Measuring the Psychological Behavior of Tourism Service Providers in Low-Income Regions: Implementing Effective Service Marketing and Performances Strategies

Abstract

An effective marketing strategy is a critical contribution in any business including the tourism sector. Understanding marketing strategies increases business performance. The purpose of this study is to determine how service marketing strategies impact small town tourism business owners. Using an econometric model, the implementation of the 4P mixed strategy on the profitability and potential of service providers in Molise is investigated. Revenue, cost, and profit are the three areas analyzed. Results showed that service operators have to place emphasis on research and development, reflecting cultural identities and the adoption of modern media. Operators should emphasize marketing and sales promotions through websites and social media. Creating a quality brand and setting reasonable prices without exploiting consumers are essential strategies. In conclusion, strategies that emphasize knowledge management and team building should be put into practice. This study could help tourism businesses in small regions to be more sustainable. It is the first research study where Stan Shih’s innovation smiling curve has been used in an Italian region.

1. Introduction

For more than a century, it has been maintained that economic progress and growth are linked to expanding the labor-intensive manufacturing sector [1,2]. Services were regarded as a low-wage, low-skilled, and low-innovative industry [3,4]. Evidence suggests that services, rather than manufacturing, are now contributing more to economic development, job creation, and poverty reduction [5]. According to the most recent available estimates of Italian GDP, convergence towards the European core started in the late nineteenth century and continued until the early 1990s: by the early 1990s, Italy’s per capita GDP was almost equal to that of Western Europe (97%) [6]. The tourist business is the most significant part of the service sector for several nations, including Italy [7]. Additionally, the tourism sector has been a significant driver of recent economic growth and has been expanding steadily [8]. However, uneven and unbalanced regional development is one of the key factors impeding the expansion of the service industry [9,10]. This difference is particularly evident in the tourist sector, which is often centered on major cities. Smaller, less developed regions that are not popular tourist destinations, however, frequently get overlooked in such growth [11]. In order for the service industry in these tiny provinces to help improve local economic growth, this discrepancy must be removed. Additionally, this would lessen other facets of regional disparity in the nation.

Being one of the first industries to define definitions and guiding principles for “sustainable tourism,” strategies, and action plans, the tourist industry has a long history of sustainability-related initiatives [12]. A feeling of flexibility and acceptance that might be advantageous for tourism research, but also raise the bar in terms of research objectives, is brought about by looking for long-lasting solutions to sustainability concerns [13]. No desired improvement to the tourist industry can be implemented without also affecting larger societal changes [14]. The key points from this case are that small businesses are willing to cooperate if given workable solutions and practical advice, especially if it can be seen to safeguard the future of their tourism businesses, despite the fact that the concept of sustainable tourism is not well-understood at the local level [15].

For a nation like Italy, the tourism industry is the most vital component of the service sector [16]. With over 94 million international visitors visiting Italy each year, the tourism sector significantly impacts allied service industries, such as wholesale and retail, lodging and restaurants, and transportation [17]. Tourism has been increasing steadily and is a significant driver of economic development in recent years. Nonetheless, inequitable regional development is one of the primary impediments to service sector expansion [18]. This gap is especially evident in the tourist business, primarily in metropolitan cities. Such growth, however, often overlooks smaller, less developed areas that lack tourist attractions. As a result, this discrepancy must be addressed to enable the service industry in these tiny provinces to contribute to local economic development. Policymakers must prioritize the potential of tourist operators in the country’s big cities and tourist hotspots and the local operators having the ability and affordability to work in underdeveloped regions. Apart from enhancing local operators’ potential and competitiveness, such a strategy would also produce employment and revenue in the chosen provinces/areas, reducing economic disparity. As a result, the Italian government has attempted to increase demand for non-major tourist locations [19].

This research aimed to examine the role of effective tourist service methods in reinterpreting Italian economic development. The 7Ps market mix strategy model consists of the following components: (1) product, (2) price, (3) place, (4) promotion, (5) people, (6) process, and (7) physical evidence; has been widely used in the service sector by tourism operators in Italy’s undeveloped regions and to establish guidelines for the adoption of marketing mix strategies in the service sector at the local level. To that end, we picked Italy’s underdeveloped area (Molise) as our research area. The model of the study is shown in Figure 1.

2. Literature Review

Since services differ depending on the industry, the notion of service marketing strategies was explored in this research in the context of specific industries. In this research, the 7Ps marketing mix strategy model is used to explain service marketing, which is based on the marketing mix theory. This concept comprises strategies in seven dimensions, which include the following: price, product, promotion, place, process, physical evidence, and people. When it comes to identifying a marketing strategy, the 7Ps framework is widely used.

