Executive Summary
This paper is about tourism marketing. The paper aims to evaluate the market potential of Bath, a popular tourist destination in the United Kingdom. It is also the objective of this paper to analyze the segmentation strategy and to determine the characteristics of the target markets. The purchase decision of the target markets will also be discussed alongside with the factors that affect decision-making process of the consumers.
The key findings of the report are:
- Bath attracts only a small portion of international visitors
- Domestic Tourists are still the major visitors to Bath
- Foreign Visitors especially, those that come from France visit Bath because of its cultural heritage and history
- The market is ageing both domestically and internationally
- The ageing consumer is one of the most promising domestic market
- The lifestyle, values and attitudes of the target markets are changing
Bath is a world heritage site; that alone attract many visitors. Leisure and holiday trips predominate followed by visiting friends and relatives and business trips. Bath is a strong tourist destination because it is accessible by road, rail and air, it has a national and international profile, a distinctive sense of place and high quality urban environment, it offers diverse attractions with some major draws and particular strengths in heritage, culture and shopping.
The most serious threat to tourism in Bath, especially domestic tourism, is the invigorated destinations and products, both domestically and internationally and the growth of low cost carriers.
Introduction
Bath is among the ten most visited tourist destinations in Britain. Bath is most famous for its hot springs. Bath is the only place in England that has hot springs. The Romans are the ones who pioneered in Spas. The city reached its fashionable pinnacle in the eighteenth century. The city of Bath is one of the few completely Georgian cities in the world. It ranks alongside Venice, Florence and Edinburgh as a world heritage site. Bath’s hot springs, Roman Baths, splendid Abbey and Georgian stone crescents have attracted visitors for centuries. Bath is truly a unique city that managed to maintain its heritage while promoting community advancement. This small city is renowned throughout the world for its beauty and breath taking Georgian Architecture. This World Heritage site is visited by about two million people from all over the world. It is also famous for being a festival city. In late spring, the Bath International Music festival takes place for two weeks ( 2007).
Market Place Review
General Market Condition: England
The population in the United Kingdom is growing. The growth in population in recent years has been caused by international migration. The United Kingdom has an ageing population this is caused by the diminishing fertility rates and mortality rate. Because of this there is a declining proportion of the population aged under 16 and an increasing proportion aged 65 and above.
There are different issues that have affected the United Kingdom domestic market. The oil price hike and the threat of terrorism and avian flu have combined with the additional challenges created by shifting UK consumer behaviour and demographics to generate challenging trading conditions for domestic tourism. The emergence of low cost carriers and the development of many regional airports have meant that United Kingdom consumers have been unable to resist the lure of cheap flights to exciting destinations. The outbound tourist travel continues to grow because of the increase in budget flights and the poor image of UK public transport. The ageing population is also expected to create a new trend in domestic tourism. Older consumers are more active and work longer than generations before them. They will be relatively well travelled and will search for new destinations (2007).
PESTLE Analysis
Political
Tourism is one of the largest industries in the United Kingdom. In the year 2000, it’s estimated worth was around £75 billion. It was estimated to support 2.1 million jobs. External factors such as the outbreak of foot and mouth disease and the September 11 bombing have greatly affected the tourism industry. Figures indicate that these events resulted in an overall decrease of overseas visitors to the UK by 6 per cent, and an overall decrease in spending by overseas visitors within the UK of up to 10 per cent. Another significant world event that affected the tourism industry was the war on Iraq. In terms of other influencing factors, there have been a range of recent developments at a national and international level that are impacting upon the industry. Tourism activity has changed significantly in recent years, reflecting a shift in consumer behaviour away from mass purchasing (mass tourism) to a more fragmented range of products each appealing to a different type of person (segmented tourism), This will lead an increasing emphasis on diversity, distinctiveness and individualism in holiday choice.
- International and National events such as outbreak of foot and mouth disease, September 11 bombing and Iraq war.
Economic
- Decrease in high spending foreign visitors
- Levels of disposable income
- Currency exchange rates
- Recession leading to unemployment and effect of disposable income
Social
Within the last decade, there has been the emergence of a distinct pattern among domestic consumers. It has now become usual for consumers to take a main holiday abroad complemented by a number of short breaks in this country. There has been a sustained decline in long holidays taken in United Kingdom, contrasting with the growth in short holidays, many of which are take within historic cities and rural locations. Seasonality is reducing as a significant proportion of breaks are taken outside the main summer season. Customer expectations are changing. Consumers are becoming more discerning in terms of the facilities and, more particularly, the service they expect.
- Lifestyle Changes
- Increase in short breaks
- Ageing population
Technical/Technology
Changes in communication technology and bookability are key factors impacting upon the tourism industry. Increasing use of digital media is having a profound impact in communication, sales and marketing. Digital media is raising the scope of interactive marketing through individual addressability, instant response, around the clock availability, global reach and the ability of consumers to shop around.
