1.0 Introduction
Marketing plays a significant role in business especially businesses that operate within the tourism sector. Marketing influences the numbers of customers reached by the company which in turn determines the markets share, revenues, profits and brand image acquired by the company. This implies that marketing plays significant role in the success of a company. This report aims to critically evaluate the role of marketing management theories in tourist attraction and how these theories apply in marketing scenarios. According to Kotler (2015) marketing management is the capacity and art of identifying the target customers and then growing the numbers of target customers by delivering value to the customers. The focus of this report is on the Tower of London. It has emerged as an important UK tourist attraction site based on its symbolism to English history. This is because during various times in history, it has served as an armoury, secure fortress, royal palace and an infamous prison (Historic Royal Palaces, 2017a). This report is composed of five parts. The first part of the report introduces the content of the report. The second part discusses the trends in the external marketing environment and how those trends are likely to affect the number of visitors coming to the Tower of London. The third part explores the importance of the current marketing concepts and how the concepts can be applied by Tower of London to create value for their customers. The fourth part provides recommendation on what can be done by the marketing manager of Tower of London to enhance the competitiveness and the overall market share of Tower of London. The final section of this discourse is the conclusion and it provides an overview of the findings of the report.
2.0 Analysis of the marketing environment in UK
2.1 Evaluation on Tower of London’s capabilities and strengths
Under the management of the Historical Royal Palaces, the Tower of London views its long term goals as being able to enable people to explore the history of the UK using the palaces and their stories (Historic Royal Palaces, 2017a). The aim of the Historical Royal Palaces is to enable all people explore and understand the story of monarchs and the people and their influence in shaping society in some of the greatest places ever built.
The most obvious organisational strengths of the Tower of London include its longevity having been established as a tourist attraction site since the Elizabethan period (Parnell, 1993). As a result, it has become popular with tourists in London since its one of the sights in London that foreign visitors are likely to visit. Other strengths include the growing volume of writing amongst contemporary writers with regards to its history (Impey and Parnell, 2000). The work by writers has helped fuel public interest in the Tower of London resulting in huge tourist numbers on a daily basis. Moreover, the most obvious capability of the Tower of London is the huge capacity to handle large volumes of tourists at a go. This was manifested by the ability to accommodate over 2.7 million tourists in 2016 alone (Association of Leading Visitor Attraction, 2017).
2.2 PESTLE analysis
On the political factors, the major political issue that has influenced the business environment for tourism in UK is Brexit. The exit of UK means that EU residents have to apply for Visas to visit UK. It is expected to minimise the number of visitors coming into the UK due to Visa fees that has to be paid by EU visitors to gain entrance into the UK (Coelho and Ratnoo, 2014).
Economically, UK economy has fully recovered from the 2008 recession and the level of inflation is down to 5% compared to 7% in the year 2016. In addition the UK GDP has grown by 0.4% in the year 2016 indicating slight increase in the consumers’ disposable income (Financial Times, 2016). The improving economic situation is expected to result in increased domestic tourism and tourists in Tower of London.
Socially, UK culture is masculine as shown by the table below. High level of masculinity implies that most of the people within that population are very competitive. This high level of competiveness motivates people and families to visit places as way of showing off to others. According to Kemp (2016) going out on family holidays shows someone status. Therefore middle class consumers in UK prefer to show off by visiting places and showing off the pictures of approval and social status. This highly increases the demand for tourist attractions in the UK. Also the increased use of in the internet as means of socialising and communicating has promoted domestic tourism as people share images of places they have visited which increase demand for domestic tourist attraction sites (BBC News, 2016).
Technologically, UK has internet penetration of 87% which implies that most of the people in UK can access the internet. Also the use of smart phones in UK is very high and over 48.26 million people in UK (figure 3) (Evans, 2016). This has changed the dimension in which profits and services are marketed in UK. Instead of the traditional marketing and sales promotion strategies companies prefer to use the internet and websites to reach out to UK residents (ONS, 2017). This has affected companies in the tourism industry as technology has also increased visibility of the competition thus making the domestic environment very competitive for local companies.
Legally, UK labour laws stipulate minimum wages that have to be paid to UK citizens. The minimum wages increases labour costs of tourist attractions such as Tower of London (GOV.UK, 2017).
On the ecological factors Plessis, Merwe and Saayman (2012) noted that tourism can have a negative influence on the tourist attraction sites when the level of visitor use exceeds the ability of the tourist attract to cope with the use based on the acceptable limits of change. Accommodating over 2.7 million customers on a yearly basis has placed significant strain on the ability of the Tower of London to cope with the visitor numbers. This poses a threat to the ability of the Tower of London of maintaining some natural elements of the palace resulting in the loss of its natural elements as a result of renovations.
