Tourism Supply and Demand

The demand for tourism products may be affected by the marketing mix elements, including the nature of the product or service, its distribution, its promotional strategies and its price. Price is the only element in the marketing mix which actually produces revenue. However, the setting of a price is not an easy task, as there are a number of pricing strategies which any travel business may apply, including; prestige pricing, penetration pricing; cost-based pricing; differential pricing and uniform pricing. Moreover, there are a number of factors which will influence what type of pricing strategy could be employed. Such factors include; corporate objectives; the marketing objectives, and the organisations' cost levels, among other matters. This chapter explains the various approaches which may be utilised when setting prices. Ultimately, the customers themselves will decide whether the product that is being supplied to them will meet or exceed their expectations