2.1. The 7Ps Mix Marketing Strategy in the Service Sector

Because services differ by industry, the idea of service marketing strategies must be industry-specific [20]. The 7Ps marketing mix strategy model is used to explain service marketing in this research. This idea encompasses seven distinct strategies: (1) product; (2) pricing; (3) place; (4) promotion; (5) people; (6) procedure; (7) physical proof. When selecting a marketing plan, the 7Ps framework is quite popular. Thus, the 7Ps marketing mix approach expands on the classic 4Ps strategy (product, price, placement, and promotion), often employed for “products” expressing a form of commodities. Although for an effective operation of a company, the 4P service marketing methods are enough but not adequate for intangibly service-based enterprises [21]. The lodging business and the hotel service sector often focus on the customer’s satisfaction, which is eventually based on the quality of service provided by personnel (people), the servicing process, and establishing an ambience or environment conducive to service supply (physical evidence) [22]. By incorporating the 3Ps (people, process, and physical evidence) into conventional 4P methods, service operators may inject more value into their service operations, resulting in increased profitability. Earlier research has shown the significance of people, processes, and physical evidences in the service industry [23]. A study has been conducted of a restaurant’s service marketing approach and found that operators could retain their client base by implementing the strategy, resulting in increased sales volume and profitability [24]. These findings were similar to research examining marketing mix methods’ effects on consumer food purchase patterns. The study’s results indicated that using marketing mix methods increases sales volume.

Additionally, it has been shown that improving the ambience, offering sales deals, and assuring attentive service by personnel all influence customer purchasing choices. These findings corroborated those who found that marketing mix strategies (7Ps) might influence customers’ purchase choices, particularly when it comes to pricing strategy [25], which has the biggest impact on consumers’ decisions to pick a certain service. The 7Ps marketing mix strategies, particularly those relating to product, place, promotion, physical evidence, process, and people, have a beneficial effect on brand equity, including brand loyalty, brand recognition, apparent quality, and association [26]. These results are consistent with the results of [27], where people, processes, and physical evidences all contribute to brand equity, resulting in increased satisfaction of customers during hotel visits and a greater likelihood for consumers in the future to repurchase this service. Likewise, it recommends that hotels use marketing mix methods (7Ps) to increase customer satisfaction [28].

2.2. Tourism Enterprises and Marketing Strategies

Tourism is a service-oriented business; restaurants, stores, gift shops, and leisure activities, such as staying in a hotel, taking a trip by airplane or train, and driving or taking a bus to a tourist attraction are the primary products provided by tourism businesses, with the direct services being hospitality and retail sales. The tourism potential of a destination can be learned about by tourists through various available marketing strategies. References [29,30] describe tourism marketing tactics as “efforts made in promoting and creating a tourism product which meets a visitor’s needs or desires”. Marketing key ideas are also used in the delivery of tourist services. Buyers and innovations are generated by providing products or services that meet the customer’s needs [31].

According to [32], tourism marketing is an approach supported by creating and proposing tourism goods and services that meet the wishes and preferences of tourists. As a result, the destination (remote areas) is encouraged to improve marketing strategies or combinations for target markets [30]. On the other hand, [33] defined marketing strategy as interdependent and complementary elements that work together to produce the desired outcomes. Using the marketing mix, destination management enterprises can determine where to focus their efforts to increase demand for their tourism products and make them more acceptable to tourists [34]. For example, as stated by [35], marketing and communication’s goal is to influence intermediaries or potential tourists (such as tour operators and travel agents) to think and act in a certain way through marketing communications. Communication includes direct marketing, sales, advertising, public relations, promotion, and personal selling [36].

2.3. Impact of Service Marketing Strategies on Customer Satisfaction

Consumer satisfaction is influenced by the service approach [37]. Results corroborated another research indicating that successful strategies in product, service pricing, promotion, distribution of services, and staff results enhanced company operations, particularly in the case of servicing employees [38]. Additionally, these techniques raise gross sales and profitability, boost customer happiness and loyalty, and attract new consumers [39]. Equally, other studies have shown that tactics including products, processes, and physical evidences lead to increased customer satisfaction [40,41]. According to a specific piece of research, process strategy has the most impact, whereas pricing, advertising, location, and personnel have little effect on consumer satisfaction. In today’s digital world, service marketing tactics are more compatible with new technologies [42,43]. In Indonesia, for example, recent research examined the impact of mobile apps on restaurant purchasing intentions [44]. Their study found that utilizing mobile apps to buy meals online had a substantial influence on consumers’ perceptions of value (i.e., they believe it to be more valuable).

