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Title: PHILIPPINE%20MARKETING%20PLAN%20FOR%20CHINA


1
PHILIPPINE MARKETING PLAN FOR CHINA
2
Outline of Presentation
  • Background on China
  • Outbound Travel from China
  • 10-year Chinese Outbound Travel Market
  • China Outbound vis-à-vis East Asian Countries
  • Destinations of Chinese Tourists
  • Travel Preferences
  • Arrangements
  • Sources of Information
  • Profile of Outbound Chinese Traveler
  • Demographic Profile
  • Travel Profile
  • Growth trend
  • Factors fueling outbound travel growth
  • Chinese Tourists to the Philippines
  • 10-year Visitor Arrivals from China
  • Profile of Chinese Visitors
  • Flight frequencies between the Philippines and
    China

3
Outline of Presentation
  • Competitive Analysis
  • Arrivals from China to ASEAN Countries
  • Air Seats Capacity between China and ASEAN
    Countries
  • Comparative Profile of Chinese Visitors in the
    Philippines and Thailand
  • Tour Products and Packages
  • Marketing Strategy and Tools
  • Issues and Action Plan
  • Philippine Tourism Marketing Plan for China
  • Objectives
  • Strategies
  • Marketing Tools
  • Work and Financial Plans
  • Communication Plan
  • Monitoring and Evaluation

4
Background
5
Demographic
  • Population
  • 1.298 Billion as of July 2004
  • 15 64 years account for 70 of the population
  • 56 ethnic groups with the Han as the largest
    group accounting for approximately 91 of the
    population
  • Mandarin is the standard dialect widely spoken
    and understood with Cantonese commonly used in
    the province of Guangdong
  • Fourth largest country in the world with 9.3
    million sq. km. land area
  • 23 provinces, 5 autonomous regions and 4
    municipalities
  • Major business centers are Beijing, Shanghai, and
    Guangzhou

6
Economic Growth
1999 2000 2001 2002 2003 Gross Domestic Product
() 7.1 8.0 7.3 7.0 7.4 GDP per
capita Current Price in Yuan 6,551 7,086 7,6
51 8,214 9,073 Current Price in US 789
853 921 990 1,093
6.2 7.3 6.8
6.5 6.9 Source Asian Development Bank
Outlook 2003 Report
7
Family Income and Outbound Travel Plans
Family Monthly One Journey Two Journeys Three
Journeys Income Less than US 180 25 US
180 US 360 55 2 US 361
US 550 70 9 More than US
550 34 58 3 Source
SSIC 2000 Survey of Five Cities
8
Outbound Travel from China
9
Top Tourist Destinations, 2003
  • Visitor Volume Visitor Receipts
  • ( in Million) (in US Billion)
  • France 75.0 36.6
  • Spain 52.5 41.7
  • United States 40.4 65.1
  • Italy 39.6 31.2
  • China 33.0 17.4
  • United Kingdom 24.8 19.4
  • Austria 19.1 13.6
  • Mexico 18.7 n/a
  • Germany 18.4 19.1
  • Canada 17.5 n/a

10
Chinese Outbound Travel(in Thousand)
Growth Rate 21 37 16 13
7 3 32 38 21 (.002)
11
China Outbound Travel vs. Outbound Travel from
East Asia (2003)
  • Country Volume
  • China 20,200,000
  • Japan 13,296,330
  • Korea 7,086,323
  • Taiwan 5,923,072
  • Hong Kong 8,380,467
  • exclude outbound to Mainland China

12
China Outbound Market
  • Total Outbound to Asia in 2002 14,271,519
    (which includes outbound travel to Special
    Administrative Regions)
  • By 2020, WTO predicts China will have more than
    100 million outbound travelers
  • Source WTO Report

13
Destinations of Chinese Tourists
Destinations 2001 2000 Growth Rate Hong Kong
SAR 4,448,583 4,142,191 7 Macao
SAR 3,005,733 1,644,421 82 Thailand 695,372
707,456 (1) Vietnam 672,372 n/a
n/a Russia 606,102 n/a n/a Republic of
Korea 482,308 400,958 20 Malaysia
453,206 n/a n/a Japan 391,384
595,660 (34) Australia 171,900
126,852 36
14
Preferences of Chinese Travelers
  • Extremely price conscious
  • Price is a major consideration
  • Tour cost has to be cheap
  • Mass market and not high-end nor deluxe
  • No optional tours but would not mind paying extra
    to go shopping or take part in activities not
    included in the package. Extra cost must not be
    too high
  • 3-star accommodation
  • Demand compliance with tour description
  • Information in Chinese language
  • Word-of-mouth communication from friends and
    relatives is still an important information source

