Reading Comprehension Directions: Read the following passage and choose the correct answers. The ways in which products are put together, that is product formulation, are the most important responses marketing managers make to what they know of their customers' needs and interests. Product decisions, with all their implications for the management of service operations and profitability, reflect all aspects of an organization's management policies, including long-term growth strategy, investment, and personnel policy. They largely determine the corporate image an organization creates in the minds of its existing and prospective customers. To a great extent, the design of products determines what prices can be charged, what forms of promotion are needed, and what distribution channels are used. For all these reasons, customer-related product decisions are the basis of marketing strategy and tactics. As the most important of the four P's in the marketing mix (product, price, promotion and place), product formulation requires careful consideration in any branch of marketing. Because of the particular nature and characteristics of travel and tourism, the subject is especially complex in the tourism industry. Any visit to a tourism destination comprises a mix of several different components, including travel, accommodation, attractions and other facilities, such as catering and entertainment. Sometimes all the components are purchased from a commercial supplier, e.g. when a customer buys an inclusive holiday from a tour operator, or asks a travel agent to put the components together for a business trip. Sometimes customers supply most of the components themselves, e.g. when a visitor drives his own car to stay with friends at a destination. Conveniently known as a "components' view", the conceptualization of travel and tourism products as a group of components or elements brought together in a 'bundle' selected to satisfy needs, is a vital requirement for marketing managers. It is central to this view that the components of the bundle may be designed, altered and fitted together in ways calculated to match identified customer needs. As far as the tourist is concerned, the product covers the complete experience from the time he leaves home to the time he returns to it. Thus the tourist product is to be considered as an amalgam of three main components of attractions, facilities at the destination, and accessibility of the destination. In other words, the tourist product is not an airline seat or a hotel bed, or relaxing on a sunny beach, but rather an amalgam of many components, or package. Airline seats and hotel beds, etc. are merely elements or components of a total tourist product which is a composite product. Without detracting in any way from the general validity and relevance of this overall view of tourism products, it has to be recognized that airlines, hotels, attractions, car rental and other producer organizations in the industry, generally take a much narrower view of the products they sell. They focus primarily on their own services. Many large hotel groups and transport operators employ product managers in their marketing teams and handle product formulation and development entirely in terms of the operations they control. Hotels refer to 'conference products', for example, or 'leisure products'; airlines to 'business class products'; and so on. For this reason, the overall product concept sets the context in which tourism marketing is conducted but it has only limited value in guiding the practical product design decisions that managers of individual producer organizations have to make. A components' view of products still holds good, however, because it is in the nature of service products that they can be divided into a series of specific service operations or elements, which combine to make up the particular products customers buy. It is usually highly instructive to analyze any service producer's operations in terms of the full sequence of contacts between customer and operator, from the time that they make initial inquiries, until they have used the product and left the premises. Even for a product such as that provided by a museum, there is ample scope to analyze all the stages of a visit and potential points of contact that occur from the moment the customer is in sight of the entrance until he leaves the building, say two hours later. Putting the components' view in slightly different terms, individual service producers designing products must define service concept in terms of the bundles of goods and services sold to the customer and the relative importance of each component to the customer. To bring the two distinctive aspects of tourist products together — the overall view and that of individual producer organizations — it is possible to consider them as two different dimensions. The overall view is a horizontal dimension in the sense that a series of individual product components are included in it, and customers, or tour operators acting as manufacturers, can make their selection to produce the total experience. By contrast, the producers' view is a vertical dimension of specific service operations organized around the identified needs and wants of target segments of customers. Producers typically have regard for their interactions with other organizations on the horizontal dimensions, but their principal concern is with the vertical dimension of their own operations. From the standpoint of a potential customer considering any form of tourist visit, the product may be defined as a bundle or package of tangible and intangible components, based on activity at a destination. The package is perceived by the tourist as the experience available at a price, and may include destination attractions and environment, destination facilities and services, accessibility of the destination, images of the destination, and price to the customer. Destination attractions and environment that largely determine customers' choice and influence prospective buyers' motivations include natural attractions, built attractions, cultural attractions and social attractions. Combined, these aspects of a destination comprises what is generically, if loosely, known as its environment. The number of visitors the environment can accommodate in a typical range of activities on a typical busy day without damage to its elements and without undermining its attractiveness to visitors is known as its capacity. Destination facilities and services are elements within the destination, or linked to it, which make it possible for visitors to stay and in other ways enjoy and participate in the attractions. These include accommodation units, restaurants, transport at the destination, sports activities, retail outlets, and other facilities and services. Accessibility of the destination refers to the elements that affect the cost, speed and the convenience with which a traveler may reach a destination, including infrastructure, equipment, operational factors and government regulations. The attitudes and images customers have towards products strongly influence their buying decisions. Destination images are not necessarily grounded in experience or facts, but they are powerful motivators in travel and tourism. Images and the expectations of travel experiences are closely linked in prospective customers' mind. Any visit to a destination carries a price, which is the sum of what it costs for travel, accommodation, and participation in a selected range of services at the available attractions. Because most destinations offer a range of products, and appeal to a range of segments, price in the travel and tourism industry covers a very wide range. Visitors traveling thousands of miles and using luxury hotels, for example, pay a very different price in New York than students sharing campus-style accommodation with friends. Yet the two groups may buy adjacent seats in a Broadway theater. Price varies by season, by choice of activities, and internationally by exchange rates as well as by distance traveled, transport mode, and choice of facilities and services. With a little thought it will be clear that the elements comprising the five product components, although they are combined and integrated in the visitor's experience, are in fact capable of extensive and more or less independent variation over time. Some of these variations are planned, as in the case of the Disney World developments in previously unused areas around Orlando, Florida, where massive engineering works have transformed the natural environment and created a major tourist destination. By contrast, in New York, London, or Paris, the city environments have not been much altered for travel and tourism purposes, although there have been massive planned changes in the services and facilities available to visitors. Many changes in destination attractions are not planned, and in northern Europe the decline in popularity of traditional seaside resorts since the 1960s has been largely the result of changes in the accessibility of competing destinations in the sunnier south of the Continent. Changes in the product components often occur in spite of, and not because of, the wishes of governments and destination planners. They occur because travel and tourism, especially at the international level, is a relatively free market, with customers able to pursue new attractions as they become available. Changes in exchange rates, which alter the prices of destinations, are certainly not planned by the tourism industry, but have a massive effect on visitor numbers, as the movements between the UK and the USA since 1978 have demonstrated. It is in the promotional field of images and perceptions that some of the most interesting changes occur, and these are marketing decisions. The classic recent example of planned image engineering may be found in the "I Love New York" campaign, which, based on
A. Product.B. Price.C. Promotion.D. People.
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