In separate research with Indonesian airlines, social media marketing’s antecedents and implications have been examined. According to their findings, marketing communication and buyer intention are influenced by social media marketing components over time [29]. Using mobile payments in physical establishments in Indonesia helps develop confidence and generates social experience views among consumers, according to recent research [45]. Researchers in Taiwan studied the effects of smartphone usage on travel companion relationships and overall trip pleasure in Taiwanese tourist locations. According to their findings, using a smartphone to pass the time or relieve boredom did not influence how happy people felt about their relationships or how much fun they had on their vacation [46]. As demonstrated by the numerous studies cited above, strategies in service marketing (7Ps) can give an advantage to hotels and restaurants included in the service sector. A variety of other service businesses can also benefit in terms of gross sales, profits, customer satisfaction, and customer retention, all of which have implied statistical significance [47]. Marketing strategies are used differently depending on the service and the company environment. The bulk of the studies listed before examined and discussed the impact of service marketing strategies on the service industry. However, no research on local community business has been conducted. Meanwhile, service business operators in the local community confront stiffer competition than entrepreneurs in big cities, owing to the community level’s lower buying power [48].

3. Methodology

The data collection is performed through interviews. This combination of data acquisition techniques aims to search for valuable new knowledge comprehensively and logically on a particular topic. It is a review to find an answer for the logical and economic issue through calculated examinations and the disclosure of the secret truth. The information gained from information is assembled from many sources such as insight, people, book diaries, nature, and so forth.

3.1. Study Context

The Italian region of Molise is the youngest and tiniest (Figure 2) with a total area of 4460 km². It is divided into 136 municipalities. South Italian Molise is where you find this region. While Abruzzo e Molise was part of the Abruzzi and Molise region until 1963, it is now a separate autonomous region. Northern Molise is surrounded by Abruzzo, eastern Apulia; western Lazio; southern Campania. Most of Molise’s countryside is covered by hills that descend to the sea, with 55% of its countryside surrounding mountains. Campobasso and Isernia, the two provinces that make up the region, account for less than 1% of Italy’s total area and 1% of its total population. Among the most important industries in the services sector are hotels and catering, gift shops, and distribution, accompanied by communication and transportation, as well as insurance and banking. Tourism enterprises in all service sectors are small, with a few notable exceptions, which explains the difficulties faced when marketing tourism products on a domestic and international level. This study investigated the steps that the tourism enterprises in Molise intend to take to implement effective service marketing and performance strategies in the services industry. This study aims to expand a long-term strategy that, with the participation of all local tourism enterprises, will allow for the development of more incisive service marketing tactics that will obtain the most significant particularities that have been extended and help organize them around a more effective strategy in the tourism sector.

3.2. Research Design

This study examined Molise’s current service marketing strategies by conducting structured interviews with tourists and service providers to determine psychology about the service quality. There were three types of enterprises: (1) hotels and accommodations; (2) restaurants; (3) stores and gift shops at several destinations in Molise. Questions about current service marketing strategies were included in the in-interview questionnaire Performa, which was designed by adapting previously used and validated construct measures. This study also examines the effect of the 7Ps strategy implementation on the possibility and profitability of service operators in Molise, Italy, by employing an econometric model and trying to define dependent variables to categorize enterprise performance in three areas—revenue; costs; profits—in log form.

3.3. Sampling

Purposive sampling was used to choose respondents, who were chosen based on secondary data. Questions about current service marketing strategies were included in the interview questionnaire Performa. The questionnaire consisted of seven parts; the first part included the product where service quality, brand quality, development of service patterns, the unique identity of the service, service creativity, whether service relates to the international standards, and service relativity to the local identity measured. The second part consisted of the service price, where the exact selling price, checking the availability of the 168 prices, fair price, and negotiability of the price measured. The third part of the questionnaire, 169, consisted of the place of the service where accessibility and support from the local government were measured. The fourth part of the questionnaire was a promotion where the promotion of the service, promotion activities, and accessibility of the service promotion on the internet, T.V. channels, brochures, and social media were measured. The fifth part of the questionnaire consisted of people who measured personnel development/training, research development, and team building capability. The sixth part of the questionnaire consisted of processes measuring research development, manufacturing, distribution, and brand marketing. The last part of the questionnaire had physical evidence where researchers measured the service providers’ environments. The population samples were those enterprises with a membership in the ETOP (European Tourist Association) and active internet marketing; they were both required for inclusion on the enterprise’s interview list.

3.4. Data Analysis

The survey of tourism and hospitality operators was conducted using preliminary statistical analysis. This paper gives recommendations for the survey and analyzes a preliminary statistical analysis (shown at the start of the results) of the data collected. Econometric estimation was used to evaluate the effects of using the 7Ps marketing mix strategies, as shown in Figure 3.

