.g. it is difficult to provide a telephone service as and when a house is being made.

6. Extent of People Orientation: Many services are people-intensive whereas others are equipment-intensive. The consumers evaluate quality of a service depending on the quality of frontline staff that serves the customers such as law firms and hairdressing services etc. The equipment-driven services are delivered through lesser human intervention like ATM services, ticket checking and security services in airports.

7. The Value of the Service to the Consumer: Customers purchase some services very frequently and consume them rapidly due to their low value. These services are purchased on impulse with lesser degree of pre-purchase evaluation and information search. Such services do not involve a high-ticket price and do not involve a substantial share from customer’s income. The purchases of a lottery ticket or a news service are examples of such category. On the other hand, there are services, which involve a greater degree of pre-purchase activity and costs higher to the consumer. These are long lasting services and are purchased infrequently like life insurance and package holidays, and holiday sharing accommodations such as Mahindra Holidays.

8. Marketable versus Unmarketable Services: There are many services, which are still unmarketable in specific cultures. Many government services are available for public benefit and without any cost. These services are impossible to cost, as no one can be excluded from public domain. Many services provided in private are still unmarketable like baby care and nursing services.

9. Multiple Classifications Method: Since there is a great diversity of services, it is very difficult to classify them on one basis. A multiple method classifies the services on the basis of their marketing needs than production process. So within a sector, there is likely to be sub categories with distinctive marketing needs. The commonality of marketing needs has provided more opportunities for companies to blend their product range with services, which are similar in their marketing needs. Although we have explained many classifications of services but a number of criteria are used for classifying a service offer and developing a marketing program.

1.5 RELATIONSHIP MARKETING – MISSION AND STRATEGY

Companies in developed countries and many businesses in developing countries aim to satisfy customer needs and build lasting relationships. The issue focuses on reliability and trust between customer and organisation. As a result of this customer focus, a whole new subject, customer relationship management is now studied in marketing courses. According to Jagdish N. Sheth and Rajendra Sisodia, the term relationship marketing refers to long-term and mutually beneficial arrangements wherein both buyer and seller focus on value enhancement through the creation of more satisfying exchanges. This approach attempts to transcend the simple purchase exchange process with customers to make more meaningful and richer contacts by providing a more holistic, personalized purchase, and use or consumption experience to create stronger ties.

The new approaches to marketing such as experiential, permission, and one-to-one marketing can all be seen as means of creating stronger relationships with customers. The emphasis is on developing long-term bonds with customers by making them feel good about how the firm interacts or does business with them by giving them some

13Service Marketing

kind of personal connection to the company. Real relationship-marketing programme is much more than the use of database marketing to target customers more precisely. Its purpose is that each customer must feel she/he has received something in return for being a member of the partnership. Firms have found that Internet is an inexpensive, efficient and more productive means to extend a firm’s customer services. Internet permits firms to ask consumers if they permit the company to send them targeted e-mail ads, promotions, or messages, before actually doing so. Some airlines, hotel chains, credit card businesses, and big retailers, etc. use relationship marketing techniques by awarding points to committed customers that can be used to obtain additional goods or services from the concerned company. To put it differently, relationship marketing is all about building trust between the company and its customers and keeping promises. These factors increasingly strengthen the customer dependence on the organisation, as a result of which the customer’s confidence grows, while the company better understands the customer and her/his needs and wants. Ultimately, this helps in cementing the relationship and encourages cooperative problem solving.

Relationship marketing is based on the principle that current customers are the key to long-term business success. According to Frederick F. Reichheld, the importance of customer retention can be judged by observing some of the following benefits it provides:

Acquiring new customers can be five times more expensive than the costs involved in satisfying and retaining existing customers.

The average company loses 10 per cent of its customers each year.

A decrease of 5 per cent in the customer defection rate can increase profits by 25 per cent to 85 per cent, depending on the industry.

The customer profit rate tends to increase over the life of retained customer.

Jagdish N. Sheth and Atul Parvatiyar are also of the opinion that it is to a company’s advantage to develop long-term relationships with current customers because it is easier and costs less to make an additional sale to an existing customer than to make a new sale to a new customer. Neighbourhood grocery shop owners frequently reassure their frequent customers that if they are not satisfied with a consumable product, they can return it, even after some use and get the full replacement. They practice relationship marketing based on conventional marketing wisdom obtaining in India.

1.5.1 Acquiring New Customers vs. Retaining Old Customers The telecom paradigm is perceptibly changing. As the focus shifts from increasing the customer base to growing the share of revenue, mobile phone service providers are focusing on a model where customer retention becomes the key focus area.

In India, significant changes in the telecom scenario have influenced the strategy shift. To start with, we had two operators in every circle. Now six or even seven operators compete in the same service area. Then, telecom costs have been consistently sliding, leading to the cheapest telecom rates in the world. All this has led to an explosion in subscriber numbers. But they also increased customer churn.

Even acquisition costs per subscriber were going down (from between ` 5,000 and ` 10,000 in the late 1990s, it is now about ` 1,000 per customer). But break-even on new customers still takes 18 to 24 months. Given these dynamics, it is more profitable to retain an existing customer than fighting for a new customer.


Today, non-portability of numbers in India acts as one of the biggest retention devices but this could be a temporary benefit. During the early stages of mobile telephony, customer retention typically meant providing basic customer services.

But when new entrants were actively wooing our customers, we recognized the need to focus on customer retention. We formed the Customer Asset Management (CAM) team, the business division parallel to our sales business unit. This team has a single-minded focus on retention activities with a direct say in all aspects of the business.

We also started to focus on attracting the right quality of customers. Towards this, we fine-tuned our acquisition strategy. We are exploring alternative channels for selling.

It is important for a service brand to create differentiation, which is an experiential sum of all its interactions with the customer.

The total experience is our ability to deliver advanced products first in the market, providing an impeccable network quality and rounding off the product experience with a memorable service experience every time the customer interacts with us.

According to Steve Schriver, research indicates that consumers are less loyal now than in the past due to the following reasons:

1. The abundance of choice.

2. Availability of information.

3. Customers ask, “What have you done for me lately?”

4. Most products/services appear to be similar – nothing stands out.

5. Customers’ financial problems reduce loyalty.

6. Time scarcity (not enough time to be loyal).

These forces lead to consumer defections, complaints, cynicism, decreased affiliation, greater price sensitivity, and a tendency to carry on lawsuits.

1.6 ELEMENTS OF DESIGN The elements of design in relationships between individuals can range from short-lived and narrow contacts to life-long friendships.

Figure 1.1: Elements of Design – Relationship

A strong tie between two individuals has a history and there will be lot of emotional interaction between them, whereas, a weak tie between individuals lacks history and emotional intensity. The reciprocating level will be less.

Personal and Social Relationships

People working in the same unit, division or centre of an organisation are work associates. There are chances of strong ties between workers because they all share the same work. (Assumed absence of conflict). Strong ties between family members occur because of blood relationships. Finally, a strong tie between two individuals is possible because of life long friendship and this leads to social relations and interactions. The three levels of strong ties are exhibited in figure 1.2 given below.

Weak tie Strong tie

Emotional intensity is low

Emotional intensity is high

15Service Marketing

Figure 1.2: Three Levels of Strong Ties

Business and Marketing Relationships

There are 'classic' relationships in the marketing perspective. There is the 'dyad-relationship' between customer and supplier and the relationship between many-headed seller and the many-headed buyer in an industrial marketing situation. The 'triad' is a relationship between the customer, his present supplier and the competitors. Finally, there is the 'network' relationship between several physical distributors. The content of these relationships and exchange processes may not be the same as it used to be in economics and traditional marketing theory; the perspective is different. The other relationships are supportive to the classic relationship (Gummeson 1994).

Relationships can be viewed as concentric circles ranging from the nano relationships to the mega relationships. The market relationship lies in between the nano and mega relationships (refer figure 1.3) given below.

Figure 1.3: A Broadened Concept of Relationship Marketing

Marketing to individuals and mass marketing are easily found in the current marketing literatures. But the nano relationships and the mega relationships are relatively new concepts. The nano relationship is found below the market proper which means internal relationships. These relationships are essential for market relationship. In other words, it is internal marketing that directs a firm to the employee market within the company in order to be successful at the external market.

The mega relationships are found above the market proper. This is mega marketing which emphasises that in certain business situations, the real decision-makers are government officials and without their cooperation, there is no market to address. The global changes after 1990's have set a new stage for marketing because of mega alliances of nations such as South Asian Association of Regional Cooperation

Relationships

Work associates — people work in the same organisation

Family relationship— Blood relationship

Friends relationship—Social

Interaction

Nano relationships

Inter-organisational relationships Mass marketing relationships Individual relationships

Mega relationships


(SAARC), European Union (EU), North American Free Trade Agreement (NAFTA), Asia Pacific Economic Cooperation forum (APEL), Association of South East Asian Nations (ASEAN) etc.

Spectrum of Marketing Relationships

Wayne E Baker (1994) developed a relationship grid which provides four spectrums of relationships. According to him, every relationship has two sides and the relationship grid is a general purpose tool for mapping both sides of a relationship. The grid provides the spectrum of relationships along two dimensions:

Horizontal Spectrum : Your spectrum

Vertical Spectrum : Other's spectrum - the other may be your superior subordinate, supplier, customer, etc.

The two dimensions create four cells and each represents a match or mismatch of the two sides of relationships.

Figure 1.4: Relationship Grid

Spot Market

In a 'spot-market' situation, both sides are deal oriented. Relationships are short lived in nature and fleeting transactions may take place. There is no expectation or commitment to future transactions. Relationships in cell I are sustainable because orientations are matching. Spot market transactions can be appropriate in many situations. For example, there are many fly-by-night platform vendors/traders who want to make quick money. They are ready to offer goods at any low price and encourage buyers to bargain as they wish. Both the seller and buyer are deal oriented. In such a spot market situation, the buyer takes risk because if he finds fault with the quality of the product, he cannot complain to anybody. However, in many business situations, spot markets are appropriate.

2. Exploitation 1. Spot Market

The Other’s Spectrum Deal Oriented

Relationship Oriented

Your Spectrum Deal Oriented

Zone of Indifference

Relationship Oriented

4. Partnerships 3. Exit

17Service Marketing

Exploitation

In this situation, you are relationship oriented but the other party is deal-oriented. So, you will get exploited and you will withdraw sooner or later from the exchange. The orientations are mismatched and therefore they are not sustainable.

Exit

This is just the opposite of 'exploitation' because you are now deal oriented. Whereas, the other party is relationship oriented. Orientations are mismatched and not sustainable. Therefore, the other party will 'exit' sooner of later as you have withdrawn from 'exploitation.

Partnerships

This is an ideal relationship in which highest performance and productivity is possible. Orientations are matching and sustainable. Mutually beneficial and loyal long-term relationships are possible. In the context of relational marketing, the 'relationship grid' is a useful tool for mapping relationships with the different stakeholds of a business.

Zone of Indifference

The circle in figure 1.4 is indicated as zone of indifference. It refers to a state of both risk and opportunity. It is risky to be in the circle because customers have neither committed for relationships nor a deal. In other words, they are indifferent and they are weak to be influenced by one way or the other. Your competitor may step in and take them away by building relationships before you act smart. Therefore, the circle also offers an opportunity to you to act swiftly and turn the indifferent customers to your side.

Check Your Progress 1

Fill in the blanks:

1. ……………………..implies lack of physical evidence, which brings uncertainty in the minds of consumers while making a decision.

2. ……………………..is based on the principle that current customers are the key to long-term business success.

1.7 MARKETING PLAN A successful marketing organization needs to deliver a good value proposition and develop market oriented strategic planning to make this value offer unique and adaptable to the changing environment. Marketing planning helps in maintaining a viable fit between the organization's goals, objectives, targets, skills and resources with its changing market opportunity. The objective is to shape the product or service offer through a marketing plan to help the organization realize its targets and profit objectives. Today's marketing managers face extraordinary challenges due to changes in the external competitive environment. So they should be flexible and adaptable enough to respond to the growing complex world of competition and achieve the desired results.

Marketing planning of an organization is planning for that organization's revenue-earning activities. Marketing managers have to face changes everyday in the market place. So a successful marketing management process should be continuous, involving a cycle of planning, implementation and control. There should be a strategic orientation to the marketing management process. A marketing strategy should stem from the broad corporate and business plan of the organization. It consists of a plan


identifying what basic goals and objectives will be pursued and how they will be achieved within a specific time frame. It is a commitment to certain courses of action and allocation of resources necessary to achieve the desired goals of the organization. While strategic decisions are taken at a higher level with long-term horizon; tactics are short term, specific actions intended to implement the strategy. Tactics are closely associated with the execution of a plan. The basic strategy of Hero Honda is to provide affordable, fuel efficient and reliable vehicles for Indian middle class. Offering a motorbike at a low pricing point of ` 30,000 is an example of operationalizing this strategy through a tactical plan of stripped down version of the model at a lower pricing point and making it available at suburban cities to suit the pocket of middle class consumers. A strategic marketing plan lays out the target markets and the value proposition to be offered to the market, based on the available market opportunity. A tactical marketing plan specifies the marketing tactics that may include features of the product, pricing, and merchandising, selection of distribution channel, promotion and advertising decisions.

1.7.1 Characteristics of a Good Marketing Plan A good marketing plan should communicate to every member what is desired of each member, so that they have some level of goal clarity, understanding of assumptions that lie behind the goals and the context of each activity and decision. Since in most of the organizations planning is a mutually agreed upon activity, a good marketing plan should also stimulate individual and group commitment. Different organizations follow different kinds of planning approaches. Organizations where top management sets both the goals and plans for the lower management, follows a top down approach. In democratic and participative organizations, there is a bottom up approach in which each unit in the organization creates its own goals and plans, which are then approved by the top management. The third approach is to have goals down-plans up approach. In this approach the top management sets the goal but various business units create their own plans to meet these goals. Importance of Marketing Planning Marketing planning is a systemic and disciplined exercise to formulate marketing strategies. Marketing planning can be related to the organization as a whole or to strategic business units (SBU). Marketing planning is a forward-looking exercise, which determines the future strategies of an organization with special reference to its product development, market development, channel design, sales promotion and profitability. We can summarize the importance of marketing planning in the following points: 1. It helps in avoiding future uncertainties 2. It helps in management by objectives 3. It helps in achieving objectives 4. It helps in coordination and communication among the departments 5. It helps in control 6. It helps the customers in getting complete satisfaction

1.7.2 Designing an Overall Marketing Plan The planning process must begin with setting down the corporate objectives and should be followed through with strategies and plans for each separate function. The first step in marketing planning process is setting down marketing objectives and policies. The objectives here must be only the long-term objectives, which can be fixed in terms of sales and revenue turnover. The second step is designing the marketing system. In the marketing system, a company has to design/define each

19Service Marketing

function with its contribution. The third step is to develop separate objectives, programs and strategies for each function (like new product development function, pricing decisions, distribution function, promotion function) so that they can be assessed for the target purpose and the broad objectives. If any function cannot meet its objectives, the latter have to be modified for that functional area. The fourth step is drawing of detailed plans for each function for a shorter period, i.e. a quarter, half a year or a year. It will be helpful in defining responsibilities, timing and costs needed to achieve the short-term objectives. The fifth step is merging the marketing plans into organizational plans.

Marketing Planning and Management Process The marketing manager at each level of the organization is expected to develop a marketing plan. While at the corporate level, the marketing planning is done for the whole organization; the SBU marketing manager does it for his specific business unit. Functional managers like sales manager, product or category manager, logistics manager and advertising and sales promotion manager need to come up with their functional plans in support of execution of the overall marketing plan. We know that marketing management is a process of identifying marketing opportunity, researching and selecting the target markets, designing marketing strategies and relevant marketing programs; organizing, implementing and controlling the marketing program. A marketing manager needs to analyse trends in the marketing environment to find out new product or service marketing opportunities. To evaluate the business opportunity, we need to conduct market research and estimate demand for the product, both in the short term and long term. Marketing research will help in analysing consumer behaviour and forecasting buying intention of the consumers in the market. This also helps in estimating current and future demand potential. The aggregate demand estimated in the market need not be a proper indicator for the new product opportunity. So it is necessary to segment and target a portion of the market where either customer is very similar or their responses to the proposed marketing program will be similar. Depending on the objective and goals, companies can decide what kind of target marketing strategy to follow in the market. The next task is to find out the customer's perception about various brands and how the company's brand is positioned in the market. In the case of a new product, positioning research helps the firm in mapping perception of consumers on existing competitors and finding out a suitable position for the product. Once the target segment is identified, segment profile is developed and positioning decision is made, the marketing manager comes out with a marketing strategy. Marketing strategies will vary depending on what position the firm has already taken in the market. A firm can play different roles depending on what kind of market share it holds. The largest player is called market leader who is challenged by few challengers. There are followers, nichers and clones in the market also. While the nicher plays in a small market segment, a clone survives on the image of the leader or one of the large players. The marketing strategy will also depend on the decision of the firm on what kind of geographic market it intends to cover. Firms can follow a country specific marketing strategy as well as a global marketing strategy, depending on the number of countries of their operation. New product planning, launch and management across the life cycle of the product form a part of marketing strategy. Firms pursue different kinds of marketing strategies at different stages of product life cycle.

Subsequent to the marketing strategy decisions, the marketing manager should plan marketing programs. Planning for marketing programs involves investment and


expenditure decisions on elements of marketing mix, which include product, price, place or distribution and promotion decisions. The marketing manager makes budgetary or expenditure decision, which involve deciding on what amount of expenditure will bring the desired result. Finally, the budget is spread across different products, distribution channels, consumer segments and on promotional tools like advertising, sales promotion, publicity.

The final step in the marketing process is to organize marketing resources, implement, control and evaluate the marketing plan. There is a need to develop a marketing organization with roles and responsibilities for each member in the hierarchy. The larger the product mix and market coverage, the more complex will be the marketing organization. The people in the organization are responsible for implementation of the marketing plan. There is a need to control the marketing efforts on the basis of time performance or profitability and on adaptability of the strategy to the evolving marketing environment. Cost control is a budgetary evaluation and performance control is individual and department evaluation. Adaptability control finds out how often the marketing manager has to do firefighting because of some assumption at the planning level going wrong when implementation happens. A smooth and systematic feedback mechanism helps the organization to bring fresh ideas and marketing information into the subsequent stages of business planning.

Contents of a Marketing Plan

A marketing plan is to be developed in detail on the basis of functional plans and programs. Further, detailed plans will act as a guide for marketing objectives and marketing strategies. Functional plans are instruments, which translate grand strategy to market place reality. If the functional plans are not drawn properly, the marketing strategy may turn into failure at the market place. The marketing plan should be formalized as a written document. A standard marketing plan should contain elements as explained below:

Executive Summary and Table of Contents: The marketing plan should start with an executive summary of the plan and should include a table of contents. The summary would help the senior management to get a glimpse of what is included in the plan.

Mission Statement: The mission statement should come out of the corporate and business unit level plan and should explain the why of the existence of the business.

Summary of Performance till Date: The plan should present the summary of the past performance. It should explain the results of the previous strategies followed by the marketer, which will help in developing a base for doing future planning. This section provides relevant background data on sales, profits, markets, competitors, number of intermediaries and relationships with them.

Summary of Financial Projections: Past marketing performance must have been measured in financial terms to explain the efficacy of financial investments. Summary of projections for the future comes out of the past performance and will help in giving a snapshot of what is going to happen in the future.

Market Overview: This comes out of the trend analysis and monitoring of the market and gives an indicator about the behaviour of the market in future. A marketer can use scenario analysis to explain the likely behaviour of the market.

SWOT Analysis for Major SBUs: If the company has more than one SBU, the marketing planner needs to evaluate each SBU and conduct SWOT analysis of each SBU, as both marketing opportunities and strengths of SBUs will vary from business to business.

21Service Marketing

Portfolio Summary of all the SBUs: A summary of portfolios helps in allocation decisions. It will show where the money should come from and which business needs further investments. Portfolio summary will show how balanced the company is among its portfolios.

Market Assumptions: Plans are always made under certain assumptions. If the assumptions go wrong then the plans will go wrong. So a careful list of assumptions should be included in the marketing plan based on which the rest of the plan will flow.

Marketing Objectives and Goals: Marketing objectives and goals in clear, measurable terms should be included in the plan. This will serve as a milestone for the execution of the plan. In this section, the marketing planner would include the plan's major market goals expressed in measurable terms like sales volume, market share, profit etc.

Financial Projections for at least Three Years: This is necessary for both implementation and control point of view. Financial projections for three coming years will help the firm to regulate the marketing function, break overall projections into achievable targets for each responsible person and into each territory of the market.

Marketing Strategy: In this section, the marketing planner will define the target segment(s) to cater to, the target marketing strategy to be followed, and the positioning of the product in the market in relation to competitors. This is done by taking into consideration the value chain followed by the company.

Marketing Action Plans: Each marketing strategy element like product, price, place and promotion should be elaborated through a set of functional plans and programs. This section should answer questions like what will be done? Who will do it? When shall it be done? What will be the result of that action? Marketing action plan should cover the functional plans as explained in the diagram.


Fill in the blanks:

1. ………………………..is a systemic and disciplined exercise to formulate marketing strategies.

2. The final step in the…………………………..is to organize marketing resources, implement, and control and evaluate the marketing plan.

1.8 LET US SUM UP The service sector has become more competitive and is posing more challenges to marketing managers to apply marketing principles and strategies to achieve success in the service sector. A service is defined as any activity or benefit that one player offers to another in an exchange process, which is essentially intangible and does not result in ownership of anything.

A pure service has a set of distinctive characteristics that differentiate them from pure goods or product manufacturing companies in ways having implications for marketing. These characteristics include intangibility, inseparability, variability, perishability and inability to own a service.

Companies in developed countries and many businesses in developing countries aim to satisfy customer needs and build lasting relationships. According to Jagdish N. Sheth and Rajendra Sisodia, the term relationship marketing refers to long-term and


mutually beneficial arrangements wherein both buyer and seller focus on value enhancement through the creation of more satisfying exchanges.

Marketing planning helps in maintaining a viable fit between the organization's goals, objectives, targets, skills and resources with its changing market opportunity. A successful marketing organization needs to deliver a good value proposition and develop market oriented strategic planning to make this value offer unique and adaptable to the changing environment.

1.9 LESSON END ACTIVITY Prepare a SWOT analysis of any service provider company (any courier company like DHL).

1.10 KEYWORDS Marketing Research: It helps in analysing consumer behaviour and forecasting buying intention of the consumers in the market. This also helps in estimating current and future demand potential.

Marketing Management: It is a process of identifying marketing opportunity, researching and selecting the target markets, designing marketing strategies and relevant marketing programs; organizing, implementing and controlling the marketing program.

Service: It is defined as any activity or benefit that one player offers to another in an exchange process, which is essentially intangible and does not result in ownership of anything.

Relationship Marketing: It refers to long-term and mutually beneficial arrangements wherein both buyer and seller focus on value enhancement through the creation of more satisfying exchanges.

Marketing planning: It is a systemic and disciplined exercise to formulate marketing strategies.

1.11 QUESTIONS FOR DISCUSSION 1. Explain the meaning and nature of services.

2. Describe the types and the importance of services.

3. What do you mean by relationship marketing? Discuss its mission and strategy.

4. Explain the marketing plan in detail.

5. Describe the procedure for developing an overall marketing plan.

Check Your Progress: Model Answers

CYP 1

1. Intangibility

2. Relationship marketing

CYP 2

1. Marketing planning

2. Marketing process

23Service Marketing1.12 SUGGESTED READINGS

Shanker Ravi, (1998). Service Marketing – Indian experience, South Asia Publication.

Panda, K. Tapan, (2013). Marketing Management Text and Cases. Excel Books. Second Edition.

Kinnison. A Harry, Aviation Maintenance Management. McGraw – Hill.

Sinha, P.K., Service Marketing, Text and Readings. Himalaya


LESSON

2 MARKET SEGMENTATION AND MARKETING MIX DECISIONS

CONTENTS

2.0 Aims and Objectives

2.1 Introduction

2.2 Bases for Market Segmentation

2.2.1 Geographic Segmentation

2.2.2 Demographic Segmentation

2.2.3 Psychographic Segmentation

2.2.4 Behaviouristic Segmentation

2.3 Marketing Mix Decisions

2.3.1 Unique Features of Developing Product

2.3.2 Pricing

2.3.3 Distribution

2.3.4 Promoting Services

2.4 Let us Sum up


2.6 Keywords




Explain bases for market segmentation

Discuss marketing mix decisions

2.1 INTRODUCTION The concept of market segmentation emerged as an extension of the marketing concept in the latter part of 1950s. It is based on the simple observation that all the existing and potential consumers are not alike: there are significant differences in their needs, wants, tastes, background, income, education and experience, etc. and these characteristics change over time with lifestyle changes. Had they been alike, it would have eliminated the need to have different variations of the same basic product and one promotional campaign is all that would have been needed. For example, there would have been only one type of soap, one detergent, one car, one computer, one washing machine and so on.

25Market Segmentation and Marketing Mix Decisions

A market is composed of individuals and they are rarely homogeneous in benefits wanted, purchase rates, and price and promotion elasticity. Their response rates of products and services and promotion programmes differ. Since consumers have dissimilar needs and wants in a market, it is called a heterogeneous market and most markets are heterogeneous. Differences in product preferences, size and growth in demand, media habits, and competitive structure of the market also affect the differences and response rates.

Market segmentation is the process of dividing the total market into relatively distinct homogeneous sub-groups of consumers with similar needs or characteristics that lead them to respond in similar ways to a particular marketing programme.

A market segment is a portion of a larger market in which the individuals, groups, or organizations share one or more characteristics that cause them to have relatively similar product needs.

Three-decision processes comprising market segmentation, target marketing, and positioning are closely related and have strong interdependence and essentially need to be examined carefully and implemented to be successful in managing a given product-market relationship. Peter Doyle cites an international example:

“In England, Japanese companies have outperformed their British rivals across a range of industries. A major reason for this was that the Japanese were better at managing the segmentation, targeting, and positioning relationships. Thus, only 13 per cent of the Japanese firms versus 47 per cent of the British were unclear about their target segment of customers and their special needs.”

“All too often, the marketing directors of British companies remarked that they see their target market as being the whole market and since their products had wide appeal, there was no need to segment the market. As a consequence, Japanese concentrated their resources in specific high-potential segments, while the British tended to spread theirs thinly across the entire market. When British companies did segment, they did so at the lower, cheaper end of the market. This resulted in customers increasingly perceiving the Japanese, in contrast to the British, as offering quality and status.”

When marketers provide a range of product or service options to serve diverse consumer preferences, they are more satisfied and happy. Market segmentation is a positive force for both marketers and consumers alike. In his book, ‘Competitive Advantage’, Michael E. Porter says:

“The competitive advantage of a firm lies in being everything to a select few. To be everything to everyone is a sure recipe for a strategic failure.”

2.2 BASES FOR MARKET SEGMENTATION Markets are complex entities that can be segmented in a variety of ways. It is an important issue to find an appropriate segmentation scheme that will facilitate target-marketing, product positioning, and developing successful marketing strategies and action programmes.

A segmentation variable is a characteristic of individuals, groups or organisations that marketers use to divide and create segments of the total market. One approach to segmentation is on “a priority” basis. In this case, the marketer may assume that differences must exist among heavy users and light or medium users of a product category. Segmentation descriptors fall under four major categories and include geographic variables, demographic variables, psychographic variables, and behaviouristic variables.


Geographic variables focus on where the customers are located.

Demographic variables identify who the target customers are.

Psychographic variables refer to lifestyle and values.

Behaviouristic variables identify benefits customers seek, and product usage rates.

Before collecting any data on the market, the basis for segmentation is analysed. The marketer can also assume that dual-income households are growing in urban areas and then develop a programme for this segment.

Selecting the right segmentation variable is critical. For example, small car producers might segment the market on the basis of income but they probably would not segment it on the basis of political beliefs or religion because political leanings or religious beliefs do not normally influence consumers’ automobile needs. Segmentation variable must also be measurable to segment the market accurately. For example, segmenting the market on the basis of intelligence would be difficult because this characteristic cannot be measured accurately. Marketers can use one or more variables to segment the market.

Different variables are used to segment consumer markets. Broadly speaking, segmentation variables fall under two categories: consumer characteristics or consumer responses. The most popular bases for market segmentation include geographic factors, demographic factors, psychological characteristics, and social/cultural variables; use related factors, use situation variables, benefits sought and combination of several segmentation bases called hybrid formats, such as demographic/psychographic profiles, geo-demographic variables, values and lifestyles.

Table 2.1: Segmentation Variables

Geographic Variables Demographic Variables

Region Nation Urban, Rural State

Gender Family size Age Occupation

City size Climate Race Family life cycle Terrain Market density Religion Income Social class Education

Psychographic variables Behaviouristic variables Personality attributes Usage volume, Occasion Motives End use Lifestyle Benefits sought Brand loyalty Price sensitivity

2.2.1 Geographic Segmentation Geographic segmentation focuses on dividing markets into different geographic units, such as regions, nations, states, urban, rural, etc. Customers located in different geographic areas vary in terms of climates, terrain, natural resources, population density, culture, service needs, sales potential, growth rates, competitive structure of the market, frequency of purchases for a variety of goods and services. For example, Jeeps are more popular in rural areas in India than in urban areas. Shopping malls are located only in larger cities in India, and raincoats are sold more in rainy areas. Geographic segmentation is used both in consumer and organisational markets, particularly where customers are not willing to travel far to acquire goods and services.


Geo-Demographic Segmentation

Many segmentation approaches involve both geographic and demographic descriptors. This approach is based on the premise that people who live close to one another are likely to have similar economic status, tastes, preferences, lifestyles and consumption behaviour. Geo-demographic segmentation is particularly useful when a marketer is capable of isolating its prospects with similar personalities, goals, interests, and in terms of where they live. For products, and services used by a wide cross-section of society, this approach may not be suitable. For example, some retailers who propose to open new stores are interested in knowing something about the people who live within a defined area whom they aim to attract.

2.2.2 Demographic Segmentation Demographic characteristics are commonly used to segment the market. Factors such as age, sex, education, income, marital status, household life cycle, family size, social class, etc. are used singly, or in a combination, to segment a market. Shaving products for women are based on the demographic variable of gender. Toy manufacturers such as Unspool and Mattel Toys segment the market on the basis of age of children. Auto manufacturers segment the market by considering income as an important variable. Producers of refrigerators, washing machines, microwave ovens etc., take income and family size as important variables in segmenting the market. Ready-to-wear garment producers often segment the market on the basis of social class. Examples are Choragi Din, Arrow, Van Heusen, Louis Philippe, Levis and others. In general, the social class can represent lower, middle and upper class depending on education, income, status, etc. For example, an engineer and a clerk are considered as members of different social classes.

2.2.3 Psychographic Segmentation When segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation. Consumers have a certain self-image and this describes their personality. There are people who are ambitious, confident, aggressive, impulsive, conservative, modern, gregarious, loners, extrovert, introvert, etc. Some motorcycle manufacturers segment the market on the basis of personality variables such as macho image, independent and impulsive. Some producers of liquor, cigarettes, apparel, etc. segment the market on the basis of personality and self-image. Marketers are often not concerned about measuring how many people have the characteristic as they assume that a substantial number of consumers in the market either have the characteristic or want to have it.

Lifestyle: It is an indicator of how people live and spend their time and money. What people do in their spare time is often a good indicator of their lifestyle. For example, John L. Lastovicka, John P. Murray, Erich A. Joachimsthaler, Gaurav Bhalla and Jim Sheurich in their study, were identified two lifestyle segments that were most likely to drink and drive: good timers and problem kids. Good timers are partygoers, macho and high on sensation seeking. Problem Kids frequently display troublesome behaviours. According to Morris B. Holbrook, people who have an affinity for nostalgia, or the desire for old things, also represent a lifestyle segment and can be a key market for old movies, antiques and books. Surfing on the Internet has also created a new type of lifestyle. Another study by Rebecca Piirto of fashion consumers found six major groups: yesteryears (older consumers), power purchasers (married households with college degree), fashion foregoers, social strivers, dutifuls (highly practical) and progressive patrons (high-income/quality buyers). Consumers in different countries and cultures may have characteristic lifestyles. For example, Indian


women are home focused, less likely to visit restaurants, more price-sensitive, spend time preparing meals at home and fond of movies.

AIO inventories are useful additions to demographic data but marketers have found the original AIO inventories as being too narrow. Now, psychographics or lifestyle studies generally include the following:

Attitudes include evaluative statements about people, products, ideas, places, etc.

Values refer to widely held beliefs about what is right/acceptable/desirable, etc.

Activities and interests cover behaviours with respect to activities other than occupation to which consumers devote time and effort, such as hobbies, interests, social service, etc.

Demographics cover gender, age, education, occupation, income, family size, geographic location, etc.

Media preferences describe which specific media the consumers prefer to use.

Usage rate focuses on measurements of consumption level within a particular product category and is generally recorded as heavy, medium, light, or non-user.

Table 2.2: Lifestyle Dimensions

Activities Interests Opinions Demographics

Work Family Themselves Age

Hobbies Home Social issues Education

Social events Job Politics Income

Vacation Community Business Occupation

Entertainment Recreation Economics Family size

Club membership Fashion Education Dwelling

Community Food Products Geography

Shopping Media Future City size

Sports Achievements Culture Stage in life cycle

The sample size is often 500 or more individuals who provide this information and are placed in groups whose members have similar response patterns. According to F. W. Gilbert and W.E. Warren, most studies use the first two or three dimensions mentioned above to group individuals. The use of other dimensions provides more complete profiling of each group.

Generally, the AIO measurements are product or activity specific. For example, W. A. Kamakura and M. Wedel have reported a study related to fashion clothing which included 40 statements and respondents reported their degree of agreement or disagreement. Five of the statements are mentioned here:

I like parties with music and chatting.

I like clothes with a touch of sensuality.

I choose clothes that match my age.

No matter where I go, I dress the way I want to.

I think I spend more time than I should on fashion.

In this study, statements relevant to activities and demographics were also included. General lifestyle studies can be used to spot new product opportunities, while product specific lifestyle analysis may help repositioning decisions regarding existing brands.


The VALS (Values and Lifestyles)

Stanford Research Institute (SRI) developed a popular approach to psychographics segmentation called VALS (Values and Lifestyles). This segmented consumers according to their values and lifestyles in USA.

Researchers faced some problems with this method and SRI developed the vals2programme in 1978 and significantly revised it in 1989. VALS2 puts less emphasis on activities and interests and more on a psychological base to tap relatively enduring attitudes and values. To measure it, respondents are given 42 statements with which they are required to state a degree of agreement or disagreement. Some examples of the statements are:

I am often interested in theories.

I often crave excitement.

I liked most of the subjects I studied in school.

I like working with carpentry and mechanical tools.

I must admit that I like to show off.

I have little desire to see the world.

I like being in charge of a group.

I hate getting grease and oil on my hands.

VALS2 has two dimensions. The first dimension, self-orientation, determines the type of goals and behaviours that individuals will pursue, and refers to pattern of attitudes and activities which help individuals reinforce, sustain, or modify their social self-image. This is a fundamental human need. The second dimension – resources – reflects the ability of individuals to pursue their dominant self-orientation that includes the full range of physical, psychological, demographic and material means such as self-confidence, interpersonal skills, inventiveness, intelligence, eagerness to buy, money, position, education, etc. The questions above are designed to classify respondents based on their self-orientation. Stanford Research Institute (SRI) has identified three basic self-orientations:

1. Principle-oriented individuals are guided in their choices by their beliefs and principles and not by feelings, desires and events.

2. Status-oriented individuals are heavily influenced by actions, approval and opinions of others.

3. Action-oriented individuals desire physical and social activity, variety and risk taking.

Based on the concepts of self-orientation and resources, Values and Lifestyle typology breaks consumers into eight groups. VALS2 suggests that a consumer purchases certain products and services because the individual is a specific type of person. The purchase is believed to reflect a consumer’s lifestyle, which is a function of self-orientation and resources. People with most resources are at the top and the ones with least resources are at the bottom of this typology. Each of the eight groups exhibits a distinctive behaviour, decision-making approach and product or media usage attributes. VALS2 represents an interconnected network of segments, which means that adjoining segments have many similar characteristics and can be combined to suit particular marketing objectives.


Status-oriented

Actualiser

Fulfilled Achiever Experiencer

MakerBeliever

Principle-oriented Action-oriented

Striver

Struggler

Abundant resources

Least resources

Figure 2.1: Values and Lifestyles 2

Actualisers have abundant resources. They are among the established or getting established leaders in business or government and are sophisticated and active with high self-esteem. Image is important to them as an expression of their taste, independence and character. They are interested in growth and seek to develop, explore and express themselves in many different ways. They have social and intellectual interests and are open to social change. They are guided sometimes by principles and at other times by desire and are fond of reading, but not fond of television and are sceptical of advertising.

Fulfilleds are mature in their outlook, are well-educated, reflective people who value order, knowledge and responsibility. They like their home and family; are satisfied with their careers and enjoy their leisure activities at home. Nearly 50 per cent of fulfilleds are in their fifties or older. They are open-minded about new ideas and accept social change. As consumers, they are conservative and practical. They purchase products for their durability, functionality and value.

Believers constitute the largest segment. They are not well-educated and the moral code of conduct is deeply rooted in their psyche and is inflexible. Their routines are established and largely influenced by home, family, religion and social organisation. Their behaviour as consumers is predictable and conservative. Their income is modest but enough to meet their needs. They are fond of watching much television and do little reading.

Status-oriented consumers value a secure place in society. Achievers make choices based on a desire to enhance their position or to facilitate their move to another group’s membership for which they aspire. They are more resourceful and active. Achievers are inclined to seek recognition and self-identity through achievement at work and in their personal lives. They have high economic and social status.

Strivers are dependent on others to indicate what they should be and do. They are blue-collar workers who believe money represents success and never seem to have enough of it. Their self-definition is based on approval and opinion of others around


them. They are impulsive by nature, get bored easily, are unsure of themselves, and low on economic, social and psychological resources. Strivers try to mask the lack of enough rewards from their work and family and to conceal this, they attempt to appear stylish. They try to emulate those with higher incomes and possessions, generally beyond their reach. Strivers read less but prefer to watch television.