2.3 Competitor analysis
The virtue of being a palatial tourist attraction site, suggests the main competitors of the Tower of London are other palaces that act at tourist attraction sites. As such, the main competitors of the Tower of London are the Hampton Court Palace and the Kensington Palace (Association of Leading Visitor Attraction, 2017).
The topography of the Hampton Court Palace enables it to be used for multiple purposes in addition to being a tourist attraction site. for instance, the palace has been used as a film location, hosted the road cycling time trial for the 2012 Olympic Games and a Roman Catholic mass service location (Historic Royal Palaces, 2017b). As such, the main threats posed by the Hampton Court Palace to the Tower of London, is the higher potential for many uses thereby greater tourist attraction.
Moreover, the Kensington Palace is the present official London residence of the Duke and Duchess of Cambridge, Duke and Duchess of Gloucester and the Duke and Duchess of Kent (Historic Royal Palaces, 2017c). The main threats posed by the Kensington Palace to the Tower of London are its ability to provide tourists with a unique experience of the private home of royalty and museum status within a single palace.
2.4 Summary
On account of the analysis of the marketing environment in UK, the following strengths, weaknesses, opportunities and threats have been identified.
Table 1: SWOT analysis for the Tower of London
| Strengths
Strong brand name making it easily recognisable to tourists in London Wide availability of information regarding the Tower of London Strong financial position due to fees charged for entry |
Weaknesses
Loss of natural factor due to renovations on older structures. Constructions of skyscrapers in London have endangered its status as a tourist attraction site (Milmo, 2015).
|
| Threats
Brexit is likely to reduce the inflow of foreign tourists Growth in technology usage in UK has increased competition for the Tower of London Increase in minimum wage raises the liability costs for the Tower of London Limited ability to cope with rising tourist numbers |
Opportunities
Improving UK economy provides an opportunity to increase local tourist numbers Growing demand for tourists due to masculine society
|
Source: Summarised by this report
3.0 The importance of the current marketing concepts and evaluation of current marketing strategies
3.1 Business philosophies
There are five kinds of business philosophies which are the holistic marketing philosophy, marketing philosophy, product philosophy, selling philosophy and production philosophy. The first theory that explains this is the product philosophy (Kotler, 2015). This theory holds that the companies can enhance value of the products by creating high quality products. Companies that do this enhance products by ensuring that they have high quality services that are going to be accepted by the customers. The marketing messages focus on communicating the quality and value of the product. This theory was essential in enabling the companies and the marketers to focus on producing superior products compared to the ones produced by the competitors thus increasing the sales and demand of products made by companies that used this philosophy (Rust, Moorman and Bhalla, 2010).
The selling philosophy holds that for a company could sell whatever product that the company produced. According to Kholer (2015) this meant that sales could be made through aggressive marketing and promotional activities made by the company. This means that with aggressive marketing companies could manage to sell large volumes of their products to consumers even when the products were low cost or low quality as long as they aggressively promoted the products and service. Nevertheless, this marketing concept wrongly held that customers could buy whatever product sold to them even though it was low quality or they did not need it.
The third philosophy was the marketing concept which held that products could be sold to customers by identifying customer needs and providing products that met the customer needs. Marketing therefore focused on ensuring that the customers were satisfied and their needs were met by the organisation (Kemp, 2016).
The fourth philosophy is the production philosophy. This concept assumes that there is so long as the product is cheap and affordable compared to the ones offered by competitors and that it is available in many places, customers will purchase the product and service (Fill, 2009). Therefore the aim of production philosophy is to minimise costs using the economies of scale in order to provide the most efficient and cost effective products in the market. However the main drawback of this theory is that it assumes that the customers are always willing to purchase the cheapest products in the market.
The fifth philosophy is the holistic marketing philosophy. This philosophy holds that marketing is interdependent on various marketing activities as well as the external environment. The focus of this philosophy is to consider all stakeholders of the company during the marketing process such that the marketing process is not only focused on the customers buy also on the society, government, employees and other stakeholders (Hollensen, 2010). The objective of this marketing philosophy is to profit through long term customer relationships and by co creating value together with the customers.
Tower of London uses the holistic marketing philosophy. The company does this by creating value with customers by encouraging customers to participate in the conservation of one of the oldest towers in London through donations or by visiting the site. In addition the Tower of London management collaborates with other stakeholders such as the government, academic and cultural institutions to maintain the heritage site (Historical Royal Palace, 2017b).