4. Results

Results found that up to 69% of service sector entrepreneurs were women. It is worth noting that many females in the service sector varied from the situation in large-scale service operations when men dominated the leadership. Regarding education, it was found that these women entrepreneurs have a reasonably high level of education, 49%, and even 10% of entrepreneurs hold a bachelor’s degree or a post-graduate degree. In terms of operational management, most service enterprises (45%) had been in operation for less than six years, while 29% had been in business for 7–11 years. This demonstrates that tourist enterprises in Molise are new, having been in operation for less than 11 years (45% + 29% = 72%). In terms of employment, 73% of service enterprises were highly tiny, employing less than seven people, while about 20% employed eight to eleven people. The biggest percentage of service revenues in the marketing of enterprises (33.95%) came from Molise residents, followed by consumers from other areas (29.91%) and clients from bordering provinces (28.92%); 7.2% of the total was from other countries. It was fascinating to consider how Molise, as a border province with a magnificent landscape, would be able to enhance the share of international visitors, as indicated in

Table 1. Tourism enterprises income proportion in Molise characterized by groups of customers.

Groups of Customers	Maximum	Minimum	Mean	Standard Deviation
Locals (Molise)	100	0	33.95	32.34
Neighboring provinces	50	0	28.92	25.14
Other regions	90	0	29.91	21.84
Overseas (International)	90	0	7.20	16.35

.

In case of the financial status of service businesses, we found that a successful enterprise may produce up to EUR 250,000 per year (at most). If we look at expenditures, one operator incurred annual running costs of up to EUR 350,000. On average, tourism enterprise in Molise may profit EUR 13,775 per year by producing average sales of EUR 50,350 per year and average costs of EUR 36,575 per year. This permitted a comparison of enterprise performance (revenue, cost/expense, and profit) of enterprises that executed such 7P marketing activities, as shown in

Table 2. Statistical table of cost, revenue, and profit variables classified by service marketing strategies.