‘Action-oriented’ consumers who are classified as experiencers, are young, full of vitality, enthusiastic, impulsive and rebellious. They are college educated and much of their income is disposable. They have an abstract disregard for conformity and authority. They are amazed at–and impressed with–others’ wealth, prestige and power. They seek excitement and variety in their lives and like to take risks. Their patterns of values and behaviour are in the process of being formulated. They are fond of outdoor recreation, sports and social activities. They spend heavily on clothing, music and fast food.

Makers like to be self-sufficient, have sufficient income and skills to accomplish their desired goals. They live within traditional family values, like practical work and physical recreation. Makers are energetic, like to experience the world, build a house, have families, raise children and have sufficient skills backed with income to accomplish their projects. They are conservative in their outlook, suspicious of new ideas, respect government and authority, but resent any intrusion on their rights. They are not impressed with others’ wealth and possessions.

Strugglers are the second largest group after believers and include households with lowest incomes. They have narrow interests; their aspirations and actions are constrained by low level of resources. They are ill-educated, with strong social bonds, low-skilled, chronically poor and concerned about declining health. They feel powerless and unable to have any impact or influence on events. As consumers, they show the strongest brand loyalties but are cautious and represent only a modest market. They watch a lot of television, read women’s magazines and tabloids.

For several reasons, psychographic segmentation variables are used on a limited scale. To accurately measure psychographic variables is rather difficult compared to other types of segmentation bases. The relationships between psychographic variables and consumer needs are often difficult to document. Also, certain psychographic segments may not be reachable. For example, it may be difficult to reach introverted people at reasonable cost.

2.2.4 Behaviouristic Segmentation Dividing the market on the basis of such variables as use occasion, benefits sought, user status, usage rate, loyalty status, buyer readiness stage and attitude is termed as behaviouristic segmentation.

Buyers can be identified according to the use occasion when they develop a need and purchase or use a product. For example, Archies greeting cards are used on many different occasions. User status, such as non-users, potential users, or first time users can be used to segment the market. Markets can also be segmented into light, medium, or heavy users of a product. Brand loyalty of varying degree can be presented among different groups of consumers and may become the basis to segment the market. There are consumers, who are very loyal to cigarette brands, beer and even toothpaste. Markets may also be divided on an imaginary Likert-type scale by considering level of product awareness such as unaware of the product, aware, interested, desirous, or contemplating to purchase the product. Based on attitude, consumers may be enthusiastic, indifferent, or hostile towards the product, and these differences can be used to segment the market.


Benefit Segmentation: By purchasing and using products, consumers are trying to satisfy specific needs and wants. In essence, they look for products that provide specific benefits to them. Identifying consumer groups looking for specific benefits from the use of a product or service is known as benefit segmentation and is widely used by marketers. For example, there are distinct groups of auto buyers. One group might be more interested in economy, the other in safety and still other in status.

Segmentation bases, such as demographics are descriptive. These variables are useful but do not consider why consumers buy a product. Benefit segmentation has the potential to divide markets according to why consumers buy a product. Benefits sought by consumers are more likely to determine purchase behaviour than are descriptive characteristics.

Table 2.3: Benefit Segmentation of Toothpaste Market

Principal Benefit Sought

Psychographic Characteristics

Behavioural Characteristics

Demographic Characteristics

Brands Much Favoured

Brightness of teeth (cosmetic)

Outgoing, active fun-loving, high sociability

Smokers Teenagers, youngsters

Close-Up, Promise, Aquafresh

Decay prevention (medicinal)

Health conscious

Heavy users Large families Pepsodent, Colgate Total, Forhans

Taste (good taste, flavour)

Self-indulgent, hedonistic

Mint lovers Children Aquafresh, Colgate

Low price (economy)

Price-conscious, independent

Heavy users, deal prone

Men, traditional Neem, Babool, ViccoVajradanti

Marketers should also appreciate that many benefits sought by consumers are subject to change with changing technologies, changing social values and competitive offers. This requires that marketers must constantly reassess benefit segments. The present scenario in the computer market is an example. With the introduction of faster and better products, the benefits consumers seek, are constantly changing. Benefit segmentation can be seen in the toothpaste market; fresh breath, decay prevention and whiter teeth are some examples and the leading brands involved are Colgate Total, Close-Up and Promise.


Fill in the blanks:

1. …………………is composed of individuals and they are rarely homogeneous in benefits wanted, purchase rates, and price and promotion elasticity.

2. When segmentation is based on personality or lifestyle characteristics, it is called…………………...........

2.3 MARKETING MIX DECISIONS Borden’s concept of marketing mix was accepted as the set of marketing tools that a firm uses to pursue its marketing objectives in the target market, influenced by specific environmental variables.

It was McCarthy who summed up twelve elements of Borden’s marketing mix into 4Ps – product, price, place (i.e. distribution) and promotion. He even clarified that the customer is not a part of the marketing mix; rather, he should be the target of all marketing efforts.


About the same time when McCarthy proposed a 4Ps approach, two more classifications were put forward. Frey proposed that all marketing decision variables can be put under two subheads, the offering and the methods or tools, as shown in Figure 2.2.

Lazer & Kelly proposed a three factor classification: namely, goods and service mix, distribution mix and communication mix. However, these classifications did not go beyond the scope of Borden’s original concept.

Decision Variables

Methods/ Tools Offerings

Distribution Channel Product Personal Selling Package Advertising Brand Sales Promotion Price Publicity Service

Figure 2.2: Frey’s Classification of Marketing Decision Variables

2.3.1 Unique Features of Developing Product Product, in the marketing context, is anything which is offered to the market for exchange or consumption. In goods marketing, we always say that there is a tangible component to which some intangibles like style, after-sales-service, credit, etc. are integrated. In the case of services, on the contrary, the tangible component is nil or minimal.

Conventionally, we describe a product as an object which is developed, produced, delivered and consumed. However, in services there is no or only a little tangible element because of which they are considered as benefits which are offered to the target market. There are two important things to note. First, a service is a bundle of features and benefits and secondly, these benefits and features have relevance for a specific target market. Therefore, while developing a service product it is important that the package of benefits in the service offer must have a customer’s perspective.

Kotler has identified five levels of a product, taking the example of the hotel industry. It is the core and the basic which might be the same for most of the competing products while it is the other levels which make them different. These five levels and their meanings are as follows:

Table 2.4: Five Product Levels

Core Benefit The fundamental benefit or service that the customer is buying (hotel: rest/sleep)

Basic Product Basic, functional attributes (room; bed; bath…)

Expected Product Set of attributes/conditions the buyer normally expects (clean room, large towel, quietness)

Augmented Product That meets the customers desires beyond expectations (prompt room services and check-in/out, music, aroma)

Potential Product The possible evolution to distinguish the offer (all-suite hotel)

The Service Package

The ‘package’ concept of service product suggests that what you offer to the market is a bundle of different services, tangible and intangible, but there is a main or substantive or ‘core’ service and around it are built the auxiliary or peripheral or


facilitator services. It is important to note that facilitating services are mandatory and if these are left out, the entire service would collapse. In the service package there are yet other types of services called supporting services. The basic difference between the two is that supporting services do not facilitate the consumption of core services, but are used to increase the value, and, thus, differentiate it from competition.

For example, in a 500-room hotel the core service is lodging and room service. Bell boy services are facilitating services and health club, car rental are support services. However, it may not always be possible to draw a line of distinction between facilitating and support services. For example, in a typical city hotel, business centre might be the support service, but in a business and convention hotel, the same service would be facilitating service.

Nevertheless, while developing the service product package, it is important to consider all the three levels of service: core, facilitating and supporting.

The Augmented Service Offering

It has been said that the basic service package is not equivalent to the service product the customer perceives, which is, in fact, based on customer’s experience and evaluation. Therefore, there is a need to involve the customer in the production of service offering and thereby reinforcing that the basic service package has to be expanded to a more holistic model of augmented service offering.

Here the suggestion is that issues related to the accessibility of the service, interaction with the service organisation and consumer participation are also integral elements of the service product. Gronross identified the relevance of these issues in relation to the augmented services offering. The details are summarised in table below.

Table 2.5: Elements of Augmented Service Offer

Accessibility of Service Number and skills of personnel Working hours and time used in performing various

tasks Location of service outlet Exterior and interior of service outlet Infrastructure, hardware, documentation The number and knowledge of consumers

simultaneously involved in the process.

Interaction with service organisation

Interactive communication between employees and customers.

Interactions with the physical and technical resources of the organisation needed in the service production process

Interaction with other customers involved in the process.

Customer participation How well is the customer aware about the process of service delivery and his or her role

How well is the customer prepared to share information How well is the customer willing to share information

or use service equipment.

Developing New Service Offering

In light of the discussion on service product, if a new service offer is to be developed, then the following five steps should be systematically followed in a sequence as shown in table 2.6.


Table 2.6: Developing New Service Offering

Stage I Consume Benefit Concept What benefits consumers seek (Problems: Inarticulate consumers, benefits sought change over time, Measurements on importance of benefits)

Stage II Service Concept What benefits the Services organisation should offer

Stage III Service Offer Sr. Elements: Tangible and intangible Sr. Forms: In what way / how Sr. Levels : Quality, image, tech, functional Quantity: Volume, flow, timing

Stage IV Service Delivery System Using benchmarks of service offer, develop processes, people and facilities

Stage V Managing Image and Communication

To support and enhance perceptions on service offer

The first step in developing a new service offering is to assess the customer benefits. It is said that people don’t buy products because of their attributes, rather they buy their benefits. Therefore, it is important to identify what benefits the prospective customer would seek from your service offer. Proper market research and available appropriate information should provide the necessary knowledge of what qualities customers expect so that the corresponding features are taken care of in the service package.

Thereafter, the service organisation should develop the service concept. Consumer benefits have to be translated into core, facilitating and support services with a view to defining what general benefits the service organisation would offer to its customers.

The third stage is that of developing the augmented service offer. Obviously the service production and service delivery system are to be developed so that the service package is not only made accessible but the customer is also involved in the delivery process itself.

Careful planning at this stage is essential because if the right service in the right form and in the right quality and quantity is not delivered, the entire customer oriented plan would collapse. Therefore, the delivery of the service offer is an inseparable part of development of any service offer.

Lastly, the appropriate market communication strategy should be prepared and its implementation plan should be defined not only to inform and persuade the customers but also to enhance the desired image.

2.3.2 Pricing Pricing is yet another variable of the marketing mix. A particular product or service is acceptable to the customer at a particular price and if the price is increased, it is likely that the same product or service might become less acceptable to the customer. The other issue, which is related to pricing, is that of perceptions about quality. Generally, to most customers, high price means high quality. However, some customers don’t need the highest quality at the maximum price. Detergents are one such example where average quality detergents at moderate prices are market leaders.

Service pricing follows the principles and practices of pricing of goods and, therefore, they are either cost based or market based.

Within these categories prices may be profit oriented, government controlled, competitive or customer oriented. However, the characteristics of services do influence the pricing and, therefore, different methods of pricing are to be followed.


Guidelines of Service Pricing

There are some basic guidelines for pricing of services. These guidelines may help in developing an appreciation of the framework for service pricing.

1. For services, the pricing strategy should be such that demand fluctuations are successfully handled. Since services are perishable, they cannot be inventoried. In such a situation pricing strategy should be such that it should encourage the customers to delay their use of services till the period of low demand.

2. Service prices should be based on costs so as to take into account the cost of tangible clues of intangible services. To the first time users of services the “services offer-package” is less understood if it is primarily dominated by intangibles. Therefore, the tangible and material content of the service product should be integrated in the ‘service-offer package’, which has definite cost implications.

3. The service pricing should be such as to provide value addition and quality indication to the customers. In situations of “homogeneous” services, the pricing strategy may be market oriented or customer oriented. But in heterogeneous services, the price may be used as a quality indicator.

4. The pricing strategy should be such as to cope-up with the degree of competition operating within a certain geographic and time zone. Services are inseparable from the person who provides them and the service providers have both geographic and time limits or markets, which can be served by them.

Pricing Objectives

As discussed above, the pricing of services is greatly influenced by the basic service characteristics. However, in setting price objectives, several factors in relation to the overall marketing strategy of the corporation should be considered.

First is the planned market position for the service product. Gitlow suggested that the price not only influences the market position but also significantly affects customers’ perceptual positioning. It is, therefore, important to keep market/customer position in mind while deciding on pricing strategy.

Secondly, the stage of the life cycle of the service product is important. For example, at the introductory stage if there is no competition and the demand is high you may opt for high price to make maximum gains in the short-term (skimming policy). However, in a similar situation but with low demand you may opt for low prices to penetrate into the market. Also you have to consider the elasticity of demand, i.e., whether the demand is sensitive to the change in price or not.

Thirdly, you have to study the competitive situation both from the point of inter brand and also from the point of view of the brand which provides the same need satisfaction. For example, a private airline is facing competition from the national airlines and other private airlines but also from the railways that provides faster trains on the same routes during convenient timings. Therefore, while pricing services, competition should be understood in greater detail and depth.

Lastly, you have to see what strategic role the pricing can play in your overall marketing strategy. For example a hotel chain might offer a package of low price or discount with a view to making people try out their services. It is likely that in the short run it might be a losing proposition, but in the long run this may give more customer satisfaction and thereby better utilisation of services.

Keeping in view the above four objectives, the pricing strategy for services should be decided.


2.3.3 Distribution Because of intangibility (from production to sales) of services, they cannot be stored, transported and inventoried. Hence traditional distribution channels available for product marketing like wholesalers and other intermediaries cannot be used. Even the retailing cannot be an independent activity. Similarly, because of the inseparability, i.e., in case of services production cannot be separated from selling, services must be created and sold at the same time.

These two characteristics make the channel very short and direct. Most services are distributed through direct sales. At best one agent or middleman can be added to it, like in the case of insurance, travel agency, courier service, etc.

So we see that there is a little controversy regarding the distribution of services. There is one school which says that since the service cannot be separated from the producer of the service, direct selling sales channel are the only method of distribution available for services. The advantage of direct selling is that the service can be offered to the customer at a lower cost. The other school partially disagrees with this theory and suggests that it is possible to have intermediaries but the channel of distribution would be rather short and simple as compared to tangible goods.

Keeping in view the characteristics of services and the potential management problems in retailing of services, there are distinct channel configurations which one can notice in services sector. Rathmell has suggested the dominant channel configuration in the service sector where agents and brokers play the key role in distribution of services.

The major function of these agents and brokers is like any other intermediary – to bring the producer of service and the user or consumer together.

For certain services, agents can be identified and deployed with selling as the chief function to be performed by them. These agents can be compared with the agents of goods and they are classified as brokers or sales agents. The example of this kind of channel is transportation (travel agents) and office or factory workers (employment agencies). However, in some cases, the agents may be trained in the creation and production of service and then franchised to sell it (e.g.: Shahnaz Hussain Beauty Parlours).

In case of certain services, actual product is not transferable and therefore tangible representations are created and transferred. This type of channel is used for marketing insurance services where a contact document exists as a physical and tangible representation of the service.

Another characteristic of services is that they are generally not delivered to the buyer and the creation of time and place utilities is a vital function in the services marketing. Irrespective of whether one uses agents or middlemen or direct sales channel the factor of location keeping in view the potential markets will be the most significant in channel selection decision. Duane David et al. are of the view that locational considerations along with personal sources of information are two of the critical factors in final purchase decision of many services.

2.3.4 Promoting Services You need to understand the clear differences in information usage between goods and services. First, the difference is that consumers of services are less likely to purchase without information than those of goods. Second, the consumer of services will prefer personal sources over impersonal sources of information. And third, the basic characteristics of services have implications for communication strategy. For example, in hospitality industry, the intangible service offer is tangibalised and represented in


the promotional material and customers decide to buy or not to buy on the strength of the description and representation of the service offer in the promotional material.

Therefore, the above three differences influence the decisions regarding the (a) communications objectives, (b) target audiences, and (c) planning of each of the sub elements in the promotion mix.

Although there could be a variety of objectives to promote, but the basic objectives of the promotion mix for services may fall under one of the following:

1. Develop personal relations with client (personal relations might result in satisfaction, more than their service offer).

2. Make a strong impression of competency, honesty and sincerity (professional orientation to service transaction so as to win buyer’s confidence in seller’s abilities to deliver the service).

3. Should be able to use indirect selling techniques (creating derived demand or act as a buying consultant).

4. Manage to maintain a fine image by positive word of mouth.

5. Packaging and customisation.

Target Audience

While you are defining the objectives of your communication campaign, you should also be clear about the target audience. In services sector there is a direct contact between the person who provides the service and the customers. Therefore, some amount of promotion should be targeted at the employees so as to motivate them to serve the customer better. In such communications the objective can also be to educate the employees about how to handle operational problems so as to increase their performance level.

The other set of target audience is similar to that of goods where the target audience may not necessarily be the buyer or user but also the influencer, decider or user of the buying cycle.

Planning the Promotion Mix

George and Berry, keeping in view the intangibility of services, proposed that in the case of services a customer is buying the performance of the service personnel and therefore the advertising in service industries should not only restrict itself to encouraging consumption, but also it should encourage employees to perform well.

They proposed the following six basic guidelines to help design effective advertising programmes.

The advertising should have positive effects on contact personnel.

It should capitalise on the word of mouth.

It should provide tangible clues to the customers.

It should make the service offering easily understood.

It should contribute to the continuity.

It should promise only what is possible.



Fill in the blanks:

1. ………………………. in the marketing context, is anything which is offered to the market for exchange or consumption.

2. ……………………….follows the principles and practices of pricing of goods and, therefore, they are either cost based or market based.

2.4 LET US SUM UP The concept of market segmentation emerged as an extension of the marketing concept in the latter part of 1950s. Market segmentation is the process of dividing the total market into relatively distinct homogeneous sub-groups of consumers with similar needs or characteristics that lead them to respond in similar ways to a particular marketing programme.

Markets are complex entities that can be segmented in a variety of ways. A segmentation variable is a characteristic of individuals, groups or organisations that marketers use to divide and create segments of the total market. Geographic segmentation focuses on dividing markets into different geographic units, such as regions, nations, states, urban, rural, etc. Demographic characteristics are commonly used to segment the market. Factors such as age, sex, education, income, marital status, household life cycle, family size, social class, etc., are used singly, or in a combination, to segment a market. When segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation.

Dividing the market on the basis of such variables as use occasion, benefits sought, user status, usage rate, loyalty status, buyer readiness stage and attitude is termed as behaviouristic segmentation.

Product, in the marketing context, is anything which is offered to the market for exchange or consumption. Pricing is yet another variable of the marketing mix. A particular product or service is acceptable to the customer at a particular price and if the price is increased, it is likely that the same product or service might become less acceptable to the customer.

2.5 LESSON END ACTIVITY Make a detailed note on the pricing policy of several service provider companies in India, what are the major considerations they take as a base for setting their price for their services.

2.6 KEYWORDS Geographic Segmentation: It focuses on dividing markets into different geographic units, such as regions, nations, states, urban, rural, etc.

Market Segment: It is a portion of a larger market in which the individuals, groups, or organizations share one or more characteristics that cause them to have relatively similar product needs.

Psychographic Segmentation: It is based on personality or lifestyle characteristics.

Segmentation Variable: It is a characteristic of individuals, groups or organizations that marketers use to divide and create segments of the total market.


2.7 QUESTIONS FOR DISCUSSION 1. What is market segmentation? What are the bases for the market segmentation?

2. Explain the VALS approach of market segmentation.

3. What is marketing mix? How companies formulate or take a marketing mix decision?

4. What is pricing? How a service company set their prices?

5. Explain the concepts of distribution.


CYP 1

1. Market

2. Psychographic Segmentation

CYP 2

1. Product

2. Service Pricing

2.8 SUGGESTED READINGS Shanker Ravi, (1998). Service Marketing – Indian experience, South Asia Publication.

Panda. K. Tapan. (2013). Marketing Management Text and Cases. Second Edition. Excel Books.

Kinnison. A Harry. Aviation Maintenance Management. McGraw – Hill.

Sinha. P.K. Service Marketing, Text and Readings. Himalaya.

41Marketing of Hospitality

UNIT II

43Marketing of Hospitality LESSON

3 MARKETING OF HOSPITALITY

CONTENTS 3.0 Aims and Objectives 3.1 Introduction 3.2 Scope of the Hospitality Industry 3.2.1 Service – the Mission and Product of Hospitality 3.3 Tourism Perspective 3.3.1 Global Perspective 3.3.2 Forms and Categories of Travel 3.3.3 Indian Perspective 3.3.4 Nature/Characteristics of Tourism 3.3.5 Importance of Tourism 3.4 Hotel Services 3.4.1 Hotel Market Segment 3.4.2 Pricing 3.4.3 Distribution 3.4.4 Communications 3.4.5 Advertising 3.4.6 Sales Promotion 3.5 Travel Services 3.5.1 The Indian Scenario 3.5.2 Players: Competition 3.5.3 Travel Services Marketing 3.5.4 Other Marketing Challenges 3.6 Airlines Services 3.6.1 The Low-cost Carriers: Aligning Service Provision with Demand 3.6.2 Marketing Strategy 3.7 Railway Services 3.7.1 The Influencing Factors 3.7.2 Importance of Financial Viability 3.7.3 Basic Principles for Pricing 3.8 Passenger and Goods Transport 3.9 Leisure Services 3.9.1 Servicing the Future Leisure Traveller 3.10 Let us Sum up 3.11 Lesson End Activity 3.12 Keywords 3.13 Questions for Discussion 3.14 Suggested Readings



Discuss scope of hospitality industry

Discuss tourism perspective

Explain hotel and travel services

Describe airlines, railway, passenger and goods transport and leisure services

3.1 INTRODUCTION Hospitality refers to the relationship process between a guest and a host, and it also refers to the act or practice of being hospitable, that is, the reception and entertainment of guests, visitors, or strangers, with liberality and goodwill.

A universal symbol for hospitality is the pineapple. Many believe that the idea was borrowed from the people who first domesticated the pineapple. These people placed pineapples outside their homes to signify that visitors are welcome. As the exotic fruit was rare and costly, it symbolized the very best in hospitality. It was used to welcome and honour royal and wealthy guests.

Hospitality can be explained in many ways as follows:

Receiving guests in a generous and cordial manner

Creating a pleasant or sustaining environment

Satisfying a guest’s needs

Generating a friendly and safe atmosphere

The hospitality industry comprising businesses that serve guests who are away from home – can be defined by its scope, mission and providers.

3.2 SCOPE OF THE HOSPITALITY INDUSTRY From history we can trace the development of the hospitality industry through thousands of years and many cultures. Learning the history of the industry is helpful because it reveals the strong relationship between the shape of hospitality and the needs and expectations of different societies. Societies change over time in what they need and want, Hence the hospitality industry would also continue to change.

The age old industry of hospitality began as an outgrowth of travel in the conduct of trade. In many countries, the quality of hospitality services varied according to the fees paid and the location of the establishment. From its simple origins as privately owned, independently operated business, the hospitality industry has grown in complexity and size.

Tourism will be by far the largest industry that the world has ever seen. Tourism accounts for 30% of the global trade and comprises 12% of the world GDP. Estimates reckon that tourism, domestic and international pumps into the national economy ` 37,000 crore. In bound visitors totalled 2.36 million a decade ago (during the year 1998), earning for the country ` 12,000 crore in foreign exchange.

Globalization has made this industry to grow at a faster rate and in India, tourism and hospitality contributes 10% to the GDP and by the year 2010 it is expected to be 12%. The world Tourism Organization (WTO) has made a forecast that globally, international arrivals will reach 1 billion by 2010 and 1.6 billion by 2020. India and China are set to become favourite travel destinations.


The foreign tourist arrivals to India during 2003 have crossed 2.75 million marks. This was mainly due to the strong recovery of the economy, IT/ITES boom and the “Incredible India” campaign. There are an estimated 95,772 standard and classified rooms in India, of which around 25.82% are in premium segment, 30% in mid –market segment, 23.34% in the budget segment, 2.35% in the heritage segment and remaining 18.4% in the unapproved segment.

By 2020, India would be the leading tourist spot in South Asia with more than eight million tourist arrivals. The average room rates and revenue per available room projected a steady growth across major economies such as U.S.A, Europe, Middle East and Asia.

A few components of Today’s hospitality industry are as follows:

Travel and tourism

Lodging

Food service industry

Recreation, sports and entertainment.

3.2.1 Service – The Mission and Product of Hospitality The intangibility of service makes seeing hospitality as an industry a little difficult for many people. Manufacturing industries produce tangible products that usually can be stored for future use and uniformly produced. Service on the other hand is an intangible product.

Some businesses related to hospitality also produce tangible products such as special kitchen equipment used in commercial restaurants, but for most hospitality business, the main business is the creation of memorable experiences through furnishing services. Restaurants and hotels have a two-fold purpose: to satisfy the physical and psychological expectations of guests. They accomplish this through providing a good product and a good service.

3.3 TOURISM PERSPECTIVE The term Tourist is believed to have been derived from the Latin word ‘TORNUS’ which means a tool, a circle or a turner’s wheel. In the sense of the word of the origin, tourist is a person who undertakes a circular trip, i.e., ultimately comes back to the place from where he sets about his journey.

The simple word travel, defined as "the act of moving" by most dictionaries, has a different definition within the context of tourism industry. For the purpose of this book, travel is defined as "the act of moving outside one's community for business or pleasure but not for commuting or traveling to or from work or school" (Gee, Makens, & Choy, 1989, p. 12). With respect to travel as an industry, there must also be the creation of economic value resulting from the travel activity.

Understanding fundamental definitions and concepts used within the context of the travel and tourism industry provides an essential framework from which most discussions on the industry are based. Because of tourism's intangible nature, common definitions of terminology benefit the industry in a number of ways.

Standardized definitions help insure that all parties are speaking about the same term or concept with little or no room for variables. This essential for tourism developers and executives from different regions or countries when they discuss travel and tourism matters.


In addition, having standardized definitions enables planners to use comparable data in which to make more informed business decisions. Exact definitions, however, cannot be taken for granted. For the first half of the 20th century, tourism visitor arrivals were barely recorded by many countries and, when they were recorded, methods varied by countries. It was not possible to effectively compare the total number of visitors from one country to another which defined visitors differently, usually counting arriving foreign passport-holding individuals.

Finally, having standardized definitions enables tourism researchers to make scientifically valid assumptions about the tourism industry. This becomes increasingly important as travel and tourism researchers continue to enlighten public policy makers and private industry executives about the extraordinary role tourism plays-in the worlds overall economy. As a relatively new academic discipline, the tourism field lacks the depth of research found in other forms of commerce. As standardized definitions become more accepted, researchers will have an easier time collecting comparable data and performing meaningful tourism studies.

Based on the various definitions of a Tourist here are some of the characteristics of a Tourist:

He takes up his journey of his own free will.

He takes up the journey primarily in search of enjoyment.

The money spent on the visit is the money derived from home, not, money earned in the places of visit.

He finally returns to his original starting point.

3.3.1 Global Perspective The World Tourism Organization (WTO), the major intergovernmental body concerned with tourism, has led the way in establishing a set of definitions for general use. In 1991, the WTO and the Government of Canada organized an International Conference on Travel and Tourism Statistics in Ottawa, Canada which adopted a set of resolutions and recommendations relating to tourism concepts, definitions, and classifications. The following definitions are based on the WTO definitions and classifications and explain the various types of visitors:

Tourism: The activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes.

Tourist: (overnight visitor) Visitor staying at least one night in a collective or private accommodation in the place visited.

Same Day Visitor (Excursionists): Visitor who does not spend the night in a collective or private accommodation in the place visited.

Visitor: Any person traveling to a place other than that of his/her usual environment for less than 12 consecutive months and whose main purpose of travel is not to work for pay in the place visited.

Traveller: Any person on a trip between two or more locations (WTO, 1995b, p. 16).

Unfortunately, there is still confusion over these very basic definitions. Even within the same country such as the United States, for example, different states may use different definitions for data gathering and statistical purposes.


3.3.2 Forms and Categories of Travel Just as there are different types of visitors, there are different forms and categories of travel which take place, varying by traveller, destination, and motive for travel, such as international vs. domestic travel, intra-regional vs. interregional travel, as well as inbound vs. outbound travel.

International and Domestic Tourism

According to the WTO, international tourism differs from domestic tourism and occurs when the traveller crosses a country's border. Not every international traveller is a visitor, however. The traveller is a visitor only if the trip takes him or her outside the usual environment, e.g., workers who cross borders for employment are not considered visitors. The interest in international tourism has always been strong, primarily for economic reasons, as this form of tourism plays an important role in trade and monetary flows among nations.

Domestic tourism has been overshadowed by the interest in international tourism, for it was thought initially to have little or no international impact, and statistics on the subject were felt to be a country's own business. It has become clear, however, that international and domestic tourism do relate to each other. Travellers’ choices change depending on circumstances, and domestic tourism can be substituted for International tourism and vice versa under the influence of external factors, such as relative growth in real incomes, price differences between countries, and international political conditions. Over the past few decades, in many Western countries domestic holidays were largely replaced by outbound holidays, influenced by the rise in living standards and discretionary incomes, while developing countries have seen sharp increases in domestic tourism.

Regional Travel

Regions are geographically united subdivisions of a larger area characterized by definitive criteria or frames of reference. Three types of regions are used in tourism research. The first one refers to geographical location. Regions such as "the north" or "the west," are examples of this type. The second type refers to administrative areas, such as "Province X." The third combines criteria referring to location with criteria of a more physical nature. Examples of this type of regions are "the lake district" or "the Pacific Basin." Regions of functional type can also be constructed, such as "urban areas" or "coastal areas”. The term interregional travel refers to travel among various regions, whether in regions found within the same province or state, a country, or various regions throughout the world. Intra-regional, on the other hand, refers directly to travel contained within the same defined region, whether domestic or international such as travel between countries of East Asia.

Inbound and Outbound Tourism

There are three forms of tourism at any level, in relation to a given area, e.g., domestic region, country, or group of countries:

Domestic tourism, involving residents of the given area traveling (as visitors) only within that area;

Inbound tourism, involving non-residents traveling as visitors in the given area;

Outbound tourism, involving residents traveling as visitors in an area other than the given area.


If a country is the area of reference, the terms "domestic," "inbound" and "outbound" tourism can be combined in various ways to derive the following categories of tourism:

Internal tourism, which comprises domestic and inbound tourism;

National tourism, which comprises domestic tourism and outbound tourism;

International tourism, which consists of inbound tourism and outbound tourism.

To avoid misunderstanding the terms "inbound," "outbound," "domestic," "internal," "national" and "international tourism" are generally used with a country as the unit of reference. However, it should be recognized that there are political subdivisions which are less than countries and differ from states such as the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands, both part of the United States (WTO, 1995b, p. 27).

3.3.3 Indian Perspective In India we see the origin of the concept of tourism in Sanskrit Literature. It has given us three terms derived from the root word “Atana” which means going out and accordingly we have the terms:

Tirthatana: It means going out and visiting places of religious merit.

Paryatana: It means going out for pleasure and knowledge.

Deshatana: It means going out of the country primarily for economic gains.

In simple terms tourism is the act of travel for the purposes of leisure, pleasure or business, and the provision of services for this act.

There are two important components that make up tourism:

1. The practice of traveling for pleasure.

2. The business of providing tours and services for persons traveling.

Difference between Travel and Tourism

Though the words Travel and Tourism are synonymies and used interchangeably but Tourism is a wider concept and encompasses a lot more than travel alone. Travel implies journeys undertaken from one place to another for any purpose including journeys to work and as a part of employment, as a part of leisure and to take up residence; whereas tourism includes the journey to a destination and also the stay at a destination outside one’s usual place of residence and the activities undertaken for leisure and recreation.

All tourism includes some travel, but not all travel is tourism. A person may often travel for a wide variety of purposes of which tourism is only one. However, if properly handled, a part of the travel for non-tourism purposes can be motivated into travel for tourism as an additional purpose. For example a person on a journey as a part of employment to a place with one or more tourist attractions – like a spot of scenic beauty or historical significance, a pilgrimage, a lake, etc. can be induced to spare some time and money for a short visit and or stay for tourism purposes alone. In this sense every traveller is a ‘potential’ tourist and is up to the managers of the industry to tap this ‘potential’ and convert the traveller into an ‘actual’ tourist.

3.3.4 Nature/Characteristics of Tourism The following are the some of the characteristics of the tourism. They are:


Absence of ownership: When you buy a car, the ownership of the car is transferred to you, but when you hire a taxi you buy the right to be transported to a predetermined destination at a predetermined price (fare). You neither own the automobile nor the driver of the vehicle. Similarly, hotel rooms, airline tickets, etc. can be used but not owned. These services can be bought for consumption but ownership remains with the provider of the service. So, a dance can be enjoyed by viewing it, but the dancer cannot be owned.

Unstable Demand: Tourism demand is influenced by seasonal, economic political and others such factors. There are certain times of the year which see a greater demand than others. At these times there is a greater strain on services like hotel bookings, employment, the transport system, etc.

Intangible: Unlike a tangible product, say, a motor car or refrigerator, no transfer of ownership of goods is involved in tourism. The product here cannot be seen or inspected before its purchase. Instead, certain facilities, installations, items of equipment are made available for a specified time and for a specified use. For example, a seat in an aero plane is provided only for a specified time.

Psychological: A large component of tourism product is the satisfaction the consumer derives from its use. A tourist acquires experiences while interacting with the new environment and his experiences help to attract and motivate potential customers.

Highly Perishable: A travel agent or tour operator who sells a tourism product cannot store it. Production can only take place if the customer is actually present. And once consumption begins, it cannot be stopped, interrupted or modified. If the product remains unused, the chances are lost, i.e. if tourists do not visit a particular place, the opportunity at that time is lost. It is due to this reason that heavy discount is offered by hotels and transport generating organizations during off season.

Composite Product: The tourist product cannot be provided by a single enterprise unlike a manufactured product. The tourist product covers the complete experience of a visit to a particular place. And many providers contribute to this experience. For instance, airline supplies seats, a hotel provides rooms and restaurants, travel agents make bookings for stay and sightseeing, etc.

Fixed supply in the short run: The tourism product unlike a manufactured product cannot be brought to the consumer; the consumer must go to the product. This requires an in-depth study of users’ behaviour, taste preferences, likes and dislikes so that expectations and realities coincide for the maximum satisfaction of the consumer. The supply of a tourism product is fixed in the short run and can only be increased in the long run following increased demand patterns.

Heterogeneous: Tourism is not a homogeneous product since it tends to vary in standard and quality over time, unlike a TV set or any other manufactured product. A package tour or even a flight on an aircraft can’t be consistent at all times. The reason is that this product is a service and services are people based. Due to this, there is variability in this product. All individuals vary and even the same individual may not perform the same every time. For instance, all air hostesses cannot provide the same quality of service and even the same air hostess may not perform uniformly in the morning and evening. Thus, services cannot be standardized.

Marketable: Tourism product is marketed at two levels. At the first level, national and regional organizations engage in persuading potential tourists to visit the country or a certain region. These official tourist organizations first create


knowledge of its country in tourist – generating markets and persuade visitors in these markets to visit the country. At the second level, the various individual firms providing tourist services, market their own components of the total tourist product to persuade potential tourists to visit that region for which they are responsible.

Risk: The risk involved in the use of a tourism product is heightened since it has to be purchased before its consumption. An element of chance is always present in its consumption. Like, a show might not be as entertaining as it promises to be or a beach holiday might be disappointing due to heavy rain.

3.3.5 Importance of Tourism Tourism sector holds immense potential for Indian economy. It can provide impetus to other industries through backward and forward linkages and can generate huge revenue earnings for the country. In the recent 2007-08 budget, the provision for building tourist infrastructure has been increased from US$ 95.6 million in 2006-07 to US$ 116.5 million in 2007-08 (Min. of Tourism, GOI). Tourism is no longer looking at it as a leisure activity, but as a major source of employment. The labour capital ratio per million rupee of investment at 1985-86 prices in the tourism sector is 47.5 jobs as against 44.7 jobs in agriculture and 12.6 jobs in case of manufacturing industries (Market plus Report, Min. of Tourism). Tourism is one of the third largest net earners of foreign exchange for the country and also one of the sectors, which employs the largest number of manpower. In order to develop tourism in India in a systematic manner, position it as a major engine of economic growth and to harness it’s direct and multiplier effects for employment and poverty eradication in an environmentally sustainable manner the state and central governments formulated several policies. But it continues to suffer from lack of consistent and comprehensive policy. While little effort has been made to tap the potential of the tourism sector over the last few decades, the central tourism ministry is formulating policies to facilitate private investments through public private partnership and focus on development of this sector. India is rated among the top five travel destinations in the world according to Lonely Planet. ABTA magazine rates India as the most preferred destination on earth. Indian tourism is one of the most diverse products on the global scene. India has 26 world heritage sites. It is divided into 25 bio-geographic zones and has wide ranging eco tourism products. Apart from this it has a 6,000 km coastline and dozens of beaches (WTO 1997). India's great ethnic diversity translates into a wide variety of cuisine and culture. It also has a large number of villages, plantations and adventure locations. The potential of tourism to contribute to development is widely recognized in the industrialized countries, with tourism playing an increasingly important role and receiving government support. Tourism along with some other activities like financial services and tele-communications is a major component of economic strategies. Tourism has become a favoured means of addressing the socio-economic problems facing rural areas on one end, while enhancing development of urban areas on the other.


Fill in the blanks:

1. The potential of tourism to contribute to development is widely recognized in the ............................... countries

2. Tourism is not a ............................... product since it tends to vary in standard and quality over time

51Marketing of Hospitality 3.4 HOTEL SERVICES

Hotels are a major service industry in India. Their significance is undoubted. A number of international hotel chains have come to India, either independently or with a tie-up with an Indian partner. The Government of India’s tourism department has also realised their importance and started classifying them on the basis of the standard of their facilities. An effort is also being made to promote India through its tourist offices all over the world.

To set achievable marketing goals and realistic objectives, four aspects of the hotel’s offerings to its chosen guests are involved. These are the products, price or tariffs, distribution and marketing communication. Just as a chef prepares varied and tasty dishes with the same basic ingredients, the marketer can also vary the quantum and proportion of the four elements of the marketing mix to achieve appropriate marketing goals and sales targets.