3.2 STP
STP includes segmentation, targeting and positioning. Segmentation is the subdivision of consumer markets in various markets that have similar needs and wants and have similar responses towards marketing messages (Baines, Fill and Page, 2013). Targeting is the strategy used to determine the most appropriate market segment that the company can focus on. Positioning is how the potential customers perceive the brand. It is how the brand is compared to the competitors in the mind of the current and potential customers. STP is important because it helps in the identification of niche markets that can be profitable to the company. In addition STP creates customer value by helping the brand to leverage on scarce resources by differentiating its brand from those of competitors and by tailoring the communication to suit the needs and wants of target customers (O’Malley, 2014). In the case of Tower of London, the current target customers of Tower of London are culturally curious international and local visitors who want to learn and understand the English culture and heritage. However, this market is diverse and contains students and other guests who are visiting London for business or work commitments which make it difficult to determine the appropriate marketing messages for this international guest.
3.3 Marketing mix
The seven P’s model discusses the seven aspects of marketing mix which include product, place, price, promotion, physical evidence, process and people. The major advantage of the marketing mix model is that it very detailed which helps marketers to effectively implement marketing management plans. However, marketing mix model is very concerned with the product aspect which makes it difficult to apply in instances where it is services that are being marketed (Hollensen, 2010).
Tower of London used 7Ps of marketing to create value. On the product aspect the Tower of London has interesting attraction sites such as the antique prison, the antique jewelleries and antique performances and dances that are performed by entertainers in the palace (Historical Royal Palaces, 2017a).
On the pricing aspect, the Tower of London used the high cost pricing strategies. Due to the high costs of maintaining the palace which include cleaning, and preserving the antiques the facility has high charges compared to other tourist attraction sites (Historical Royal Palaces, 2017a). This makes the hotel unattractive to the students who are the target market as they are price conscious.
On the promotional strategies used by the hotel, Tower of London mostly promotes is products through advertising on television (Historical Royal Palaces, 2017a). However, this increase the costs of operating the tower as advertising in newspapers and magazines are very expensive.
On the place aspect of marketing the tower of London sell its tickets through its websites only or at the gate. However, this limits the number of people of who can purchase the tickets especially the international students who may not be knowledgeable of English language as the website is in English.
On the people aspect, Tower of London has tour guides who escort the visitors around the tower. However, the guides are not multilingual which make communication between international visitors and the guide difficult.
On the physical evidence, the tower unique architecture in London makes its distinct from other tourist attraction sites. Also the staffs are dressed in antique uniforms to make the site distinct from other locations in London.
On the process aspect, the Tower of London has a customer care department which is in charge of handling complaints. However, the department does not have consistent online customer care which frustrates customers who have complaints.
4.0 Recommendations
4.1 Corporate strategy
In order for the Tower of London to grow in the long term, it should find new ways in which it can increase profits and reach new customers. Leveraging on the Ansoff matrix, the numerous options available to the Tower of London include market development, market diversification, market penetration and market development (Toften and Hammervoll, 2011).
On this account, the most appropriate expansion strategy that the Tower of London should utilise is the market penetration strategy. According to Taylor (2012) the market penetration strategy enables a firm to sell more of the same thing within the same market. The reason for this is because it enables the Tower of London to take advantage of the opportunity presented by London being a top tourist destination by developing a new market strategy that can influence more tourists to prefer visiting the Tower of London over other tourist attraction sites in London.
4.2 Marketing objectives
The SMART marketing objectives that should be satisfied by the marketing mix are listed below.
- To grow tourist revenues by 20% over the next 12 months
- To increase profit margins by 15% over the next 12 months
- To increase tourist numbers by 10% over the next 12 months
- To generate 200 tourist enquiries on a monthly basis for the next 12 months
4.3 STP
Segmentation refers to the division of the market into distinct group based on shared characteristics (Goyat, 2011). Psychographic factors should be used to segment the UK market. According to Singh (2010), psychographic factors focus on the interests, attitudes and traits of consumers. On this account, the UK market can be divided into people that have an interest toward tourism and those that lack an interest towards tourism.
According to Fifield (2012), targeting refers to selection of a niche market to be acted upon. The niche market of the UK tourism population can add value to the Tower of London. The perception of London being a tourist attraction suggests that there is a huge tourist population that can justify the Tower of London improving its marketing strategy in order to position itself as a top UK tourist destination.
Positioning refers to the process of differentiating a product or service from competitors (Hawkins, Mothersbaugh and Best, 2013). By marketing itself as a location that offers tourists the unique experience of enjoying the rich English culture based on its unique palaces, the Tower of London should grow its tourist numbers and increase its revenues and profits significantly. The perceptual map that should be used by the Tower of London is shown below.
| Richness of the English culture |
| Profitability |
| Tower of London |
| Kensington Palace |
| Hampton Royal Palace |
Figure 1: Perceptual map for the positioning of the Tower of London
Source: Summarised by this report
4.4 Marketing mix
4.1 Product
Mullins, Walker and Boyd (2012) argue that in improving the product of a firm, it should focus on the quality, image and branding. The product of the Tower of London is the secure fortress, royal palace and infamous prison. In improving the quality of the Tower of London experience, the Historic Royal Palaces organisation should improve the quality of customer experience by providing a seamless experience of the fortress, royal palace and the infamous prison. This will help the Tower of London minimise the threat posed by rival palaces that provide multi-levels of tourist attraction.