7Ps Service Marketing Strategies		Cost (EUR)	Revenue (EUR)	Profit (EUR)	Place (Number)
Product
Does service quality meet the market requirements?	More	7856.44	13,768.86	5912.42	71
	Most	16,618.66	27,698.74	11,080.08	29
	Least	-	-	-	0
	Less	1078.00	1900.00	822	4
Is this an acceptable and reliable brand?	More	7916.16	14,215.00	6298.84	79
	Most	16,790.98	28,114.00	11,323.02	23
	Least	-	-	-	0
	Less	3888.66	9730.00	5841.34	2
Do you think there is a continuous development of service patterns?	More	10,942.58	19,678.88	8736.3	6
	Most	28,766.00	46,788.00	18,022	38
	Least	7866.88	14,978.00	7111.12	5
	Less	5040.60	8866.12	3825.52	54
Does your service have a unique identity?	More	10,112.00	16,014.00	5902	55
	Most	14,678.90	26,256.00	11,577.1	28
	Least	300.00	16.00	−284	2
	Less	6986.54	11,344.98	4358.44	20
Service is unique and creative.	More	12,146.00	20,566.98	8420.98	40
	Most	16,898.00	28,186.00	11288	11
	Least	3168.00	5980.00	2812	11
	Less	8010.99	15,260.00	7249.01	43
Services comply with international standards.	More	12,980.00	23,579.88	10,599.88	28
	Most	53,660.90	79,450.00	25,789.1	3
	Least	4170.00	8490.78	4320.78	39
	Less	9114.18	15,292.00	6177.82	34
Is your service reflecting local wisdom and expressing local identity?	More	9544.00	15,880.88	6336.88	50
	Most	6116.86	12,366.00	6249.14	29
	Least	3876.98	8190.66	4313.68	4
	Less	12,678.88	22,358.00	9679.12	20
Price
Do you have a reasonable price for the quality of services?	More	10,964.00	20,960.00	9996	14
	Most	10,220.99	17,455.88	7234.89	88
	Least	-	-	-	0
	Less	164.55	276.37	111.82	2
Do your services have various price ranges?	More	10,790.68	19,886.19	9095.51	29
	Most	11,786.19	19,865.98	8079.79	54
	Least	4887.06	10,216.98	5329.92	11
	Less	1522.13	2566.88	10,44.75	11
Do your services have expressly clear selling prices?	More	987.28	15,698.17	14,710.89	16
	Most	10,986.72	18,876.05	7889.33	82
	Least	-	-	-	0
	Less	11,345.88	16,687.96	5342.08	5
Your service prices can be checked easily.	More	11,987.98	21,567.88	9579.9	31
	Most	9786.44	16,785.00	6998.56	68
	Least	-	-	-	0
	Less	926.00	510.78	−415.22	6
Are your prices negotiable?	More	10,772.00	18,976.00	8204	47
	Most	15,576.88	21,656.98	6080.1	7
	Least	8991.88	17,165.87	8173.99	26
	Less	9200.98	16,084.98	6884	24
Do you have fair prices?	More	10,765.52	18,964.32	8198.8	84
	Most	15,598.00	21,616.00	6018	17
	Least	-	-	-	0
	Less	9200.00	16,086.00	6886	3
Do you take advantage of prices from customers who do not know about the market price?	More	12,456.98	23,278.00	10,821.02	17
	Most	9440.12	16,087.00	6646.88	85
	Least	-	-	-	0
	Less	13,256.05	22,861.98	9605.93	2
Place
Is your service place accessible?	More	7678.88	13,166.05	5487.17	66
	Most	14,565.87	25,546.88	10,981.01	26
	Least	1378.98	3282.78	1903.8	2
	Less	5631.00	9028.00	3397	11
Are you receiving support from government agencies in public relations?	More	8158.00	14,595.00	6437	71
	Most	4096.98	7495.76	3398.78	7
	Least	114,899.00	23,117.98	−91,781.02	2
	Less	12,567.86	21,235.56	8667.7	23
Promotion
Do you make regular advertisements and public relations through various media platforms?	More	11,987.42	21,986.76	9999.34	28
	Most	26,157.34	42,465.12	16,307.78	6
	Least	4551.32	8384.98	3833.66	13
	Less	4416.76	7904.98	3488.22	58
Do you implement sales promotion activities?	More	14,254.76	24,284.87	10,030.11	21
	Most	37,145.76	51,914.98	14,769.22	5
	Least	4687.87	9446.98	4759.11	48
	Less	10,088.98	18,674.76	8585.78	31
Payments can be made via several methods such as cash, credit cards, etc.	More	10,066.87	18,124.88	8058.01	40
	Most	23,176.48	37,865.87	14,689.39	15
	Least	3663.23	7335.87	3672.64	29
	Less	4183.84	6790.33	2606.49	21
Do you disseminate the information on service products?	More	7598.75	14,042.76	6444.01	60
	Most	22,986.65	38,415.76	15,429.11	11
	Least	9983.00	19,966.00	9983	2
	Less	3621.76	6341.97	2720.21	32
Is your service product information easily available and accessible on the Internet?	More	6969.64	13,097.98	6128.34	65
	Most	22,103.56	37,477.66	15374.1	11
	Least	4845.76	10,360.00	5514.24	3
	Less	4553.76	6891.63	2337.87	26
Do you use public relations channels?
Sign boards?	Yes	14,567.87	24,378.65	9810.78	30
	No	9237.85	15,785.88	6548.03	73
Brochures?	Yes	13,654.65	23,986.65	10,332	26
	No	9543.76	16,755.76	7212	77
Television?	Yes	3465.76	6874.00	3408.24	3
	No	10,463.76	18,264.56	7800.8	100
Newspaper?	Yes	-	-	-	0
	No	10,385.77	18,086.43	7700.66	102
Store website?	Yes	39,574.33	62,264.54	22,690.21	3
	No	7765.74	14,256.76	6491.02	100
Online product selling websites?	Yes	56,823.00	75,903.00	19080	3
	No	9378.87	16,964.75	7585.88	100
Online network?	Yes	12,767.98	22,378.87	9610.89	56
	No	5298.73	9100.76	3802.03	47
Others?	Yes	8349.75	15,809.98	7460.23	53
	No	11,975.87	19,865.87	7890	50
People
Do you have any personnel development/training?	Yes	28,464.91	40,936.76	12,471.85	26
	No	13,607.76	23,860.43	10,252.67	13
Do you have the capability of team building?	Yes	8714.56	15,207.76	6493.2	31
	No	13,616.98	23,974.67	10,357.69	17
Process
Research development?	Yes	58,176.76	92,986.54	34,809.78	7
	No	14,106.87	24,546.86	10,439.99	95
Product manufacturing?	Yes	16,854.65	28,854.65	12000	30
	No	7382.56	8754.76	1372.2	72
Distribution?	Yes	33,414.76	48,914.96	15,500.2	100
	No	15,686.65	27,234.76	11,548.11	2
Experience in branding/marketing?	Yes	20,576.87	34,653.76	14,076.89	7
	No	8897.86	16,745.76	7847.9	95
Do you use software or technology in your business?	Yes	5586.76	9735.87	4149.11	70
	No	11,698.75	21,013.76	9315.01	31
Physical Evidence
Does your place for product/service distributions have an attractive atmosphere?	More	8895.87	15,066.87	6171	71
	Most	15,245.76	27,765.76	12,520	7
	Least	12,165.86	19,145.76	6979.9	3
	Less	2989.87	5015.87	2026	23

.