At the very outset some basic assumptions regarding hotel marketing are necessary. These are:

Hotel customers are referred to as ‘guests’ as they receive hospitality by way of accommodation, food and drink or all for which they pay. If satisfied, they return to the hotel for receiving further paying hospitality.

A hotel is “immovable” in contrast to a manufactured product or service which is mobile and can be taken from the venue of production to the site of consumption.

The capital investment in a hotel industry is generally high and the gestation period for adequate returns on the investment is normally long.

The demand for hotel facilities has a variety which a few manufactured products have.

Some hotel facilities like rooms, and ‘covers’ in restaurants are quickly perishable just as empty airline seats are.

Hotels are not only in competition with other’s hotels, but also with the products and services of other industries catering to discretionary expenditure.

These assumptions postulate that the economic viability of a hotel depends largely on three factors. First, the speed with which demand for hotel facilities can be generated; second, the capacity to ensure and retain customer satisfaction which will result in repetitive business and expansion of business; and third, the package, tenor of atmosphere, service and quality which together constitute the hotel’s standing and image. The hotel product comprises the basic service that is offered, which consists of accommodation and food beverage.

3.4.1 Hotel Market Segment The total hotel market, which consists of the total demand for hotel facilities, may be divided into various segments. These segments are determined as per the needs of the people and the means they possess to pay for their satisfaction. The fulfilment of these means relates to the market package. The market for the hotel will be served according to what is provided, how it is provided, and for how much.

Independent Guests

A common classification of hotel market segment is according to the purpose of visit by guests, i.e. holiday-tourism oriented, business-traveller oriented, conference oriented, or foreign versus domestic traffic oriented. These terms tend to be equivocal as they relate to a particular type of traveller or customer irrespective of the market


segment to which he belongs. For instance, a foreign tourist staying at a luxury hotel may be on business on his company’s expense account whereas if he comes as a normal pleasure or leisure tourist, he may well stay at a lower-tariff hotel suiting his budget. Similarly, a guest staying at a luxury hotel may be a businessman for whom the address and image of the hotel are important enough to justify the tariff. On the other hand, when he travels for pleasure or for social purposes, he may stay in the same luxury hotel or one with a lower tariff, depending on the purpose of the visit.

Groups

Customers travelling in groups comprise another segment, so do meeting and conference groups. Therefore, the hotel market segments correspond to the basic market packages in terms of spending power as also social classifications – upper/upper-middle/lower.

Special Groups

For us, in India, there is yet another important segment, namely, non-vegetarian or vegetarian. Vegetarian hotels (with comparatively lower tariffs than non-vegetarian hotels), may attract the same category of customers as for the non-vegetarian group, who would naturally evaluate and choose hotels according to the purpose of their visit and stay; consequently, the tariff they are prepared to accept.

Hence, it is apparent that interchange between segments does take place, whether as a temporary or permanent phenomenon, according to the duration of the changing circumstances of the guest-segments. These segments of the total market for a particular hotel may be further divided into primary and secondary levels of demand; each of which, in turn, contains two further levels of demand, as shown in Table below.

Table 3.1: Primary and Secondary Levels of Demand

Primary level Basic demand which exists for hotel facilities but not being served at present.

Displacement demand rising from the clientele of other hotels where the customers’ needs are not fully met by the market package offered.

Secondary level Created demand which does not exist so far, and arising from people who do not normally use hotel facilities, or from people who do not use the hotel facilities in a particular area.

Futuristic demand which may occur at sometime inthe future, due to certain socio-economic or socio-psychological factors or both, e.g., rise in the standard of living and per capita income (‘green revolution’ areas, new industrial complexes), increase in population, changing social systems and habits, etc.

A new hotel introduced in a particular segment of the hotel market may eventually be able to exploit all these levels of demand. It is essential that there should be substantial basic demand which can be tapped by a new hotel. Displacement and created levels of demand require a period of time and a sustained sales effort to realise their potential, whereas, the assessment of future demand relates to the continuing long-term prosperity of the hotel. If the basic demand is absent but if the displacement created and future levels of demand promise well for an investment appraised on a ‘10 to 15 years basis’, the decision to start a new hotel under such circumstances has perforce to be a long-gestation decision.


For accommodation, each segment of the market, together with its primary and secondary divisions, contains some or all of the potential buyers of hotel accommodation, as shown in Table 3.2, which may sometimes overlap.

There may well be more types according to the geographical, economic, industrial, and social characteristics of the location of each hotel.

Similarly, for food and beverages, each segment of the hotel market contains varied categories of potential buyers of catering services which may also sometimes overlap.

Table 3.2: Potential Buyers for Accommodation and Catering Services

Accommodation Transit tourists, passing through the particular location. Terminal tourists, for whom the location represents end of a journey. Travelling businessmen. Visiting personnel, i.e. business or industrial employees for whom travel

is an occasional part of their job. Organised tours. Conventions, conferences, workshops, meetings, where the location is

pre-fixed by the organisers. Social visitors, i.e. guests to weddings or other social functions.

Catering Occupant customers staying in the hotel. Transit or change customers – people other than local residents of the

areas patronising the hotel either by impulse or intentionally planned for meals, refreshments, etc.

Organisations and societies consisting of members acting in unison. Local business customers who patronise the hotel due to local industrial

or commercial activity. Meetings and conferences organised by agencies from outside areas. People on tour who step into the hotel for meals, refreshments, etc.

The Hotel Product

The hotel product has a number of components like accommodation, food and beverage, recreation and health, shops, car rental service, apart from others. But of all these, the accommodation and food and beverage components are the primary ones.

The accommodation component of the hotel product requires a clear identification of the type of clientele the hotel wishes to attract and serve. Regardless of ‘star’ categorisation, as customers tend to graduate from one ‘star’ category to another, accommodation can be either of the luxury type almost regardless of the price, or the economy type providing the essentials of shelter frugally. Between these two there are a variety of accommodation facilities—catering to customers whose accommodation is paid for; leisure customers who pay for their accommodation; customers who are part of groups either on business or on pleasure. However, once the hotel property has been constructed to serve identified and specific customer segments, the possibility of variation is severely restricted. Admittedly, the economy type property cannot be moved up into a luxury one without considerable expense and time although a reversal from the luxury to the economy class is more feasible and less problematic.

To tide over the above difficulties, hotel architects, the world over, are now designing properties with as much flexibility as possible to make multipurpose adjustable public rooms feasible. In the case of a hotel where such flexibility does not exist, the hotel product decision for accommodation will depend entirely on the accuracy of selling rooms to the right type of customers.


On the other hand, the food and beverage component of the basic hotel product offers greater scope for flexibility. Qualitative differentials can be very wide and would range from high class a la carte high-price menu restaurants with complete table service to the utilisation table of medium or low-priced menu dining rooms. Capital expenditure is relatively lower – décor, furnishings and fittings can be changed more easily to transform the image of a restaurant or dining room in either way. Availability of room service from either the hotel’s own kitchens or from outside is another area of flexibility.

It is obvious, however, that resident guests in a hotel know what exactly they are buying in room occupancy and in food and beverage sales. Hence their experience of the hotel product will condition their future relationship with the hotel and the patronage afforded.

3.4.2 Pricing It is difficult for a hotel to exercise differential pricing except for certain specific purposes. These may typically be differentials in tariffs and prices during the peak and lean seasons; group rates; contact rates for airline crew; special conference rates or special concessions to attract customers; tourism year syndrome, etc. However, by and large, hotel pricing tends to follow or conform to pricing standards applicable to

3.4.3 Distribution As has been said earlier, the hotel does not journey to its customers to consummate a sale. It is the reverse that takes place—customers come to the hotel. Hotel distribution relies on interdependence with other industries serving travellers and tourists such as the transportation industry (airlines, railways, roadways, shipping lines), travel agents and tour operators, national and state tourism organisations, shopping and entertainment providers. In sum, those services which provide certain other facilities to the traveller or the tourist which are bought when accommodation and food are assured.

Some interesting features of hotel distribution need critical examination. The first is cooperative distribution which operates in passing on traffic overflow from one hotel to its neighbour, on a reciprocal basis, without affecting regular business with the main intermediaries in the distribution system such as travel agents; tour operators; airlines and special business clientele. The second is the increasing development of franchising. Franchising may take various forms but it basically involves making available to the franchisee (the beneficiary) of a service system that is designed and controlled for quality standards by the franchiser. The franchisee gets the advantage of being part of a reservation and sales system which ensures a certain level of business which may not be available otherwise. The franchisee also benefits from the image of the franchiser, professional advice and training provided by the franchiser. In the process, he improves his own operational image and efficiency. The franchiser also benefits as his investment is not required in the franchisee’s properties. At the same time, the franchiser’s distribution system is expanded and the franchisee is well motivated to succeed in his own business. Hotel distribution is, thus, an important element of the marketing mix.

3.4.4 Communications Perhaps this element of the hotel marketing mix is most important as it is directly responsible for bringing customers to the hotel. Hotel marketing communications are either direct or indirect. The direct communications are through personal selling, advertising, sales promotion and direct mail. Appropriate messages are conveyed to those who are potential buyers of the hotel product and those who directly influence


decisions to buy the hotel product. Personal selling of the hotel product is effective when long-term relationship between the hotel and the customer is sought. It is also required where the level of business per customer is likely to be significant. Indirect marketing communications for hotels include public relations and publicity, both of which may and may not form a part of the hotel’s marketing communication programme but may function independently. The major elements of the hotel communication mix are – mass media advertising, direct mail, sales promotion, public relations, and publicity.

3.4.5 Advertising Hotel advertising is an effective and, generally, a long-term effort to inform the customer about the existence of the property, giving details about the location and types of facilities offered. Advertising is also aimed at influencing the attitude of the customer to bring about his acceptance of the particular service offered. Informative advertising is necessary for a new hotel or a hotel offering new facilities or services which are different from the past. Persuasive advertising is aimed at a more competitive situation where desired business from all departments of the hotel is not achieved.

In advertising, a hotelier is dealing with a non-personal contact with the target audience, unlike sales promotion where the hotelier is aware of the identity of the target. The purpose of advertising is indeed the same as the purpose of communication – it aims to inform and persuade the consumer or the travel trade to change, to influence their attitude towards the advertiser’s product or organisation.

3.4.6 Sales Promotion Sales promotion is aimed at generating immediate response in terms of a buying decision. For a hotel which wishes to cash in on sales promotion, the specific part of the business which stands to benefit, i.e., room sales or food and beverage sales, has to be clearly identified and a promotion drive which will bring about the desired increase of sales must be launched. For instance, a hill station hotel which normally has almost empty rooms during winter or off-season may promote its accommodation and other facilities when a famous winter sports festival is to be held in that area or a national or international conference is to take place or any other special convention or workshop where participating delegates also need relaxation. People who would normally not visit the hill station in winter will do so when presented with such an opportunity.

There are two ways in which one can examine sales promotion. First, schemes which can be defined in terms of time; and second is an ongoing permanent activity/function. Irrespective of these distinctions one can clearly identify three groups of activities under sales promotion: trade promotions; consumer promotions; and display.

Trade promotions are schemes which are generally intended to induce or persuade the travel trade or the distribution channel to generate more demand. The term “travel trade” has been used in its generic form—to refer to all the available distribution channels or outlets to the hotel industry. Trade promotions are, therefore, schemes which are intended to induce or persuade the travel trade to sell more of the hotel product or hotel service and for this purpose a variety of incentives are given.

Consumer promotions are schemes to persuade the consumer, i.e. the potential hotel guest or the user of hotel services, to buy a particular hotel product or service, at a particular point of time. Consumer promotions should be understood as the first definition of sales promotion schemes which are defined in terms of time and are finite.


The third group of activities which include product display and related point-of-sale material, i.e., posters, show cards, display units, etc., help keep in perspective the view that one can’t obviously display the actual hotel product or service at the point of sale and so one has to depend on the descriptions and representations of the actual product.

3.5 TRAVEL SERVICES Conventionally, it was believed that a travel agent (TA) does not create a need but only fulfils an existing need. But it is now a reality that a number of TAs not only create the need to travel to destinations but give business to hotels, carriers and many others. A TA is an important link between the traveller and the rest. How some travel agencies have grown and benefited from the marketing approach, is being discussed in this lesson.

The purpose of marketing is to create a customer, to persuade him to purchase your product, in spite of the options open to him to either buy from someone else or not to buy at all. It is a well recognised axiom that the customer pays not for the product, but for the satisfaction he desires. To begin with, only the customer knows what would satisfy him. Or does he, really? It is, therefore, important to know who the customer is, or can be; to determine what satisfies him or does not; or, even to change his perspectives and bring around to recognise the possibilities inherent in the offer you are making.

Obviously the operative word here is value. To qualify, it is the value that the customer receives or perceives he is getting, in exchange for a segment of money or time or choice surrendered by him, which determines the 'decision variable'. As a consequence, value for money has become a consumer buzzword as powerful and pervasive as 'brand loyalty' and 'quality' – the latter, no doubt, being an integral part of the value concept.

It is axiomatic that the 'decision variable' itself is not a constant. To explain, given the same product backed with consistent value, the customer may decide not to buy it, or defer his purchase decision, depending on various factors external to the product—economic, attitudinal and societal. The marketer, in such situations, has to reach out beyond the confidence circle of his own product into larger concentric circles which he can only hope to control most of the time. It is, perhaps, this perception of outer circles and the compulsion to reach out for them which adds true value to his product, particularly in fiercely competitive situations.

Fortunately, not only travel agents, but everyone else knows by now of the dramatic attitudinal and societal changes which have come about in India over the last twenty years in matters of business and leisure travel. It is no longer considered a luxury, and certainly not a psychological block, to want to get from 'Point A' to 'Point B' in the least possible time and in a most pleasurable manner. The 'decision variable' has, in the main, become more need driven as the external factors influencing such decisions have weakened and lost their bite.

Since most things in life have a price attached to them, the advantages of a potentially large travel market, close at hand, must be placed in the context of constricted marketing opportunities. This is neither a paradox nor a contradiction in terms. What really has emerged for the trade is a scenario in which the players have to operate with not much to fall back on, in terms of Unique Selling Propositions (UPSs). The seller of a travel service is not about 'to change the world'—the world has changed! What he is attempting, really, is to add value to an existing product for influencing the buying decision in his favour.


He is conscious all the time that the competitor is selling intrinsically the same product—a flight coupon, a car rental, a passport or visa service, a tour, and so forth. What could or does make a difference for him are the peripherals he can add on or, as is increasingly obvious worldwide, what reductions he can offer to his client from the cost of the service provided, by working as closely as possible.

This is not to imply that the travel business is a non-professionalised hit-or-miss operation, working without sophistication and driven by cut-rate deals, made in little offices. As a matter of fact, travel is the largest and fastest growing commercial enterprise in the world. In India too, the growth patterns are exciting, but more of that later. Moreover, technology has given the business a number of powerful operational tools. Internally, large scale computerisation of travel agencies has brought about a sense of productivity and efficiency norms – concepts which, in the 'people business', are difficult to formulate and monitor. Externally, access to international reservation mega-systems have changed the rules of the travel marketing game by offering remarkable instant options to the airline traveller and hotel guest and travel agents are no longer unfamiliar with the distinct advantages of satellite data links and electronic mail.

The most important point, however, is: are we, in the travel business, marketing or selling? Are we creating a need or merely fulfilling an existing need? Driven as we are by the more amorphous elements of personal choice, how do we lend the product a marketable dimension and how different are we allowed to be from the travel agent next door? These are aspects which must be viewed in the current and short-future Indian context.

3.5.1 The Indian Scenario The travel trade in India is about sixty years old, and has received its impetus from the growth of civil aviation in the country. From small beginnings with a few firms like Thomas Cook, Vensimals, Mercury of the Oberoi's followed a few years later by TCI and Sita, today it encompasses about 750 travel agencies spread all over the country. Yet, this growth has been random and uncontrolled, manifest by today's trade syndromes, a serious lack of professionalism, particularly in areas of marketing and finance, the absence of clear-cut institutional and product definition, competition of the most pernicious kind, and an inadequate code of ethics.

Also, apart from the odd ones out, travel agencies in India have grown around the expertise, experience and enterprise of single individuals and, so, tend to be highly personalised. These are superior technocrats who have plunged in, armed with assurances from a small but dedicated clientele, mostly with poor funding and weakly held beliefs on the workability of modern methods in a market-place, where contacts, word of mouth publicity and perpetual deal making predominate. For instance, how can one explain the fact that computerisation has been adopted just about a decade ago, and even then, in the most rudimentary manner? Or that, finance still remains primarily, a bookkeeping and debt-collection function? Or that the marketing function is seen as an exercise in trade espionage, sweet-dealing with the clients, wheeling-dealing and pumping in sales volumes at any cost or consequence.

The biggest problem a travel service marketer faces is determining what to sell and to whom. As an agent there is not much he can do about the activities of his principals, or those on whom he must depend: be they airlines or shipping companies, government or foreign embassies, local transport operators or their agents abroad. Thus, the need is to be both circumspect and selective. Overpromising and under-delivering a service can lead to loss of money and loss of a client; and, in a trade which is as insular as the travel trade, the ripple effect is disastrous. Ironically, the Indian travel agent constantly gambles on these imponderables because he believes


he is safer off in familiar territory, as opposed to offering products he is not comfortable with.

3.5.2 Players: Competition Situational, the Indian travel agent finds himself caught in the cause and effect fallout of unplanned and non-regulated growth. He is forced to compete not only with fellow agents, but with other players in the Held like general sales agents and passenger sales agents. Initially, these firms were appointed by certain airlines to sell their capacities in areas where no IATA approved travel agent existed, at commission percentages higher than what the travel agent earned. First at a slow pace, but later with gathering momentum, GSAs and PSAs have 'crossed the borders' and it is not unusual to find, particularly in our metro cities, the air l ine, its GSA or PSA and IATA approved travel agents operating next door to each other, and often running after the same client! Furthermore, cases of airlines competing against their own agents for a plum account are not difficult to find.

In the highly price sensitive travel trade, the IATA approved travel agent is at a serious disadvantage; because every other client is primarily concerned with neutralising the effects of steeply increasing air fares on his travel budget and he is forced to offer discounts from his earnings just to stay in the game.

Within the travel fraternity itself, at least five classifications have emerged; the IATA agent offering a wide clutch of services on a multilocational basis; the single location agent; the corporation promoted 'in-house' agency; the 'consolidator' who buys business for cash on a heavily discounted basis; the non-IATA 'Mom and Pop Shop' who have no airline ticket stocks or service back-ups and exist by pulling in clients literally from the pavements for IATA agents in exchange for a small sub-agency commission. Add to these the firms which specialise only in visa or passport work on the side, and the usual assortment of free lancers and touts. The IATA approved travel agent must find his way through this maze of options and enticements to reach his prospective client.

3.5.3 Travel Services Marketing The quality, reach, and ultimate success of the marketing activity in a travel agency depends on how clearly the marketer has understood the service levels his firm can deliver, and how accurately he assesses the factors which make his firm stand out from competition. To arrive at such level of clarity and accuracy, he will have to measure his firm's potential and performance against the generic and specific factors which contribute to the success of a travel services operation.

Whilst a distinction has been made between the generic and the specific, it must be understood that the factors are not insular; there is both an overlapping and an interlocking into one another. Moreover, there are some functional relationships between them, particularly in terms of cause and effect.

This is not a priority listing and each factor assumes importance at a particular point in time or amidst a specific scenario. However, everything should finally progress into credibility and confidence.

Seven Cs of Travel Services Marketing

Competence

Credibility

Confidence

Consistency


Customization

Care

Clout

Credibility and Confidence: These are the strongest allies a travel agent can have in the market-place. Qualitatively, selling travel services is a complex business, not only due to convoluted fare structures, a lot of regulations to be complied with, involved itinerary planning and so forth, but to a great extent due to the fact that the agent has little control over the end product he offers. An aircraft may get delayed, or not take off at all, leading to a missed connection; a visa or passport may be refused and there is almost nothing you can do about it in a hurry; a hired car may fail to turn up, or a hired coach may break down miles from anywhere; a hotel may not have a pre-booked room ready for your client; your client's air cargo may be shut out at the last moment; a tour can start with delay and misunderstandings and even end in a fiasco. Each of these primary services are organised by you from principals; no principal is answerable to you and only a few choose to commiserate with you. On the other hand, since the client rarely interacts with the principals, you are inevitably answerable to him.

These traumas are what a travel agent has to frequently live through and a good agent develops techniques and plans to safeguard his cliënt and himself. How well he does reflect the credibility and the confidence level he is able to generate and sustain in the market. Word does tend to get around and if the marketer, in pitching for new business, can demonstrate these qualities backed with data and facts, he can manoeuvre his agency into a position of strength. Even so, we, in the Indian market-place, are lucky because loyalties die hard here, unlike in the West where credibility is subjected to constant testing and analysis. But with business perspectives becoming increasingly bottom-line and pressure oriented, things are changing. The marketing professional must realise this and search for credibility and confidence advantages for his agency.

Competence and Clout: Listing competence as a marketing advantage may be resorting to a tautology. Nevertheless, the qualities a travel agent possesses in terms of high job specific skills and professional staff strength set him apart from the run-of-the-mill agent and help in promoting client confidence. Here, competence is related to technical excellence more than to street smart 'mister fix it' labels. There will be enough opportunity to demonstrate the latter when things need to get done out of turn by bending rules, but to begin with, an agency's prime strength lies in how well the technicalities of the trade are handled by its staff and managers. Competence, therefore, is a function of superior staff, strong supervision, effective systems and controls and diverse experience culled from the trade. The marketer who can assert, based on a proven track record, that his firm knows all the options and can deliver the best one to the client, or has the talent to anticipate problems before they arise, is bargaining from a position of strength.

Clout, of course, can be applied when, in spite of having pressed all the buttons, the machinery remains immobile. Given the multiplicity of operational systems laid out by a number of principals, anything could go wrong—cancellations, delays, tariff revisions. If the marketer perceives the efficacy of his agency's contacts within the confines of offices that matter he must project this strongly to his prospective client. He should, however, avoid overkill; contacts remain productive only if they are handled judiciously.

Consistency: This is another important factor which the marketer must exploit to the firm's advantage. It is far easier to maintain consistency of quality while selling goods


which can be produced to DIN or BS or ISI specifications than when you are selling services which do not conform to tangible parameters and have a perceptual bias.

As a matter of fact, it is this bias which determines the vital 'decision variable' which was discussed earlier. Consistency, however, is easy to comprehend, but not as easy to sustain particularly, "when you are marching in someone else's parade." The travel service marketer, in view of competitive pressures, tends to pitch at the highest promise levels every time to the client. This practice is undesirable and one should see very objectively on what the agency can do, time after time. The service performance must not read like the ECG of someone with a systolic problem, nor should it be a flat-liner. It is important to learn how to say 'no' at times and play safe. It pays in the long run to consistently deliver good levels of service than be a 'one shot wonder'.

Customisation and Care: If an agency is still arguing about what has been discussed, remember that the negative fallout of saying 'no' to a client can be neutralised if, as the marketer, one is prepared to approach each client as someone who has special needs, even if they are not obvious.

The travel service marketer is rarely selling a branded product. There is no single airline that everyone always likes or dislikes; there is no best airport in the world where your client wants to get stuck in for hours; there is no ideal stopover or routing. Each client has a special perspective and he wants a travel agency which can assure him that it understands this well.

Small and medium sized agencies have gainfully employed this factor in their selling and servicing, perhaps due to low volumes that they handle which help a one-to-one relationship with their clients. It is the larger travel agencies which suffer in comparison.

For example, Mercury Travels, which is one of the top three in the country, has a client base of over 500 companies. The problem of providing each passenger, which could be say 1000 travellers a month on international flights alone, with highly customised treatment, is acute. Just to keep track of their travel related data is no small task. Until a satisfactory answer to this can be found, high volume agencies will have to create a special sales and servicing cell, and then allocate perhaps 5 to 10 clients per staff on a dedicated basis. But, as is obvious, this adds not only to staff costs, but also to pernicious in-house squabbling, when each group member pushes for emergency attention from the ticketing counter staff. Ideally, large agencies should find the resources to create dedicated cells comprising one staff each drawn from domestic ticketing, international ticketing, sales and servicing and documentation departments, who deal with just their 'own' clients. But such a nuclear configuration may not always be possible.

Large agents in America and Europe are highly computerised, both in-house as well as being subscribers to mega-computerised reservation systems like Sabre, Galileo, Amadeus and so forth. We, in India, are far behind till now. Indian travel agencies are far behind. At Mercury Travel the focus, therefore, has been to bring about quantum changes in in-house computerisation to go completely online. This will also help in building up a comprehensive travel profile of each of the customers of Mercury Travels. Whilst waiting for this upgradation to come about, marketers must sell services on the premise that every passenger will receive personalised treatment, and ensure that his or her commitment to the client is backed up by strong operational support. The silver lining in this situation for a large agency is that, with years of handling a wide span of customer needs, agency staff is conditioned to expect complications and provide quick, effective, cost-saving solutions which are really what the client is looking for, to begin with.


Customisation is pointless without care. First, the marketer must assert that his agency cares about your particular needs and is prepared to put his money where his mouth is. Second, his agency takes more than adequate care in planning your travel details and follows through till departure. It is generally believed that if a client is convinced that adequate care has been taken at the planning stage and all that needs to be done has been done, he tends not to hold the agency responsible for the problems and frustrations which may befall him later. A client can be a business person, a corporate manager, a government official, a self-employed professional, with whom the travel service marketer can strike the empathy chord.

3.5.4 Other Marketing Challenges There are a number of specific factors which can be used to great advantage in marketing a travel service within the distinctive scenario that exists in India. These factors are:

Low general awareness

Intense competition

Poor infrastructure

Lack of control.

The Indian traveller, having truly come of age in the last decade or so, is ironically, by and large, still ignorant of all that a travel agency can do for him in terms of servicing, obtaining the best deals for him from the airlines and hotels, the various meet and assist services which are available at airports in India and abroad, the most inexpensive methods of transportation, time saving and so on.

On the other hand, the market is intensively competitive, with an increasing number of players running after the same client groups. Even if .01% of our 880 million travel (at 8,00,000 travellers), our country has immense potential. It is reasonable to estimate that just about 10% of this potential is tapped. On the other hand, the number of travel agents have increased fifty-fold in the last two or three decades. To paraphrase Winston Churchill, never have so few expected so much of so many! Travel services are overwhelmingly concentrated in the metros and their environs—few travel agents have been intrepid enough to invest time and effort in opening up the vast and affluent hinterland. This manifests itself in growing and intensive competition.

The tools that the travel agent has to work with are at best, primitive, and at worst, non-existent. In-house computerisation levels in the trade are very low because given the abysmal margins available to the agent, he fights shy of all investment that cannot guarantee instant returns. Additionally, the agent is familiar with mega-reservation systems only through the pages of foreign trade journals. On the other hand, the available domestic service infrastructure from our telephone systems to airplanes can keep anyone guessing and missing.

Finally, as explained earlier, the travel trade in India is not regulated by a charter or by a strict ethical code. IATA norms, save for financial guarantees, are loosely operated both in terms of licensing and monitoring. The premier travel trade body, the Travel Agents Association of India is constituted by preference and has no statutory control over its members which constitute about half of all IATA recognised agents in the country. Thus grab-as-grab-can is the name of the game. The operational ethics of many travel agents border on malpractice. Price, and not service, has become the prime mover in the market.


Value Add-ons in a Travel Agency

A tie-up with a credit card company for rupee payment in India, and a hotel reservation system.

A tie-up with authorised dealer in foreign exchange to secure the benefits of quick processing at minimum cost.

To possess a full-fledged money changers licence and work as a one-stop shop.

To introduce a Privilege Travellers Club which can give frequent traveller benefits. This could take the form of complimentary meet and assist services of free tickets, or even an all expense paid holiday.

Computerised reminder service on visas and passports and e', en on the highlights of previous journeys.

The art of service recovery is also a very powerful tool in the hands of the travel marketer. As we have seen, a travel agent is horribly prone to the more deadly aspects of Murphy's Law, being subject to the fallout from its own and other’s errors of omission and commission. It capitalises on and gets mileage from adversity.

Instances of a group being bumped off a flight and taken straight by a travel agent to a restaurant for a five-star dinner or his picking up the tab for an aborted flight connection or offering a complimentary trip to Agra when the usual transport fails to report, are not uncommon. A leading hotel chain in America asserts that if 'Room Service' takes more than 10 minutes the service is complimentary. If the marketer is in a position to commit such quid pro quos, he should use it to his advantage.

As far as discounts, credit and complimentary service in general are concerned, the agency policies must be clearly defined. The marketer must make the initial pitch by forcefully highlighting such benefits, keeping in mind what the competition has to offer. He must be prepared for counter demands from the prospective client and be flexible enough, as dictated by circumstance. Compulsions of high volumes and prestige play an important role here. In securing a large bank's travel business, higher discounts and Jonger credits than are usually offered by his agency may be justified if there is a strong chance of the goodwill rubbing off on to the Bank's commercial clientele, who may then swing their travel business towards that agency. Offering special terms to powerful trade bodies and associations may also pay off in a similar manner.

It is considered both ethical as well as sound business policy to check out the prospective client's record with the earlier agency – why is he leaving them? An independent financial review and rating helps in this matter.

On the other hand, the marketer, reviewing a client's past performance, must take into account sales volumes and payment record. In re-negotiating contracts, one of the prime considerations is whether it has been a profitable relationship for both the parties.

Look through any newspaper or magazine and you will observe that the advertising of services in this country constitutes an infinitesimal segment of the total amount spent on product advertising. This is a ridiculous situation because, obviously, it is the former which is more nebulous in its perceived benefits and therefore needs to be more positively projected at the potential market. Travel agents stop at the occasional cocktail party or PR base—with the guest list being generally restricted to existing or past clients. There is an agent who has an annual party for over a thousand people at a football stadium, comprising past and present travellers with them! What little advertising there is, limited to specific launches — an outbound tour programme, or the opening of a new location.


The concept of producing an effective corporate brochure, or a sales kit, is important; it can form the basis of the marketer’s initial sales pitch. Similarly, in going for a very large account, it may be worthwhile to invest in an audio–visual presentation. For instance, once a very prestigious Bangalore based client called for an AV presentation and Mercury Travels won the account on the strength of its AV presentation. Newspaper and magazine advertising, leave alone TV, is very expensive and must be judiciously used.

In the main, the successful travel service marketer must be convinced that effective institutional advertising which forcefully imprints the agency's product in the public mind, is essential. There are hundreds of potential clients out there who must be told what you can offer them.

3.6 AIRLINES SERVICES Growing global competition in the air travel market meant that the 1990s were the decade of the air traveller as a consumer seeking enhanced service quality. This has gone a stage further in the new millennium as the price-sensitive customer is a dominant element, especially in domestic air travel, and is concerned with a minimum Standard of service. Airlines been forced to reduce operating costs and compete aggressively for business, and also to focus on the needs of their customers. Airline marketing is now more complex as it is vital to the management process of deciding what to produce and how it should be sold. Thus, '... the role of airline marketing is to bring together the supply of air services, which each airline can largely control, with the demand, which it can influence but not control, and to do this in a way which is both profitable and meets the airline's corporate objectives' (Doganis, 1991: 202). BA explained its financial turnaround from a loss of £544 million in 1981-1982 to a profit of £272 million in 1983-1984 in terms of a more focused marketing orientation involving recognizing customers' needs and setting about satisfying them. This has now come full circle, with a re-evaluation of the company's core business and marketing focus as its business has been significantly affected by the rise of low-cost carriers on short-haul domestic and European routes. BA has had to align its fare structure to what customers are prepared to pay, and also to rationalize its operations. For example, up to July 2002 BA had reduced fares on 71 routes and removed restrictions on lower priced tickets to stimulate demand. This was a result of the company's poor financial performance for the year ended 30 March 2002, where a £200 million loss before tax compared to a £150 million profit in 2000. In February 2002 the company announced its 'Future Size and Shape' study, which began a process of realigning the company to demand by removing unprofitable sections of its business through capacity and overhead reduction. One notable outcome was the decision to reposition its short-haul routes to compete with the low-cost airlines.

How Airlines Use Marketing Functions?

Marketing in the management of airline services can be summarized as a four-stage process:

1. Identify the markets and market segments using research methods and existing data sources and traffic forecasts.

2. Use the market analysis to assess which products to offer, known as product planning. At this stage price becomes a critical factor. Therefore product planning is related to:

Market needs identified from market research

The current and future product features of competing airlines and the cost of different product features


Assessing what price the customers can be expected to pay for the product.

3. Develop a marketing plan to plan and organize the selling of the products. Sales and distribution outlets need to be considered, together with a detailed programme of advertising and promotion, such as the impact and effect that advertisements on the side of taxis may have on the travelling public.

4. Monitor and review the airline's ability to meet service standards, assessing this through sales figures, customer surveys, analysis of complaints, and long-term planning to develop new service and product features (Page, 2002).

The role of marketing, particularly advertising, has also assumed an increasingly important role in the evolution of the low-cost carrier market.

3.6.1 The Low-cost Carriers: Aligning Service Provision with Demand Airlines have traditionally targeted service quality in the business travel and luxury market for first-class travel. This is because it is the most profitable segment of the market for scheduled airlines, with premium pricing and high profit margins per seat, compared to lower yields in economy class, where profitability is attained by achieving high load factors. However, this traditional strategy has been significantly challenged in many markets that have allowed liberalization of services, permitting new entrants to compete for business - notably low-cost carriers, as more travellers now seek budget fares.

The innovations in low-cost flying have been translated into the low-cost revolution that has now affected the UK and mainland Europe, whilst other companies in Australasia and Asia are following this pattern. The development of the low-cost airline revolution in the USA means that up to 15 per cent of all domestic air travel is now on low-cost carriers. In Europe this figure is much lower at 3 per cent, although it is growing rapidly, especially in the UK.

Low-cost carriers in Europe: The dominant low cost players include Ryanair, easyjet, GO, and a number of other competitors such as BMI. The scale and significance of low-cost airlines in the UK can be illustrated by the history of Ryanair and its subsequent development.

Airline Marketing and Developing Client Relationships: Frequent Flyer Programmes and Alliances

In order continually to build and develop the market for air travel, airlines have begun to recognize the benefits of collaboration and joint working in terms of alliances. The concept of frequent flyer programmes (FFPs) is one example of building good client relationships to encourage customer loyalty. These programmes were originally developed in the USA in May 1981 by American Airlines (AA), where FFPs were developed to attract business following deregulation. AA used its database of passengers to identify frequent flyers, who were enrolled into a ‘Very Important Travellers Club’. The reward for loyalty was free air travel on a route that consistently had a high ratio of unsold seats – Hawaii. AA's Advantage FFP aimed to maximize revenue yield and its load factor; it helped to develop Dallas as a logical hub; and it also succeeded in capturing business from their competitors' airlines. AA's Advantage scheme was closely followed schemes launched by other companies (United, TWA and Delta), though BA was added to the AA FFP to give it an international dimension, with Qantas joining to form the One World Global Alliance.

To broaden the marketing appeal of FFPs, non-airline travel services (e.g. car rental companies, tour operators and hotel chains), airline-affiliated credit card purchases (mileage credits added according to the volume of spending) and other services now attract FFP points. It is a basic element of airline marketing strategy in the USA, and


European and other global carriers have also introduced it. In the Asia-Pacific region there is a major airline alliance to challenge the One World Global Alliance discussed above; this is the Star Alliance, which is a combination of Air New Zealand, United, Lufthansa, Thai Airways International, SAS, Varig and Air Canada, offering services to over 700 destinations in 111 countries. In 2001, 51 per cent of the world airline capacity was linked to airline marketing alliances, and this reflects a growing consolidation in the market. The Star Alliance now dominates the alliance networks, with 20 per cent of capacity; One World has 15 per cent; SkyTeam has 10 per cent; and KLM/NorthWest has 6 per cent. The remaining 46 per cent are in non-aligned groupings. This allows partner airlines to grow their network, achieve economies of scale in ticketing, maintenance and purchasing, and provide the consumer with seamless travel.

Doganis (2001) has identified two types of airline alliance in existence:

1. Commercial alliances, which are operationally driven and focus on the early stages of alliance development

2. Strategic alliances, leading towards a full merger of airlines.

This is reflected in the three stages to alliance development. The first phase is revenue generation, where partners can enter and exit easily, and involves a series of code shares, joint FFPs, network coordination, joint sales, shared/business lounges and an alliance logo. In the second phase the alliance is cemented together, seeking to make cost savings for its members from common ground handling, joint maintenance, sales and call centres, purchasing and fleet harmonization. Exit is difficult at this stage. In the last phase, a joint venture situation, and exit is almost impossible as it involves franchising, joint product development, sharing of aircraft and crews and a single alliance brand. The emergence of alliances reflects a more sophisticated business approach to airline development, although some airlines still seek to differentiate themselves on the basis of unique selling features or propositions – especially in the luxury market, through in-flight food provision.

Key characteristics of low-cost carriers that make them more competitive than other carriers.

Some carriers have introduced single/one-way fares not requiring stopovers or Saturday night stays to get advanced purchase (APEX) prices

No complimentary in-flight service (no frills), which often reduces operating costs by 6-7 per cent

One-class cabins (in most cases)

No pre-assigned seating (in most cases)

Ticketless travel

High-frequency routes to compete with other airlines on popular destinations, and up to three flights a day on low-density routes

Short turnarounds (often less than half an hour) with higher aircraft rotations (i.e. the level of utilization is higher than other airlines) and less time charged on the airport apron and runway

The use of secondary airports where feasible (including the provision of public transport where none exists)

Point-to-point flights


Lower staffing costs, with fewer cabin crew because there is no complimentary in-flight service, which also reduces turnaround times due to the lack of cleaning caused by food service

Flexibility in staff rastering, a lack of overnight stays for staff at non-base locations, and streamlined operations (e.g. on some airlines toilets on domestic flights are only emptied on cabin crew requests rather than at each turnaround to reduce costs)

Many of the aircraft are leased, reducing the level of depreciation and standardizing costs

Many airline functions are outsourced, such as ground staff and check-in, minimizing overheads and reducing costs by 11-15 per cent

Standardized aircraft types (e.g. Boeing 737s) to reduce maintenance costs and the range of spare parts that need to be held for repairs

Limited office space at the airports

Heavy emphasis on advertising, especially billboards, to offset the declining use of travel agents as the main source of bookings

Heavy dependence upon the Internet and telephone for bookings

Small administrative staff, with many sales-related staff on commission to improve performance (as well as pilots in some cases)

With the opening of the Indian economy, Indian skies were also opened to private operators. To start with private air taxi operators (ATOs) were introduced but not allowed to fly on prescribed schedules. Subsequently, full private airlines status was granted to most of them.