- Developments in the Internet
- Destination Management Systems
- Information Point Provision
Legal
- EU directives and regulations
Environmental
- Traffic Management
- Visitor Management
- Management and protection of open spaces/ countryside areas
SWOT Analysis
Strengths
- Accessibility by different means of transportation
- National and International profile
- Famous as a World Heritage Site
- Rich culture and history
- Wide array of attractions
- Numerous festivals and activities (West of England Development Plan 2006)
Weaknesses
- Concern about the quality of accommodation stock
- Sluggish development
- Declining status of the Bath city as a destination for staying visitors
- Unable to tap business tourism market ( 2006)
Opportunities
- Increasing tourist awareness through effective destination marketing arrangements
- Capitalizing on the region’s accessibility and encouraging the use of public transport
- Explore the opportunity for providing welcome and information points at key gateways such as airports, rail and bus stations
- Publicize and highlight interesting attractions, associations, pubs and restaurants etc. in Bath
- Consider visitors’ needs in public transport planning and make it easier for visitors to use public transport during their stay
- Create an environment which encourages investment in existing heritage and cultural attractions to maintain their appeal
- Explore the potential for developing a new attraction or event which capitalizes on the string local associations with environmental and sustainable issues ( 2006)
Threats
- Increasing competition
- Limited prospects for growth
- Declining number of domestic and foreign visitors
- Changing consumer demands ( 2006)
General Market Condition: West of England, Bath
Overseas tourism to the United Kingdom continues to grow. Even if tourism is greatly affected by external events such as terrorism and natural disasters, the effect of such events only last for a short period of time, causing changes in demands rather than an overall reduction. Bath, together with the rest of the West region only attracts a relatively small percentage of international visitors. The domestic tourists are the major visitors to Bath. However, recent figures show that there has been no significant increase of visits by domestic tourists in Bath ( 2006). In order to attract tourists both domestic and foreign, Bath showcases different events and activities. History and culture are among the top reasons why tourists visit Bath.
Bath: Competitor Analysis, Market Share and Niche Markets
Bath is s strong tourist destination due to the following reasons:
o It is accessible by road, rail and air
o It has a large, relatively affluent and growing resident population combined with a buoyant and expanding economy
o It is a destination with a national and/international profile, a distinctive sense of place and high quality urban environment
o It offers diverse attractions with some major draws and particular strengths in heritage, culture and shopping
o It has an attracting array of festivals and activities which draw visitors from outside the area
o A good range of accommodation base
o Professional and focused destination marketing and management ( 2006)
The City of Bath attracts high volume of tourism relative to population. There are a significant proportion of overseas visitors. It is mostly visited by up market, largely adult groups. There is a range of age groups of tourists who visit Bath but middle and age groups are the majority. Leisure and holiday trips predominate followed by Visiting Friends and Relatives and business trips. The most serious threat to tourism in Bath comes form new and invigorated destinations and products, both domestically and internationally ( 2006).
Segmentation and Targeting Analysis
Market segmentation according to (2000) is the prerequisite for selective market operation. It means splitting consumer markets into homogenous subgroups of consumers. There are two fundamentally different concepts of market segmentation. The first is ‘a priori’ (criterion) segmentation. This departs from a predetermined criterion such as purchasing volume and loyalty. In a priori segmentation, the marketing objective determines how to divide markets into smaller units. The second concept is ‘a posteriori’ (similarity) segmentation. This rests on the assumption that subgroups in a consumer population are homogeneous in terms of motives, attitudes and/or activities. This mental and behavioral homogeneity is likely to make them react to product offerings and promotional efforts in a similar manner. Market segmentation, applied to tourism is the division of the tourist market into more or less homogenous subgroups, or tourist market segments, based on a certain common characteristics and/or behavioral patterns.
Market Segmentation Bases
There are different ways to segment a market. The fundamental segmentation variables for consumer markets focus upon geographic, demographic, psychographic, and behavioristic dimensions ( 1991).
Geographic segmentation is carried out on the basis of the market’s origin.
Sociodemographic segmentation is based on social and demographic variables such as gender, age, family lifecycle, education, occupation and income. Psychographic segmentation comprises personality, motivation, and lifestyle variables. Psychographic segmentation makes it possible to divide different markets on the basis of lifestyle and values ( 2003). It is based on the differentiation of the tourist market on the basis of psychological and motivational characteristics such as personality, motivations and needs. Behavioral segmentation is the identification of tourist markets on the basis of activities and actions undertaken during the actual tourism experience.
In order to make an effective market segmentation strategy segmentation bases such as demographics, sociodemographic and psychographic. In segmenting the market and identifying the target market, it is important to know the geographic origin of the consumer. It is also important to identify different social and demographic variables such as gender and age in order to determine the buying behavior of the consumer. The decision making process of the consumer can be understood more clearly if psychological and motivational characteristics will be studied.
Target Markets
The characteristics of the target markets will be discussed based on demographics, sociodemographic and psychograpic bases. Because of space constraints only the domestic market and the French Market will be discussed.