Direct sales to customers/tourists accounted for about 84% of income, with other services (indirect) sales accounting for 14.6% and others accounting for 1.4%. Administrative expenditures accounted for roughly 50.42% of overall expenses, followed by labor (21.18%) and raw material costs (19.94%). Marketing expenditures (4.20%), transportation costs (0.6%), design costs (0.10%), and miscellaneous expenses accounted for the rest (3.56%). Furthermore, the cost per unit varied based on the service. The average per-unit price was EUR 6.94 (with a maximum of EUR 78.40). Furthermore, the service sector’s average selling price per unit was EUR 10.16, representing a 72% mark-up [(10.16–6.94)/6.94]. Store service enterprises earned the most revenue and profits as compared to restaurants. However, when asked about profit/loss, most operators (63%) said their enterprise was still earning “excellent profits,” while 23% thought they were making “regular profit.” On the other hand, 14% of all service enterprises in Molise were run by operators who saw their operations as unstable, capable of producing profits and losses, barely surviving, or likely to experience large losses. Regarding 3Ps impacts on service provision, namely, (1) people, (2) process, and (3) physical proof, service enterprises that invested in staff development/training generated more revenues than those that did not.

Because each product has unique service characteristics, identifying differences in service marketing strategies in each sector based only on preliminary information does not constitute a thorough statistical study. Furthermore, each kind of service has its employment and service patterns, as well as the technical standards for managing and developing distinct staff. Therefore, the current study simply compares the means; is biased and inaccurate since it lacks a needed controlled variable and estimate using an econometric model, which will be used in the next section.

Econometric Estimation

Enterprises performance is divided into three categories: (1) revenue, (2) cost/expense, and (3) profit—in log form. This section employs an econometric model and dependent variables.

$$\begin{gathered} Log \left(Revenue\right)=\alpha +\beta Xi+\gamma Mi+\epsilon i \\ Log \left(Cost\right)=\alpha +\beta Xi+\gamma Mi+\epsilon i \\ Log \left(Profit\right)=\alpha +\beta Xi+\gamma Mi+\epsilon i \end{gathered}$$

Gender, educational level, age, and type of business are all included in the Xi control variable group, as are the highest product star rating (in the case of multiple services, the service with the highest star rating will be chosen), type of business, the proportion of customers, the degree to which production technology is reliant, and where the original creative idea(s) used in the project come from. The Mi variables are a set of dummy variables that depict the service sector’s market mix activities in the 7Ps. Price, location, advertising, and physical proof are service product factors that may be categorized into four tiers (least/less/more/most). The “age of establishments” was the first control variable in company revenues that led to a growth in revenues/gross sales of tourist businesses. With statistical significance, an enterprise’s sales increased by around 7% as it became older by one year. Meanwhile, the owner’s gender or educational degree (group president) had no impact on revenue. Furthermore, it was shown that when a company gained an extra star in its ranking (moving up one level), sales climbed by around 24%.

Furthermore, if a company raised its reliance on technology by 1%, its sales would grow by around 7%. An enterprise’s revenues increased by 24% compared to selling via distributors when it launched sales/service marketing online. As demonstrated in

Table 3. Estimation of the factors which affect cost/revenue and profits of the enterprises.