Soon competition in air travel industry became intense and thus, the need for marketing was felt.

Marketing of airlines through travel agencies started accidentally in the 1930s—when Pan Am opened a small counter in Thomas Cook’s office in New York. Pan Am was so small that they could not afford to rent an office. In return, they offered Thomas Cook 10 per cent commission on airlines sales than the usual 5 per cent. Today, there are 55,000 travel agencies operating all over the world—30,000 in USA alone, and earning commissions worth several billion dollars—a very convenient distribution channel.

100 per cent load factor is rather an elusive target which commercial airlines want to achieve—but are seldom able to. Load factor is considered as airline's equivalent of occupancy. It determines the level of profit or loss in a given flight. Break-even load factor is often 60 per cent—and, anything above that is the operating profit. This break-even factor may even be higher in case of some government-owned airlines which are saddled with excessive workforce. For instance, Air India employs 800 people per plane compared to 250 by the Singapore airlines and 200 to 255 by various American and European airlines. This is the price taxpayers pay for the inefficiency and lack of consideration of public sector airlines. Indian Airlines are no better in carrying excess baggage of manpower as compared to the standards of the other third world countries.

Airlines business is a complex phenomenon. Although it is part of the transportation industry, airlines do not operate in isolation. For example, if TAW advertises only US$300 for a return trip to Paris, do people buy a ticket because of the price attraction or are they tempted to see the eternal beauty of Paris? Alternatively, do people fly to New York for low air fares or to see what 'Broadway' and "Time Square" offer. Entertainment, hotels, sightseeing, cultural exchange – all these form part of the


massive movement of human beings on the wings of airlines from one continent to another. In 1991 some 1.2 billion people travelled by scheduled airlines. And we can safely add another 400 million who travelled by charter aircraft. About 400 million travelled by air internationally. There are 10,000 commercial aircraft in the world offering 1.6 million seats daily. This broadly is the size of the airlines market which is expanding at the rate of 6 to 7 per cent a year. In the long-term, the growth in airlines industry is irreversible, the only debatable factor being the rate of growth.

3.6.2 Marketing Strategy The principles of marketing that apply to the airlines industry are the same as for any other product, say garments or shoes, as airlines marketers also have to cater to the needs of customers. The following definition developed by the British Institute of Management holds good for airlines also — "Marketing is simply customer orientation — looking at your business from the customers' point of view". An airlines executive has put it differently - "In airlines business we need three things—service, more service, and even more service."

While marketing principles undoubtedly apply to airlines product, there is an important difference – airlines marketing can never brook any delay. It is a highly perishable commodity – if it is not used on Friday, it perishes, and so, a quick and creative marketing response is called for. Another difference is that the product has to be "bought unseen". The customer has to come to it to consume it. It is an expensive product, and is bought on trust.

In a deregulated environment, the customer has many choices — he can easily shift to another airline if the original airline does not measure up to his or her standards of service. Keeping these parameters in view, we have to undertake the normal marketing drill of locating our markets and segmenting them according to income, education and preferences. The basic questions are:

Where do our customers live?

What kind of income should they have to afford the luxury of a holiday by air?

Where do they want to go?

What do they want to see?

We need answers to all these queries. After identifying our markets, we communicate with potential customers through media advertising, public relations, direct mail, sales calls, telephone contacts, a wide variety of tools to reach them. Thereafter, the performance in terms of earnings and expenses needs to be monitored.

Marketing through Travel Agencies: In the process of marketing, airlines are often helped by travel agencies which have become the principal marketing arms of airlines; some 90 per cent of international airlines sales and over 60 per cent of domestic sales are affected by agents, big and small. They have a vested interest in selling the airlines product, which is a seat in the plane because they are compensated by airlines through generous commission, sweetened by other overriding factors. The advantage to airlines is that agents earn commission on only what they sell. But, if airlines open their own offices to sell their product directly to customers, they end up incurring huge overheads.

Some airlines offer financial support to travel agencies to give a helping hand in marketing. Travel agents often produce colourful brochures listing tours to foreign countries, or even domestic tours. The cost of the brochures is reimbursed by the airlines. The bulk business generated by such marketing efforts goes to the sponsoring airlines. The tours can be operated during the off-season for the airlines, thus bringing


in new business. The yield from such traffic may not be high, but it does go to fill the belly of the planes at a price which is not unremunerative. Such traffic would not exist in the absence of consistent marketing effort.

Airlines provide another form of incentive to travel agents – they organise familiarisation trips for productive foreign agents to their home destination to encourage them to sell more – a kind of a free holiday. Journalists too fall in this favoured category for they provide free and credible publicity on the destinations visited.

Marketing through Consortiums: Availability of too many seats on airlines has created a new situation for the travel agency business - supply has outstripped demand. Some corporate houses opened their own travel agencies and began buying tickets at special rates. For want of a better term we can call it discount on volume sales. These consolidators emerged out of the confusion caused by far too many fares in the market-place. These consolidators were business organisations which bought airlines tickets in bulk at special rates from the principals and offered those seats at a discount to fellow travel agents. Another development was the formation of consortiums consisting of affiliated travel agencies with the avowed objective of obtaining bargaining power vis-a-vis airlines. This was done in response to the bargaining power of mega-travel agencies like American Express or Thomas Cook, who could not get better deals from carriers. The fact of the matter is that airlines are out to make a deal so long as they do not lose money.

Marketing through CRSs: An unusual development took place in the late seventies which has changed the complexion of airlines marketing. It is the development of mega - Computerized Reservation Systems (CRSs) by airlines. A modern CRS system lists thousands of routes and fares and is able to construct complicated itineraries and price them from its database. The race for independent or jointly owned CRSs started when some airlines felt that major airlines had their own displays which naturally featured them favourably thus giving them a better share of the market. Airlines today are being marketed through thousands of computer terminals in offices of travel agencies which provide instant reservations on airlines, hotels, motels and rental cars. Owning airlines charge fees from participating airlines and hotels and some of the airlines are making more money from CRSs than from the operation of airlines. More than 90 per cent of the 30,000 American travel agents have access to these computer terminals. Air India and Indian Airlines too have joined most of the better known CRSs, taking advantage of their marketing clout.

Marketing, therefore, is in the hands of these machines which inform you which airlines fly from place A to place B. Travel agent is an important decision-maker as he can advise the client about an airline. Time has come; a client could be doing his bookings from the cosy comfort of his own room by pressing a button on his screen and making payments through his credit card. In such an eventuality, the image of an airlines created through advertising will be a key factor in determining the choices of consumers.

Marketing and Frequent Flying Programmes (FFPs): An outgrowth of CRS systems is the Frequent Flying Programme (FFP). Pioneered by the American Airlines as its 'advantage' programme, FFPs are essentially motivated as an effort on the part of the airlines in an industry with very little product differentiation and a very large number of customers. In their quest for brand loyalty for an airline, the real battle is for the business traveller who pays full fare and takes on an average 6.5 business trips in one year in the USA – according to a study done by Gallup Poll. The pleasure traveller, on the other hand, averages only 1.5 trips in one year. In terms of specifics, the FFP offers the traveller free or discounted travel for him or his family depending on points earned on the number of trips taken. Looking at it from a different angle, it


provides business travellers a rationale to fly at higher fare at the cost of his employer. The employer also keeps quiet because the expense is tax-deductible.

3.7 RAILWAY SERVICES Indian Railways always worked on the premise that there is no competition for their services. They also felt that there is no need for marketing for them as the demand for their services is much higher than the capacity. Nonetheless, Indian Railways is competing with other modes of transport for both – passenger traffic as well as freight.

Criss-crossing the country over a 62,000 kilometre, route having more than ` 16,000 crore as capital-at-charge an annual turnover of above ` 13,500 crore, and a large workforce of about 16.5 million employees, Indian Railways are the second largest railroad system in the world under unitary management. Efficient management of this gigantic infrastructure plays a vital role in the economic, industrial and social progress of our country. Indian Railways carry over 10.57 million passengers and 0.94 million tonnes of freight traffic, on an average, per day.

Railways in India are a semi-monopoly as they hardly face any competition from other modes of transport in respect of the numbers of traffic carried by them. Long distance passengers of average means and commuters in and around metropolitan cities have hardly any other choice. Similarly, long and medium distance freight traffic comprising bulk commodities such as coal, iron ore, cement, fertilisers, iron and steel etc., also have to depend primarily on rail transport. As far as marketing of Railways’ services is concerned, pricing is a major element which needs to be updated from time to time. The other elements of marketing, however, have a limited scope primarily due to two reasons—First, the semi-monopoly of the Indian Railways and second, the demand-supply syndrome. Pricing of Railways’ services is not guided by competitive market forces but is decided by the government after detailed discussions in the Parliament keeping in view the various socio-economic factors and the overall interest of the country. Therefore, Rail tariffs in India are, in fact, administered prices. Pricing of railways’ services influence not only prices of essential commodities, raw materials and finished products but also a large population of travelling public. The importance of having a proper and rational pricing policy for the railways cannot, therefore, be over emphasised.

Also Railways have the flexibility of being a discriminating monopoly. They can fix different tariffs for various commodities and passenger services so long as there is no undue discrimination between individuals or specific users. Thus they can resort to cross-subsidisation of certain services by others. In fact, the passenger services in India are being cross-subsidised by freight traffic earnings.

3.7.1 The Influencing Factors Keeping in mind the semi-monopolist nature of rail transport and the objectives of a social welfare state, there are four important aspects which have to be borne in mind while devising freight rates and passenger fare structure,

1. Requirement of the developing economy

2. Importance of making the Railways financially viable

3. Interest of the common man

4. Possibility of increased efficiency

Amongst the various modes of transport, our country has to rely more and more on rail transport from an energy conservation, efficient land use and anti-pollution point of view. Apart from making use of electric traction on their busy routes, the Railways


are six times more fuel efficient in diesel traction than road transport. In view of a difficult balance of payments situation and very heavy burden on foreign exchange due to import of oil and oil products to the tune of nearly ` 15,000 core per year, it is obvious that Railways have to play a far more vital role in the transport sector than road or air transport.

3.7.2 Importance of Financial Viability Railways can be considered to be financially viable if four major conditions are satisfied. First, adequate funds are available for proper maintenance of assets and for ensuring good quality of service to the users with, of course, a rigid control over working expenses eliminating avoidable expenditure. Secondly, there should be enough provision for timely replacement of worn out and overaged assets by realistic appropriations to the Depreciation Reserve Fund. Thirdly, appropriations to the Pension Fund should be based on scientific actuarial calculations. Lastly, Railways should ensure a fair return, say 10 per cent, on the total capital invested, or at least on the capital-at-charge, after the above provisions have been made so that not only the dividend liability is met in full but some surplus is available to be credited to the Development Fund for such development activities which cannot be carried out from the loan capital advanced from the general revenues.

3.7.3 Basic Principles for Pricing Pricing of Railways’ services has to take into account twin considerations – cost of services and value of services.

To achieve financial viability, it must be ensured that each stream of traffic meets its fully distributed cost or at least its long-term marginal cost. This, therefore, forms the lower limit that can be attained. Then to generate the requisite surpluses we take into account the ‘value of service’, or in other words ‘what the traffic can bear’. Rates are fixed for different commodities and classes of travel based primarily on the principle of ‘value of service’. It is very difficult to estimate exactly the cost of service stream wise, commodity wise and class wise mainly because of the joint costs involved in Railways’ operation. These costs comprise terminal, line haul and intermediate marshalling expenses. However, costing methods have been refined to assess these costs as accurately as possible.

Value of service can be determined more easily in respect of traffic where alternative competitive modes of transport are available, e.g. road transport for highly rated freight traffic or short distance passenger traffic. However, for captive traffic, the inflationary impact in case of freight traffic and public welfare and reaction in case of passenger traffic have to be duly taken into account.

3.8 PASSENGER AND GOODS TRANSPORT Passenger travel or transport can be classified into public transport and private transport. Public transport are those transport services that have scheduled services on fixed routes, on the other hand private transport comprise of vehicles that render ad hoc services as per the requirement. Private transport services offers better flexibility, but has lower capacity, and a higher environmental impact. Travel may be as part of daily travelling, for business, leisure or migration.

Automobile and mass transit dominates the short-haul transport. Mass transit takes into account buses in rural and small cities, supplemented with commuter rail, trams and rapid transit in larger cities. Long-haul transport encompasses the use of the automobile, trains, coaches and aircraft. Aircraft services have become mainly used for the longest, together with intercontinental, travel. Intermodal passenger transport is


where a journey is performed through the use of several modes of transport; since all human transport usually starts and ends with walking; all passenger transport can be well-thought-out to be intermodal. Public transport may also consist of the intermediate change of vehicle, within or across modes, at a transport hub, such as a bus or railway station.

Buses and taxies can be located on both ends of the public transport spectrum. The cheapest mode of transport is the buses, but they are not much flexible, whereas taxis are very flexible but more expensive. In the middle is demand responsive transport, offering flexibility whilst remaining affordable.

International travel may be constrained for some individuals as a result of legislation and visa requirements.

3.9 LEISURE SERVICES Leisure travel is travel in which the primary motivation is to take a vacation from everyday life. Leisure travel is often characterised by staying in good hotels or resorts, going on guided tours, relaxing on beaches or in a room and feeling local tourist attractions. Most meals are eaten out when traveling for pleasure, and often more expensive modes of transportation, for example taxis, are used to get around. In certain cases, leisure travel might be used to denote to any trip that lasts more than a week, irrespective of the primary focus. Leisure travel is usually seen as the opposite of business travel.

Leisure travel includes many things, but besides being a vacation, it does not have to be any one of them. Although many leisure travellers spend more money than they would in their normal life, others might choose to travel economically. These leisure travellers might stay in hostels, cook their own meals and take public transit – as long as the main focus is on leisure, they are still leisure travellers. Correspondingly, a leisure traveller might make a business contact at a bar, acquire a new client, or work on a proposal for when she returns home. If the focus still is mainly on vacation, it is leisure travel.

“Working vacations” has become more common among people, in which they split their time between work and play. Not like a business trip, this sort of travel still includes many aspects of leisure travel. Numerous tour agencies have initiated offering “volunteer vacations,” which combine aspects of the leisure travel lifestyle with volunteering one’s time to an organization in need. Travelling of this type enables vacationers to enjoy the beauty of a new place while giving something back to it.

Rationale

Leisure travel has many advantages. Walking outside of a busy lifestyle can give people space to relax and relief their stress, returning to their jobs and everyday lives re-energized and refreshed. It also can provide people the chance to experience parts of the world they have never seen earlier, enriching their understanding of life on the planet. Traveling can be an exceptional way to come across new people and make new relations, and leisure travel provides people the space and time they need to really forge those bonds.

Costs

Even for those reluctant to get on truly budget leisure travel, there are numerous methods to limit costs. There is a wide swing among popular leisure travel destinations in prices among hotels, restaurants, travel, and activities, depending on the season. Locations in the Caribbean or Mediterranean, e.g., might be twice as


expensive in the course of winter, as millions of visitors from Europe and the U.S. try to escape cold weather.

3.9.1 Servicing the Future Leisure Traveller By 2015, it is estimated that the world leisure travel will be worth $672 bn. According to the travel port’s research one in two leisure travellers use offline travel agents and two in three say they also use online travel agency sites. The leisure travellers comprising of young generations, who consider their smartphones as their personal travel companions, were more likely to engage a travel agent for more complex trips.

Despite their technology savvy and preference to research and book trips themselves, leisure travellers are becoming ever more confused with the amount of information on the Web. The technology-engaged younger generation expressed concern that as the travel cycle moves closer to departure or mid-holiday, their requirements could be more sufficiently met. That is particularly the case for more complex trips, for instance international travel where travel agents are required to provide the necessary expertise and reassurance that the trip will deliver the experience planned and desired.


Fill in the blanks:

1. ............................... travel is often characterized by staying in nice hotels or resorts, relaxing on beaches or in a room, or going on guided tours and experiencing local tourist attractions.

2. Pricing of ............................... services has to take into account twin considerations – cost of services and value of services.

3.10 LET US SUM UP Hospitality refers to the relationship process between a guest and a host, and it also refers to the act or practice of being hospitable, that is, the reception and entertainment of guests, visitors, or strangers, with liberality and goodwill.

The term Tourist is believed to have been derived from the Latin word ‘TORNUS’ which means a tool, a circle or a turner’s wheel. The World Tourism Organization (WTO), the major intergovernmental body concerned with tourism, has led the way in establishing a set of definitions for general use. According to the WTO, international tourism differs from domestic tourism and occurs when the traveller crosses a country's border.

Tourism sector holds immense potential for Indian economy. It can provide impetus to other industries through backward and forward linkages and can generate huge revenue earnings for the country.

Hotels are a major service industry in India. A number of international hotel chains have come to India, either independently or with a tie-up with an Indian partner.

The travel trade in India is about sixty years old, and has received its impetus from the growth of civil aviation in the country. The quality, reach, and ultimate success of the marketing activity in a travel agency depends on how clearly the marketer has understood the service levels his firm can deliver, and how accurately he assesses the factors which make his firm stand out from competition.

Growing global competition in the air travel market meant that the 1990s were the decade of the air traveller as a consumer seeking enhanced service quality. The role of airline marketing is to bring together the supply of air services, which each airline can


largely control, with the demand, which it can influence but not control, and to do this in a way which is both profitable and meets the airline's corporate objectives'.

Indian Railways always worked on the premise that there is no competition for their services. Railways in India are a semi-monopoly as they hardly face any competition from other modes of transport in respect of the numbers of traffic carried by them.

3.11 LESSON END ACTIVITY Prepare a presentation on the marketing of some hospitality services.

3.12 KEYWORDS Hospitality: It refers to the relationship process between a guest and a host, and it also refers to the act or practice of being hospitable, that is, the reception and entertainment of guests, visitors, or strangers, with liberality and goodwill.

Leisure Travel: It is travel in which the primary motivation is to take a vacation from everyday life.

Tourism: The activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business, and other purposes.

Tourist: (overnight visitor) visitor staying at least one night in a collective or private accommodation in the place visited.

Visitor: Any person traveling to a place other than that of his/her usual environment for less than 12 consecutive months and whose main purpose of travel is not to work for pay in the place visited.

World Tourism Organization (WTO): It is the major intergovernmental body concerned with tourism

3.13 QUESTIONS FOR DISCUSSION 1. What do you mean by hospitality? Discuss the scope of the hospitality industry.

2. What are the characteristics of a tourist? Discuss various forms and categories of travel.

3. What are the basic assumptions regarding hotel marketing?

4. What do you mean by travel services marketing? Discuss seven C’s of travel services marketing.

5. How airlines use marketing functions?

6. What are the key characteristics of low-cost carriers that make them more competitive than other carriers.

7. Write a brief note on;

(a) passenger and goods transport

(b) leisure travel



CYP 1

1. Industrialised

2. Homogeneous

CYP 2

1. Leisure

2. Railways

3.14 SUGGESTED READINGS Robert D. Reid, David C. Bojanic, Hospitality Marketing Management

Kumar. Prasanna (2010), Marketing Of Hospitality & Tourism Services. Tata McGraw Hill Education Pvt. Ltd.

75Positioning and

Differentiation StrategiesLESSON

4 POSITIONING AND DIFFERENTIATION STRATEGIES

CONTENTS


4.1 Introduction

4.2 Positioning Strategy

4.2.1 The Process of Determining the Positioning Strategy

4.3 Differentiation Strategy

4.3.1 Steps in Differentiation

4.4 Quality of Service Industries

4.4.1 Achievement and Maintenance of Service Quality Management

4.4.2 Service Quality Dimensions

4.4.3 Gaps in Service Quality Delivery

4.5 Customer Support Services

4.5.1 Customer Acquisition

4.5.2 Focus on Public Relations

4.5.3 Focus on Existing Customers

4.5.4 Handling Customer Complaints

4.5.5 Types of Customer Complaints

4.5.6 Categories of Customer Complaints

4.6 Let us Sum up


4.8 Keywords




Discuss positioning strategy

Discuss differentiation strategy

Explain quality of service industries

Describe customer support services


4.1 INTRODUCTION Why do consumers prefer one product to another? In today’s over-communicated society and highly competitive markets, consumers have numerous options in almost all product categories. For example, consumers can buy a PC from IBM, Acer, Sony, Apple, HPCompaq, Zenith and others including low-cost assemblers. Every day, an average consumer is exposed to numerous marketing related messages and the marketer must successfully create a distinct and persuasive product or service image in the mind of the consumer.

4.2 POSITIONING STRATEGY Product positioning is a decision reached by a marketer to try to achieve a defined brand image relative to competition within a market segment. Product positioning decisions are strategic decisions and have an impact on long-term success of the brand. A product cannot exist unless it finds a place in the consumer’s perception of the world of products around her/him. Any product or brand is noticed only when it occupies a particular point or space in the individual consumer’s mind relative to other brands in the same product category. This perception of product is subjective and is governed by the individual’s needs, values, beliefs, experience and environment. The ‘position’ is the way the product or the brand is defined by consumers on important attributes. Positioning is the perception of a brand or product it brings about in the mind of a target consumer and reflects the essence of that brand or product in terms of its functional and non-functional benefits as judged by the consumer. Maggi brand of noodles has been successfully positioned as the “two minute” noodle in the minds of target consumers and has created a distinctive brand image. HLL’s soap, Lux, is hypothetically positioned as the “beauty soap” of female film stars and Dettol is the antiseptic for minor nicks and cuts, while possessing a plethora of uses, from preventing nappy rash to doubling as effective after-share lotion. BMW car is positioned as the “ultimate driving machine,” and Volvo is positioned on safety and durability. As markets become more crowded and competitive with similar types of products, consumers rely more on the product’s image than on its actual characteristics in making their buying decisions.

The right positioning is probably more important to the ultimate success of a brand than are its actual attributes. Marketers sometimes assign different images to the same product or service in different market segments or at times reposition the same product without actually making it any different physically. They attempt to create a distinct position for their brand so that consumers perceive it as being different and occupying a niche, no other product does and thereby try to create a product image congruent with the relevant self-image of the target consumers. Marketers strive to differentiate their products or services by emphasising attributes that they claim to be better able to satisfy consumer needs and wants than competing brands.

Positioning theory is significantly different from target marketing. It puts emphasis on the target consumers’ perceptions of brands in relation to other brands in the same product category. A major contribution of positioning theory is that it has introduced the concept of ‘distance’ and ‘dissimilarity’ between brands in the ‘perceptual space’ of the consumers. This concept can present many opportunities for perceived differentiation of products and brands. Prof. Levitt says that there is no such thing as a commodity; all goods and services are differentiable. To be meaningful, a differential advantage has to be persuasive and sustainable. Michael Porter points out: “A company can outperform its rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or both.” With rapid developments in science and technology, more and

77Positioning and

Differentiation Strategies

more brands in a given product category tend to become physically similar and more or less equal in performance. The product or brand manager has little choice but to fall back more and more on non-functional factors to distinguish her/his brand, and meaningful persuasive differentiation becomes an increasingly challenging task.

4.2.1 The Process of Determining the Positioning Strategy The exercise to determine the positioning strategy is not easy and could prove to be difficult and quite complex. It is important to fix a competitive point of reference by defining customer target market and nature of competition because arriving at the proper positioning requires establishing correct points-of-parity and points-of-difference associations.

Points-of-parity mean those associations that are not necessarily unique to the brand in some way but may in fact be shared with other brands. These associations can be of two types: category points-of-parity refer to those associations that consumers consider as being necessary within a certain product or category to make it a legitimate and credible offering. They may be necessary but not sufficient in themselves for brand choice. These attributes are minimally at generic product level and most likely at expected product level. For example, consumers might not consider a bank truly a “bank” unless it offers saving account facility, cheque books, fixed deposit, and a range of other services, convenient banking hours, ATM, etc. Over the years, facilities may change depending on technological developments and consumer trends, but the attributes and benefits that function as category can be seen to play the marketing game. Competitive points-of-parity associations attempt to discard or weaken competitors’ points-of-difference associations, or other such type of benefit. If a brand offers the same benefit plus more in some other areas, the brand is likely to emerge stronger and have a better competitive position.

Points-of-difference refer to strong, favourable and unique associations for a brand in consumers’ perceptions. These may be related to virtually any type of attribute or benefit association, functional, performance-related or imagery-related psychological considerations, to become a point-of-difference in the minds of consumers. They strongly associate these attributes and benefits with a brand, positively evaluate, and have a firm belief that they could not find these to the same extent in other competing brands. This is actually similar to USP concept pioneered by Rosser Reeves.

Steps need to be taken to reach a decision about positioning the following:

1. Identify Competitors: It may appear simple but it is not. This requires broad thinking. The competing products may not be restricted only to those which come from the same product category with which the brand competes directly. For example, Maggi competes not only with Top Ramen and other noodles, but also with all other products which are used as snacks. The marketer must consider all likely competitors, various use situations and usage effects on the consumer.

2. Assessment of Consumers’ Perceptions of Competition: After defining the competition, it is important to determine how consumers perceive the competing products. To do this, a set of product attributes, such as product characteristics, consumer benefits, product uses or product users are chosen for comparison. The task is to identify relevant attributes to avoid any which would be superfluous. The most useful and relevant attributes are chosen which describe the brand images.

Kelly repertory grid is one approach to generate an attribute list. The respondent is given a deck of cards containing various competing brand names. The consumer is asked to separate all unfamiliar brand names. After this, three cards are then selected randomly from the remaining ones. The respondent is asked to pick up


the two brands that are most alike and to describe the reasons for their similarity and why they are different from the third. The respondent is then asked to rate the remaining brands on the basis of attributes thus identified by her/him. This procedure is repeated a number of times for each respondent. This technique often generates a number of attributes. Once again, the redundant ones are separated from the long list of attributes so developed.

After obtaining a list of relevant attributes, most important, meaningful, and distinguishing attributes that influence the consumer’s purchase decision, are selected. These attributes are the ones that represent the consumer’s image of the competitive brands. Research by Russel J. Haley has shown the relevant attribute list of toothpaste as decay prevention, whitening capability, taste, colour, product and package attractiveness and price.

3. Determining Competitor’s Position: This exercise is undertaken to determine how all the competing brands, including the company’s own are positioned and what is their relative position in the consumer’s perceptual map — which are the competing brands that consumers consider as similar, and which are the ones considered dissimilar.

Marketing research can be used to plot a perceptual map that would show the position of different competing brands. Two-dimensional and multidimensional scaling techniques are available to help the researcher. (For a comprehensive discussion of these research techniques, the reader should refer to some good text on Marketing Research.)

4. Analysing the Consumers’ Preferences: The analysis so far discussed would determine where in the perceptual map the product should be positioned. The next step requires the identification of segments or clusters of customers who prefer this product location in the perceptual maps. Customers who value a certain set of attributes or benefits would form a segment. An ideal product would be the one that is preferred to over all others.

5. Making the Positioning Decision: Up to this point, it may become reasonably clear to make some subjective decision as to which position can be appropriate. In many situations, however, it may become necessary to rethink.

Positioning usually involves segmenting the market and choosing one or more segments. This would require ignoring the remaining parts of the market and focusing on selected part only. It is to be considered whether the selected segment or segments would support the brand entry. A specific chosen position may lead consumers to believe that this is what the product is for and those not looking for that specific benefit may not consider the brand. If the decision is for undifferentiated strategy, it may be possible to be general in positioning approach, encouraging consumers that they will get what they are looking for. For instance, the Toyota slogan, “I love what you do for me – Toyota,” communicates to consumers that they will get whatever they are looking for in this brand.

Some companies wait to see the market development work done by the competitors and when the market is educated, they enter the market with suitable product modifications. This is what happened in case of cellular phones in India. Some currently strong brands entered the market later, only after companies like Ericsson had created product awareness and market development. Ericsson lost much money in the process and today Nokia, Samsung and LG have good market share, while Sony Ericsson, Panasonic and Motorola are trailing.

A major question, as already pointed out by Trout and Ries, is “Do we have enough marketing money to occupy and hold the position?” Often it happens in

79Positioning and


this game of creating a brand position that even a series of ads is not likely to be enough. For example, it took long and sustained advertising efforts to create a position for Kinetic Honda. It was only after the ads of Himalayan Rally, with comparative figures of performance, that the product could establish itself on reliability, ruggedness, and durability.

There is an old saying, “If it isn’t broke, don’t fix it.” Many companies have learnt this the hard way. If an ad is working, changing it is usually unwise. Just because the managers are bored with some theme, it is not reason enough to change. Unless there are strong reasons to change the existing positioning of a brand, sticking with the current one is wise.

4.3 DIFFERENTIATION STRATEGY Due to the intangibility factor, it is rather difficult to differentiate one’s services from those of the competitors. The problem assumes a still larger dimension in those services where prices are regulated or in case where the competition is non-price competition based.

However, with a view to getting a competitive edge, the solution lies in a differentiated offer, delivery and image. The important thing to understand is the various levels of service package. One has to understand the primary service package and the secondary package in relation to a specific service and then create differentiation.

If we take the example of recent changes which have come about in the Indian aviation industry, the strategies package for civil aviation industry includes punctuality. If these airlines have achieved 97% on time departures, they are able to differentiate themselves from the public sector airlines. The other strategies towards differentiation include free on board liquor, non-Indian cabin crew, quality of food, etc.

From this example we observe that most innovations in service industries are capable of being copied. Although this is a reality in service industries, a marketer still keeps introducing newer innovations to sustain the competitive edge. For example, Citibank in India (more specifically, Delhi) was not permitted to open branches beyond a limited number affecting “retailing of their services”. They made innovative arrangements with other parties for increased distribution of their loan services to purchase house, scooter/car, durables and other household appliances. This arrangement gave Citibank a competitive edge.

Gaining a competitive edge by product differentiation, product positioning, market segmentation, new product planning, innovations, product quality, etc. has become the foundation of marketing strategy

with the purpose being to win a long-term commitment from key customers. The consumer orientation of business strategy has become far more important because of growing competition, and, as a result, knowing your business, your markets, your customers and your products with specific reference to you competitors has become the new strategic tool.

Michael Porter, in his works, has said that it is rather difficult to understand competitive advantage by looking at a firm as a whole. Instead, each of the activity, which a firm performs to design, produce, market, deliver and support its product, should be examined and the interaction of each with the rest should be analysed to identify the sources of competitive advantage. But is it that one always has to develop competitive policies, and do such policies always pay? A recent survey published in Economic Times suggests in affirmative after examining the impact of competition on


different sectors of industry. In this survey, industries in each sector were analysed on the basis of their profitability and productivity. The results of the survey are summarised in Table 4.1.

Table 4.1: Impact of Competition across Sectors

Category Industry Degree of Competitive Forces 1

Hotel Competitive forces were moderate and the firms responded with improvement in productivity to sustain profitability.

2 Finance, Leasing, and other financial services

Competitive forces were fairly high and the firms responded with a services improvement in productivity without being able to arrest a decline in profitability.

3 Transport Competitive forces were low and firms sustained their profitability without significant improvement in productivity.

4 Miscellaneous Services Competitive forces were quite high and firms were not able to increase productivity and moved towards a steep decline in profitability.

The study clearly showed that the competitive forces had a direct impact on a firm’s profitability and, therefore, marketing or business strategy should take competition into cognizance.

Kotler has observed that differentiation is a major issue in service industries as most service innovations are easily copied. Service companies, therefore, face the challenge of continuously developing new innovations to gain a succession of temporary advantages over their competitors.

However, Kotler observed that firms invariably view the potential sources of differentiation too narrowly. He agreed to the fact that a firm needs to differentiate its offer from that of competitors by providing something unique that is valuable to the buyer. If this is successfully achieved then the firm can command a premium price – it would sell more of its product in the long run and win greater loyalty.

Levitt contended that products are differentiated by the company’s image and reputation, the salespersons with whom the customer interacts and a bundle of other intangible attributes.

Porter further observed that differentiation couldn’t be understood by viewing the firm in aggregate. Differentiation stems from each of the specific activities a firm performs and how they affect the buyer. Therefore differentiation, in fact, grows out of the firm’s value chain. Though the concept of value chain was devised keeping the manufacturing companies in focus, however, this concept applies equally well to the service industry.

The value chain desegregates a firm into strategically relevant activities with corresponding cost implications. A firm can gain competitive advantage by performing these strategically important activities more economically or better than its competitors to gain an advantage over them.

Value chain activities are broadly categorised under two heads. First are the primary activities like inbound logistics, operations, outbound logistics, marketing, sales and servicing. The second are the support activities which include infrastructure, human resource management, technology development and procurement. In fact, the support activities are integrating functions that cut across the various primary activities which can be further subdivided into specific and discrete primary activities, which contribute to the value chain.

81Positioning and


As one can observe from Figure 4.1, value activities are discrete building blocks of competitive advantage. How each value activity is performed with its economics of cost in relation to the competitors would determine its contribution to the buyers needs and, thereby, create a differentiation and a discrete competitive advantage.

Similar to the firm, buyers also have value chains. It is difficult to construct a value chain that covers everything an individual buyer or a household and its occupants do. But it is possible to construct a chain for activities that are relevant to how a particular product is used.

A chain need not be constructed for every household but chains for representative households or individuals can provide an important tool for use in differentiation analysis. To the extent that a firm is able to relate its value chain with the buyer’s chain, it would determine the quality of differentiation.

MARGIN

INBOUND LOGISTICS

OPERATIONS

OUTBOUND LOGISTICS

MARKETINGAND SALES

SERVICES

F

IRM

IN

FRA

STR

UC

TU

RE

HU

MA

N R

ESO

UR

CE

S M

AN

AG

EM

EN

T

T

EC

HN

OLO

GY

DE

VE

LOPM

EN

T

P

RO

CU

RE

ME

NT

SUPPORT ACTIVITIES

PRIMARY ACTIVITIES

Figure 4.1: Generic Value Chain

4.3.1 Steps in Differentiation Porter, in his works, recommended an eight-step approach to determine the bases of differentiation and selecting a differentiation strategy. More specifically, the differentiation exercise would follow the following steps.


The first step is to determine who the real buyer is. In other words, within the overall buying cycle who would interpret your offer and decide. It is possible that apart from the end user, channel members may also be the buyers. The second step in this process is that the firm must identify the direct and indirect impact on its buyer’s value chain to determine the value the firm should create for its buyers. A firm must explore all possible options to influence the buyer’s value chain in its direction. Such an analysis of buyer’s value chain would provide a foundation for determining the buyer purchase criteria (BPC). Therefore, logically, the third step is to rank the buyer purchasing criteria. At times, such an analysis might suggest purchase criteria that the buyer does not currently perceive. However, the same must be identified in a manner that it can be operationalised, and their list of buyer purchase criteria on a continuous basis to sustain competitive advantage. Such an inventory of BPC is then divided into two categories; use criteria and signalling criteria. The fourth step is that the firm must identify its existing sources of uniqueness in relation to its competitors and also the potential new sources of uniqueness, because differentiation stems from the uniqueness of firm’s value chain. Since differentiation is always relative, a firm’s value chain must also be compared with the value chain of competitors. Such an exercise should result in the identification of specific factors of uniqueness, which Porter termed as ‘drivers’. The fifth step then is to study the cost implications of all the identified factors, both use criteria and signalling criteria, which can lead to differentiation. The sixth step is to choose the configurations of value activities that create the most valuable differentiation for the buyer. The seventh step is to check the sustainability factor of your chosen differentiation strategy. Sustainability has to be checked against erosion or imitation. Kotler has observed that in services industry imitation is easy to copy, but some companies have been able to cross this stage successfully. The last stage is that of cost reduction in activities that do not affect the chosen forms of differentiation. Such a strategy would not only improve profitability but also reduce vulnerability to competitors because of price premium. In fact, successful differentiation strategies communicate multiple forms of differentiation throughout the value chain. After all, the value created for the buyer must be perceived by the buyer if it is to be rewarded with a premium which means that the firm must communicate their value to the buyer through an appropriate marketing communication mix. If these stages are carefully analysed, then one can develop such differentiation strategies which are not only implementable but also sustainable, and give a competitive advantage to the organisation.

Differentiation versus Positioning

Differentiation and positioning are two related terms in marketing theory but both are different from each other. According to Schnaars6, differentiation seeks merely to make products different in order to avoid competition and positioning steers product perceptions to a particular point in the consumers’ minds. In fact, positioning incorporates a sense of direction rather than simply a sense of difference. Therefore, product positioning implies a greater concern with changes in product image as opposed to physical product changes.

Ries and Trout have summarised the meaning of positioning that it is not what you do to the product but what you do to the mind of the consumer.

83Positioning and


However, these two concepts are related concepts – perhaps one leads to the other. If differentiation strategy, arising out of the value chain analysis, has to be implemented, in the implementation plan one can’t ignore the communication and positioning element of the differentiated value.


Fill in the blanks:

1. .................................. seeks merely to make products different in order to avoid competition

2. .................................. usually involves segmenting the market and choosing one or more segments.

4.4 QUALITY OF SERVICE INDUSTRIES Customers test the quality of service of a firm at every encounter. Each of the customer encounters is called ‘moment of truth’ and a series of moments of truth lead to a relationship. If the experience from service encounters is bad, it may not lead to customer satisfaction. Management of service quality is a growing concern for a service marketer. Quality management involves deciding on quality standards and implementing a method of assurance on performance level of the staff and the facilities. Quality has emerged as a major competitive element in service company strategies. Service providers are giving increasing emphasis on creating reputation for good quality of service as this provides a positive image for their organization.

4.4.1 Achievement and Maintenance of Service Quality Management The service quality management process involves matching evolving customer expectations. Customers have their own service expectations from a firm. A customer is satisfied when his expectation matches the perceived service. When the perceived service passes over the expected service, the customer is delighted. Failure in meeting expectation results in customer dissatisfaction, complaint and withdrawal of the service consumption. There are three reasons for the increasing relevance of quality management in services sector.

Increasing Relevance of Service Quality Management. Companies need to find ways of creating differential advantage by having better

service levels than their competitors. Increased level of consumerism and greater media attention on quality, have

meant that companies have to be more responsive to quality issues. There has been a growing sophistication of consumer markets, with the non-price

factors of image, product positioning and service delivery processes becoming more important.

