The four cycles of tourism products and marketing strategies at each stage

1. Tourism product life cycle theory

The tourism product life cycle refers to the entire process of tourism products from entering the market to being eliminated by the market. It can be divided into investment period, growth period, Four stages: maturity and decline. The ideal tourism product life cycle is S-shaped. In addition, there are about 6-17 life cycle types of tourism products. Candidates should master the more typical tourism product types introduced in the textbook, including: (1) "Growth-Decline-Maturity" type; (2) "Cycle-Recirculation" type; (3) Fashion type; (4) Scallop type.

2. Reasons for the existence of tourism product life cycle phenomena and methods of dividing life cycle stages

(1) Analysis of the reasons for the existence of tourism product life cycle phenomena

The main reasons for the existence of the tourism product life cycle phenomenon are: (1) the diffusion of innovative products has a process of information transmission; (2) potential customers also have a process of accepting new products. (3) The role of competition laws.

The phenomenon of tourism product life cycle gives us the following enlightenment: (1) The market life of most tourism products is limited. Although some are longer and some are shorter, there is a general trend of shortening. (2) Each stage of the tourism product life cycle presents different opportunities and challenges to business operators. Enterprises should take different marketing measures accordingly to make the tourism product cycle develop in a favorable direction. (3) Sales and profits rise and fall at different stages of the tourism product life cycle. Tourism companies need to grasp these fluctuations and develop new tourism products and adjust product mix in a timely manner. (4) The trends and changes in the life cycle curves of different tourism products are not all standardized and will show obvious individual characteristics.

(2) Judgment methods for each stage of the tourism product life cycle

There are three main methods for dividing the life cycle stages of tourism products:

1. Sales growth rate method . This is a method of dividing the different stages of the tourism product life cycle based on the sales growth rate of a certain tourism product in different periods. The calculation formula is as follows:

Sales growth rate = (sales of the current period - sales of the previous period) * sales of the previous period

Some foreign marketing scholars have proposed empirical figures to define each stage. It is believed that:

Sales growth rate ≤10%, tourism products are in the investment stage

Annual sales growth rate >10%, tourism products are in growth stage

Annual sales growth rate 0.1-10% Tourism products are in the mature stage

Annual sales growth rate <0 Tourism products are in the decline stage

2. Supply and demand ratio method. The supply and demand ratio of a certain tourism product is the ratio of the supply of the tourism product in the existing market to the overall market demand (including existing market demand and potential market demand). The reference values ??used to divide the various stages of the tourism product life cycle using the supply and demand ratio method are:

Investment period ≤ 0.15 Growth period ≤ 0.65

Maturity period ≤ 1.2 Decline period > 1.2

3. Analogy. Refers to analysis and judgment based on the development of similar tourism products. Two points should be noted when using this method: (1) the two tourism products must be comparable; (2) attention should be paid to specific analysis of specific situations.

3. Characteristics and marketing strategies of each stage of the tourism product life cycle

There are three main purposes of studying the life cycle of tourism products: (1) At different stages of the tourism product life cycle Adopt different marketing strategies; (2) Research ways to improve tourism products and extend their life cycles; (3) When the recession period inevitably arrives, develop new tourism products to better adapt to the changing needs of the tourism market.

(1) Characteristics of each stage of the tourism product life cycle

The main characteristics of the investment period are: the product has just been put on the market and has not yet been understood and accepted by consumers, so the sales volume is small And the growth is slow; the design of tourism products has not yet been finalized, and the quality is not yet stable; external publicity and advertising costs are high, tourism companies have low profit margins, or even lose money; there are few competitors.

The characteristics of the growth stage are: new tourism products gradually take shape and form certain characteristics, so they are gradually accepted by consumers, have a certain degree of popularity, product sales increase rapidly, advertising expenses decrease, and sales costs increase. The margin dropped and profits soared. Seeing the profits, other tourism companies have combined the same tourism products, and the number of competitors in the market has increased.

Characteristics of the mature period: This period is the peak sales period for tourism products. Famous brand products are formed, but imitations and substitutes continue to appear, and the sales growth rate of specific tourism companies is declining. The tourism market has become increasingly saturated, and competition among enterprises in terms of sound quality is becoming increasingly fierce.

Characteristics of the recession period: This is the stage when tourism products age and are gradually eliminated by the market.

On the one hand, new alternative tourism products have emerged, travel consumers have shifted their interest, and sales have declined significantly. On the other hand, promotional expenses increase, costs rise, and therefore profits fall. At the same time, many tourism companies have been eliminated in market competition and withdrawn from the market, and competition has weakened.

(2) Marketing strategies for each stage of the tourism product life cycle

In order to enhance marketing effects and improve economic benefits, tourism companies must target the different characteristics of each stage of the product life cycle, enter and exit different marketing strategy.

1. Marketing strategy during the investment period

(1) Quick skimming strategy. That is, using high prices and high promotional expenses to quickly enter the market for new tourism products. The following three conditions must be met to use this strategy: First, most travel consumers in the potential market do not know the product yet. Second, consumers who understand the tourism product are eager to obtain the product and have sufficient paying ability. Third, tourism companies face potential competition and must cultivate “brand preference” as soon as possible.

(2) Slow skimming strategy. That is, introducing new tourism products to the market with high prices and low promotional costs. The following four conditions must be met to use this strategy: First, the market size is limited. Second, most potential consumers in the market are aware of this tourism product. third. Potential travel consumers are willing to pay high prices. Fourth, the threat from potential competitors is weak.

(3) Rapid penetration strategy. That is the strategy of launching new tourism products at low prices and high promotional expenses. The following four conditions must be met to adopt this strategy: First, the market is large and there are many potential tourism consumers. Second, most tourism consumers are sensitive to product prices. Third, consumers do not understand tourism products. Fourth, there is the threat of strong potential competition.

(4) Slow penetration strategy. That is the strategy of launching new travel products at low prices and low promotional costs. The following four conditions must be met to adopt this strategy: First, the market is huge. Second, tourism products are well-known. Third, the market has greater price elasticity for this tourism product, and there is greater room for market development. Fourth, there are potential competitors.

2. Marketing strategies in the growth stage

Four strategies should generally be adopted in the growth stage: (1) Improve tourism products and improve product quality. (2) Develop and adopt new sales channels. (3) Open up new markets. (4) Strengthen tourism promotion.

3. Marketing strategies in the mature stage

The following four strategies should generally be adopted in the mature stage: (1) Market improvement strategy. (2) Product improvement strategy. (3) Marketing mix improvement strategy. (4) Research and development of new tourism products.

4. Marketing strategies during the recession period

There are generally three strategies to choose from during the recession period: (1) Give up the strategy immediately. That is to say, we decisively decided to withdraw from the market and no longer produce the original tourism products. (2) Harvest strategy. That is, tourism companies do not take the initiative to give up a certain product, but continue to use the past market, channels, prices and promotion methods until the tourism product is completely exhausted. (3) Gradually abandon the strategy. It means that for those tourism products that still have certain potential to be tapped, tourism companies do not give up blindly, but analyze the reasons for the decline in product sales. Prescribe the right medicine to the problem, expand product uses, and improve product quality in order to increase product sales.