Independent Variables	Cost (n = 93)		Revenue (n = 93)		Profit (n = 93)
	Sig	B	Sig	B	Sig	B
Continual value	0.00 ***	5.29	0.00 ***	3.92	0.00 ***	4.05
Gender	0.20	0.33	0.54	0.11	0.40	0.27
Education (secondary)	0.66	0.30	0.43	0.52	0.53	0.44
Education (Masters/Ph.D.)	0.30	0.66	0.12	0.99	0.29	0.77
Stars (High)	0.03 **	1.03	0.02 **	0.24	0.10 *	0.61
(1): Hotels	0.26	0.50	0.22	0.46	0.32	0.47
(2): Restaurants	0.22	0.65	0.19	0.54	0.32	0.48
(3): Stores	0.40	0.56	0.34	0.61	0.42	0.57
(4): Others	0.35	0.61	0.24	0.80	0.56	0.41
Age (Years)	0.04 **	0.04	0.02 **	0.07	0.02 **	0.07
Customer’s proportion (locals)	0.06 **	0.09	0.80	0.86	0.93	0.01
Customer’s proportion (nearby provinces)	0.04 **	−0.02	0.94	0.03	0.84	0.11
Customer’s proportion (other regions)	0.08 *	0.10	0.13	0.05	0.05 **	0.11
Customer’s proportion (internationals)	0.04 **	0.08	0.85	0.04	0.80	0.02
Dependent on technology by percentage	0.02 **	0.14	0.00 ***	0.07	0.04 **	0.08
The proportion of creative ideas by community leaders by percentage	0.82	0.11	0.63	0.07	0.88	0.04
The proportion of creative ideas by group president (%)	0.16	0.08	0.16	0.11	0.12	0.11
Promotions of service or sales by using the storefronts (data obtained from distributors)	0.55	0.43	0.47	0.48	0.50	0.48
Promotions of service or sales by using different events (data obtained from distributors)	0.01 **	0.04	0.00 ***	0.10	0.08 *	0.12
Promotions of service or sales by using the business networks front place (data obtained from distributors)	0.31	0.78	0.26	0.80	0.25	0.87
Promotions of service or sales online (data obtained from distributors)	0.07 *	0.91	0.07 *	0.24	0.04 **	0.58

Note: Significance of Correlations: * p < 0.050; ** p < 0.010; *** p < 0.001.

, each marketing technique played an essential part in generating sales in tourist businesses.

As shown in

Table 4. Estimating the factors which affect the enterprises’ cost/revenue and profits with regards to the Ps.

Independent Variables	Cost (n = 93)		Revenue (n = 93)		Profit (n = 93)
	Sig	B	Sig	B	Sig	B
Price
Quality of services with reasonable price	0.03 **	0.08	0.90	0.08	1.00	0.02
Various price ranges in services	0.06 **	0.04	0.90	0.08	1.00	0.02
Have a clear selling price on services	0.10 *	0.03	0.08 *	0.11	0.03 **	0.06
Prices of services can be verified easily	0.65	0.10	0.09 *	0.05	0.30	0.08
There are negotiable prices	0.07 *	0.06	0.84	0.06	0.95	0.07
There are fair prices and not taking any benefit from the customers	0.02 **	0.07	0.00 ***	0.07	0.04 **	0.02
Services
Brands are reliable and acceptable	0.04 **	0.07	0.02 **	0.05	0.02 **	0.07
Services have quality according to the market requirements	0.25	0.76	0.11 *	1.03	0.25	0.80
Service patterns have continuous development	0.04 **	0.21	0.02 **	0.11	0.04 **	0.23
There is a unique identity of the services	0.46	0.49	0.42	0.50	0.48	0.47
Creative and unique services	0.30	0.52	0.31	0.36	0.02 **	0.46
Services meet international standards	0.02 **	0.55	0.02 **	0.57	0.33	0.45
Local identity and knowledge expressed in services	0.33	0.64	0.22	0.76	0.08 *	0.49
Place
Support from government agencies	0.86	0.11	0.59	0.04	0.95	0.08
Services are in an accessible place	0.10 *	0.13	0.10 *	0.10	0.07 *	0.09
Promotion
Promotion activities for the implementation of sales	0.02 **	0.66	0.00 ***	0.77	0.00 ***	0.80
Regular public touch and advertisements via different media platforms	0.51	0.13	0.29	0.10	0.06 **	0.13
Payments can be made via several methods such as cash, credit cards, etc.	0.22	−0.22	0.34	−0.10	0.13	−0.22
Service products propagation	0.76	0.02	0.86	0.06	0.63	0.00
Information about the service product is available on the internet	0.00 ***	−0.22	0.00 ***	−0.18	0.00 ***	0.26
Sales/promotions and publicity of services (through broachers and flyers)	0.43	−0.18	0.29	−0.25	0.45	−0.14
Sales/promotions and publicity of services (through radio, television, etc.)	0.85	0.14	0.61	0.19	0.10 *	−0.02
Sales/promotions and publicity of services (through websites)	0.00 ***	0.97	0.00 ***	0.93	0.00 ***	1.09
Sales/promotions and publicity of services (through social media)	0.60	−0.25	0.32	−0.48	0.07 *	0.45
People
Training or development of a person	0.60	0.25	0.32	0.48	0.07 *	0.48
Process
Designed process for service products	0.22	−1.39	0.15	−1.72	0.15	−1.72
Service product research development process network	0.44	0.28	0.37	0.31	0.37	0.31
Service product research development process	0.02 **	1.55	0.00 ***	1.60	0.00 ***	1.63
Service product brand development	0.22	0.83	0.16	0.95	0.16	0.98
Process of production	0.53	−0.52	0.62	−0.45	0.62	−0.45
Transportation or Logistics	0.14	−1.08	0.13	−1.17	0.13	−1.20
Development of brand/marketing	0.79	0.39	0.04 **	0.52	0.04 **	0.54
Usage of technology in brand development	0.77	−0.30	0.53	0.18	0.53	0.21
Physical evidence
The attraction of the atmosphere of service development	0.00 ***	0.97	0.00 ***	0.97	0.00 ***	1.04
F	2.86		2.58		2.54
Adjusted R Square	0.37		0.34		0.35

Note: Significance of Correlations: * p < 0.050; ** p < 0.010; *** p < 0.001.