A reputation of good quality is a major advantage because perception of risk for many service providers is very high. Good quality bridges the gap between pre-use perceptions and post-use experience of the service consumed. The perceived quality of service depends upon following factors termed as five stars of quality. Five Stars of Service Quality (The RATER Model)

Reliability

Assurance

Tangibles


Empathy

Responsiveness

Reliability

Assurance Responsiveness

Tangibles Empathy

Figure 4.2: Five Stars of Quality

The service providers are more likely to be successful if they can be depended upon to deliver high quality service with respect to the quality determinants as mentioned above in relation to competitors. Quality management approach can be divided into two categories, namely product attributed approach and customer oriented approach.

Product Attributed Approach

In product-attributed approach, customers try to judge the product’s conformance to standardized requirements, which have been set by reference to what company managers think the failure point is. In this approach, organizations try to control their products using an internal product perspective e.g. a manufacturer of potato chips can grade pieces of potatoes received from the supplier according to certain objective criteria. These criteria can be weight, shape, size, colour, texture, etc. From the consumer’s point of view, as an external perspective, assessment of quality can be made at the supermarket or vegetable store prior to purchase. Consumers can touch or feel goods at a more subjective level. But in both cases, the assessment of quality relates to the finished product. This involves inward looking product-led approach. The product-attributed approach focuses on eight elements: Performance, Features, Reliability, Conformance, Durability, Serviceability, Aesthetics and Perceived Quality.

Starts with Company

Company describes what a product represents

Company develops product based on its definition

Decreased likelihood of satisfying customers

Long term misleading of market price

Figure 4.3: Product Attributed Approach

85Positioning and


Consumer Oriented Approach

This approach may also be termed as user-based approach. This approach starts from the premise that quality “lies in the eyes of the beholder”. It is, therefore, more appropriate to adopt a consumer-oriented approach, which recognizes that the holistic process of service delivery has to be controlled by taking into consideration the expectations and attitudes of service clients. Goods that satisfy customer preferences best are believed to have high quality. The major problem with customer-oriented approach is the equating of quality with maximum satisfaction.

Figure 4.4: Consumer Oriented Approach

A consumer may enjoy a particular brand because of its unusual taste or features; and yet he may regard some other brand as being of higher quality, e.g. you may enjoy Dosa at Karnataka Restaurant but still feel that the one at Sagar Ratna is the best. This highlights that customers make judgments about the quality of service delivery process as well as the final outcome. The independent businessman might assess the quality of the consultant’s work not only on the final appearance of the techno-economic feasibility report but also on the way the employees of the organization respond to the queries and the speed with which the work is being performed.

A service is made up of tangible and intangible components. Researchers have made attempts to define service quality and in the process have made distinction between objective measures of quality and subjective measures of quality. According to Gronoroos, a service can be broken down into two components, namely technical quality and functional quality; both the dimensions are relevant to customers. For a service provider, it is the starting point to know that how quality is judged by customers and what are the perceptual processes of this judgment towards the quality of service experienced.

Starts with Consumer

Company describes what a product

represents

Company develops product based on its

definition

Decreased likelihood of satisfying customers

Long term competitive edged in the market

price


Table 4.2: Two Dimensions of Quality

Component Definition Example Technical Quality Relates to quantifiable aspects of

service i.e. ‘what’ is being done. This aspect can be accurately measured.

In case of repair of car, customer may look at the equipment and machinery being used to repair the car.

Functional Quality Relates to ‘how’ technical quality is being delivered to consumer. This aspect cannot be as accurately measured.

The general attitude, behaviour, appearance, dress code of the employee may be instrumental for functional quality being delivered.

Whatever approach we may take to define quality, most researchers are of the view that it is the customer who defines quality.

4.4.2 Service Quality Dimensions

Quality is a concept related to the attitude of the customers and their comprehensive evaluation of the service. It is built upon a series of evaluative experiences of the services delivered by the organization to the customers. The service quality can only be accessed after the service is consumed. The assessment of service quality is made during delivery of service when customer encounters the service personnel. Customer satisfaction with service quality is defined by comparing perceptions of service received with the perception of expected service of the consumers. When the expectations exceed, service is perceived to be of exceptional quality and gives a pleasant surprise to the customer.

Dimensions of service quality refer to the elements which customers judge as relevant in developing a good quality service. Parasuraman, Zeithaml and Berry suggested that the criteria used by consumers that are important in moulding their expectations and perceptions have ten dimensions; each of these dimensions is explained below.

Reliability: It means ability to provide what was promised dependably and accurately

Tangibility: It means physical facilities and equipment and the appearance of the personnel

Credibility: It means honesty and trustworthiness

Responsiveness: It means the willingness to help customers and provide prompt service

Communication: It means keeping customers informed in a language that they can understand

Security: It means physical, financial and confidentiality for the service delivery

Competence: It means possession of required skills and knowledge to deliver the support services

Access: It means the ease of approach and contact with the organization personnel

Empathy: It means degree of caring and individual attention provided to customer’s needs and demands

Courtesy: It means politeness, respect or friendliness in delivering the services.

Subsequent research has reduced these dimensions of service quality to five independent factors namely reliability, responsiveness, assurance (a combination of competence, courtesy, credibility and security), empathy (a combination of access, communication and understanding of customer) and tangibles. There are four key

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factors that can influence a customer’s expectations, which may help customers in shaping their expectations of a service:

Word of Mouth Communication: This is the communication that flows from one person to another in a social loop and helps in formulating service quality perceptions.

Personal Needs and Preferences: The relative importance that the person gives to the service as an essential part of the offer.

Past Experience: The customer expectations also depend upon past experiences of the customer with the service provider.

External Communications: External communications like advertising, public relations and other publicity tools also influence the quality of service perception.

Figure 4.5: Dimensions of Service Quality

There are various issues involved in the quality of service productivity. The managerial task is to transform the service inputs into outputs, to bring a balance between the productivity and quality of services. If the productivity increases then there is a chance that the quality might be compromised. Whether technology is the issue related to delivery of services or the quality of manpower; the service provider will decide the perception of the service. Productivity helps to keep the costs down as lowering prices helps in building the market and competing better. Higher productivity helps in generating additional revenue, which helps in enhancing marketing budget and rising profits, which in turn, helps in investing in innovative service management programs.

Quality helps in gaining competitive advantage through services in a commodity market. It also helps in increasing customer value, which contributes towards improving the bottom line. The service quality is measured using three parameters – efficiency, effectiveness and productivity. Efficiency is a comparison to a standard, which is usually a time-based phenomenon that explains how long the employee takes to perform a service function. Effectiveness is the degree to which the firm meets its

Influencing Expectations

Word of Mouth Communication

Personal Needs

Past Experiences

External Communication

Expected Services

Perceived Services

Dimensions of Service Quality

Reliability Responsivene

ss Assurance Empathy Tangibles

Perceived Service Quality

1. Expectations exceeded

ES>PS (Quality Surprise)

2. Expectations MET

ES=PS (Satisfactory

Quality)

3. Expectations not met

ES<PS (Unacceptable

Quality)


goals whereas productivity is the financial evaluation of output to input, i.e. consistent delivery of output desired by customers should command higher price.

4.4.3 Gaps in Service Quality Delivery Leading service and consumer durable companies measure the gap between the customer’s service expectations against the perceived services as a routine feedback process. Zeithaml, Parasuraman and Berry developed a model which suggests that customers become dissatisfied when their perceptions about service performance don’t match their expectations and the model explains five gaps that can lead to customer dissatisfaction. Expectations are affected by four factors – customer’s personal need, past experience with the service providers, word of mouth communication with other customers and communications from service firm and its competitors. What the service provider promised and what he ultimately delivered affect the perceptions of the quality of services. This model identifies five gaps as mentioned below: 1. The service provider does not know what customers expect 2. The wrong service quality standards are set 3. Standards are not met (Service Performance Gap) 4. What is delivered does not equal what was promised 5. Gaps 1-4 lead to service that does not equal expectations. The ZPB model is applicable to all service providers and empirical research suggests that organizations should manage to fill the quality gaps in services so that the customer will stay satisfied.

Figure 4.6: Service Quality Gaps

In the above diagram, the gap between customer expectations and perceptions is defined as the Gap-5 and shown to depend on the size and direction associated with the delivery of services. The Gap-1 is the discrepancy between the customer

Gap 3

Word of Mouth Communication

Service Quality Specifications

Service Delivery

Perceived Service

Expected Service

Personal Needs Past Experience

Management Perceptions of Customer Expectations

External Communication to

Customers

Customer

Provider

Gap 5

Gap 1 Gap 2

Gap 4

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expectations and management perceptions of these expectations. It arises from the management’s lack of understanding of how customers formulate their expectations on the basis of a number of sources i.e. advertising by the firm, past experience with the firm and its competitors, personal needs and communication with friends.

Strategies to close this gap include improving marketing research, fostering better communication between management and service employees and reducing levels of management that distance the customer. Gap-2 results from the management’s inability to formulate target levels of service quality to meet perceptions of customer expectations and to translate them into workable specifications. It results from lack of management commitment to service quality as a result perception of infeasibility in meeting customer expectations for each of the resources and excessive demand.

However, setting goals and standardizing service delivery tasks can reduce this gap. Gap-3 is referred as ‘service performance gap’ because actual delivery of service does not meet the specifications set by management. This can arise because of lack of teamwork, poor employee selections, inadequate training and inappropriate job design and man specifications. Gap-4 is the discrepancy between service delivery and external communications in the form of exaggerated promises and lack of information provided for service personnel. Gap-5 represents key challenges to ensure good service quality. The provider must meet or exceed customer expectations, as perceived service quality is the result of the consumer’s comparison of expected service with perceived service delivery. It is possible to identify the service quality gaps in each of these levels and take corrective actions for solving the service quality management problems.

4.5 CUSTOMER SUPPORT SERVICES Under the present context of competitive environment, the focus of the organizations is more on customer retention and customer support services than simply on customer acquisition. Customer retention is the process of keeping customers in the customer inventory for an unending period by meeting the needs and exceeding the expectations of those customers. It is the approach of converting a casual customer into a committed loyal customer.

Acquisition is a vital stage in building customer relationship. Certain key issues connected with customer acquisition are dealt here.

4.5.1 Customer Acquisition Following are some of the requisites essential for an organisation to be effective in its acquisition efforts.

Focused Approach: The organisation operating in a market condition consisting of potential consumers who can be categorised from the organisation’s service or product point of view as; (a) Knower-set of people just know the existence of the product or service without any specific preference for those products; (b) Referrers, set of people preferring to have the product or service, but have not acted on their preference; (c) Indifferent, set of people are indifferent towards the organisation’s offering; (d) Rejecters, set of people mentally reject the organisation’s offerings and are far away from the acquisition process.

The organisation should have a detailed database containing the above classification of the market and related details, which would help to make the approach of acquisition effective.

It is necessary to develop and provide a win-win platform applicable to both the prospective customers and to the organisation concerned. This would


induce easy customer acquisition because of the benefits the customers might anticipate.

Communication plays a vital role in the acquisition process. Communication has to be open and interactive in nature. This would enable prospective customers to come closer to the organisation.

The organisation should also ensure integrated communication, ensuring integrity and dependence every time the customer communicates. This would bring confidence in the minds of the customers and would enable them over towards acquisition.

The organisation must effectively plan to minimise Fear, Uncertainty and Doubts (FUD) that might occur in the minds of customers during the course of acquisition. As far as an individual customer is concerned, prior to becoming a customer, he would be in the “buy” stage of Extended Problem Solving (EPS), in which the FUD influence would be at the maximum level. In the subsequent stages, namely Limited Problem Solving (LPS) and Routine Responsive Behaviour (RRB), the FUD aspects will gradually minimise and the customer tends to become more and more loyal. If the customer is an organisation the “buy” stages corresponding to EPS, LPS and RRB would be, new task or experimental buying, Modified Re-buy and Straight Re-buy.

The critical success factor, leading to customer acquisition, is the benefits that the organisation provides to the customers. Customers do not buy products or services; they are interested in the core or the augmented benefits the product or service might generate. If the benefits promised by the organisation correspond to their expectation, then the customers can be easily acquired.

Customers assume differing roles in various contexts, relating to their purchase and consumption environment. Those roles include: Initiator, Influencers, Decider, Buyer, and User, and so on of the product or service. The efforts towards acquisition are to be directed in tune with specific role the prospective customer plays in a given context. The organisation should gather those details in relation to who influences, decides, buys, uses, and so on. At times, the same individual would be playing all the roles. On occasions, different individuals in a family or an organisation would play different roles. The organisation attempting to acquire customers should have total knowledge of these actors ad has to set its approach accordingly.

4.5.2 Focus on Public Relations Publicity and public relation aspects deserve special focus. Both publicity and public relations help to boost the organisation’s image in the society, which in turn help to gain more customers within the organisation’s fold. For this reason, many organisations commit themselves to meet social needs.

4.5.3 Focus on Existing Customers Existing customers will no doubt help a lot in acquiring new customers. Existing customers are valuable spokespersons whose views would be rated very high by the prospective customers. For this purpose, the organisation should evolve appropriate rewarding and incentive schemes. Many organisations, which are practicing this method, find it very fruitful in their process of customer acquisition.

It is hard to imagine a customer transaction not vulnerable to problems and complaints, be it buying groceries, connecting to cable service, purchasing a car or having a home repair done. Nor is it hard to see why businesses benefit from making concerted efforts to prevent and respond to customer complaints.

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The companies attract and keep customers when they follow customer service standards and policies that prevent problems from arising, and are honest, fair and responsive when things go wrong. Customer Complaint Management (CCM) encompasses techniques, processes and systems that lessen the chance of customers having problems and allow businesses to respond fairly, efficiently and effectively when complaints arise.

4.5.4 Handling Customer Complaints Successful businesses work hard to keep their customers satisfied. Although prevention is better than cure, it is almost inevitable that at some stage you will receive a customer complaint. Don’t presume a customer complaint is a negative experience because, if handled well, it can be a valuable learning tool.

An effective complaints handling system is essential to your business. Your business can benefit in several ways:

Improved product quality and service delivery

Fewer mistakes and less time spent fixing them

Better understanding of customers’ needs

Greater customer loyalty

More customers through word of mouth advertising from satisfied clients

Less time and money spent attracting customers

Improved business reputation

A healthier bottom line.

Remember you could be pushing profits out of the door if you do not have an effective complaints handling system.

Handle complaints effectively by:

Having a policy of welcoming customer complaints

Setting up a system to handle complaints effectively

Training your staff to handle complaints well

Dealing with the complaints you receive immediately

Ensuring the process for making complaints is easy for your customers

Regularly reviewing your complaints record.

An effective complaints handling system needs someone in the company to drive it and take ultimate responsibility. This is a person who has the best interest of both the customer and the company at heart, and the interpersonal and managerial skills to ensure the system is performing well.

The complaints officer needs to ensure that:

There is adequate information available to the public about how to address any problems with your business, especially at the point of sale.

Front line staff are aware of:

The complaints handling policy

Their authority to settle complaints

When and to whom they need to refer complaints.


There is a process to handle the more difficult and complex cases.

Complaints are reviewed regularly to identify any ongoing issues.

Reports are made to senior management about complaints.

4.5.5 Types of Customer Complaints Customer complaints come in all shapes and sizes. Complaints can be generated by everything from product malfunctions to improperly trained or uncaring employees. Understanding the main types of customer complaints is the key to handling them correctly.

Product-specific: Customers receive products or services that do not operate correctly. This common complaint can be handled by fixing the product or replacing it with a new one. Customer service training expert Myra Golden cautions against blaming the customer when a product is faulty.

Wait Times: Long wait times are frustrating to many customers. Whether on the phone or in a store, lengthy queue times will generate customer complaints simply because time is precious for customers.

Misunderstanding: Miscommunication, by the customer or the company or both, can trigger complaints. Minimizing misunderstanding requires knowledgeable associates and accurate marketing materials. The Small Business advice website morebusiness.com suggests that even when the customer is clearly confused, treating him with respect helps retain business.

Delivery Error: With online shopping on the rise, delivery errors increase. Upset customers may complain to the company, but the company may use an independent shipper, complicating complaint resolution.

Personnel: Customers may feel slighted by employees who are rude or uncaring. Golden warns that customer service representatives and other employees must remain caring and polite even when dealing with angry customers.

4.5.6 Categories of Customer Complaints At least five types of complainers can be identified. Each type is motivated by different beliefs, attitudes, and needs. Consider the following definitions of the types of complainers, how one might respond to them, and the danger of not handling complaints effectively.

(a) Meek Customer: Generally, will not complain.

Response: Must work hard at soliciting comments and complaints and act appropriately to resolve complaints.

(b) The Aggressive Customer: Opposite of the Meek Customer. Readily complains, often loudly and at length.

Response: Listen completely, ask: “what else? “Agree” that a problem exists, and indicate what will be done to resolve it and when.

Danger: Being aggressive in return. The Aggressive Customer does not respond well to excuses or reasons why the product or service was unsatisfactory.

(c) The High-Roller Customer: Expects the absolute best and is willing to pay for it. Likely to complain in a reasonable manner, unless a hybrid of the Aggressive Customer.

Response: Is interested in results and what you are going to do to recover from the customer service breakdown. Always listen respectfully and actively and question

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carefully to fully determine cause. Ask: “what else?” and correct the situation. Like the Aggressive Customer, the High-Roller Customer is not interested in excuses.

(d) The Rip-Off Customer: The goal is not to get the complaint satisfied but rather to win by getting something the customer is not entitled to receive. A constant and repetitive “not good enough” response to efforts to satisfy this customer is a sure indicator of a rip-off artist.

Response: Remain unfailingly objective. Use accurate quantified data to backup your response. Be sure the adjustment is in keeping with what the organization would normally do under the circumstances. Consider asking “What can I do to make things right?” after the first “not good enough.”

(e) The Chronic Complainer Customer: Is never satisfied; there is always something wrong. This customer’s mission is to whine. Yet, he is your customer, and as frustrating as this customer can be, he cannot be dismissed.

Response: Extraordinary patience is required. One must listen carefully and completely and never let one’s anger get aroused. A sympathetic ear, a sincere apology, and an honest effort to correct the situation are likely to be the most productive. Unlike the Rip-Off Customer, most Chronic Complainer Customers will accept and appreciate your efforts to make things right. This customer wants an apology and appreciates it when you listen. Tends to be a good customer (in spite of his constant complaining) and will tell others about your positive response to his complaints.

Analysis and Resolution

Management finds out about customer dissatisfaction through two mechanisms: Voice and Exit. “Voice” represents complaints … the voice of the customer. “Exit” occurs when the customer stops buying or using the services. All of us have exited at one time or another, for example, if you’ve changed your doctor, telephone carrier, or plumber due to poor service.

Service providers employ all sorts of strategies to avoid customer turnover. Smart organizations know that it is not enough to have the lowest price or the best technology – there always seems to be a competitor who can do it better or cheaper. There are no guarantees, but one of the best customer retention strategies is to provide superior customer service. And that means listening to your customers.

How well do you listen and respond to complaints from your customers? We all aim to be customer focused ... we claim to be customer focused ... but we need to become More Customer Focused.

Although listening and responding is necessary, it’s not good enough. Too often, a response is reactionary and you can easily find yourself reacting over and over again to the same complaint (sometimes this is called “firefighting”). We need to listen and protect. That means listening to the voice of the customer and making process improvements based on that feedback so that the same complaints don’t recur.

A complaint is any measure of dissatisfaction with your product or service, even if it’s unfair, untrue, or painful to hear! Complaints may be about:

Service Content, Delivery or Quality

Response time

Personnel

Documentation


Requests

Billing

Communication

Follow up.

To increase the visibility of complaints, you should:

Listen to the Customer: Complaints don’t always identify themselves. Someone who is requesting the same information for the 5th time isn’t asking for information anymore … it’s a complaint!

Solicit Complaints: Everyone in the organization should collect and report complaints. All this input should funnel to one place where your objective is to build a valid database of complaints. Most of us are accustomed to environments in which receiving customer complaints are considered negative an interruption to doing business. But in the Customer Complaint Resolution Process, the more complaints you log, the better! This is one of the biggest cultural issues for organizations to overcome.

Record Complaints: Create complaint categories that make sense for your organization. For example, data that tells you that you had 123 complaints about adoptions last month tells you nothing. The 123 complaints need to be broken down into categories so that you can get to a root cause analysis.

If you only respond to complaints without correcting the root cause, you’re spinning your wheels and you’ll find yourself fighting fires instead of putting them out for good. You can identify root because if you collect, categorize, and analyse complaints. As a result, process improvements will be complaint-driven and thus should be high-priority.

This is a customer complaint resolution process that anyone can implement:

Focus on the Customer: If you can’t immediately solve the problem, respond to the customer and identify an “owner” who will be responsible for final resolution. Complete the communications loop with customer. If you’ve referred the complaint to others, make sure there’s closure. If you’ve left the customer hanging without a response, you’ve become part of the problem.

Focus on the Complaint: Collect all complaints from all external customers and categorize them in a way that allows you to analyse data to see trends, patterns, concentrations, tendencies, etc.

Focus on Process Improvement: Use the database of complaints to define processes that are important from the customer’s perspective and to improve the most critical ones. Based on analysis of the database, make appropriate investments to prevent issues that result in customer complaints. Look for permanent improvements to response time, cycle time, internal processes related to the complaints, and complaint frequency.

Advantages of Online Complaint Handling Systems The key advantages of online complaint-handling system are:

Enhanced effectiveness and saved time and money: The use of ODR technology in complaint-handling processes can be an important tool to assist complainants as, more often than not; they have no insight into their legal rights when they come into conflict with a supplier or with governmental institutions. Because of this, some clients give up defending their rights, whereas others hold on to their

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conflict – some of them irresponsibly and always at relatively high costs – when they opt for legal proceedings.

Streamlined back-office functions and automated routine tasks: Online complaint-handling technology facilitates taking the time and money that are not spent on routine tasks and applying it to primary tasks or cases where the specialty of complaint-handling services’ representatives is needed more.

Increased participation through a setting that is perceived as safe and neutral: Technology (coming across as more “neutral”) facilitates more-structured communications and provides a secure neutral environment for claimants to engage and tell their side of the story, stimulating constructive dialog rather than argument and fostering a problem-solving attitude.

A comfortable and safe environment: Many claimants feel more at ease with the privacy offered by the Internet or with textual and delayed means of communication, avoiding stress and destructive communications that occur in emotional live communications;

Uninterrupted access with 24 × 7 availability: Suiting today’s busy lives with the at-your-own-pace flexibility and convenience of online collaboration, expediting resolution and enhancing transparency.

Increased focus on conflict prevention: At an early stage, stakeholders are given the opportunity to assess the legitimacy of the claim or case, explore underlying interests and evaluate both the preferred as well as second-best outcomes: As the ABA Taskforce Report (2002) concluded: “effective complaints handling is more important than effective third-party dispute resolution”.

Complaint Handling – An Advantage for Businesses

For many businesses, the holiday season provides a windfall of customers and profits, and in some cases accounts for a substantial portion of annual operating income. With seasonal customers comes an increase in complaints, and the simple fact is that some businesses drive profits right back out the door because they do not have an effective complaint handling system.

Industry estimates say that generally businesses receive complaints from only about five per cent of unsatisfied customers. About 95 per cent of customers simply will not complain, but more importantly, about 90 per cent of this group will never use the business again. Equally alarming for businesses is that typical dissatisfied customers will mention the problem to about eight family, friends and acquaintances.

“Businesses operating in tough markets with small margins are constantly searching for points of competitive advantage and effective complaint handling can be a key differentiator”. “A complaint offers a superb opportunity to transform an unhappy customer into a loyal customer, who may even help you win new business by word-of-mouth advertising.” The most common factors affecting consumer’s trust in businesses were principally service-related – the exact space where a well-managed complaint handling system can provide an edge over competition. Consumers are asked what one business or company they regularly deal with in their everyday life, large or small, they trust the least – and what does that company do to not earn their trust. Customer relations policies on a regular basis, and advises that complaint handling processes must make it easy for customers to complain and empower employees to deal with complaints promptly. The following procedures are essential:


Screening and Logging: The date the problem occurred, a description of the problem, and any other pertinent information should be recorded.

Investigating: Along with information from the customer, gather more facts by researching in-house records, requesting receipts and inspecting the product.

Acknowledging: Let the customer know that the matter is receiving attention and provide a realistic estimate for how long it will take to resolve the issue.

Formulating a Solution: Important criteria to consider include warranty obligations; customer expectations; cost versus benefit of alternative solutions; fairness of your decision; and your ability to carry out the solution.

Responding: Any response should be clear, appropriate and specific to the customer’s complaint. Avoid form letters and technical jargon. Explaining a decision can preserve a customer’s goodwill, even if a different result was desired.

Following-up: Contact the customer following your response to verify whether or not the matter has been resolved satisfactorily. If the customer is unhappy, you can refer the matter for third party dispute resolution.

Effective complaint handling is a value-added service that is appreciated, remembered and talked about by consumers.


Fill in the blanks:

1. A ................................. offers a superb opportunity to transform an unhappy customer into a loyal customer.

2. A complaint is any measure of ................................. with your product or service, even if it’s unfair, untrue, or painful to hear!

4.6 LET US SUM UP Product positioning is a decision reached by a marketer to try to achieve a defined brand image relative to competition within a market segment. A product cannot exist unless it finds a place in the consumer’s perception of the world of products around her/him. The right positioning is probably more important to the ultimate success of a brand than are its actual attributes. Managing differentiation is one of the major challenges a service marketer faces. The problem with service industries is that others can copy whatever you want to do to seek differentiation. You may be aware that one ‘air-taxi-operator’ started offering liquor on board on the domestic routes and others followed. Nevertheless, service industries must strive for differentiation strategies for competitive advantage. In this lesson, you have been taken through the eight steps of Porter’s model and it was suggested that differentiation strategies must communicate multiple forms of differentiation throughout the value chain.

4.7 LESSON END ACTIVITY List a few examples to clarify the difference between product differentiation and product positioning.

4.8 KEYWORDS Product Positioning: It is a decision reached by a marketer to try to achieve a defined brand image relative to competition within a market segment.

97Positioning and


Points-of-parity: It means those associations that are not necessarily unique to the brand in some way but may in fact be shared with other brands.

Differentiation: It seeks merely to make products different in order to avoid competition.

Reliability: It means ability to provide what was promised dependably and accurately.

Tangibility: It means physical facilities and equipment and the appearance of the personnel.

Credibility: It means honesty and trustworthiness

Responsiveness: It means the willingness to help customers and provide prompt service.

4.9 QUESTIONS FOR DISCUSSION 1. Explain “complaint handling – an advantage for businesses”.

2. What are the key advantages of online complaint-handling system?

3. Discuss the types of customer complaints.

4. What do you mean by dimensions of service quality?

5. Explain five stars of service quality.

6. Describe the steps in differentiation.

7. Discuss the steps required to be taken to reach a decision about positioning.


CYP 1

1. Differentiation

2. Positioning

CYP 2

1. Complaint

2. Dissatisfaction

4.10 SUGGESTED READINGS Shanker, Ravi, (1998). Service Marketing – Indian experience, South Asia Publication.

Panda, K. Tapan. (2013). Marketing Management Text and Cases. Excel Books. Second Edition.

Kinnison, A Harry, Aviation Maintenance Management. McGraw – Hill.

Sinha. P.K., Service Marketing, Text and Readings. Himalaya.

99Public Relations in Aviation

UNIT III

101Public Relations in AviationLESSON

5 PUBLIC RELATIONS IN AVIATION


5.1 Introduction

5.2 Public Relations: An Essential in Aviation

5.2.1 Duties and Responsibilities

5.2.2 The Benefits of PR

5.3 Issues in PR: Airport Operators, Air Operators

5.3.1 Functions and Roles of Airport Managers

5.3.2 Issues with Air Operators

5.4 Requisites of a Good PR Professional

5.5 Challenges

5.6 Let us Sum up


5.8 Keywords




Discuss public relations essentials in aviation.

Discuss the issues in PR: airport operators, air operators.

Explain security requisites of a good PR professional and challenges

5.1 INTRODUCTION To put it simply, public relations is the art of managing a company’s reputation with confidence, honesty and intentionality. It is a crucial element in an integrated marketing effort and can produce greater returns for companies that make an investment in it.

Public relation is far beyond getting a press release published. It involves the entire spectrum of connecting with your audience everywhere you find them. PR thus includes newsletters, trade show participation, social media, white papers or technical articles, charity sponsorships, speaking engagements by company experts and annual reports.

Possibly a better term for public relations is managing reputation—planning and monitoring your organisation’s reputation with intentionality, and leaving nothing to


chance in the process. You cannot afford to be shy here. You have a story to tell, a reputation to manage, and as a result some important PR work to do.

Alternatively, a healthy dose of paranoia can be helpful. You should possibly undertake that some misrepresentation about your company is out there in the marketplace, and it will ultimately need to be addressed with positive, corrective messages. The best defence is a good offense.

5.2 PUBLIC RELATIONS: AN ESSENTIAL IN AVIATION In order to promote and protect the image and reputation of the airline industry together with media relations, executive communications and third-party supporters - both proactive and responsive–relative to airline industry and operations are essential. May they be both strategic and opportunistic in promoting the industry. Role consists of development of messaging, operations support, communications materials, social media and testimony support.

5.2.1 Duties and Responsibilities Develop and execute proactive communications plan in support of key safety,

security and operations objectives and the A4A strategic plan.

Design programs that increase visibility and improve image of the airline industry with key opinion leaders, the media and travellers.

Lead media relations outreach together with developing media strategies for important announcements; press releases, message maps, questions and answers and briefing documents; prepping/media training executives and answering to media questions/requests. Utilise traditional and new/social media.

Develop and manage crisis/issues management communications, serving as a spokesperson. Represent the views of the media to A4A leadership; assist in shaping responses to complex issues, comprising of operations, labour, safety and security in addition to marketing and industry business initiatives.

Monitor industry news; recognise evolving customer, business, operations, safety and security issues to proactively prepare for.

Lead communications on airline operations matters relative to the environment.

Develop and maintain appropriate relationships with media and other key groups. Be familiar with all relevant media.

Oversee executive communications, which includes hands-on support of members of senior management, in the development of speeches and presentations. Seek out strategic/thought leadership speaking and conference opportunities for senior management and promote those events.

Function as part of a strong team, furnishing support in other areas, together with Hill communications and social media and measurement.

On a rotating basis with others in the department, produce a weekly newsletter for A4A employees, highlighting progress against the A4A strategic plan and other relevant topics.

5.2.2 The Benefits of PR Consider public relations and advertising as the right and left wing of an aircraft: Both are tremendously very important. Advertising permits you to control your message completely. You pay for space in a magazine like the one you are reading now, on a website or on a banner at NBAA. You are completely in control of what goes in that


media space to create recognition for your brand, to deliver a few important messages, to encourage a list of capabilities or to showcase your aircraft inventory.

Public relations, on the other hand, is about giving variable degrees of control over to others, and allowing a positive, viral effect to take place. Whether it is a reporter that picks up on your press release or a blogger commenting on your recent announcement, Public relations means empowering others to talk about your story, and hence expand your audience. You should be ready for something to get lost in the translation, yet look forward to the benefits that come from a third party pushing your message forward.

Audiences at times give more weightage to editorial content or even social media than certain forms of advertising, so public relations should reinforce advertising with consistent messages and stories that support the brand. Therefore, accuracy and control are delivered by advertising. Credibility and viral distribution through public relations—two wings…both essential.

Often, the greatest value of getting a story published is not only the number of people who read it, but the many ways you can leverage the story after it runs. It can go in your online newsroom or be distributed by email to your contact database. A published story can be re-printed for inclusion in proposals you give to prospects as further evidence of your company’s expertise. And as most news stories have an online existence on the publisher’s website, links from those stories back to your site create two benefits:

1. more website traffic, and

2. in-linking to your site—something that search engines like Google reward when ranking your website for relevancy.


Fill in the blanks:

1. PR is about giving varying degrees of control over to others, and allowing a positive, …………………… to take place.

2. PR is far more than getting a …………………… published.

5.3 ISSUES IN PR: AIRPORT OPERATORS, AIR OPERATORS

In aviation, airports are perhaps the most complex organisations. Airports are often presented as a city within a city where anything can happen and sometime does. Airport managers should have the ability to deal with complex and sometimes political issues.

Courses like public relations and airport communication helps a person to become a successful airport professionals and managers so as to deal with the issues concerning communication that may arise in daily but also in exceptional airport circumstances.

5.3.1 Functions and Roles of Airport Managers The daily operations of an airport is taken care by the airport manager. Either alone or by the help and support of subordinate supervisors, the manager directs, coordinates, and reviews all aircraft operations, maintenance of the airfield and buildings, community relations and financial matters of the airport. Some airport managers are also accountable for running the airports fixed base operation (FBO) under a separate agreement with the airport owning jurisdiction.


No matter what specific duties an airport manager has each day, the number one accountability of an airport manager is to operate a safe and efficient airport. The overall quality of the national airspace system depends on it.

An airport manager reports to, and receives direction from, the airport’s owner/operator. The airport manager is also responsible for interpreting the functions and activities of the airport to the public. Public relations also play a significant role in airport management.

5.3.2 Issues with Air Operators Advancement in technology: Technological advancements in the field of

telecommunication have also replaced the need for air travel to a greater extent. The corporate sector is increasingly utilizing communication technology like video conferencing in order to save time and costs. Virtual communication facilities have negatively affected air passenger traffic especially in the international travels.

Emergence of substitutes: Air travel in India is facing tough competition from railways. The railways were facing competition with the introduction of low cost air carriers therefore various steps were taken to improve the rail services in the country. Many new trains with improved service quality have been introduced offering passengers a good substitute comparing to air travel. Though there is an overall growth in air passenger traffic but this has affected the traffic negatively.

Flight delays: Flight delays are a common and everyday scene but they leave huge impact on operators as well as the economy. The delays result into money costs, time costs and cost of lost demand because it discourages many air passengers. A delay in flights not only negatively affects the aviation industry but other industries as well because aviation largely connects people with their businesses.

Stiff competition: There is stiff competition in aviation industry which leaves the operators helpless. High operating costs along with highly price sensitive consumer profile compel Indian operators to reduce passenger fares in order to compete for market share. This tendency to lure passengers through attractive discounts and low fares has resulted in price wars in the industry.

5.4 REQUISITES OF A GOOD PR PROFESSIONAL Remember, professional growth is an investment you never stop making if you want to remain valuable in business.

1. Polish your writing and editing: The fundamental skill of our craft remains writing—news or feature, online or print. If you can't string words together interestingly to tell a story, you're going to be working with a serious handicap. The most frequent error is writing in academic- or corporate-speak.

Use plain language. Eliminate the use of passive voice, infinitives, or past tense. Active voice and present tense are ideal. Varying sentence structure will get you points as well. Whether you're writing for online (digital media) or print, terse but informative writing without buzzwords wins the day. Reading a lot, including good literature, will definitely help your writing. The more you write, the better you'll become at it.

Keep in mind that most people don't read today; they scan everything, especially emails. Studies show we tend to read in an "F" pattern—top left to right, left to right, little bit of left, and on to the next document. So today you have precious


few words to get attention, make your point, build interest, and generate action. Make it personal, make it interesting, and make it quick.

2. Become clearly strategic: Too often, PR campaigns take off without a flight plan. Sometimes, Marketing, or whoever is calling the shots, needs help defining and agreeing on direction. Get comfortable understanding and knowing the difference between objectives, strategies, and tactics. Many people don't. Better yet, become knowledgeable about the entire campaign-planning process. That includes branding or product differentiation, including competitive analysis and positioning.

Create relevant strategic messaging that connects with audiences and communities. Learn how to dramatize a position or message. Become very clear about how tactics must be connected to strategy. Discover the use of visual messaging and creative strategy. By growing in those important areas, you'll offer far more value than merely executing programs.

3. Vary tactical PR tools, formats, and styles: Expand your bag of tactical tricks to suit today's wide range of communications challenges. Repeating approaches rarely works, and it also gets boring. Get comfortable creating electronic and social media releases. Understand the differences between mainstream vs. citizen journalism. The blogosphere awaits. Become more knowledgeable in content creation and publishing.

4. Think like (and outthink) the media: The reason so many former journalists are in PR is that they understand the media—how journalists work, what journalists want and don't want, and what makes news. You can be equally effective by taking an outside-in perspective on storytelling and by nurturing your audience empathy. Make sure your subject is news—news to the world, not just to your boss or the CEO. Being on top of trends, issues, and what's next for your company's or client's business will put you in a far better position for thinking like a media person. Guess what? In today's self-publishing, content-development world, you are part of the media!

5. Remain focused: Remaining focused is vital, considering today's media possibilities. Chasing every potential tactical opportunity that comes along or that someone suggests will certainly keep you busy, but it likely won't help create campaign success. Keep your eye on your objectives. Weigh what you're doing by how it can affect the desired outcome. Take a hunting or fishing perspective: Prepare, and go after big game, not just rabbits.

6. Dive into video: Video communications has changed radically and is now applicable to nearly any program. Learn how it can be cost-effectively included in the media mix. Understanding how online video can be effectively applied (or not), along with learning about telling stories with pictures as well as words, is a huge professional advantage. Set yourself apart by becoming conversant, if not immediately skilled, in video production.

Video is the key new online medium and leads the way to mobile and geo-proximity marketing. You don't need to be a scriptwriter, videographer, or trained editor to create opportunities for applying video to a PR campaign. Professional help is available, however, and you will not need a $20,000 budget to get started. Moreover, working with visual communications specialists will help broaden you professionally.

7. Get comfortable managing change: Changing market focus and remaining competitively agile have never been more important. Keeping up with rapid technology changes and new communications channels and techniques is


becoming a full-time job. PR pros must understand their target audiences, including media-consumption habits and media preferences. The customer is more in control than ever. You must be where they are. Broad knowledge, versatility, and flexibility must all be a large part of your personal-skills arsenal.

8. Study your subject: Understanding human behaviour and communication theory and practices will make you far better at strategic planning as well as tactics. We, after all, are attempting to influence humans. You can learn a ton about that. Channel noise and a seemingly ever-shorter audience attention span are only two current challenges you can learn to deal with effectively.