15
Preferences of Chinese Travelers
  • Multi/Single-destination tied with varied
    interesting spots
  • Beautiful scenery
  • Shop authentic but cheap souvenirs for neighbors,
    colleagues, etc.
  • Relaxation, knowledge and experience different
    culture
  • Taste different food
  • Give status in the community

16
Sources of Information
  • Travel Agents 38
  • Books/ Newspapers/ TV 33
  • Word of Mouth 18
  • Brochures/ Flyers 7
  • Internet 2

Source PATA China Outbound Travel Study, 1994
17
Travel Arrangements for Pleasure Travelers
Source PATA China Outbound Travel Study, 1994
18
Readership of Different Types of Magazines
  • Type of Magazine Pleasure Traveler Business
    Traveler
  • Major news magazines 50 61
  • Digest magazines 44 46
  • General interest magazines 44 35
  • Film/TV magazines 34 18
  • Travel magazines 24 13
  • Professional magazines 24 45
  • Sports magazines 22 27

Source PATA China Outbound Travel Study, 1994
19
Demographic Profile of Chinese Traveler
  • Sex
  • Male 71
  • Female 29
  • Age
  • 30 or younger 27
  • 31 50 49
  • 51 and older 22
  • Education
  • No higher education 20
  • Less than4 years 27
  • 4 years and more 52

Position Top/Senior 33 Middle-level 50 Other
15 Monthly household income Less than1600
yuan 30 1601 2400 yuan 32 More than 2401
yuan 34 Marital Status Married 78 Non-married
20
Source PATA China Outbound Travel Study, 1994
20
Travel Profile of Chinese Tourist
  • Purpose of Visit
  • Business (64)
  • Visiting partners 24
  • Conventions 12
  • Exchange tours 10
  • Sports/ Cultural 2
  • Others 13
  • Pleasure (39)
  • Sightseeing 19
  • Visiting relatives 16
  • Visiting friends 2
  • Sports/ Cultural 2

Frequency of travel 1 trip 59 2 trips 19 3
or more trips 20 Length of most recent
trips One week or less 19 8 to 21
days 54 More than three weeks 26 Traveled Alo
ne 21 With others (78) Delegation 16 Compa
ny Trip 40 Package Tour 14 Spouse/Children
6
Source PATA China Outbound Travel Study, 1994
21
Most Popular Items Chinese Buy When Traveling
Abroad
  • Items Pleasure Traveler Business Traveler
  • Food/ candy/ chocolate 57 50
  • Liquor/ Tabaco 34 36
  • Womens clothing 36 17
  • Souvenir 30 20
  • Mens clothing 31 17
  • Jewelry 25 19
  • Electronics 18 20
  • Leather goods 17 12

Source PATA China Outbound Travel Study, 1994
22
Market Segment
Business Purpose
Pleasure Purpose
Source PATA China Outbound Travel Study, 1994
23
Chinese Travel Outlook
  • Type of travelers
  • Pleasure 54
  • Business (46)
  • Economic 48
  • Non-economic 40
  • Frequency of travel
  • Once 38
  • Twice 46
  • Frequent 70
  • City
  • Beijing 61
  • Shanghai 39
  • Guangzhou 38

Place of work Foreign-invested/foreign
owned enterprises 51 State enterprises 48 Acad
emic/ research 48 Government 41 Other
non-profit orgs 33 Have relatives living
abroad Yes 48 No 26
Source PATA China Outbound Travel Study, 1994
24
Major Sources of Outbound Travel
Beijing Shanghai Guangdong (Peking)
Population 13 M 16 M 72.70 M Urban
Population 4.7 M 7.5 M 2.6 M
(Guangzhou) Per Capita Income US
13,471 US 13,602 US 2,029 Capital
of Industrial/ Political/Economic
China Financial/ Technological/ Commercial C
ultural Center Center Places of interests
Shops 83 85 93 Historical
sites 65 75 66 Theme
parks 46 45 58 Museums 41
35 41 Casino/ Bar 13
9 15
25
Chinese Travel Outlook
  • Rising rapidly and will be first tourist source
    nation by 2020
  • Major visitor-generating market for ASEAN
    destinations
  • 7th largest tourism spender in the world
  • Global trend for short - haul travel
  • Workers enjoy seven-day holidays on May 1
    (International Workers Day) and October (National
    Day) for a total of 14 days yearly