Domestic Market
Tourists in the 35-54 age group are the most likely to go on holiday, and the most likely to visit local attractions. This may be due to the fact that this age group is consist of parents, whose children may put some restraints on the choice of holiday destinations. The domestic market is segmented based on people’s core values and definitions of quality. Value-based segments will differ in their brand choice, behavior, lifestyles, leisure activities and interests and so a deeper understanding of their purchasing behavior, inclination to travel and general views on life can be achieved. The following are examples of the market segments:
- High Streets – The high street segment are generally externally referenced. They are interested in fashion brands. Style is more important than functionality or individuality. They are an active segment moderately interested in intellectual pursuits, arts and culture ( 2007).
- Discoverers – The discoverer segment are independent. They do not care what other people think. Style and brand do not have a big influence on them unless it represents values they are seeking. They look for functionality rather than style. They value good service. They live a relatively relaxed paced of life. They enjoy intellectual challenges but arts and culture are not a significant part of their personality ( 2007).
- Cosmopolitan – Cosmopolitans are strong, active confident individuals who do what they want rather than following any particular fashion Cosmopolitans view themselves as stylish, but individuality rather than fashion is most important and they are quite happy to adopt traditional values when they feel they are appropriate. They are risk takers; this is reflected in their purchase, but also in their desire for things that are new and different and provide them with new challenges, both physical and intellectual. This includes an appreciation of art and culture. Life for this group is full and active, yet peace and relaxation is still valued ( 2007).
International Market
France
Thirty-three per cent of visitors from France to England come for the purpose of holiday. Visiting friends and relatives (VFR) are the purpose of 32 percent of the French tourists. Business travelers account for 25 per cent. Overall visits from France to England are evenly spread throughout the seasons. Holiday visitors (29%) come to England in April and June. October, November and December are the most popular period for VFR visitors, which make up 26 percent of French tourists (2007).
Almost half of all visitors from France (47%) are aged below 35. The largest age category for French visitors was 25-34 (21%), followed by 35-44 (20%). The proportion of visitors aged 55 and above has increased steadily over the past five years, reflecting the aging population. The French Holiday market segment is consist of High Income Young Families and Middle Income Couples (2007).
The French are reluctant to speak English through a lack of confidence. French people look for good deals. The French prefer to stay in mid-range accommodation. Country house hotels are popular in France. Bed and breakfast are popular, but mid-range and above rather than budget. Because of price issues, youth travelers prefer to stay in hostels or university accommodation ( 2007).
Consumer Decision Making
What Attracts Domestic Tourists
England excels in the provision of Unspoilt Countryside and History and Heritage. These also attracts British visiting England. England also attracts domestic tourists through its Local Produce, Arts and Crafts, facilities of Camping and Caravanning, Activities for Children and Myths, Legends and Folklores. The beaches and the coastline also motivate domestic tourists.
Source of Information
Previous experience is the most popular source of information when choosing accommodation, while advice from friends and relatives and the internet are important factors (2007).
What Attracts French Visitors?
- History, Heritage and Culture – French visitors are attracted to England’s rich history, heritage and cultural attractions.
- Countryside – French visitors are interested in England’s natural scenic beauty and countryside.
- Shopping – Another reason why French tourists visit England is shopping for traditional English products and trendy items ( 2007).
French Tourist’s Perception of England
- Close geographically
- An island culture
- Its Europe without being Europe
- Colonial past means excellent museums and galleries
- Educational, especially for children
- A place to learn English, especially for children
- Good for a weekend away ( 2007)
Source of Information
French tourists rely mostly on travel agents for information and booking. The internet is second choice when deciding on the destination and booking the trip ( 2007).
References
APPENDICES
Appendix 1: Value-based Segmentation: Domestic Market
Source: 2007
Appendix 2: Overseas Visitors to the United Kingdom in 2005
Overseas Visitors to the UK: 2005
Rank
Country
Visits
%
(000)
Share
1
USA
3,438
11
2
France
3,324
11
3
Germany
3,294
11
4
Irish Republic
2,806
9
5
Spain
1,786
6
6
Netherlands
1,720
6
7
Italy
1,186
4
8
Belgium
1,112
4
9
Poland
1,041
3
10
Australia
919
3
11
Canada
796
3
12
Sweden
728
2
13
Switzerland
699
2
14
Norway
627
2
15
Denmark
538
2
16
Japan
332
1
17
South Africa
306
1
18
Czech Republic
292
1
19
Austria
287
1
20
Hungary
274
1
21
India
272
1
22
Portugal
222
1
23
New Zealand
210
1
24
Greece
199
1
25
Russia
177
1
26
Finland
174
1
27
South Korea
149
0
28
Hong Kong
146
0
29
Nigeria
143
0
30
Israel
140
0
Others
2,633
9
Total World
29,970
100
Source:
The table above shows that French Tourists are among the major visitors in the United Kingdom.
Appendix 3: Demographics of French Visitors to England
Source: 2007
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