9. Work on your personal demeanour: How you present yourself has always been—and still is—essential. The ways you interact with others and your skills in selling yourself and your ideas will determine how your career progresses. You must have effective communication skills, certainly, but you must also develop interpersonal skills that enable you to interact effectively with a range of people, including management, peers, suppliers, channel partners, shareholders, the media, customers, and any others who have a stake in your company's or client's success.

Among those skills are collaboration and leadership capabilities that help gain consensus, integrating and directing efforts toward common goals. Add the need for crossing time zones and executing worldwide, any time of day, via a variety of media.

5.5 CHALLENGES The various challenges faced by aviation industry are as follows:

Accessibility

Capacity Constraint: When the demand at a particular airport exceeds the available supply, the airport can be considered as capacity constrained. However, this situation may occur only at certain days of the week, certain hours of the day, or in certain seasons such as summer (tourist traffic), or in the most severe cases, during all hours the airport is open. Thus, the severity of a capacity constraint can vary widely among airports calling for different measures to deal with it. In some regions the limited capacity available has already led to serious problems, notably in the form of flight delays, with spillover effects worldwide.

Peak Charges: At some airports peak charges consisting of higher landing, passenger and aircraft parking charges are levied. Such charges are designed to stimulate a more efficient use of the peak period capacity by encouraging its use by those who value it most. It is therefore a method for prioritizing the use of scarce capacity among competing users. Relatively few airports around the world have introduced peak/off-peak charging schemes. However, with the increase in traffic and shortage in airport capacity other airports may also be tempted to introduce such charges not only to regulate traffic but also as an additional source of revenue, a situation which would have adverse effects on business and international general aviation.

Effect of the organizational structure of airports: Until the late 1970s, virtually all or most international airports were owned and operated by national or local governments. However, the fast development of civil aviation and the increasing demand on air transport placed a heavy burden on States’ financial resources. To reduce the financial burden on governments, gradual changes in the ownership and management of airports started to develop and were primarily limited to the establishment of autonomous entities to operate and manage airports while


ownership remained in the hands of the government. In the mid 1980s, further changes in favour of private sector involvement in ownership and management of airports emerged. This has ranged from management contracts, to leasing of airports, minority participation in equity or outright sale of airports to investors through stock offerings.

In parallel with these developments, a number of governments espoused commercialisation as an alternative to privatization through establishing a corporation or company to develop and manage the facilities and services at the airport on a commercial and business basis normally without involving the private sector in the ownership or management

Environmental constraints: Another factor contributing to the issue of business and international general aviation access to airports is the regulatory measures taken by governments to alleviate aircraft noise in the vicinity of the airport. This can take the form of banning or restricting the operation of aircraft that do not meet certain noise standards (stage 3), or imposing night curfews and/or noise abatements procedures designed to minimize the adverse effect on adjacent communities. Economic measures are also used to deal with aircraft noise by levying noise-related charges at airports experiencing noise problems possibly by means of rebates to promote quieter aircraft or surcharges to discourage noisy aircraft.

Integrity of Information and neutrality

Every airport is committed to respecting your privacy and protecting your personal information. Airports recognise their obligation to keep sensitive information secure and have created this statement to share and explain the current information management practices on their websites. The handling of all personal information by Airports is governed by their respective privacy and security acts. Public relations in aviation are committed to protecting your privacy whether you are browsing for information or conducting business electronically.


Fill in the blanks:

1. Understanding human behaviour and communication theory and practices will make you far better at ........................... planning as well as tactics

2. ....................... are probably the most complex organisations in aviation.

5.6 LET US SUM UP The great challenge in airport management is to establish an ownership and organizational structure that meets the needs of each of the airport’s “publics,” from direct users of the airport, to airport employees, to the local community. In addition, the ownership and organisational structure of an airport must be flexible to adapt to the changing needs of the airport’s publics. This is not an easy task, although it is one that maintains the excitement of airport management.

5.7 LESSON END ACTIVITY Research on the role of public relation in aviation industry world wide. Point out few critical issues come across in the meantime.


5.8 KEYWORDS Airport Manager: Airport manager is a skilled and experienced executive with a broad background in all facets of aviation and management in general.

Public Relations: The management function that attempts to create goodwill for an organisation and its products, services, or ideals, with groups of people who can affect its present and future welfare.

5.9 QUESTIONS FOR DISCUSSION 1. What are the essentials of public relation in aviation?

2. Discuss the benefits of Public Relation in terms of aviation.

3. Explain the issues in Public Relation.

4. What are the requisites of a good Public Relation professional?


CYP 1

1. Viral effect

2. Press Release

CYP 2

1. Strategic

2. Airports

5.10 SUGGESTED READINGS Jaroslav J. Hajek, Jim W. Hall, David K. Hein, (2011). Common Airport Pavement Maintenance Practices, Transportation Research Board.

Manuel Ayres (Jr.), (2007), Safety Management Systems for Airports: Guidebook, Transportation Research Board.

Antonín Kazda, Robert E. Caves, (2007), Airport Design and Operation, Emerald Group Publishing.

Kinnison, A Harry. Aviation Maintenance Management. McGraw–Hill.

109Handling the MediaLESSON

6 HANDLING THE MEDIA

CONTENTS


6.1 Introduction

6.2 Types and Role of Media Handling

6.2.1 Types of Media

6.2.2 Role of Media Handling

6.2.3 Do’s and Don’ts in Media Handling

6.3 Preparation for Effective Media Handling

6.3.1 Planning

6.3.2 Media

6.3.3 Execution

6.3.4 Program Follow-up and Recap

6.4 Electronic Media

6.4.1 Importance of Electronic Media

6.5 Let us Sum up


6.7 Keywords




Discuss the types and role of Media Handling

Describe preparation for effective media handling

Explain the concept of electronic media

6.1 INTRODUCTION The media plays a very important role in most community, public policy, national, and international affairs. Depending on the nature and the amount of media coverage, the situation can be made better or worse. If the media does a good job of presenting the issues clearly, from both sides' points of view, much can be done to correct misunderstanding and avoid escalation borne from rumours and fear. Coverage of


moderate, rather than extreme positions is also helpful, as is coverage of attempts to de-escalate or resolve the conflict.

6.2 TYPES AND ROLE OF MEDIA HANDLING Handling the media can be a complex and is often a very specialised business. The media can easily convince people to make comments they would perhaps not have otherwise made.

People are exposed to different types of media every day. Who does not read the daily newspaper? Are not people watching television? No matter what the contents of the programme, people are attracted by television because of its visual effect. Media undoubtedly helps in informing and persuading, Media helps us by telling us what to think about and this influences public opinion towards an organisation. The media, therefore, have great relevance to public relations in creating positive feelings for the organisation on whose behalf they are used.

6.2.1 Types of Media The media may be classified on the basis of their appeal to the human sensory organs. They are put into three categories, those which:

appeal to the eye

reach the ear

appeal to both the eye and the ear

Visual Media: Media which are attracted by the sense of sight and the impressions received from the eye are called visual media. They include newspapers, magazines, photographs, pictures, cartoons and books. In all these media, vision is the instigator of thought. Messages are received with the help of the eye.

Audio Media: In the second category are tools which influence the ear i.e. radio and audio tapes are the media which come under this category. People in this case receive messages through the ear.

Audio-Visual Media: The tools which appeal to both the visual and auditory senses (that is the eye and the ear) belong to the audio-visual category. Television and cinema are examples.

Each medium has its own importance and utility in disseminating information to the people. It will be futile to separate the media in to watertight compartments. They are all closely interrelated in their functions communication is the basic element that is a common factor.

Mass Media

When we discuss mass media, it is imperative to study the background of the communication process. Communication may be categorised into three levels:

Person-to-person communication (Oral communication)

Group communication, and

Mass communication

6.2.2 Role of Media Handling Gaining positive and regular coverage in the media might have a far-fetched influence on the work done by a number of community groups and organisations.

111Handling the Media

It can have a multiplier effect on the good work that groups are doing. If people know what you have accomplished and what you do, they are more probable to support your group. The greater the support that you get, the more likely you are to have a greater influence.

While it is important that groups do not become obsessed about getting media attention as a higher priority than actually doing the work they do, it can make a difference.

So, some of the important role played by handling media effectively are as follows:

It gets your message across to a wider audience: The different forms of media – mainly television, newspapers and radio – spread and distribute information. Getting your information into the media will spread your group's story further than it could be spread without the help of media coverage.

It can help you target your message to the people you want to hear it: The media is so different that a community group or organisation can closely target almost any sector – and through them, almost any section of the public – by observing closely at where it is directing its media focus.

For example – a small, locally-based community group would perhaps look at thinking on its efforts in local newspapers, radio and if appropriate television.

A bigger event or bigger community organisation may possibly look further afield – to major daily newspapers and commercial radio and television. And then there is the Internet, which continues to emerge as a component of the media.

It provides free publicity and exposure for not only your news, announcement, event or request – but for your group or organisation as well: When it comes to news media, the biggest advantage is that the coverage is free – a factor of major importance when it comes to community groups or organisations with tight budgets!

And only does your event or news receive free publicity or new coverage, your group is bound to receive a boost through this coverage as well.

It is important to remember though that while your group won't have to pay for this coverage, it will have to work for it in other ways – building relationships with the media, preparing information and releases for them, being willing to speak to them or be interviewed by them, etc.

Without putting in this type of work, your group will not reap the benefits of "free" media coverage.

It can help establish your group as "legitimate", and its activities as important or notable: Gaining coverage in the media is a great way of providing your group and its activities with greater credibility and that has a lot to do with the thought processes of the public which monitor and "consume" the media each day.

Readers, listeners and viewers who find out about something or read/hear/see something in the media automatically place a greater level of credibility to it than if they saw it in a paid ad.

The attitude of most media consumers is: if the story is gets into the pages of the newspaper, on the air or on TV, then it is "important" and worth taking notice of.

So, if your story is among those that make the grade, then it is "important" enough to be on the news and therefore worth taking notice of.


It can increase your profile among the general public: Media coverage can build your profile in the community, which means may be able to attract more members, donors, fundraisers, supporters, helpers, etc.

Not only this, but a raised profile through media exposure will also shore-up and strengthen the support you already have among existing members, donors, supporters, helpers, etc.

It also builds brand definition for you – setting your group apart from other groups operating in the same space.

It increases your profile among decision makers and VIPs: Having a media profile not only gets you noticed by the general public, but also among decision makers, VIPs and government.

Those decision makers and VIPs can be peak bodies in your area of interest, grant makers and philanthropic organisations, and others with influence or power.

Those in government that could notice you can be at a local, State or Federal level – or a combination of all three.

Because of this, those decision makers or levels of government could become more likely to ask for your group's input or opinion on matters relevant to you.

It can sway opinions: One of the most significant powers the media has is that of being able to shape opinions.

For your community group or organisation, this presents great opportunities to get more people thinking positively about you after hearing positive news coverage of your group and what it is doing.

Because of this, your group should actively seek out positive publicity through positive media coverage.

But your group should also remember that any positive opinions generated from positive media coverage can be blunted or reversed by negative opinions generated through negative media coverage.

This means you need to have a plan in place if a "media crisis" hits.

6.2.3 Do’s and Don’ts in Media Handling Do’s in Media Handling:

Be Accessible: If you’re going to work with the media, you’re going to have to accept that reporters live by the deadline. That doesn’t mean you have to do an interview unprepared, though. Set a time to talk that will meet both the needs of the reporter and your own needs as well.

Be YOURSELF: Feel free to be enthusiastic, motivated, or passionate about what you’re talking about. Be friendly, be natural, be yourself. When you’re comfortable and confident, it’ll show.

Feel Free to Bring Notes AND to Take Notes: Do not bring in a statement and read from it. However, it is acceptable to have a few note cards with some key points or facts you want to get right. And, whenever possible, take notes during an interview, especially a phone interview. Make a list of information you promised to provide, or simply jot down some questions you felt you had difficulty answering.

Keep Up Appearances: Be aware of your body language – do not fidget, drum your fingers, play with your jewellery, or act nervous. Dress appropriately for the occasion and for your audience.


Listen to the Questions asked (Even if the Question is Asked of Someone Else): Ask a reporter to clarify what he or she means if you don’t understand a question. If necessary, take time to think about an answer before you give it. Also, it’s important to look at and address the person who is speaking to you.

Practice: It’s not silly to practice! Stand in front of a mirror and pretend to answer questions while using your talking points. Ask yourself the questions you think will be asked by the reporter (and those you hope will not be asked – remember to bridge to your message!), so you feel prepared to answer.

Provide Written Background Information: It is very helpful to send a reporter some information in advance to help reporters to better grasp the subject matter you’ll be talking about. This will help better position you and the organization in the final story. Advocates’ web site has almost all of our publications available on the web to help accomplish this!

Remember “Repetition equals Retention”: You can not repeat your key message too often. It’s said that your audience may need to be informed of your key messages as many as seven times for the information to sink in!

Respect Deadlines: Follow up with the reporter!! Ask when the reporter needs the information, and then make sure you get back by that time. Tie up lose ends, get promised background/supplemental information into the reporter's hands in a timely manner.

Stay On Message: Give concise, to-the-point answers (Use your talking points!!). Go into an interview with two or three points you wish to make – then make them, no matter what questions are asked. Get to key messages by ‘bridging’ to your answers—turning the question around and returning to your point.

DON’T

Be Afraid to Say ‘I Don’t Know’: It’s fine as long as you also say “I will find out the answer and make sure to get back to you.” If it is a question you cannot answer, say so and direct the reporter to another source of information. Just don’t use it too often!

Be Defensive or Lose Your Temper: You lose control of an interview if you respond in kind to what you perceive as a personal attack. On the other hand, it is okay to object to a line of questioning you believe to be unfair or that asks you to reveal personal information.

Feel Pressured to Fill an Awkward Silence: It’s a little trick reporter’s will use to make you say something stupid – because when people try to fill the silence, they aren’t thinking as clearly and are more apt to say something unplanned. Don’t fall in the trap!

Go ‘Off the Record’: NEVER go off the record unless you have known the reporter for a very long time and you trust him or her. NEVER speak off the record for the electronic media. If you don’t want a statement quoted, don’t say it!

Let Inaccurate Statements Go Unchallenged: If you feel a reporter has made a mistake or ‘put words in your mouth,’ correct it immediately, or, if necessary, even after the interview is over.

Lie, Embellish, or Generalize: You WILL be caught. Honesty and credibility are valuable – once you lose either, it’s nearly impossible to get it back.

Say ‘No Comment’: This can make you seem unresponsive, or, worse yet, evasive or guilty! If it is a question you don’t want to answer, use it as an opportunity to bridge to a question you DO want to answer!


Use professional jargon or acronyms: Keep your message simple, but not condescending. Even though terms like “HHS,” “AMA,” or “GLBTQ” may seem very familiar to you, don’t assume the reporter will know what you mean.


Fill in the blanks:

1. The tools which appeal to both the visual and auditory senses (that is the eye and the ear) belong to the …………………… category.

2. The media have great relevance to …………………… in creating positive feelings for the organisation on whose behalf they are used.

6.3 PREPARATION FOR EFFECTIVE MEDIA HANDLING The effectiveness of a program or campaign often depends upon the level of marketing efforts, implemented before the program actually launches, and well after it ends. Media relations is a cost-effective marketing tool to reach a target audience on a small or large scale using the broad reach and influence of the media. The following four elements of media relations are cornerstones for achieving the most positive results:

Planning

Media Tactics

Execution

Follow-Up

6.3.1 Planning It is no secret that the success of a campaign or event largely relies upon the planning that goes into it. The focus of media relations planning is to help reporters and media representatives better inform the public. It is your job to deliver the most complete and concise information for a valuable story.

Media outreach requires the same meticulous preparation and thought that is invested into the program you want to promote. Once program objectives have been solidified, it's a good time to begin the public relations planning process, which establishes the appropriate audience, key media sources, relevant media materials and messaging, program spokesperson(s), and the option for a media event or press conference.

Determine Target Audience

It is important to know your audience. By raising awareness about a particular issue, your organization can help initiate change. The media can help deliver your message to a broad audience, but it is imperative to first establish the best primary and secondary recipients of that message. Narrowing your focus will also help to prioritize media sources to generate press coverage.

Consider the following:

Who does this program affect? Who should receive this message?

What is a common denominator for members in this group(s)?

Who has the ability to reach and influence other audience members?

What core values and objectives are shared?


What benefits are expected for these individuals?

What is the current level of awareness among these constituencies?

Identify Target Media

By developing a direct line of communication with the media, your organization can take an active role in establishing a position in the community. When determining which media targets to pursue, keep in mind the idea of quality over quantity. A single, in-depth and thoroughly written article directed at the right group of people can often have more potential for effect on your target audience than multiple impressions with less substance.

Media can be divided into five basic groups:

Print (newspapers, magazines, newsletters, internal and trade publications)

Television (news programs, talk shows, and public service announcements)

Radio (news programs, talk shows, and public service announcements)

News wire services (Associated Press, United Press, Reuters, etc.)

Online news publications

The more you know about the needs of any media organization and the media professional, the more efficient and effective you can be as a communicator and program liaison. Do some research – by reading or watching your target media diligently, you'll considerably increase the chances for a favourable response and positive view of the story that you are pitching.

Assemble a Media List

To assure effective communication of your message, distribute relevant information to the right people. This can be accomplished by developing a comprehensive media list that identifies the most appropriate contacts at each of the media outlets at the community, local, state and/or national level. Assembling a media list allows you the chance to better promote a program and respond quickly to publicity opportunities. Make a list of media that are important to your organization and identify appropriate contacts for each media group.

Create a spread sheet or list with the following information to help in all story pitching efforts:

Media organization name

Phone number

Media contact name

Fax number

Title

E-mail address

Area of expertise/interest

Circulation (daily, weekly, etc.)

Address, city, state, zip

Personal notes, contact log

The following is a list of different types of media, the general kinds of editors and reporters on staff, and the range of stories each will cover. Some media


(e.g., newspapers, TV) have reporters who write stories exclusively on specific topics (e.g., environment, health, consumer interest, government, etc.). If there is no such topic specific reporter, ask for someone who covers these similar issues and direct all communications toward that person.

To obtain the appropriate contact information for any media professional, start out by visiting their main website or searching through the actual publication for a general contact. Even for the most experienced public relations professional, narrowing down the right contact person can be a bit of a wild goose chase. Have patience and keep trying until you identify the appropriate contact to help you deliver your message.

Print

Journalist (types of coverage) Newspapers

Environmental Reporter (responsible for environmental stories)

Health Reporter (responsible for health related stories)

Consumer Reporter (responsible for consumer issues)

Lifestyle Reporter (responsible for local profiles and human interest stories regarding people involved with a local cause)

City Editor (responsible for news taking place in your city; emphasis on community events; features on outstanding residents; local issues)

Features Editor (responsible for human interest stories including: profiles of outstanding citizens; social trends; lifestyles; programs that benefit the community)

Photo Editor (responsible for events or backdrops that provide good photo opportunities) Magazines

Managing Editor/Articles Editor (responsible for reviewing all incoming press materials and choosing which stories to cover)

Environmental Editor (responsible for coverage of all environmental issues)

Newsletters Editor (responsible for reviewing all incoming press materials and choosing which stories to cover)

Television

Journalist (types of coverage)

News Program

Assignment Editor (responsible for reviewing all incoming press materials and assigning stories to staff reporters)

News Room/Desk (responsible for receiving all incoming press materials and story leads, passes information to editors)

Health Reporter (responsible for health related stories)

Consumer Reporter (responsible for consumer issues)

Environmental Reporter (responsible for environmental stories)

Talk Show

Producer (responsible for reviewing all incoming materials and choosing which stories to cover; also responsible for booking guests for the show)


Radio


News Program

News Director (responsible for reviewing all incoming media materials and choosing stories to cover on the air)

Newswire Services


Bureau Chief (responsible for reviewing all incoming press materials and choosing stories to cover)

Photo Desk (responsible for assigning news photographers to cover events and other photo opportunities; also distributes photo submissions)

Determine Media Timeline

Depending upon each media outlet (print, television, radio, etc.), you will need to begin pitching at different times. For example, magazines require a longer lead time for stories, while television news programs usually accept story pitches up to the morning of an event. A media timeline should be developed as part of an overall organizational schedule to provide a guide for when messages should be created and sent to the media. When first establishing contact (see Sec. II: MEDIA TACTICS - 'Making the Pitch') be sure to get deadline information from the media professional immediately.

Establish Key Messaging and Program Spokesperson

Maintaining consistent key messages is imperative to the program, since any incomplete or incorrect information can create unjustified concern and jeopardize the program's credibility. To help facilitate the dissemination of accurate and relevant information to an audience and members of the press, create documents that briefly summarize the program (e.g., mission, objectives, activities, etc.). These materials should be compiled and included in media kits, which become reference tools for generating a good story.

Media Kits

Media kits usually include the following:

Press release with program logo

Program background information

Program fact sheet with stats

Spokesperson biography

Other relevant background information

Organization contacts

Key news articles

Spokesperson

Selecting the appropriate spokesperson for your program is very important. It is essential for keeping your message as straightforward and concise as possible. This individual(s) should be seen as a resource for the audience and media professionals, someone who is an expert and directly entrenched in the program issues. Selecting too


many representatives can dilute program messages and decrease the chance for effective communication.

A spokesperson not only needs to be knowledgeable but also open to interviews and comfortable appearing on camera and in photos, and/or being quoted. This person will essentially serve as the face and voice of your program, so choose wisely.

Create talking points (summary of program key features that highlight newsworthy facts and issues)

Training/briefing (formal media training of key spokesperson(s) on what to expect and how to respond to media inquiries)

Practice (prior to interviews, make time for practice runs)

Determining the need for media events

Media events provide members of the press with a special opportunity to see a program in action and capture key images and interviews. However, not every program will need a media event since it means additional planning time and finances. It is a great way to reach multiple mediums in an appealing and memorable fashion that highlights all major points of a story.

Consider the following to gauge whether or not a media event is appropriate for your program:

Magnitude – How many people are impacted by your program?

Newsworthiness – Compared to all other activities taking place in the community, is this important at the given moment?

Locality – Is the story relevant here?

Visuals – What interesting imagery, action, interviews are available?

6.3.2 Media With your communications planning and key messaging finalized, it is time to begin generating interest for your program with active media outreach.

Making the Pitch

Media professionals are always on deadline and have little time for long story pitches. Remember that you are not the only one trying to get a reporter's attention. Anyone can pitch a story; it does not rest exclusively upon the spokesperson. The most effective way to begin sharing a story with the media is by telephone and email. Be aware of the preferences of individual media professionals, since some may prefer to receive news releases by fax or email instead of the telephone.

When talking with media professionals, remember to:

Sound enthusiastic about the story you are proposing

Be an authority and know your program

If you don't know, be honest and follow up with an answer later

Always follow up any conversation with an email and another phone call

Media Follow-up

Even the most compelling story requires active follow up efforts. Once you have established an appropriate contact with the media, continue to check in regularly to


maintain interest around your story and program. The only way to gauge their interest for your story is to follow up.

If you are ready to announce your program or event, send a media release via email and/or fax and confirm whether or not the reporter received the information they needed. If you are planning a media event, provide a media advisory that details the occasion, followed by a press release.

Finalize Program Messaging and Media Resources

From program media kit materials to question and answer sheets for the spokesperson, all messaging and resources should be completed and finalized at this time. Since you control the information shared with the media, maintaining accuracy and uniformity is crucial for these reference materials.

6.3.3 Execution After a period of detailed planning, making media contacts and booking appointments, it is time to launch the media campaign in order to create ongoing visibility for the program.

Briefing the Media

The best way to impact a member of the media is to conduct a personal, face-to-face briefing where media materials can be passed on and questions are handled efficiently. While this meeting situation is ideal, it may be hard to secure face-time with every journalist, so use the following tactics to help you in seeking and obtaining coverage:

Media Releases (customize): Depending upon their medium and specialty area, each media professional will interpret and use the information you provide differently. Take time to customize your message and media release for the targeted journalist.

Media Alert: Issued only in preparation for media events; serves as an informational invitation that helps break down the elements of a media event which will highlight your program in a newsworthy fashion.

Media Kits: Relevant and concise packet of program information used by the media as a resource to develop their story; also establishes appropriate contact persons from your program.

Follow-Up: After sending all written materials, follow-up with the journalist to ensure receipt and answer questions.

Staging a Media Event

As mentioned previously, a media event is an extremely useful (but not required) tool for drawing media attention to generate publicity and awareness around your campaign. Media events are like press briefings, with the added responsibility of providing compelling visuals (e.g., photo opportunities, interviews, demonstrations, etc.) to appeal to a variety of media types. In addition to any one-on-one press briefings, a media event is an efficient and quick way to achieve multiple impressions across several mediums.

One to three days before:

Create an agenda

Detail the entire media event, including preparation time, participants, etc. so that there is no confusion about the day's events.


For example:

Event Date: Month XX, 200X

Location: Exact site for press

Spokespeople: Same as included in media kits

Event schedule

8:30 AM:

Business representative arrives to begin preparation.

Spokesperson 1 and 2 arrive to help program volunteers with set-up. (Note: Volunteers will bring final press kits.)

9:00–10:00 AM:

Representative from school district arrives.

Program volunteer reviews messaging and event agenda with business representative and program spokespersons.

Spokesperson 1 does a practice run of the demonstration.

Spokesperson 2 and school representative decide on location for interviews.

10:30 AM:

TV stations arrive (typically not at the same time) and primary program volunteer presents press kits, coordinates interviews, and introduces visuals.

Send reminders

Confirm media event date/time with all program participants, spokesperson(s), and media contacts.

Send and review agenda with program representatives.

Day of event

Arrive early - Plan for unexpected surprises; arrive early to begin set-up and briefing of all participants well in advance of media arrival.

Practice run - Conduct a mock run-through of any demonstrations, speeches, or program activity that will be shown to media.

Review message - Reiterate with spokesperson(s) key messages and program statistics to highlight during media event.

6.3.4 Program Follow-up and Recap Again, the follow-up process is important to maintain constant contact with media as well as solidify the focus of your story. Even after you have successfully pulled off a great campaign, it is imperative to keep in touch with media contacts and monitor your progress with a program recap.

Final Media Follow-up

This is the last chance to secure coverage for your program. Your contact should be:

Timely - Wait no later than a week following your media event.

Informative - Provide any additional information to media.

Concise - Journalists appreciate brevity and clear information.


Program Recap

As news and feature stories begin to appear, begin to catalogue media coverage and create a document that traces the progression of your media campaign.

Clipping Service

A media clipping service can be contracted with to capture articles and stories, depending upon the number of articles that you plan to place. It is an easy way to thoroughly monitor any media coverage that you have obtained from countless pitching efforts. A cost-effective alternative is to simply search for articles you know have been printed; this can be confirmed through final media follow-ups.

Archives

An archive of media materials and tracked coverage should be developed for future use and reference for your program.

A basic outline for a recap document will include:

Your program description

Success of media event, including results compared to initial objectives

Media campaign objective

Media coverage report

Press contacts you made

Future efforts for program

6.4 ELECTRONIC MEDIA Electronic Media is information or data that is created, distributed and accessed using a form of electronics, electromechanical energy or any equipment used in electronic communications. On a day-to-day basis our access to Electronic Media is our television, radio, computer, cell phones and other devices transporting information to and from us by means of electronic involvement. With the ongoing evolution of technologies, new media have emerged. In the digital age, how we look at advertising have to change radically. Where video, sound, graphics, animation, telephony and data meet in the merger of computers, satellites, television and Internet, this mix of communications holds the key to a large part of our future. From outdoor LED advertising for those who want their product or service to be in the public eye, to online advertising opportunities, we can assist to make that happen.

Electronic media is enjoying broader use every day with an increase in electronic devices being made. The meaning of electronic media, as it is known in various spheres, has changed with the passage of time. The term media has achieved a broader meaning nowadays as compared to that given it a decade ago. Earlier, there was multimedia, once only a piece of software (application software) used to play audio (sound) and video (visual object with or without sound).

Following this, it was CD (Compact Disc) and DVD (Digital Versatile Disc), then camera of 3G (Third Generation) applications in the field. In modern terms, the media includes all the software which are used in PC (Computer) or Laptop or Mobile Phone installed for normal or better performance of the system; today, however, hard discs (used to increase the installation capacity of data) of computer is an example of electronic media. This type of hard disc is becoming increasingly smaller in size. The latest inclusion in the field is magnetic media (magnetic stripe) whose application is common, in the fastest growing Information Technology field.


Modern day IT media is commonly used in the banking sector and by the Income Tax Department for the purpose of providing the easiest and fastest possible services to the consumers. In this magnetic strip all the data relating to a particular consumer is stored. Credit card, Debit card, ATM card, High end travel card are comprised within the term Media as it is known today. The main feature of these types of media is these are prepared unrecorded (blank form) and data is normally stored at a later stage as per the requirement of its user or consumer.

Electronic communications is any communication based on electricity. The basis for this wasn’t properly harnessed until both direct current and alternating current electricity were mastered and popularized in the late 19th century. Thomas Edison warned that direct current electricity was safer, and thus should form the basis of a national power company. Unfortunately, alternating current electricity had better transmission capabilities and although it is more dangerous, became the basis for modern electrical power. These basic truths would ultimately form the foundation for modern electronic communication. All communications formed with alternating electrical current will be investigated.

What we know of as electronic communications originated with the telegraph. The telegraph was a simple electrical circuit that transmitted electrical impulses across country via wire. It had two signals, a dot and a dash. This formed a code that could be interpreted as words. This code was Morse code. Over time, the code would be translated into all languages and became state-of-the-art technology. It permitted coast to coast data transmissions and formed the basis for facsimile transmission as well.

The next major communications invention was the telephone. The “plain old telephone” has changed very little since it was invented in the early 19th century. It has just become more popular and accepted since its invention. It was patented by Alexander Gram Bell in 1876 but more than likely invented by Innocenzo Manzetti and was originally called the “speaking telegraph”. The history indicates that the telephone as actually being demonstrated in England some nine years before Alexander Bell filed his patent in America. The idea that the phone was invented in America is a misconception. Regardless of its origins, there was nothing as convenient as the phone until wireless radio transmissions became fashionable quite a while later.

The idea of sending messages via radio waves didn’t become popular until Faraday proved that such transmissions were possible and done easily and cheaply. Wireless transmissions evolved from simple messages with ranges of only a few miles to the cellular phones we use today. Wireless transmissions eventually have become the premier communications medium. Wired transmissions are looked at as backwards and troublesome in comparison. This viewpoint comes from the fact that wires are prone to trouble. Cables break, get dug up and become disconnected from equipment. Virtually every wired industry in the world today, wishes to become wireless. There are many business benefits to dropping the cable. The most important of which is to increase reliability. Today customers see wires as a weakness and low standard of technology. Modern communications, with the way cell phones work, have grown by leaps in bounds in terms of size, scale and the ability to reach others. Now a person with just a satellite phone can call someone on the other side of the planet without an operator and complex operation. This was unthinkable just 50 years ago. The history of communications is moving faster and faster.

6.4.1 Importance of Electronic Media Man has a nature of curiosity. He always engages with doing something unique. In the past century they explored in many field. It was a time when a man could hardly think about the unbelievable development that is within reach now.


Media is a mean of transmitting the message, thought, opinion and view point. In the beginning, man used horse and other animal to send the message to the receiver. It took time to deliver the message and the probability of spoiling the message was on the top. Now man has entered the age of science and technology. They have explored the farther space. The have got a tremendous achievement in many field as well as Electronic Media. We are living in the era of electronic media. None can avoid and escape from it. It is prevailing profound effects on advertisement, education, information, politics and other social activities.

Now students have a great opportunity to enhance their knowledge through accessing internet. All the information in all topics is far beyond one touch of a button. Electronic media has entirely changed the mode of advertisement. Different types of tricks are employed to attract and attend the valuable customers. Sometimes an innocent client is really confused in making the decision. On the other hand it gives extensive options in selecting the desired product.

Electronic media has revolutionized the information system. Now everyone can be aware himself with current information and updates. So many TV channels in the country and internet websites justify the importance and advantages of electronic media where everyone has a freedom to exchange his view point freely.

The international politics are greatly influenced by the electronic media. It is said who will win the media war will be most successful. It is a media through which the West propagates against Islam and other opponents. If we want to be dominant in the world, we will have to accept the challenge of electronic media otherwise we will be limping and looking at others.

Role of Electronic Media

In this technology oriented era the use of electronic communication is inevitable. The role and importance of electronic communication can't be overlooked. Electronic information interchange is necessary for the survival in current era. Information is the back bone of the economy of a Nation. Electronic media has improved communication numerous ways.

Internet has immensely helped in communicating. There are a lot of new websites coming in each day, each hour. Emails are an efficient and economical mode for communication with no time restraints and country borders. More and more people use emails to communicate and spread information. These characteristics of electronic communication have a tempting effect on the organizations to carry on their businesses. Organizations use electronic communication as their marketing tool leading to spam for some of the recipients.

The Internet and electronic communications (also called computer mediated communications, or CMC) doesn't just mean new tools for communication; it means new ways to communicate. Today our organization interacts with its various constituents differently – employees, board members, customers, partners and others – depending upon the nature of the message, the goals you are trying to achieve and the strengths (and weaknesses) of the available media – telephones, voice mail, fax machines, print, etc. Electronic communications adds a powerful new channel that not only will change how you use this mix of options, but it will create entirely new ways to interact. For example:

Electronic communications lets you combine numerous media – text, graphics sound, video, etc. – into a single message. That can result in far more meaningful communications tailored to the nature of your particular audience. In contrast to broadcasting, narrowcasting reflects the ability to develop numerous communications for subsets of your market or constituencies.


Electronic communications is interactive. It engages audiences in active, two-way communications. That requires a new way of thinking about advertising copy and the handling of public relations. The pay-off, however, is a self-selected audience, engaged and actively participating in the communications process.

Two-way communication is nothing new. But electronic communications creates a new form of many-to-many communications that lets geographically distributed groups communicate interactively and simultaneously through text, sound and video. You can hold inexpensive video conferences or press conferences from your desk, or conference with people at several desks located across the world. One of the burgeoning phenomena of the Internet is businesses and organizations sponsoring, supporting and moderating discussion groups about issues, products, strategies – anything of interest to the organization and its constituents. Sponsorships are also solicited for popular resources, such as indexes and other Internet search tools, and these provide a further communications and marketing opportunity.

Many organizations are using electronic communications facilities, such as the World Wide Web, as internal communications tools to enhance team work. Many individuals at different locations can work on the same documents, hold meetings and integrate research findings.

Electronic communications removes the power of communications gatekeepers to both positive and negative effects. Most organizations are used to controlling the messages that go out to its constituents through managers, spokespeople and others. But with the Internet, constituents begin to talk among themselves, requiring new approaches and a new emphasis on listening and reacting, not just talking.

With the Internet you have the ability to transmit and receive large amounts of information quickly to and from individuals and workgroups around the world. These changes the way activists, for example, can galvanize communities, inform legislators and change public opinion. It changes the sources and depth of your constituents' knowledge levels. It also lets those constituents reach you with new kinds of communications they may never have attempted before.


Fill in the blanks:

1. When determining which media targets to pursue, keep in mind the idea of ……………………….. over quantity.

2. ……………………….. -interchange is necessary for the survival in current era.

6.5 LET US SUM UP The media plays a very important role in most community, public policy, national, and international affairs. Handling the media can be a complex and is often a very specialised business. The media can easily convince people to make comments they would perhaps not have otherwise made. The media may be classified on the basis of their appeal to the human sensory organs.

For many community groups and organisations, gaining positive and consistent coverage in the media can have an incredible impact on the work they do. Media relations is a cost-effective marketing tool to reach a target audience on a small or large scale using the broad reach and influence of the media. Electronic Media is


information or data that is created, distributed and accessed using a form of electronics, electromechanical energy or any equipment used in electronic communications.

6.6 LESSON END ACTIVITY Research on the latest trends and updates used as a means of electronic media.

6.7 KEYWORDS Audio-Visual Media: The tools which appeal to both the visual and auditory senses (that is the eye and the ear) belong to the audio-visual category.

Visual Media: Media which are attracted by the sense of sight and the impressions received from the eye are called visual media.

Audio Media: Tools which influence the ear i.e. radio and audio tapes are the media which come under this category.

Mass Media: A means of public communication reaching a large audience.

Electronic Communication: It is defined as passing of information from one individual to another using computers, fax and phones.

6.8 QUESTIONS FOR DISCUSSION 1. Define the audio and visual media.

2. Discuss the importance of electronic communication in mass media.

3. Explain the types and role of media handling.

4. Discuss the Do’s and Don’ts in Media Handling.

5. What are the steps involved in effective media handling?


CYP 1

1. Audio-visual

2. Public relations

CYP 2

1. Quality

2. Electronic information

6.9 SUGGESTED READINGS Panda, K. Tapan, (2013). Marketing Management Text and Cases, Excel Books. Second Edition.

Kinnison, A Harry, Aviation Maintenance Management, McGraw Hill.

Sinha, P.K. Service Marketing, Text and Readings, Himalaya

127Crisis Management at Airports

UNIT IV

129Crisis Management at AirportsLESSON

7 CRISIS MANAGEMENT AT AIRPORTS


7.1 Introduction

7.2 Crisis at an Airport

7.3 Planning for Crisis

7.3.1 Aircraft Accidents

7.3.2 Managing the Crisis

7.4 Let us Sum up


7.6 Keywords




Discuss crisis at an airports

Explain planning for crisis

Describe the procedure for managing the crisis

7.1 INTRODUCTION Crisis management is the practice by the help of which an organization handle the major event that threatens to harm the organization, its stakeholders, or the common people. Crisis management originated as a study for the large scale industrial and environmental disasters since 1980s. We may say that crisis consist of the following:

A short decision time. A threat to the organization, The element of surprise, and

Venette argues that "crisis is a method of alteration where the old system can no longer be retained." Therefore the fourth important quality is the requirement for change. If change is not required, the occasion could more precisely be termed as a failure or incident. As compared to risk management, that comprises estimating potential pressures and defining the best ways to avoid those fears, crisis management includes dealing with fears before, during, and after they had occurred. It is a discipline enclosed by the


wider context of management comprising skills and methods obligatory to recognize, assess, understand, and manage a serious situation, particularly from the instant it has occurred to the point that recovery processes started.