26
Factors Fuelling Outbound Travel Growth
  • Growing gross national income which is number six
    (6) in the world
  • Growing disposable income with household savings
    in urban and rural areas exceeding 10 trillion
    RMB. GDP per capita is expected to reach US
    1,000
  • Shifting consumption pattern from dressing warmly
    and eating ones fill, to living a well-off life

27
Factors Fuelling Outbound Travel Growth
  • Outbound travel restriction are being relaxed
  • Exit clearance has been lifted since 01 February
    2002, However, Chinese traveling abroad must
    obtain or hold a valid visa issued by a foreign
    government before they are allowed to exit China
  • Chinese tourists can take between US 3,000 US
    5,000 on a trip abroad
  • Outbound tourists can also buy foreign currency
    themselves rather than thru travel agency
  • More travel agencies are being allowed to operate
    outbound tours
  • Simplification of passport application procedures

28
Factors Fuelling Outbound Travel Growth
  • Improving air capacity infrastructure. By 2019,
    China is projected to have 22,000 passenger
    airplanes which is more than 10 times the worlds
    total
  • Increasing number of destinations being granted
    ADS from 4 in 1992 (Thailand, Malaysia, Singapore
    and Philippines) to 73 in September 2004
  • Outbound tour is no longer a once-in-a-lifetime
    event. Repeat outbound travel is becoming
    common.
  • Middle-class families are becoming main force.
    Middle-aged travelers and educated young adults
    with high incomes comprise a big proportion of
    outbound tourists

29
List of ADS Countries
Year Countries 1983 Hong Kong,
Macau 1988 Thailand 1990 Singapore,
Malaysia 1992 Philippines 1999 Australia, New
Zealand, Republic of Korea 2000 Japan, Vietnam,
Cambodia, Myanmar, Brunei 2002 Nepal, Indonesia,
Malta, Turkey, Egypt 2003 Germany, India,
Maldives, Sri Lanka, South Africa Croatia,
Hungary, Pakistan, Cuba 2004 Austria, Belgium,
Cyprus, Denmark, Estonia, Finland France,
Greece, Italy, Latvia, Lithuania,
Luxembourg Netherlands, Poland, Portugal,
Ireland, Slovakia, Slovenia, Spain, Sweden,
Norway, Iceland, Switzerland, Liechtenstein,
Romania, Zimbabwe, Brazil, Tanzania, Russia,
Ethiopia
30
Chinese Passport and Visa
  • Before
  • Chinese citizens wishing to travel overseas need
    to apply for a passport which is valid only for
    the journey applied
  • Invitation from foreign country is required
  • For ADS countries, invitation is not required but
    the number of Chinese citizens visiting said
    countries is established through quota system
    for authorized travel agents only allowed to sell
    outbound tours
  • Exit clearance is required

31
Chinese Passport and Visa
  • After
  • July 2000 Chinese citizens can obtain passport
    without an invitation letter from foreign country
    but requirement to obtain permission /exit
    permit or visa for each journey remains
  • February 2002 Exit clearance has been lifted,
    however, valid visa from foreign country to be
    visited must be secured before Chinese tourists
    are allowed to exit China