4.2 Price
Price factors that firms should consider include discounts, payment methods, free or value added elements (Yan and Pei, 2011). In improving its pricing strategy, the Tower of London should utilise a mixture of free and charged entry. This pricing strategy would help the Tower of London achieve its objective of growing customer numbers. For instance, museums such as the British Museum and the National Gallery utilise the pricing strategy of free and charged entry to a high degree of successes in terms of tourist numbers (Association of Leading Visitor Attraction, 2017).
4.3 Promotion strategies
Promotional factors that firm should consider include marketing communications, sales promotions and direct marketing (Kemp, 2016). In order to improve the promotional aspects of the Tower of London, it should leverage on both traditional and modern promotional approaches. The leverage on direct marketing, sales marketing and social media marketing practices should enable the Tower of London to not only generate 200 customer enquiries on a monthly basis but also grow its tourist numbers. This is based on the success achieved by the British Museum in the use of traditional and modern marketing strategies (British Museum, 2017).
4.4 Place aspect
Jobber and Ellis-Chadwick (2012) argue that in improving the place factors of the firm it should be located at a convenient place for easy access by the target consumer. The Tower of London is located in Central London bordering the River Thames and opposite The Shard (Historical Royal Palaces, 2017a). In improving the accessibility for the tourists, the Tower of London can organise for tourist access using the Thames River. This can not only improve the accessibility and convenience of the Tower of London but can also improve the tourist experience by visiting the Tower using boats.
4.5 People
According to Hawkins, Mothersbaugh and Best (2013), having the right people is an essential aspect of the quality of the product or service offered by a firm. In order to improve the quality of the tourist experience at the Tower of London, it should employ staff that are not only knowledgeable on the rich English history represented by the Tower of London but also curious to ensure that tourist experiences and knowledge is improved after the tourism experience. By virtue of improve tourist experience; the Tower of London can increase its profitability because tourists will perceive the tourism experience as good value for money charged.
4.6 Process
Success at the British Museum has been as a result of the unique processes used in service delivery. The British Museum focuses on the individual customer during the visit in order to deliver customised tourist experiences depending on the level of knowledge and number of previous visits of the customer (British Museum, 2017). This enables tourists making repeat visits to enjoy better experiences that are similar to their first experiences. The Tower of London should leverage on this process by combining IT-support and tailored tourist experiences from the moment of arrival, tour of the castle, information sharing and farewell to the tourist.
4.7 Physical evidence
According to Fifield (2012), the physical elements of the product and service contribute to the overall customer experience of what the customer is paying for. In improving the physical evidence of the Tower of London, it should improve its online experience by providing an online guide and map for the sections of the Tower of London. The tourist interaction with the online version of the Tower of London can serve to heighten experiences in touring the physical location and satisfying the curiosity of self-discovery based on the artistic impression of the map on the website.
5.0 Conclusion
This report set out to analyse the marketing environment and make recommendations for the improvement of the marketing strategy of the Tower of London. The report focused on the Tower of London as the tourist attraction case for this report. In the first section, the analysis of the marketing environment of the UK and the competitor analysis of the Tower of London were conducted. This report found out that the strengths and weaknesses of the Tower of London were strong brand name, wide availability of information, strong financial information and the loss of natural factor due to renovations, construction of skyscrapers endangering its status as a tourist attraction respectively. The threats posed by the Tower of London is the Brexit that is likely to reduce the inflow of foreign tourists, growth in technology usage in UK has increased competition for the Tower of London, increase in minimum wage raises the liability costs for the Tower of London and the limited ability to cope with rising tourist numbers. The opportunities created are the Improving UK economy provides an opportunity to increase local tourist numbers and the growing demand for tourists due to masculine society. In the second section this report established that the Tower of London utilises the holistic marketing philosophy. This was achieved by the Tower of London co-creating value with customers by encouraging customers to participate in the conservation of one of the oldest towers in London by paying for visits. In the third section, this report recommended that the Tower of London should utilise the market penetration strategy. Under the market penetration strategy, the Tower of London should pursue the objectives of growing tourist revenues by 20%, profit margins by 15% and tourist numbers by 10% and generation of 200 tourist enquiries monthly. Having identified the target market as the UK population that has an interest in tourism, the proposed 7P marketing mix is a combination of free and charged entry pricing strategy, combination of traditional and modern promotional tools, additional access points using Thames River, employing knowledgeable employees, leveraging on IT and tailored customer experiences and the improvement of the online customer experience.
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