Crisis management consists of different aspects including;

Communication that occurs within the response phase of emergency-management scenarios.

Crisis-management methods of a business or an organization are called a crisis-management plan.

Establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms.

Methods used to respond to both the reality and perception of crises.

Crisis management is sometimes referred to as incident management; even though several industry specialists such as Peter Power argue that the term "crisis management" is more perfect.

A crisis mindset needs the skills to think of the worst-case scenario while all together suggesting various solutions. Trial and error is a recognized discipline, as the first line of defence may not work. It is essential to maintain a list of possible plans and to be all the time on alert. Organizations and persons should always be ready with a fast reaction plan to emergencies which would need analysis, drills and exercises.

The reliability and status of organizations is deeply affected by the observation of their responses at time of crisis situations. The organization and communication helps in responding to a crisis in a timely manner makes a challenge in the businesses. There must be open and reliable communication all through the hierarchy to contribute to an effective communication process.

The related terms emergency management and business-continuity management emphasis respectively on the rapid but short lived "first aid" type of answer and the longer-term recovery and restoration phases. Crisis is also an aspect of risk controlling, though it is perhaps incorrect to comment that crisis management represents a let-down of risk management, since it will never be possible to totally mitigate the chances of disasters' occurring.

7.2 CRISIS AT AN AIRPORT During the crisis management practice, it is significant to find out the types of crises in that diverse crises impose the use of various crisis management tactics. Potential crises are massive, but crises can be grouped. Lerbinger categorized eight types of crises

Confrontation

Malevolence

Natural disaster

Organizational misdeeds

Rumours

Technological crises

Terrorist attacks/man-made disasters

Workplace violence


Airport Managers only consider accidents on or nearby to their own airport whereas Airline Managers are not that much lucky approximately half of the incidents and accidents occur at a distant place from their home airport. Nevertheless an airline have an accident away from an airport where few of its own staff are stationed, airport and other local staff is required to take on further responsibilities unless and until the airline staff arrive.

The accidents should be avoided and yet plan must be ready for them might be established by means of the comprehensive simulation of an mishap with senior management staff making the Crisis Management Team and having to reply to the varied range of difficulties reaping up resulting to the 'accident'.

Airport and Airline Safety Managers are well known about the fact that there is a fine difference between having an incident and having a major accident. They are also very well aware of the benefits of having well managed Emergency Procedures to decrease the effects that can be either it is social or financial. Senior managers, despite new requirements originating from the USA, may be less likely to appreciate the wide variety of problems that they may have to face in the aftermath of a major accident and may thus be reluctant to give safety the backing necessary if we are to maintain, let alone improve, the air transport industry's existing excellent safety record during the coming decade.

By chance accidents are infrequent but this leads to the unfortunate fact that very rare managers have had the chance of acquiring the necessary knowledge to deal with the kind of emergency likely to grow in the come around of an accident. There is a strong requirement for various important people to be aware with everything concerned with what it is fervently hoped will never happen. This can occur by means of the wide training of all who are nominated to be involved if and when an accident or other such event does occur.

There are various areas which are quite important, including:

Establishing good communications,

Finding out what has occurred and where;

Checking that those on board, whether fatalities, casualties or unhurt survivors, are being or soon will be looked after appropriately;

Similarly that next-of-kin and other 'meeters and greeters' will be looked after and kept informed;

Establishing good relations with the media, it being vitally important that the airline is seen by the media to be doing all that it can to help those involved.

While airport staff will also be concerned with all these topics they may be more directly involved in matters of direct concern to the airport, including establishing the state of the airport, will it be closed to other traffic and if so for how long? Fire covers status, organizing accommodation for next-of-kin, etc. the media.

The airport and the airlines should working together, although the airport is not likely to go out of business, as the airline, its profits could be cut permanently if airlines and passengers perceive it to be in any way responsible.

Numerous diverse range of problems arise after the damage of an aircraft, regarding the emergency response, engineering, operations, legal matters and others, if anyone not dealt with efficiently could undesirably affect the capitals of the airport and/or the airline.

It is very essential that it should be recognized that different parties will have different priorities yet the airline is the chief or perhaps the single source of information


important to other parties. One problem clear to the airline is that it must not only keep up its plans while being one aircraft short but may also have to carry a large number of people to the accidental place – or as close as is possible to it since the accident may have occurred far from an airport or, if on it, the airport may still be closed. Also if they can be got there – where will they stay?

Similarly the airport need to deal with extra passengers and other people of the public than normal because of flight delays but have to do so with less space and fewer staff since some large rooms or areas may have to have been allocated to the various groups associated with the accident.

The airline will request to continue its jobs with the least disruption, if required by diverting flights and passengers to other airports. The airports do not have this choice but also request to restart usual processes as soon as possible. Holiday locations, mainly islands have a tendency to be filled at peak times of year. If an airplane lands with a fresh load of tourists and then crashes on or shortly after take-off, closing the airport, pressure upon housing may be stressed beyond its limit. If the accident has happened in US territory, or if US citizens are involved, then the requirements of the National Transportation Safety Board's, (NTSB's) Federal Family Assistance Plan will need to be met, putting an even greater strain on resources. Furthermore, if it is believed by the media to be a significant accident then the media will be there in force and the media is renowned for fixing its lodging needs very well.

Legal action may be started against the airline, airport or both even before the dust has settled at the accident site and even if this does not occur there is still the need to copy any documents that might become pertinent to the accident before the originals are seized by investigation or judicial authorities.

Such matters and many more are all part of crisis management and therefore a part of Air Transport Management that may affect the whole industry and its future.


Fill in the blanks:

1. The reliability and status of organizations is deeply affected by the observation of their responses at time of …........................ situations

2. Crisis management is sometimes referred to as …........................ management

7.3 PLANNING FOR CRISIS A major emergency have variety of forms, not only an aircraft accident but perhaps an aircraft hijack, an aircraft trapped in a war zone, the contamination of aircraft catering, a bomb explosion in the airport or in an airline sales office or any other major event associated with the airline or airport. Unfortunately not all airlines can cope properly, some will muddle through, and others may go out of business. Others again may face the world and be seen to be giving every possible assistance to the survivors, to the next-of-kin and to the investigators; such airlines may come through relatively unscathed.

As the actual accidents are unusual it is obligatory for the staff of the airport and airline to take part in systematic full scale disaster movements, employed with all the emergency facilities. Airports must run such trainings to preserve their authorizations but all parties can learn a great deal if they are properly run.

Such trainings are tremendously valuable but they are almost unavoidably limited to a 'home' airport and, however important, are an exclusive way to acquire the basic


programs, many of which may be learned initially just as effectively from small scale and relatively inexpensive 'table-top' simulations.

The vital fact is that around a half of an international airline's mishaps are likely to be at distant place. Thus a table-top simulation may be the only way to become involved in and appreciate the additional problems surrounding 50% of its accidents, those in a foreign country, somewhere that the airline has only a handful of staff or perhaps where it does not operate and thus has no staff at all.

7.3.1 Aircraft Accidents The effects of a major accident are broadly categorises into several distinct yet overlapping stages.

If hazardous problems came into picture prior to landing, the Emergency Services at the projected destination and the airline itself can be notified and emergency procedures brought into action in advance the accident, if any, occurred. If there is no such warning then inevitably action starts only after the accident has occurred, in which case the location of the accident site may or may not be known immediately. Thus there may still be a period of uncertainty before any real action takes place.

As soon as the accidental site is known the Emergency Services take control of the safeguarding of life taking total priority. The Fire and Rescue Services will ordinarily be in control of the wreckage and the Police of everything else, allowing triage and drive to hospitals and elsewhere to take place smoothly. All at once the airline will take care for the information both for its own use and should be given to others and will work to offer housing for the uninjured, the 'meeters and greeters', relatives who have been waiting at the airport or who arrive soon, and for the media as well.

Once the accidental site is cleared of people and the debris is secure the Emergency Services soon stand down and the accidents investigators take control of the site. Even though the examination of site may only take a small number of days, allowing the wreckage to be moved and the site is organized again, the whole investigation often take months, even a year or more to complete and will study happenings that led up to the accident, the impact itself and any fire that followed, and the actions of the airline and Emergency Services since these may have affected the continued survival of those on board.

The airport's and the airline's participation may start beforehand the emergency is declared and remain until after the investigation report is issued. It may commence with the initial problem of an aircraft, with the crew notifying Air Traffic Control who will prepare airport and airline ground staff; remain in equivalent to the work of the Emergency Services through the initial stages after the accident; and continue both with the supply of information relating to passengers and crew and with that concerning the aircraft, its maintenance, its cargo and everything else is required by the accidents investigators. Nevertheless as the principal joins between those on the aircraft and their next-of-kin the involvement may continue for several years, as counselling of staff.

The crisis management simulation define later is primarily proposed to cover the first two or three days after an accident but it also points to issues that are likely to arise at some substantial time in the upcoming.


Emergency Procedures

While it is clear that the airline's emergency actions are important, in certain cases the effectiveness of an airport's emergency techniques may also significantly affect the result, for improved or for of poorer quality.

7.3.2 Managing the Crisis This Forbes Group disaster response plan is a specification of how to respond after a disastrous event. It is planned to help system of government to think through what they should do. There are three parts of crisis management

1. preparedness

2. reaction

3. response

These are explained below:

Preparedness: It consists of safety of physical and knowledgeable resources. Response comprises communications and restoration. Reaction contains the demonstrative toll of a disaster.

Every association should have thorough emergency response and communications strategies. In developing these plans, it is useful to make circumstances of possible disastrous events to permit staff and leaders to define how to deal with them before the fact. The Federal Emergency Management Agency (FEMA) has a comprehensive guide to help organizations prepare for emergencies. It is available at the FEMA website.

The Forbes Group: The Forbes Group is a 20-year-old tactical management counselling organization headquartered in Fairfax, VA. The mission of the organization is to help various other organizations to create their preferred future by thinking, planning and acting strategically.

Seven-Step Crisis Management Formula

1. Define the scope of the crisis

Local, regional or national

Organizational areas involved

What have others done in similar situations

2. Establish unified response

Designate one authorized spokesperson and one alternate; tell staff and members who they are, where they are and how they can be reached day or night

Designate one person authorized to clear statements to the media and the public; responsible for getting clearances from lawyers, public safety officials, etc.; make arrangements in advance

Develop and maintain a unified position and supporting messages

Keep messages simple, clear and consistent

Tailor messages to audiences

3. Create a central information service

Set up an adequately staffed and equipped media headquarters away from the crisis site; know how to arrange for additional phone lines


Staff and volunteers should refer all crisis questions to the central source:

Arrange for the receptionist and voice mail to refer calls to the crisis centre

Have emergency numbers (police, fire, public safety, medical) available

Request stakeholder cooperation

To avoid inconsistencies in media responses, have all requests funnelled through information central

4. Act promptly

Actions being taken by organization, stakeholders

Arrange for a news conference for the designated spokesperson as soon as facts are known

Console the stricken, reassure the affected, offer help

Different crises have different focuses

Disasters/industrial accidents/environmental problems affect local communities first

Extent of problem, damages, injuries

Gather facts calmly

Immediately make a simple statement indicating awareness of the situation, action being taken and willingness to inform media and public of details when they are known

Keep stakeholders informed of developments (staff, leaders, association members, government officials)

Make spokesperson available for interviews

Notify media and cooperate with reporters

Openly and honestly provide as much detail as possible

Product recalls/consumer boycotts affect customers, stakeholder sales forces, suppliers distributors

Staff, leaders, stakeholders, government officials, media

Takeovers, mergers, acquisitions affect financial markets and media

Target communications to those affected by the crisis and who can effect action

Use facts to squelch rumours

Work with hospitals/public safety organizations to designate spokespersons

5. Establish media response policy

Arrange for photographer/videographer to document important developments for media, lawyers, insurance companies, organizational records

Do not stonewall or deny that there is a crisis

Have media monitoring plan

If appropriate and acceptable to public safety officials, arrange for access to disaster area


Keep media away from families until approved by appropriate person

Keep records of all replies (media, reporter name, date, time, respondent, summary of response, follow up requests)

Limit statements to the immediate problem

Provide no information about victims until families have been notified

Schedule regular briefings to relay data, correct misconceptions and maintain positive media relations

Stick to the facts

Treat all media equally; no exclusives

6. Document everything

Keep thorough and accurate records of everything – planning sessions, crisis management team meetings, reports and all public conferences; tape thoughts and reasons for making decisions because these will give a solid basis for quotes; document decision making and protect from blame fixing

7. Conduct a post-crisis review

Appoint a crisis evaluation team to assess handling of the crisis and recommend changes in crisis procedures, evaluation team members should be different from crisis management team members

Questions to ask – Did the crisis plan work? Where did it break down? What should be added? What was unnecessary and obsolete? Who should be on the next crisis management team?


Fill in the blanks:

1. ................................. contains the demonstrative toll of a disaster.

2. ................................. consist of safety of physical and knowledgeable resources.

7.4 LET US SUM UP Crisis management is the practice by the help of which an organization handle the major event that threatens to harm the organization, its stakeholders, or the common people.

Crisis management is sometimes referred to as incident management. A crisis mindset needs the skills to think of the worst-case scenario while all together suggesting various solutions.

The reliability and status of organizations is deeply affected by the observation of their responses at time of crisis situations. During the crisis management practice, it is significant to find out the types of crises. A major emergency have variety of forms, not only an aircraft accident but perhaps an aircraft hijack, an aircraft trapped in a war zone, the contamination of aircraft catering, a bomb explosion in the airport or in an airline sales office or any other major event associated with the airline or airport.

7.5 LESSON END ACTIVITY Prepare a presentation on crisis management at airports.

137Crisis Management at Airports7.6 KEYWORDS

Preparedness: It consists of safety of physical and knowledgeable resources.

Response: It comprises communications and restoration.

Reaction: It contains the demonstrative toll of a disaster.

Crisis management: It is the practice by the help of which an organization handle the major event that threatens to harm the organization, its stakeholders, or the common people.

7.7 QUESTIONS FOR DISCUSSION 1. What do you mean by crisis management? Discuss various aspects of crisis

management.

2. What are the various types of crises?

3. Discuss the broad classifications of the effects of major accidents.

4. Discuss the procedure for managing the crisis.

5. Describe seven-step crisis management formula.


CYP 1

1. Crisis

2. incident

CYP 2

1. Reaction

2. Preparedness

7.8 SUGGESTED READINGS Harry A. Kinnison, Aviation Maintenance Management, McGraw Hill

Manoj, Risk Management and error reduction in Aviation Maintenance

S. Patankar and James C. Taylor – Ashgate Publishing Ltd.


LESSON

8 PR: THE ROLE DURING CRISIS

CONTENTS


8.1 Introduction

8.2 Role of PR during Crisis

8.2.1 PR Strategies for Crisis Management

8.3 Four Steps Public Relations Process

8.3.1 Step 1: Defining PR Problems

8.3.2 Step 2: Planning and Programming

8.3.3 Step 3: Taking Actions and Communicating

8.3.4 Step 4: Evaluation

8.4 Let us Sum up


8.6 Keywords




Discuss the role of PR during crisis

Explain four steps public relation process

8.1 INTRODUCTION Planning for crisis management is of utmost importance as information and news travels much faster these days as before. Organisations should be proactive in handling questions and allegations regarding looming crisis.

There are a number of examples of organisations that are not able to deal with crisis management correctly. Generally, most companies are not prepared in advance when the crisis takes place and for that reason are not able to handle the situation properly. Organisations might try evading the situation, toughing it out or make believe the crisis will pass, but this does not solve the purpose instead they make the situation worse. Organisations should not waste their time when the crisis arises as it can impact their revenue generation and falling stock prices.

139PR: The Role during Crisis

During crisis, an organisations most vital asset is at risk; their reputation, their image that they might have spent years on building. It is useless to hide the truth from the public as ultimately someone will blow the whistle.

Thus, managing crisis is very important for each and every organisation. There are three smart approaches to deal with crisis situations:

1. Avoid a crisis in the first place (a pinch of prevention is worth a mound of cure)

2. Quickly address and resolve crisis issues before they intensify

3. Seek possible ways to turn your crisis into an opportunity.

8.2 ROLE OF PR DURING CRISIS Public relations consultants play an essential role during crises, preserving and refining their organisation’s relationships by communicating effectively with its public (target audiences). Public relations practitioners are not usually accountable for determining the underlying problem(s) that generated a crisis situation. They cannot individually govern their organisation’s actions.

The department of public relation within an organisation during a crisis is responsible to get the organisation through the situation with as little damage to its credibility, reputation, and important relationships as possible.

Even though crises necessitate quick responses, public relations specialists need to maintain a long-term outlook that purposes to enhance long-lasting relationships with key publics. At times this involves hostile or painful, short-term actions.

The public relations role is to help stabilise the environment by developing public relations strategy and messages which results in rapid, authentic, useful and concerned communication with all significant internal and external audiences.

The role of PR includes but is not limited to:

Audit: The foremost step at the time of planning crisis management is audit. During this step a public relation executive need to forecast the possible threat to an organisation. A crisis audit establishes inside an organisation the various crises it may face and any susceptibilities within its structure. If an operational issue is discovered in the course of the audit, for example rumours about malpractice, then this issue can be resolved.

Scenario planning: The second role of a public relation executive is scenario planning. Scenario planning aims to develop flexible plans to deal with possible crises. It takes account of known facts, with educated guesses, for instance, the possible reaction of the press to news that an employee has committed fraud.

‘What are the worst things that might happen to your client or to your organisation?’– is the second method of scenario planning. Identifying all the possible ‘what ifs’ will permit you to measure the likelihood of crisis happening and their severity if they did occur. By means of this information it is likely to draw up a series of possible scenarios or stories and develop a model for managing them. While carrying out planning of this type, it may be likely to forestall possible crises and adapt current protocols to stop them from occurring in the first place.

Risk analysis and contingency planning: There is some crisis management planning that can be put in place in advance a crisis occurs. A crisis needs a very rapid response, so it is good to have a basic plan in place. Identification and severity of the type of risk can be measured by the organisation; by means of risk analysis. Having recognised risks, you can put a plan in place to minimise the risk


of a crisis happening or to minimise the damage if it does happen – these are contingency plans. Organisations prepare contingency plans for the reason that it is understood that things can and will go wrong at some point. The contingency planning will prepare people, for instance, by providing media training to important spokespeople who may be called on in a crisis.

8.2.1 PR Strategies for Crisis Management As soon as the crisis occurs, you need to act swiftly and assertively to limit damage. This can be done with the help of a crisis management plan, but every crisis will not be similar and you need to assess the best way to respond. A strategy to do this is as follows.

Monitor: Collect all the available information and quickly prepare a thorough assessment of the facts. Continue to do this as the crisis develops: evaluate the situation and how it is changing. Listen to your stakeholders.

Manage: Decide on the key messages you need to give to stakeholders and the best way to reach each group. Brief any spokespeople and make them to speak to the media.

Respond: It is necessary to react rapidly. A lack of information will give the public and the media space to speculate. Rumours and speculation may be far more damaging than the original crisis. Responding quickly may let you to direct the narrative of the crisis and limit the damage. Connect to stakeholders by appropriate channels, both traditional and social media. Ensure the tone of voice is suitable and that you are listening along with giving your key messages. Be honest – remember that people are more probable to forgive an organisation if they are open and appear to want to address an issue.

Reassess: Some stakeholder will remain unhappy in spite of how good your communications are. In this in course of these circumstances you need to decide how to respond. At times, it may be better to stay quiet, but if you feel you may still be able to change their outlook, prepare an appropriate communication.

Timelines

It is always advisable to frame a timeline, one you have identified the crisis. Timeline helps to indicate the task you need to do in order of priority so as to monitor, manage and respond to crisis situations. It will also ensure you to complete each activity in a particular time frame effectively to handle the crisis, not spending too long on one thing.

Lines of Communication

Always keep your internal and external lines of communication open. You need to keep your own people informed along with ensuring your key messages are communicated clearly to stakeholders and the public. It is also significant that you monitor and listen to the feedback in reaction to the crisis and your key messages.


Fill in the blanks:

1. It is important to keep internal and external lines of .......................... open.

2. ........................... aims to produce flexible plans to deal with potential crises.

141PR: The Role during Crisis8.3 FOUR STEPS PUBLIC RELATIONS PROCESS

8.3.1 Step 1: Defining PR Problems The main step in the process is to define the problem. This includes either formal research or informal research, to collect information that best describes what is going on. Formative research is the research used to understand the situation and help formulate strategies.

According to Cutlip, Centre, and Broom, research “is the systematic gathering of information to describe and understand situations and check out assumptions about publics and public relations consequences.” Secondary research is the research that has been previously conducted. For example, the Interstate Natural Gas Association of America has conducted surveys on public opinion and communication practices of pipeline companies. Research on NIMBY and other social behaviours is also available through a review of academic and professional literature. The least expensive way to gain background knowledge is secondary sources.

There are numerous ways to collect the data that is required to fully understand the situation.

Using a SWOT Analysis

A very common tool for analysing situations is the SWOT (strengths, weaknesses, opportunities, threats) analysis. SWOT analysis breakdowns down a situation by looking at the internal and external factors that might be contributing to the situation prior to strategy development. The internal factors comprise the Strengths and Weaknesses of the organisation. The external factors take account of the Opportunities and Threats prevailing in the organisation’s environment.

Strength

Weakness

Opportunity

Threats

Figure 8.1: SWOT Analysis The foremost step is to look at the strengths and weaknesses of the organisation. For example, the aviation company may have very strong relations with members of the media, has good employee morale, is economically sound, and has a culture that values modernisation. It may also find that it has weak associations with environmental groups and neighbourhood relations, has a culture that encourages confidence in its decisions, and has devoted few resources in the past toward community associations.

The external factors, opportunities and threats, are usually the reasons the organisation finds itself in the situation. Once you have conducted the SWOT analysis, you can then frame possible strategies by combining the internal and external factors.

Strength –Opportunity (SO) strategies: It focuses on using organisational strengths to capitalise on the external opportunities.

Strength – Threat (ST) strategies: It also uses organisational strengths to counter external threats.


Weakness-opportunity (WO) strategies: It addresses and improves organisational weaknesses to be better equipped to take benefit from external opportunities.

Weakness – Threat (WT) strategies: It attempt to correct organisational weaknesses to defend against external threats.

8.3.2 Step 2: Planning and Programming It involves resolving or capitalising on the situation recognised in the problem-statement/opportunity statement. It starts by reversing the problem-statement/ opportunity statement into a goal.

The goal renders the way for the strategic plan and objectives furnish the direction of measurable and specific outcomes needed to fulfil the goal. A good objective meets the criteria given below: it should be an end and not a means to the end; it should be measurable; it should have a time frame; and it should identify the public for the intended outcome.

End and not means to an end: An objective has to be an outcome that leads to the goal. There are three potential outcomes for these objectives:

cognitive: It includes awareness, understanding, remembering,

attitudinal: It create attitudes, reinforce positive attitudes, change negative attitudes, and

Behaviour: It creates behaviours, reinforces positive behaviours and changes negative behaviours.

The opposite of these outcome objectives are what Lindenmann called “Output Objectives,” Lindenmann, which are the means to an end. They take account of the communication efforts that are used to reach the objectives. These are actually strategies and not objectives.

Measureable: Objectives also help public relations professionals to be held responsible for their efforts. Public relations must engross only in tactics and strategies that actually add to larger organisational goals. Comparative number is usually required for measurable objectives. For example 65% awareness of a product or program. If the current level of awareness is not known, an objective cannot be set to increase awareness by 20%. Because of this reason formative research is required to establish standards/benchmarks. It is customary to establish a desired level, if no such benchmark exists, such as “increase awareness to 85%.” In this case the only problem is that you are not aware about how close you are to that figure prior to the campaign. In case your level of awareness is already at or above 85% then this might be an easy objective to achieve, on the other hand it may be very difficult one if your awareness level is around 20%.

Time frame: You need to be effective and efficient in meeting the objective. This entails that by what time the objective will be met if there is no time frame stated, and then it cannot be accountable.

Identify the public: It is always be better to identify the overall objectives prior to trying them to a public. This will enable to think about which publics are associated to the objective. Though, in order to make an objective completely measurable it should identify a public, because various publics will be at different levels of attitudes, awareness, and behaviours. For instance, an objective to increase the number of participants at employee benefits meetings. Research may find that the messages are getting blocked at middle management, which has many people who have an undesirable attitude about the meetings and are not inspiring employees. One objective might focus on growing the level of awareness


of employees while creating another objective focused on increasing positive attitudes of middle management. Of course, this also means that you should look into your meetings and find out how to improve them.

The objectives should advance overall business goals for example increase sales, retain employees, increase share values, reduce litigation or improve social responsibility. They must also be written in the limitations of possible public relations outcomes. For example, this might look like a good objective:

Increase sales of product A by 20% over the next 6 months among younger consumers between ages group of eighteen to twenty-four.

However, there are numerous variables that lead to augmented sales of the product that are not under the control of public relations for example product quality, price, and availability. Unless the public relations effort can be isolated to show that it was the variable that moved the needle on sales for instance positive publicity in one market that showed augmented sales although all other elements in the marketing mix remained the same, you may be setting yourself up for failure. And, if sales increase, you will not be able to take advantage for the increase owing to the other significant variables. You would have to share advantage with quality control, marketing, and sales representatives. Public relations can lead to this larger goal by means of improved attitudes, increased awareness, and possible consumer trials of the product. Providing that the product is of good quality, reasonably priced, and available to consumers, these activities must contribute to increased sales. So the following might be the reworked objective:

Increase awareness of product A among young consumers in the age group of eighteen to twenty four by 20% within the next 6 months.

Usually there is a hierarchy to the various levels of objectives. Lindenmann identified three levels of objectives:

outputs

outtakes

outcomes

Output objectives are dedicated on the efficiency of meeting strategies for example the number of messages placed in the media, the size of the audience that received the message, the percentage of positive messages that were contained in the stories, and so forth. It is helpful to measure output objectives since they furnish a good indicator of how soundly the strategy has been implemented. On the other hand, they are not considered objectives as defined in this section because they are not ends but means to an end.

Outtake objectives: These objectives focus on increasing the awareness, understanding the key points of the message, and retention of the important points of the message points. It is far more essential to know that the audience received the message than whether it was sent out. For instance, you may send out a message in the newsletter of employees that passes to 10,000 employees. You need to be more worried on the impact that message had than the number of people it reached.

Outcome objectives: These are the most important objectives, but also the very difficult to achieve. For example, let’s say the public relations program is for the state highway patrol to increase awareness of the importance of seatbelt usage and the objective is to decrease the number of fatalities caused by not using a seatbelt. There is a diffusion process that occurs with adoption of this behaviour.


First, the safety advantages of seatbelts should be understood by the drivers. Next, they should carry a positive attitude regarding wearing seatbelts. Finally, this positive attitude will optimistically translate to increased use of seatbelts. People who know what is good for them do not always like it. “However seatbelts are not comfortable.” “What if the seatbelt traps me in the car after an accident?” “Seatbelts crumple my clothes.” Even if someone has a positive attitude toward an issue, they may still not act compatibly with the attitude. It may be due to habit, idleness, or dysfunction. Thus, attitude needs to increase by a higher level (50%) and awareness by an even higher level (80%) in order to increase behaviours by 30%. Once the public relation program and its measurable objectives are established, it is time to turn attention to strategies. Strategies show the way by which objectives are met. There are certain elements that should be included in this step: First, identify what is trying to be accomplished with each public (tie the strategy to an objective). Second, Audience segmentation is done based on common characteristics. Third, create communication strategies keeping in mind the self-interests of the publics, and Fourth, identify how messages or actions will reach the public.

Segment Audiences

As said earlier, depending upon the common characteristics, the groups of the publics are differentiated, on the basis of demographics, geographics, or psychographics.

1. Demographics segmentation includes variables for instance gender, income, level of education, and ethnicity. Females may be connected to the issue very differently than males. College graduates may have different attitudes than high school graduates.

2. Geographics segmentation describes your public by their location. People living within a thousand feet of a pipeline may have different attitudes toward energy companies than those who live a mile or farther from those lines.

3. Psychographics segmentation is used to segment your audience depending on their values and lifestyles. People who are single, adventurous, fast car drivers, and spend a lot of their earnings on entertainment may have very dissimilar opinions about seatbelts as compared to people who have small children, drive minivans, and invest most of their money on securities.

It is important to segment your key publics because it will help you identify their self-interests.

Create Communication Based on Self-Interests

Greater attention is paid by the people to communications that are linked to their values, needs, and goals. You must ask yourself what your public value and care about. You can create a message that connects your audience to your program based on the demographic, geographic, and/or psychographic segmentation of the important publics.

For example, let’s say in case of young adventurous drivers you may want to show how seatbelts permit them to have more fun by showing how someone on a curved road stays comfortable in the seat, while someone without a seatbelt is sliding around and has poor control. A primary message can be created that will give direction to the communication efforts, once the self-interests have been identified. For the drivers


who are young adventurous it might be more effective to have a message from sports adventurists for instance race car drivers or stunt drivers, who can explain how they depend on seatbelts.

Choose Communication Channels The last element in the strategy is recognising the medium or channel by which you can reach target publics. The channels can be mass media, for example newspapers or television or radio programming. They can be transmitted by other mediated channels for instance e-mail, blogs, or Twitter. They can also be town hall meetings, mediated slide shows, and interpersonal communication. Sometimes the channel is a group of people, usually opinion leaders, that may take into account teachers, scientists, doctors, or other experts, e.g., if we want to target the parents for a seatbelt campaign, then in that case message kits must be given to teachers so that they can communicate to students in a classroom and give homework concerning the same to be completed with parents. The information found in these kits may be supported with billboards and radio public service announcements, reaching parents while they are driving. Generally the target audience is reached through multiple points of contact to reinforce the message. So for the seatbelt campaign the following could be one strategy: “Appeal to young parents’ concern for family safety by means of educational materials that need communication between parents and their children registered in elementary schools.” Often, there are a number of strategies for each public and for each objective. Tactic is the most creative element in the strategic planning stage. Tactics are the specific tools of communication and tasks that are used to perform the strategy. In the case of the seatbelt campaign, the tactics would be the elements found in the educational kit, for instance colouring books, crossword puzzles, or interactive games. They would also be the billboards, social media applications, Internet Web sites, public service announcements, and other materials. The challenge is to make tactics that cut through the clutter of all the messages rival for the attention of the audience. A great deal of brainstorming takes place during this stage in order to develop the most clever and creative messages, designs, and activities. However, there is also the temptation to get carried away with the creativity and lose sight of the tactics’ purposes. A basic rule is to always assess your tactics within established objectives and strategies.

8.3.3 Step 3: Taking Actions and Communicating The best public relations programs consist of both taking actions and communicating. The old saying “actions speak louder than words” is as true for public relations as it is for other business disciplines. At times it is essential for an organisation to act, or react, prior to communication. For example, training seminars are not being attended by the employees; it might not be enough to try more creative and persuasive messages. The seminars ought to be more appropriate and stimulating for the employees that can provide something which may change behaviours. Organisations should not only expect stakeholders to behave in ways that is beneficial to the organisation; sometimes the organisation is expected to change their activities and behaviours to improve these critical relationships. During the communication and action stage two additional components to the public relations process are usually developed: 1. the planning calendar, and 2. the budget


A calendaring tool such as a Gantt chart is used to plan the development and execution of the tactics once the tactics have been determined. A Gantt chart is a horizontal flow chart that provides a graphic illustration of when tasks should begin and end in comparison to all other tasks.

Also, you need to determine the costs for developing, distributing, and executing the tactics. You might want to start with the wish list of all tactics and trim them down to those that will furnish the highest return on investment. Some tactics may fall by the wayside when you project their costs against their potential of meeting your objectives.

8.3.4 Step 4: Evaluation According to Paine, four concerns should be addressed when evaluating the effectiveness of a public relations campaign:

Define your benchmark

Select a measurement tool

Analyse data, draw actionable conclusions, and make recommendations

Make changes and measure again

In case these steps are followed in the process of public relation then you have already identified your audiences and established objectives for each. If the objectives are measurable then you already have the criteria by which to assess the success of your program. If you set the objective of increasing awareness by 40% then a benchmark has been set against which to measure. The benchmark helps you to compares your current situation to your past situation. Paine also recommends comparing the data gathered to other organisations, such as key competitors. The data proves to be more relevant after comparative analysis.

Depending on this evaluation, the tools that will help the best in measuring against stated criteria are chosen. Normally, the same tools are used that helped establish the benchmark data. In case primary research method was used while establishing benchmarks then the same methods will be used to evaluate success. If you surveyed employees to establish awareness and attitude benchmarks, then a follow-up survey is the obvious measurement tool. If you used attendance at employee meetings to establish behaviour benchmarks, then counting attendance after the public relations program is the appropriate measurement tool. As said earlier, primary research is the most expensive and necessitates the most expertise, but it is the best measure of the real impact of a public relations effort on stated objectives/outcome, for example changes in awareness, attitudes, and behaviour.

Perhaps the most widespread evaluation tools used in public relations measure the output objectives. There are a number of ways to measure the effectiveness of communication output, but some are better than others.

One of the earliest methods was clip counting. A clip is an article, broadcast story, or online message that mentions the company or product. You can either collect your own clips or hire a clipping service. At the end of a determined period, the number of clips obtained is examined. This is the simplest method and convenient way to measure output and is one-way to monitor media coverage. It is also the least informative since you do not know what the clips mean they are only counted, not evaluated except that, possibly, it has stroked the egos of some senior management by getting their names in the media.

Measurement and evaluation should not take place only at the time where your efforts end. You should be monitoring the media continuously to regulate whether your


message is available for people to see (what advertisers call “reach,” public relations professionals call “opportunities-to-see,” or OTS). In case media strategy is not working, corrective actions in the middle of the program are required to be undertaken, not after the program has been completed.

Though there are number of sophisticated measures that are developed over the years for communication output, it is still more serious to consider the outtake and consequences of those messages. Getting the communication into various channels be they traditional or new media, is only the means to the end of affecting attitudes, opinions, and behaviours. The outcomes need to be measured so as to tie back to organisational goals and purposes.

Cost comparisons among public relations and advertising messages are not commonly used or encouraged as an evaluation tool because of the difficulty in measuring the actual impact of these messages. However, we do know that although public relations and advertising generate the same amount of product awareness, brand recall, and purchase intention, public relations content produces higher levels of product knowledge and positive product evaluation than advertising.

To measure attitudes and opinions, the most popular tool remains the survey. Public opinion polls and attitude surveys can be conducted and compared to benchmarks to determine whether the messages and behaviours of an organisation have had the intended effect. Intentions to behave and preferences for purchasing can also be measured through surveys, providing some figures on people’s inclinations.

Behaviours can also be measured against benchmarks. Increases in employee retention, increased donations, and improved sales and investments could all be used to measure behaviours. Often the connection between communication strategy and behavioural changes could be due to other variables, so it is important to isolate and track the impact of the public relations efforts in order to evaluate whether they are the driving force in the change.


Fill in the blanks:

1. .............................. is the systematic gathering of information to describe and understand situations and check out assumptions about publics and public relations consequences.

2. A very popular tool for analysing situations is the .............................. analysis.

8.4 LET US SUM UP Planning for crisis management is of utmost importance as information and news travels much faster these days as before. There are number of examples of organisations that are not able to deal with crisis management correctly. During crisis, an organisations most vital asset is at risk; their reputation, their image that they might have spent years on building. Thus, managing crisis is very important for each and every organisation.

Public relations consultants play an essential role during crises, preserving and refining their organisation’s relationships by communicating effectively with its public. The public relations role is to help stabilise the environment by developing public relations strategy and messages which results in rapid, authentic, useful and concerned communication with all significant internal and external audiences.


8.5 LESSON END ACTIVITY Prepare few slides to show the four steps of public relation process.

8.6 KEYWORDS Tactics: These are the specific communication tools and tasks that are used to execute the strategy.

Demographics: It includes variables such as gender, income, level of education, and ethnicity.

SO Strategies: It focus on using organisational strengths to capitalise on the external opportunities.

WO Strategies: It addresses and improves organisational weaknesses to be better prepared to take advantage of external opportunities.

Research: It is the systematic gathering of information to describe and understand situations and check out assumptions about publics and public relations consequences.

8.7 QUESTIONS FOR DISCUSSION 1. Discuss the smart ways to approach crisis situations.

2. Explain the role of PR during crisis.

3. Describe PR strategies for crisis management.

4. Explain four steps public relations process.

5. What do you mean by scenario planning?


CYP 1

1. Communication

2. Scenario planning

CYP 2

1. Research

2. SWOT

8.8 SUGGESTED READINGS Robert L. Heath, (2001), Handbook of Public Relations, Sage Publications, California.

Robert L.D., (2010), The AMA Handbook of Public Relations, AMACOM Publications.

David Meerman Scott, (2007), The New Rules of Marketing and PR, John Wiley and Sons.

149Strategies of Successful

PR Personnel

UNIT V


PR PersonnelLESSON

9 STRATEGIES OF SUCCESSFUL PR PERSONNEL

CONTENTS


9.1 Introduction

9.2 Successful PR of an Organisation: Strategy

9.2.1 Helping Create a Market

9.2.2 Influencing Non-consumer Groups

9.2.3 Influencing the Influential in Crisis

9.2.4 Influencing the Dealers and Sales People

9.2.5 Influencing Direct Consumer through Means other than Advertising

9.2.6 Influencing Employees to Serve the Customers Better

9.3 Models and Tools of Public Relations/Alternatives

9.3.1 Tools/Alternatives of Public Relations

9.4 Choices in Communication

9.4.1 Choices of Communication used in PR

9.4.2 Components of Communication

9.5 Let us Sum up


9.7 Keywords




Discuss strategy of successful PR of an organisation

Discuss the alternatives of public relations

Explain choices in communication

9.1 INTRODUCTION The origin of public relations happened with publicity, but today its scope has enlarged to an extent that it is being defined as helping an organization and its public adapt mutually to each other. Conventionally, public relations department is considered as a small appendage to a large corporation with four major functional areas like finance, operations, and marketing and human resource management. In


such corporations, all such activity, which was not specifically falling under the jurisdictions of any functional department, was given to the public relations department. However, today there is increasing realization on ‘relations’. The public relations department is in constant interaction with all other functional departments. For example, financial public relations help in resource mobilization; labour relations for shop floor productivity; consumer relations for better understanding of customer needs; and employee relations for morale and team building. Not only this, today public relations department helps in strategy formulations and organizational policies as this is the department which operates as the bridge between different publics of the organizations and functional departments.