32
Chinese Tourists to the Philippines
33
Arrivals from China to the Philippines1993 - 2003
32,039
27,803
24,252
21,220
19,093
18,937
15,757
14,724
9,259
8,606
7,011
increase/ decrease
32
-7
83
21
27
-13
-31
29
47
15.2
Source A/D Cards
34
Profile of Visitors from China to the
Philippines, 2003
Sex Male 61.61 Female 33.45 Age 25 34
years old 25.22 35 44 years old 31.51 45
54 years old 17.37 Occupation Professional/
Managerial/ Administrative 24.57 Clerical/
Sales Services 1.23 Housewife
4.54 Student/ Minor 4.51 Not Stated 60.09
Purpose of Visit Holiday 40.69 Business
8.83 VFR 8.21 Convention 1.19 Official
Mission 0.26 Not Stated 37.52 Activities Sh
opping 94.80 Sightseeing 10.30 Sports
1.90 Conference 1.30 Others 1.30 Beach
Holiday 0.60 Incentive Travel 0.60
35
Profile of Visitors from China to the
Philippines, 2003
Type of Accommodation Hotel 16.07 Apartel/
Rented Homes 3.76 Homes of Relatives/
Friends 5.63 Not Stated 74.55 Travel
Arrangements Package 32.27 Independent 17.86
Not Stated 49.87 Frequency of Visit First
Visit 32.92 Repeat Visit 20.79 Not
Stated 46.29
Average Daily Expenditure (in US) Accommodation
20.06 Shopping 11.35 Food/ Beverage 9.72
Local Transport 3.19 Entertainment/
Recreation 2.93 Guided Tour
0.19 Miscellaneous 8.77
US 56.21 Average Length of Stay
11.10 nights Visitor Receipts
US 19,900 M
36
Profile of Visitors from China to the
Philippines, 2003
Things like most about the Philippines Warm,
hospitable and kind people 37.60 Beautiful
scenery/ nice beaches 20.70 Good
climate 14.10 Good food/ liquor/ fruits
8.50
Things dislike most about the Philippines Heavy
traffic 36.20 Air/ water pollution/ dirty
environment/ bad roads 32.10 Crime incidents/
poor peace and order 23.30 Widespread
poverty beggars 4.80 Cheating,
reckless/ dishonest taxi drivers 2.60
37
Flight Frequencies between Philippines and
China(as of October 2004)
Entitlements 624,000 Utilized
entitlements 214,084
  • China Southern Airline (96,252)
  • gt Peking (Beijing) Xiamen Manila (Daily)
  • gt Canton (Guangzhou) Laoag (Wed, Fri, Sun)
  • gt Shanghai Laoag (Fri, Sun)
  • Philippines Airlines (117,832)
  • gt Shanghai - Manila (Daily)
  • gt Xiamen - Manila (4 times)
  • Cebu Pacific (38,688)
  • gt Canton (Guangzhou) Subic Manila (Fri,
    Sun)
  • gt Manila Xiamen (Sun)
  • Based on CAB Summer Schedule

38
Visas Issued by Philippine Consulate General
January September 2004
  • Type of Visa Beijing Shanghai Total
  • Pleasure
  • Individuals 4,597
  • Tour groups 2,399
  • Business 1,523
  • Official 6
  • Crew members 96
  • Student 1
  • Total 4,836 8,622 13,458

39
Strengths, Weaknesses, Opportunities and Threats
(SWOT) of the Philippines as a destinationfor
Chinese tourists
  • Weaknesses
  • - lack of information on Philippine
    destinations (consumers and tour operators)
  • - pricing (high price and not one price)
  • - negative image re security problems
  • - no variety in tour offerings
  • - lack of infrastructure development
  • - lack of professional Mandarin-speaking tour
    guides
  • - aside from Manila, no direct flights from
    China to Cebu and Davao
  • - fragmented private sector
  • Strengths
  • - natural scenery (beaches, etc.)
  • - friendly to Chinese (Chinese heritage of
    Filipinos)
  • - different culture
  • - variety of seafood (for southern Chinese)
    and sunny island resorts (for northerners)
  • - proximity to China
  • - English-language facility

40
Strengths, Weaknesses, Opportunities and Threats
(SWOT) of the Philippines as a destinationfor
Chinese tourists
  • Opportunities
  • - compared to Bali and Phuket, several Chinese
    tour operators prefer Boracay
  • - China is a sellers market, so with enough
    local advertising and information to operators
    and consumers , Philippine tour packages can be
    pushed more
  • - China is used to charters
  • - good relationship established between DOT
    and CNTA and local officials
  • - large portion of outbound market are
    first-timers out of China
  • - Future events in China require them to learn
    English fast (i.e., 2008 Olympics)
  • Threats
  • - More countries granted Approved Destination
    Status (ADS) as of 2003 especially in Europe
  • - terrorism and security problems
  • - aggressive marketing and sufficient budget

41
Approved Destination Status (ADS)
  • According to the China National Tourism
    Administration (CNTA), several countries who
    have been granted ADS , have not been successful
    in getting substantial share of the Chinese
    outbound market due to
  • no advertising for tour offerings in publications
    of travel agencies
  • high price is a major obstacle
  • no brochures and lack of communications making it
    difficult for Chinese travel agencies to promote
    new destinations
  • more professional tour guides required

42
COMPETITORS PACKAGES
  • Thailand
  • - Beijing-Phuket, 6 days 5 nites, with
    airfare
  • 3980 RMB or 485.
  • - Beijing-Bangkok-Pattaya (full board), 6
    days-5 nites, 4480 RMB or 545 or 691 during
    high season (May and Oct)
  • Thailand spent 200,000 in advertising in China
    during 1st year of operation
  • Philippines
  • - Beijing-Manila-Cebu, 6 days-5 nites, 5980
    RMB or 728.

43
MAP OF ASIA
China
Vietnam
Philippines
Singapore
Thailand
Indonesia
Malaysia
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