9.2 SUCCESSFUL PR OF AN ORGANISATION: STRATEGY Public relations constitute one of the strategic tools in marketing function as its responsibility lies in developing and maintaining a sustainable positive image in the minds of its constituent public universe. Public relations contribute to the marketing function in six different ways, apart from supplementing and enhancing the impact of the advertising effort. Though public relation is used as a tool for supplementing the image building process, but its contributions is well felt in many ways. We list here six steps for a successful PR of an organisation.

9.2.1 Helping Create a Market Marketing assumes the existence of a market, and the role of marketing invariably is to satisfy the needs and wants of those who constitute the market. However, sometimes companies face a situation where market is blocked for them and they just can’t operate. Many governments across the world have developed protected economic systems, where entries of new players and capacity expansion of existing players are under the control of governments. So many firms, though they can sense an opportunity for business, find it difficult to enter into business due to such restrictions. Till 1982, India was a blocked market for colour television, as colour transmission didn’t exist. For all television manufacturers, the marketing task was to convince the government to commence transmission in colour.

The opportunity was the ‘Asian Games’ and the Ministry of Information Broadcasting (MIB) was, perhaps, convinced on the need to telecast the prestigious games to the rest of the world in colour. Here, one can see the linkage between political strategies of a country influencing the opening up of the markets. It is said that companies, therefore, must identify with people who have the power to open the gates of the blocked markets and prevail upon them to exercise their power. Such tasks fall under the domain of Public Relations, and not marketing. Governments always take directions and decisions in favour of certain businesses and promote such businesses. Companies and trade associations use lobbying as a potential tool for building effective public relations programs.

In this process, the organizations should not only identify the chief gatekeeper, but also determine the right mix of incentives to offer. Under what circumstances will the gatekeepers cooperate? Is legislator X primarily seeking fame, fortune or power? How can the company induce this legislator to cooperate? In some countries, the answer may be with a cash payoff (a hidden P of the marketing Mix). Elsewhere, a payoff in entertainment, travel of campaign contributions may work. So, companies use various means for building positive image with the decision makers and influencing government decisions in their favour.

What is expected is to successfully negotiate and do lobbying in order to successfully achieve the objectives, which one has been lobbying for. Successful marketing is


PR Personnel

increasingly becoming a political exercise. During the control regime, Coca Cola was thrown out of India due to excessive political pressure from socialists in India. Pepsi Cola outwitted its arch-rival, Coca-Cola, by striking a deal to gain entry into India’s huge consumer market. While Coca-Cola withdrew from India in 1978, Pepsi made an entry forming a joint venture with the Indian counterpart, winning government approval, despite opposition from other Indian soft drink companies, and anti-MNC legislations. The package offered includes exports of agro-based products, focus on rural markets, newer food processing, and packaging and water treatment technology. This package was attractive enough to win over the various interest groups.

Taking the example of Pepsi Cola’s entry in the Indian market where they focused more on the drinkers of Pepsi or Coke, there is a need for supplying benefits to parties other than target consumer. This need extends beyond the requirements to serve and satisfy normal intermediaries like agents, distributors and dealers. So parties involved beyond these direct transactions include governments, labour unions and other interest groups that individually or collectively, can block profitable entry into a market. These groups act as gatekeepers and they are growing in importance. In dealing with such groups, one has to add to power and public relations of these people in influencing and processing information.

9.2.2 Influencing Non-consumer Groups Invariably, marketing addresses its efforts to the ultimate consumer and overlooks those, which might influence the bottom line. Such groups of people or publics are approached by the public relations function for overall organizational goals. When a medical representative calls on a physician, he does not aim to sell medicines, like any typical salesperson involved in marketing and selling. The medical representative has a purpose of just to keep the physician informed about the new products and formulations the company has introduced in the market though public relations expects the physician to recommend his company’s medicines to the patients. Similar is the case with representative of publishing houses who visit professors and teachers in different schools, colleges to inform teachers and not to make them buy their books. One can identify many such examples where public relations programs are strategically and regularly executed to meet the business objectives from the target audience other than non-consumer groups.

9.2.3 Influencing the Influential in Crisis It is very important to handle communication during crisis in the corporation. The marketing crisis can range from product failure or tampering during transit or by trade, protests by activists (e.g., KFC in Bangalore), accidents (e.g., fire in a hotel) and government pronouncements (level of pesticides in soft drinks).

Such situations of crisis get complicated and they get further messed up due to inaccurate reporting. By not submitting clarifications to the media due to the fear of jeopardizing the legal stand, the organizations end up with a negative image in crisis. Denials or withholding information may be viewed as a cover up and even is viewed as admission of guilt by the company. In such situations, legal and marketing objectives should be dealt separately. In such situations, the organization should confirm facts rather than giving explanations. It is likely that due to such a positive reporting, organizations will emerge with a cleaner image.

9.2.4 Influencing the Dealers and Sales People Most organizations find it difficult to reach their product to the consumers directly. They use either a sales force to sell their goods door to door or to dealers and alternatively they have a whole lot of intermediaries who participate in reaching the


company’s product from a place of manufacturing to a place of consumption. It is the trade, which can push the product in the market and give priority to a product over the competitors.

It is, therefore, important to exercise good relations with dealers, wholesalers who contribute significantly in making the bottom line healthy. Dealer conferences, conventions, display contents, gifts and in-house publications are all such public relations tools to achieve dealers’ support and cooperation. Similarly, this is also significant for the sales force.

9.2.5 Influencing Direct Consumers through Means other than Advertising

In certain industries, it is not possible to use the conventional promotion tools with success. For example, there are organizations where the size of the operation is not large enough to support a heavy promotional budget. There are others who find it difficult to advertise or promote as it might be considered to be in bad taste. For example, a hospital might find it very difficult to advertise abortion services. Similar could be the case for open-heart surgery or other services for a hospital. There are some organizations that buy purely on the basis of rational evaluation and objective evaluation criteria. Ability and scope of advertising for bringing effectiveness is minimal.

There are some customers who avoid advertising, thinking that the marketer pays for advertising. They are not very impressed by the dramatic presentation of facts through a marketer-sponsored communication like advertising. Hence, public relation is an effective media for reaching these customers, as the source is neutral. Since the sponsor is not identified and there is a feature orientation in the communication, public relations work more than any other form of advertising. Arising out of these reasons, the conventional promotional tools have a limited use. There is very successful example of a medical doctor specializing in eye care running his own clinic-cum-nursing home and organizing free eye camps in his region. The community service not only spreads his name, but also proves his competence. The local newspapers might carry stories about such camps to give further boost to the promotion. Therefore, promotional activities like community relations, event management, media blitz, corporate identity programs have relevance and they should be used for building a good image among the relevant public.

9.2.6 Influencing Employees to Serve the Customers Better Marketing activities in all organizations can, be clubbed under three major heads namely: external marketing, internal marketing and interactive marketing. The traditional 4 Ps of marketing mix are external to an organization as these efforts are targeted at customers. However, every single individual in the organization plays some role in marketing a product or service and, therefore, an effort by the company by way of training on product knowledge, product handling, and customer knowledge and selling should be made. Interactive marketing relates to the skill of employees in handling customer contact. A customer judges quality not only on the basis of technical quality of the product but also by its functional quality.

Customer’s experiences at the moments of truth are based on certain expectations created by the service provider. The traditional marketing efforts give promises, which correspond with the personal needs and aspirations of the target group of customers. In addition, employee’s abilities and motivation to meet the expectations of customer as created by external marketing efforts are backed up by internal marketing efforts. Public relations strategies help marketers in addressing image related issues for all the three types of customers.


PR Personnel9.3 MODELS AND TOOLS OF PUBLIC RELATIONS/

ALTERNATIVES There are four types of public relations models in current practice by marketing organizations. The first model, most closely identified with P.T. Barnum, is the press gentry/publicity model. This kind of public relations is known as propaganda. It is focused on sending out strongly positive messages about the product, service, or organization, with little effort to strike a balance between puffery and fact.

The second model is the public information model, which is associated with the early public relations practitioner Ivy Lee. This form of public relations focuses on educating the public about organizations and issues. In this model, there is much greater emphasis on truthfulness than in the press agentry/publicity model. But in this case also public information is a one-way flow of ideas, from company to public, with little effort to conduct research to assess either message content or effectiveness.

The third public relations model is the two-way asymmetric model, developed by Edward L. Benays. He is referred to as the father of modern public relations. This model has persuasion as its chief goal, and relies heavily on research, designed to monitor and evaluate public attitudes on issues.

The final model is the two-way symmetric model, also associated with Benays but further refined by educators and professional leaders. This model focuses on building understanding between organizations and their publics through the use of research, intended to evaluate what misunderstandings exist and how they might be cleared up. Both of the two-way models are important aspects of successful public relations efforts today.

9.3.1 Tools/Alternatives of Public Relations Public relation has its origin in publicity with a broader focus as it addresses a wider set of audience. David Yale defines publicity as supplying information that is factual, interesting, and media newsworthy and not controlled by the company. Publicity a critical aspect of public relations, is described as the process of planning, executing and evaluating programs that encourage purchase and consumer satisfaction through credible communication of information and impressions that identify companies and their products with the needs, wants, concerns and interests of consumers. Public relations involve activities related to persuading customer and prospects to buy (or continue to buy) the firm’s products and services. We list here a set of publicity tools.

Press Releases: The press release is the basic building block of a publicity program concerned with story placement. This is where the important information about the product or services is summarized in a way that will catch the media’s attention. Just as the marketer would customize the advertising message for each target, he needs to customize press releases for the various media he contacts.

Fact Sheets: A press release should be written so it can be used without any editing. That means all the relevant information must be included. There may be additional important information that doesn’t really fit into the press release. That’s where the fact sheet comes in. Fact sheets include more detailed information on the product, its origins, and its particular features. By providing fact sheets, it is easier for the media to write a story about the product because the fact sheet can help to clear up misperceptions and answer reporters’ questions, saving them a phone call or e-mail query.

Press Kits: The press kit pulls together all the press releases, fact sheets, and accompanying photographs about the product into one neat package. A comprehensive folder can serve as an attention-getter and keep the provided


materials organized. Many organizations supply press kits and gifts to people so that the reporters can use them for a longer period of time.

Video News Releases: The video news release (VNR) is the video equivalent of a press release. Prepared for use by television stations, the typical VNR runs about ninety seconds and can be used to highlight some important features of the product. These are called infomercials. They are based on facts and often help corporate communication and media relations’ people release the video release through their channel.

Employee/Member Relation Program: An organization’s employees are an extremely important internal public. Corporate public relations people often spend a great deal of time developing employee communication programs, including regular newsletters, informational bulletin boards, and internet postings. In service organizations these kinds of activities can be used to support brand communication efforts. For example, using the company newsletter to remind employees about the importance of prompt and polite customer service is an effective way of building a strong brand image.

Community Relations Program: It is critical that companies maintain the role of good community citizens within the markets where they have offices and manufacturing facilities. Many companies actively encourage their employees to take part in community organizations, and local corporations are often major sponsors of community events and activities such as art presentations, blood donation drives, and educational activities. Tata group of companies highlight their community relationship based communications for building a strong brand image within the local community and stakeholders at large.

Financial Relations Programs: Most of the brand-marketing organizations are publicly held companies. Financial relation has become a key aspect of public relations activity. Downturns in company earnings quickly lead to decline in stock prices, leading to the exit of top executives. Financial relations people are responsible for establishing and maintaining relationships with the investment community, including industry analysers stockbrokers, and journalists specializing in financial reporting. The financial relations specialist has the job of getting maximum press coverage for a company’s financial successes and putting the best face possible on any financial loss. Financial relations personnel write the company’s annual report as well as other communications directed to stockholders.

Industry Relations Programs: The primary public that industry relations specialists deal with is other businesses operating within the same industry, as well as trade associations. The recent travails of the tobacco companies of India help to underscore the importance of industry relations. While various companies are not in agreement on all issues, they have banded together in many instances to try to influence policy and legislations, with a thought that there should be strength in numbers. Acceptance in peer firms and within trade associations helps in building good public relations.

Development/Fund-Raising Program: This is a particularly important area for not-for-profit organizations such as art organizations, educational institutions, and community service programs. These types of companies often rely on donations from the public, government, and other organizations to make up all or part of their operating budgets. Development specialists identify likely prospects for donation, prepare proposals to present to those prospects, and work to nurture ongoing relationships. Initiatives taken for fund raising include luncheons, seminars and dinners among prospective donors.


PR Personnel

Special Events: Event marketing is rapidly gaining popularity. Besides linking their brands to existing events, marketers are also creating events of their own, designed to reach special targets. The event itself can serve as a compelling news angle for related publicity efforts. It can also be promoted through advertising, and can serve as a distribution point for sales promotion incentives. With a little creativity, events can serve as an important point of differentiation from competitors. Today we have many event management companies in India, that specialize in product launch, fashion shows, and cultural program marketing in India.

House Ads: A company uses various media like newspapers, magazines and broadcast stations to prepare advertisements for the internal public. Public relations program manages these house advertisements.

Public Service Announcements: These are ads for charitable and civic organizations that run free of cost on television or radio or in the print media. These are called public service announcements. Many trade associations and companies launch programs, which are called public service announcement programs. These advertisements highlight public and civic issues.

Corporate Advertising: This kind of advertising promotes corporate image or corporate viewpoints. These advertisements do not talk about products and services. Public relations department prepares these advertisements and sometimes addresses some issue and the company’s stand on the subject. Corporate identity advertisements are forms of advertisements in which the company has a targeted and identified audience and tries to establish certain levels of awareness of the company’s name and its message. Companies also deliver their point of view messages through advocacy advertisement. Oil companies and cigarette advertising companies use their point of view about environment and health respectively.

Publications: Companies publish various publications in the form of pamphlets, booklets, annual reports, books, bulletins, newsletters, inserts and enclosures and position papers. Companies publish annual reports explaining their performance and future plans. Collateral materials are used to support their marketing public relations efforts.

Speakers, Photos and Films: Many companies use speaker bureaus to communicate with people about topics of public’s interest. Some publics like news media also want pictures and video films for use in their media. So public relations department uses speakers, photos and films for this purpose.

Displays, Exhibits, Events and Tours: Exhibits, displays, tours and events are important tools for public relations. Companies use displays and point of purchase materials for image building. Exhibits are also examples used by companies to promote positive image. Staged events include open houses, planned tours and event celebrations. Companies use events for guerrilla marketing.

Press Conferences: When a company spokesperson makes a statement, they use press conference in front of media representatives. This is one of the riskiest public relations activities because the media may not see the company’s announcements as being the real news. Companies have used press conferences for new product launch.

Online Communications: The companies use new electronic media, which is making the biggest change in the communication landscape. Email, intranets, and extranets are used for online communication. Companies develop web sites and


portals to provide corporate information on the World Wide Web. Companies use intranet and emails to communicate with public.


Fill in the blanks:

1. The .............................. is the basic building block of a publicity program concerned with story placement.

2. .............................. constitute one of the strategic tools in marketing function as its responsibility lies in developing and maintaining a sustainable positive image in the minds of its constituent public universe

9.4 CHOICES IN COMMUNICATION Communication is the significant factor of public relation. You already know that for any organisation public relation is of utmost importance so as to maintain a positive image with the general public and the consumers. A Portion of working good public relations means notifying the media to the company's position in response to public concerns, sustaining high levels of customer satisfaction and being an active member of the local community. The most important component of a positive public relations plan is communication. Understanding the significance of communication in public relations practice will help a company in constructing a good corporate policy.

Communication is a process by which information is enclosed in a package and is channelled and communicated by a sender to a receiver by means of some medium. The receiver then interprets the message and gives feedback to the sender. All forms of communication involve a sender, a message, and an intended recipient; though the receiver need not be present or aware of the sender's intent to communicate at the time of communication in order for the act of communication to occur.

Communication plays a vital role in effective public relations. Two way communication between both the parties is important and information must flow in its desired form between the organisation and the public. The receiver must understand what the sender means to communicate for an effective public relation. The receivers who can be target audience, public, stakeholders, employees or investors, etc. should clearly understand the sender’s message. The message or information needs to create an impact in the minds of customers for an effective positioning. Communication needs to have a strong influence on the target audience for them to remain loyal towards the organisation.

9.4.1 Choices of Communication used in PR So as to customise the public image of a company, product, or person; public relations utilise integrated communications. Various tools can be used within public relations so as to create an effective marketing plan that can be adjusted accordingly.

Media Relations encompasses publicising products and/or a company to the different areas of the press for instance magazines, newspapers, newsletters, the television or the internet. In order to promote products, relevant stories are given to the media in, of which the media is not permitted to accept any gifts. Some of the important tools that are used in media relations take account of the following:

Press Kits comprise of written information that supports the business. This may take in news releases, business history, or information on the organisation's officers.


PR Personnel

Audio and Video news releases (Audio or Video) consist of pre-recorded information that features the business as part of a story.

Matt Release: It is a written article that is used as filler material. Matte releases are sent by way of syndicated services, emailed, faxed or mail.

Website Press Room appeals to the media while providing contact information from the company.

Media Tours occur when companies send a representative of the company to discuss a new product on TV or radio talk shows. These representatives also conduct interviews with reporters online and offline.

Newsletters are used for regular contact with an audience. Electronic mail and regular mail are used for these letters of information, and if effective, are well received.

Special Events comprise of very wide variety of items together with receptions, dinners, or shows. The target audience can be very specific or quite diverse. Making sure that the correct message is represented to the public is very significant in this type of tool.

Speaking Engagements can take account of conventions, meetings, or other demonstrations. The main objective of a speaking engagement is to establish expertise.

Sponsorships are used to build brand recognition by means of the association of a planned event or group. These opportunities can range from local to international levels, from t-shirts to cars and other items.

Employee Relations is significant for keeping employees informed of business information for example personnel information, corporate events, and other communication information.

Community Relations and Philanthropy comprises building good relationships with parts of the community in order to minimise bad publicity that can arise.

9.4.2 Components of Communication Communication includes six components: context, sender-encoder, message, medium, receiver-decoder, and feedback.

1. Context: Every message, whether oral or written, begins with context. Context is a broad field that includes country, culture, organization, and external and internal stimuli. Every country, every culture, and every company or organization has its own conventions for processing and communicating information.

This aspect of context is the playing field on which you must plan, design, and communicate your message successfully.

Another aspect of context is the external stimulus that prompts you to send a message. The source of this prompt may be a letter, memo, note, electronic mail, fax, telex, telephone call, a meeting, or even a casual conversation. Your response to this prompt may be oral or written.

Next, internal stimuli have a complex influence on how you translate ideas into a message. When you encode, your own view of the world affects the choices you make in language. Your attitude, opinions, emotions, past experiences, likes and dislikes, education, job status, and confidence in your communication skills all influence the way you communicate your ideas. Especially important is your ability to analyse your receiver’s culture, viewpoint, needs, skills, status, mental


ability, experience and expectations. You must consider all these aspects of context in order to communicate a message effectively.

2. Sender-Encoder: When you send a message, you are the ‘encoder,’ the writer or speaker, depending on whether your message is written or oral. You try to choose symbols—usually words (and sometimes also graphics or picture)—that expresses your message so that the receiver(s) will understand it and react with the response you desire. After considering all the factors mentioned above, you decide which symbols best convey your message and which message channel will be the most effective among the oral and written media.

3. Message: The message is the core idea you wish to communicate; it consists of both verbal (written or spoken) symbols and non-verbal (unspoken) symbols. You must first decide what the main point of your message is and what other information to include.

4. Medium: Your message channel depends on all the contextual factors discussed above and the nature of the message itself. Your medium can be the printed word, electronic mail, or sound.

Like message content, the choice of medium is influenced by the relationship between the sender and the receiver. Some research suggests that the urgency of a message is a primary factor in whether to use the written or spoken medium. You may also consider factors such as importance, number of receivers, costs, and amount of information. If the message goes to an international audience, you must also consider which medium is preferred in the receiver’s culture.

The written channel is often preferred when the message is long, technical, or formal in nature, and when the message must be documented. The oral channel is effective when the message is urgent or personal or when immediate feedback is important. These guidelines can change when your receiver is from another country. For example, in Europe and Asia, complex messages are often dealt with written documents provided only later, if necessary.

Inside Your Organization

Internal communication consists of sending messages inside your organization; external communication consists of sending messages outside your organization.

Outside Your Organization

External written communication media may be letters, reports, proposals, telegrams, cablegrams, mailgrams, faxes, telexes, postcards, contracts, ads, brochures, catalogues, news, releases, and a host of other things. You may also communicate orally in face-to-face discussions, by telephone, or by presentation in solo or panel situations. You may speak to groups in live presentations or through teleconferences, video conferences, or television.

5. Receiver-Decoder: The message receiver is your reader or listener, also known as the decoder. Many of your messages may have more than one decoder. The receiver-decoder is influenced by context and by his or her mental filter.

6. Feedback: The components described above represent what happens in communication. A context exists in which a sender chooses a message to communicate; the sender must also choose the medium for the message; a receiver decodes the message and provides feedback. Feedback can be oral or written. Sometimes silence is used as feedback, though it is almost always ineffective. Senders need feedback in order to determine the success or failure of the communication.


PR Personnel


Fill in the blanks:

1. ............................ need feedback in order to determine the success or failure of the communication

2. ............................ is a broad field that includes country, culture, organization, and external and internal stimuli.

9.5 LET US SUM UP Public relations constitute one of the strategic tools in marketing function as its responsibility lies in developing and maintaining a sustainable positive image in the minds of its constituent public universe.

There are four types of public relations models; the first model, most closely identified with P.T. Barnum, is the press gentry/publicity model. This kind of public relations is known as propaganda. The second model is the public information model, the third public relations model is the two-way asymmetric model, and the final model is the two-way symmetric model

Public Relation is completely about communication. As we know that public relations for any company is essential for maintaining a positive image with consumers and the general public.

Communication plays an essential role in effective public relations. Two way communication between both the parties is essential and information must flow in its desired form between the organization and public.

9.6 LESSON END ACTIVITY Prepare a presentation on the strategy and alternatives of successful PR personnel.

9.7 KEYWORDS Communication: It is the activity of conveying information through the exchange of thoughts, messages, or information, as by speech, visuals, signals, writing, or behaviour.

Decoding: This is the act of translating symbols in communication in to their ordinary meanings.

Encoding: It is changing the message into symbols that is patterns of words or gestures or pictorial forms or signs of a specific visual or aural language.

Message: It is information, written or spoken, which is to be sent from one person to another.

9.8 QUESTIONS FOR DISCUSSION 1. What are the six steps for a successful PR of an organisation?

2. What are the various types of public relations models?

3. Discuss the alternatives of public relations.

4. Explain choices of communication used in PR.

5. Describe the components of communication.



CYP 1

1. Press release

2. Public Relations

CYP 2

1. Senders

2. Context

9.9 SUGGESTED READINGS David Meerman Scott, (2007), The New Rules of Marketing and PR, John Wiley and Sons.

Robert L. Heath (2001), Handbook of Public Relations, Sage Publications, California.

Chia, Joy & Synnott, Gae, (2009), An Introduction to Public Relations: From Theory to Practice, Oxford University Press Australia & New Zealand.

163PR: Planning and PrioritizationLESSON

10 PR: PLANNING AND PRIORITIZATION

CONTENTS


10.1 Introduction

10.2 Need for PR Strategy

10.3 PR Planning and Prioritisation

10.4 Evaluating the Program

10.5 Elements of Public Relations

10.6 Objectives of Public Relations

10.7 Let us Sum up


10.9 Keywords




Discuss the need for PR strategy

Explain PR planning and prioritisation

Discuss about evaluating the program and the elements of public relations

Discuss the objectives of public relations

10.1 INTRODUCTION Public relation (PR) is the practice of managing the flow of information between an individual or an organization and the public. Public relations may include an organization or individual gaining exposure to their audiences using topics of public interest and news items that do not require direct payment. The aim of public relations by a company often is to persuade the public, investors, partners, employees, and other stakeholders to maintain a certain point of view about it, its leadership, products, or of political decisions. Common activities include speaking at conferences, winning industry awards, working with the press, and employee communication.


10.2 NEED FOR PR STRATEGY A PR strategy will help you target your communication to the right audience and the right publications at the right time. Below are some reasons why you need a PR strategy:

1. Find your target audience: When you create a PR strategy think about the target audience whom you want to receive your message. This is an important step to ensure your message will make the most impact. Without finding your target audience your message will not be received by the right people and your PR activities will not be very successful.

2. Find your key messages: One of the first steps to creating a PR strategy is to create your key messages. Key messages are the underlying points you want your target audience to hear and understand through your PR activities. For example a key message for a business may be: The [insert business] is a thought leader and expert in its field, always staying on top of industry trends to produce cutting edge programs.

3. Target the right journalists: Once you have determined your target audience and your key messages, you can now think about what publications and journalists you need to contact. The best publications are the ones that your target audience reads. This will help you to achieve media coverage in the most appropriate publications.

4. Determine your goal: It’s important to always have a goal for your PR activities. By determining your goal you will have a clear purpose for your PR strategy and maximise the success of your PR activities. For example, your goal may be to achieve a 25 per cent increase in sales for product X in three months.

5. Create a time frame: By creating a goal, you can then plan out the steps to achieve this goal. A PR strategy will help you to establish a time frame around these steps so you can achieve your goal in the set time frame.

6. Measure your success: If you’re conducting PR activities for your business your boss is bound to ask you, “How successful are these PR activities.” If you don’t have a PR strategy it will be harder to measure your success and answer this question. A strategy will help you to create measurable data and determine if you achieved your goal. For example, if your goal was to increase sales by 25 per cent you need to constantly measure how many sales you received while implementing your strategy.

7. Better communication: When you have a PR strategy it will be easier to communicate your goal and activities. For example you can tell your client exactly what you will be doing for them and when.

A PR strategy enables you to consider every aspect of communicating a message in the best possible way. It will also help you to maximise the success of your PR efforts and gain the most appropriate media coverage.

10.3 PR PLANNING AND PRIORITISATION Effective Public Relations strategy for an organisation can be planned by using a nine step creative communication planning tool. In these steps, the planner draws on existing information available to the organisation and, simultaneously, creates a research program for gaining further information required to drive the decisions that will come later in the planning process.

165PR: Planning and Prioritization

Thus, the steps involved in planning an effective PR strategy are as follow:

Step 1: Analysing the Situation: The first and crucial step in planning an effective PR strategy is your analysis of the situation. It is vital that all involved – supervisors, planner, clients, key colleagues and the final decision makers-are in solid agreement about the nature of the opportunity or obstacle to be addressed in this step.

Step 2: Analysing the Organisation: The second step while planning an effective PR strategy is analysing the organisation. It involves a careful and sincere look at three aspects of the organisation:

The internal environment of the organisation (mission, performance and resources)

Perception of the public about the reputation of the organisation and

The organisation’s external environment that comprise competitors and opponents, as well as supporters.

Step 3: Analysing the Publics: In this step, you need to recognise and analyse the key public of the organisation that interact on the issue at hand. Strategic Planning for Public Relations delivers an objective technique for setting priorities among the several publics, helping you select those most important on the particular issue being dealt with. This step consist of an analysis of each public in relations to their needs, wants and expectations about the issue, their relationship to the organisation, their involvement in communication and with various media, and a variety of social, political, cultural, and technological trends that may affect them.

Step 4: Establishing Goals and Objectives: This step is the most crucial area for public relations and marketing communication strategists. It focuses on the ultimate position being sought for the organisation and for the product or service. It helps you develop clear, specific and measurable objectives that can recognise the organisation's hoped-for impact on the awareness, acceptance and action of each key public. A good deal of attention is given to objectives dealing with acceptance of the message.

Step 5: Formulating Action and Response Strategies: This step comprise of typologies of initiatives and responses. At this stage, various alternatives are available with the organisation, and in this step you consider what you might do in various situations.

Step 6: Designing Effective Communication: In this step various decisions about the message is taken, for example the content of the message, the sources who will present the message to the key publics, its tone and style, verbal and nonverbal cues, and related issues.

Step 7: Choosing Communication Tactics: This step deals with the various communication options. Generally, the planner considers four categories:

1. Opportunities for personal involvement and face-to-face communication,

2. Organisational media (sometimes called controlled media)

3. News media (uncontrolled media)

4. Advertising and promotional media (another form of controlled media).

While all of these tools can be used by any organisation, not every tool is appropriate for each issue.

Step 8: Implementing the Strategic Plan: In this step, budgets and schedules are prepared and otherwise preparation for implementation of communication program is done. It turns the raw ingredients identified in the previous step into a recipe for successful public relations and marketing communication.


Step 9: Evaluating the Strategic Plan: This is the last step in the planning phase of an effective PR strategy. In this step specific method for measuring the effectiveness of each recommended tactic in meeting the stated objectives is indicated. Here evaluative research, deals with evaluation and assessment, allowing you to determine the degree to which the stated objectives have been met and therefore to modify or continue the communication activities.


Fill in the blanks:

1. .............................. are the underlying points you want your target audience to hear and understand through your PR activities.

2. A .............................. enables you to consider every aspect of communicating a message in the best possible way.

10.4 EVALUATING THE PROGRAM As the public relations program addresses a wide range of audiences, we can evaluate the public relations programs on the basis of the type of audience they address. The word relation refers to relationships with various factors. The key publics addressed by relationship management programs in public relations are media, employee and financial community, including a company’s shareholders, governments and general public.

Media Relations: Media relations focus on developing media contacts i.e. knowing who in the media is interested in the organization’s story. The conventional idea of media relations includes publicity covering only media relations. A successful relationship management program establishes a link between the organization and the editor. It is based on honesty, accuracy and professionalism. Once the reputation is lost, the public relations manager cannot function in liaison with the press.

Employee Relations: These programs are aimed at communicating with internal employees. A related program is also called internal marketing which is communication aimed at informing employees about the company and marketing programs. This also helps in winning the support of employees at the time of crisis so that employees can stay put with the company.

Financial Relations: These programs are aimed at the financial public like stockholders, banks and financial institutions involved with the company as investing public. These programs are aimed at press releases sent to business publications, meetings with investors and analysts and the annual report, which the central government requires of public listed companies.

Corporate Relations: These programs focus on an organization’s image and reputation. The goal is to persuade people to view the company in a positive light. It takes a long time to build a good corporate image and takes only a small mistake to spoil the show. The corporate image is a fragile commodity. The goal of reputation management is to strengthen the trust of stakeholders on the organization. The public affairs take care of corporate communication with government, and with the public on issues related to government and regulation. Lobbying is also another form of public affairs. Issue management involves managing and monitoring public opinion about issues central to the organization’s interest and developing programs to communicate with public about these issues.

167PR: Planning and Prioritization10.5 ELEMENTS OF PUBLIC RELATIONS

The various elements of good public relations comprise:

Human Relations: None of us can work in vacuum. Human relation is about getting well along with the internal and external public. Every individual in the organizations deals with some or the other individual within the organisation, they out to be aware about others and must show interest within each-other.

Every person working in an organisation has a human element present in them. Every human being is unique in some way or the other and generalisations about humanity are subject automatically of all sorts of qualifications and expectations. The personality of human beings is extremely complex and is a combination of many qualities. Human relations are often mixed up with psychometry which takes account of the science of measuring individual or group behaviour, human engineering and management discipline. Human relations deal with attitude and feelings of a person as they interact with one another. Each person is supposed to be aware about others and should take serious interest in each others official and personal progress. The basics of human relations should not be ignored in public relations. There are three basic needs of individuals. They are:

A man’s sense of dignity, the belief that he has basic human rights that others need to respect.

A sense of security

The need of human recognising and appreciation of what another has done or achieved.

Empathy: The feeling towards the other is called empathy and an individual feeling sorry for him is sympathy. Empathy can be considered as primary essential for a satisfying experience in a relationship where a certain degree of depth of understanding is expected.

It is an imaginative projection of one’s own perception in another’s viewing there is a great need of empathy in the operations of public relations. Empathy and sympathy are quite different from each other. Empathy contributes to the public relations managers’ success in different ways. In empathy, the psychological attitude taken by a person is that of being with another on an equal footing. Empathy should be present in daily communications of the manager of public relations which promotes the equality of understanding. Empathetic understanding can be expressed verbally as well as non-verbally. When Empathetic level of understanding is attained, the person has the sense of emotional satisfaction that has been understood. There is no judgment involved in empathy.

Persuasion: There are two forms of interaction between individuals and between groups: force and persuasion.

If one party forces another to do something rather urging him, this is despotism it is against the principles of proper conduct, authorised by society. A person’s sense of human interest who is being persuaded will understand and appreciate the cause and effect of his action.

Persuasion is an argument of a wise man. An individual with strength of character can listen with persuasion, consider, what is said and arrive at knowledgeable conclusions. It is generally a weakling who runs away persuasion. A person generally does not want to risk being persuaded against his prejudice.


In selling, a person is said to be walking on a weak road if he relies upon that argument is learning. A win sale is the persuasion in the prospect interest. It is founded mainly upon knowing what makes people think. This knowledge may be put to use through words or in pictures that appeal to one of the senses.

Dialogue: Dialogue is conversation with a purpose. It is the only weapon of reasons. It is not a bargain basement transaction with haggling and arguing; it is a low form of negotiation.

Dialogue is used for influencing behaviour so as to sell goods or inspire ideas. It is a reasonable exchange of ideas bringing into being a new form of knowledge.

Dialogue generally involves compromise and conciliation. The first task while talking to an unfavourably disposed group or person is to conciliate people and break down prejudice if any. A person is clever enough who, under any conditions, make it in bringing a state of urbanity into a gathering that is marked by high profile discussions.

People carry numerous reasons in order to oppose compromise. A fanatic person may object since he looks upon it as a sign of ignorable weakness. One who believes that he holds the key to truth and virtue can make no concessions to what he regards as vice or error. You cannot prosper in persuading people without communicating accurately and clearly.

Communication: Without communication there cannot be mutual understanding. Mutual understanding is at the heart of public relations.

Real communication cannot resolve five problems in life. If that notion sounds far-fetched, possibly that is for the reason that what we normally call communication is not real communication. You usually think of communication in term of information exchange, public speaking, expressing our feelings honestly or being sincere or persuasive. So you think effective communication depends on having special talent, a good vocabulary, and the right circumstances and particularly on the receptiveness of other people. Effective and true communication does not depend on any of these things but somewhat on uncovering within ourselves the ability to communicate.

Real communication is that communication which is in totality understood by another person.

10.6 OBJECTIVES OF PUBLIC RELATIONS Professional public relations programs help business organizations accomplish their objectives. They can fulfil some of the objectives listed below:

Presenting a favourable image and its benefits

Promotion of products or services

Detecting and dealing with its publics

Determining the organization’s posture in dealing with its publics

Goodwill of the employees or members

Prevention and solution of labour problems

Fostering the goodwill of communities in which the organization has units

Goodwill of the stockholders or constituents

Overcoming misconceptions and prejudices

169PR: Planning and Prioritization

Forestalling attacks

Goodwill of suppliers

Goodwill of the government

Goodwill of the rest of the industry

Goodwill of dealers and attracting other dealers

Ability to attract the best personnel

Education of the public in the use of a product or service

Education of the public regarding a point of view

Goodwill of customers or supporters

Investigation of the attitude of various groups towards the company formulation and guidance of policies

Fostering the viability of the society in which the organization functions

Directing the course of change


Fill in the blanks:

1. Professional ...................................... programs help business organizations accomplish their objectives

2. Conciliation and compromise are generally involved in ....................................

10.7 LET US SUM UP Public relation (PR) is the practice of managing the flow of information between an individual or an organization and the public. A PR strategy will help you target your communication to the right audience and the right publications at the right time.

As the public relations program addresses a wide range of audiences, we can evaluate the public relations programs on the basis of the type of audience they address. The key publics addressed by relationship management programs in public relations are media, employee and financial community, including a company’s shareholders, governments and general public.

The various elements of good public relations comprise of; human relations, empathy, persuasion, dialogue and communication. Professional public relations programs help business organizations accomplish their objectives.

10.8 LESSON END ACTIVITY Prepare an assignment on the elements of public relations and how public relation programs are planned and evaluated. You can take any real life example to support your explanation.

10.9 KEYWORDS Empathy: It is a feeling towards the other and person feeling sorry for him is sympathy.


Corporate Relations: These programs focus on an organization’s image and reputation.

Media Relations: Media relations focus on developing media contacts i.e. knowing who in the media is interested in the organization’s story.

Employee Relations: These programs are aimed at communicating with internal employees.

Public relations (PR): It is the practice of managing the flow of information between an individual or an organization and the public.

10.10 QUESTIONS FOR DISCUSSION 1. Why is there a need for PR strategy?

2. What are the steps involved in planning an effective PR strategy?

3. How can you evaluate the public relations programs?

4. What are the various elements of good public relations?

5. Discuss the objectives of public relations.


CUP 1

1. Key messages

2. PR Strategy

CUP 2

1. Public Relations

2. Dialogue

10.11 SUGGESTED READINGS Robert L. Heath, (2001), Handbook of Public Relations, Sage Publications, California.

Robert L.D., (2010), the AMAR Handbook of Public Relations, AMOCO Publications.

David Merman Scott, (2007), The New Rules of Marketing and PR, John Wiley and Sons.

MODEL QUESTION PAPER BBA

Third Year

Sub: Service Marketing and Public Relations in the Aviation Industry

Time: 3 hours Total Marks: 100

Direction: There are total eight questions, each carrying 20 marks. You have to attempt any five questions.

1. Explain the nature and importance of service marketing. Also Discuss the contents of a marketing plan.

2. What do you mean by values and lifestyle? Discuss the benefits derived from product differentiation by taking any product as an example.

3. What are the various dimensions of service quality? Discuss each of them in detail.

4. Discuss the role of public relations in aviation industry.

5. What do you mean by media handling? List down the do’s and don’ts of media handling.

6. Explain in detail the seven step crisis management formulae.

7. Describe PR strategies for crisis management.

8. What do you mean by PR planning? Explain the elements of public relations.

Logistic and Supply Chain Management

Service Marketing and Public Relations in the Aviation Industry

Documents

Transcript of Service Marketing and Public Relations in the Aviation Industry