, price strategy had less of an impact than product strategy. However, it was found that enterprises with expressly clearly set, fair prices without taking advantage of customers and easily checkable ones generated higher revenues up to 11%, 7%, and 5%, respectively. Compared to items that did not fulfill market criteria, the service quality of products that satisfied market requirements resulted in revenue growth of up to 103%. Compared to enterprises that did not satisfy international standards and service systems in conformity with international standards resulted in a 57% increase in gross revenues. Having a trustworthy and acceptable brand resulted in a 5% boost in income. However, the estimated findings revealed no implied statistical significance between services representing local identity and the gross sales of businesses providing such services. In terms of place/location, it was found that a service location with easy accessibility had a beneficial influence on revenue growth of around 10%. However, publicity/sales promotions via the internet produced 94% more profit than advertising on billboards, which had the greatest impact on revenue.

It was shown that enterprises that encouraged employee training or development increased sales by up to 48% compared to those that did not. The need of building a process to “link” the activities in terms of (1) upstream activities (i.e., product research and development processes) and (2) downstream activities are discussed in this article to examine the process (i.e., marketing and sales or after-sales services that increase operator profits). The activities that link the upstream and downstream operations are divided into five categories: (1) research and development, (2) product design, (3) product production, (4) product distribution, and (5) public relations, and sales promotions, and branding. Research methods, which resulted in a revenue boost of up to 161%, were among the activities that had a beneficial impact on the revenues of the enterprises. Similarly, for every 2% increase in an enterprise’s dependence on technology, costs/expenses increased by around 14%. According to sales and marketing studies, the greater the expenses operators had to face, the farther clients situated from Molise, whether from neighboring regions or international nations. However, for supplying clients from neighboring provinces, prices and expenditures were lowered.

Maintaining a service system in conformity with international standards led to a 56% rise in costs/expenses for product strategy. Costs/expenses increased by 22% for enterprises continually developing their services. Compared to enterprises that were unable to build an acceptable and reliable brand, generating acceptable and reliable brands resulted in a 7% increase in costs/expenses and the pricing approach only boosted costs/expenses by around 3% to 8%. In terms of location strategy, having a service in a convenient location has an additive influence on costs/expenses of around 14%. In terms of a promotion strategy, public relations/websites/sales promotion channels and sales promotion management increased costs/expenses by 97% and 67%, respectively. Meanwhile, using an online or Internet marketing approach might save costs/expenses by around 23%. In terms of personnel, although enterprises that focused on team building increased revenues by up to 104%, the execution of this approach resulted in an increase in costs/expenses of 84%. Compared to enterprises that provided less skill development/training, skill development/personnel training raised costs/expenses by only around 11%. Physical proof, the last P, also additively influences costs/expenses.

In terms of profitability, two control factors had the biggest impact on the profitability of Molise’s tourism enterprises. First, receiving an extra star from the government’s Department of Community Development (Ministry of Interior) enhanced an enterprise’s earnings. A service company’s earnings grew by almost 62% when it obtained an extra star rating (pushing it up another level). Second, online sales/service promotions raised earnings by 58% compared to sales via agents. As enterprises revenues grew by around 7% annually, the proportion of customers from outside the region increased by about 2% and enterprises became more dependent on technology; all of which contributed to a 10% increase in revenues and, therefore, a 10% increase in profits (revenues tended to increase by 8% if technology dependency increased by 2%).

5. Discussion

In our study, after the preliminary analysis, we found that most of the entrepreneurs were women. This might be because providing services in small provinces necessitates paying close attention to consumers and connecting with many people. In this aspect, women are more likely than males to be skilled in these areas [33]. They have a high level of education; some have post-graduate degrees. This suggests that tourism service enterprises needed abilities in this province that could only be obtained via a higher school degree [35]. Though most of the enterprises were new as they started less than six years before, this suggests that these enterprises were still in their “infancy,” and hence were not yet competitive in many ways. Our study proved that the enterprises that prioritized product/service marketing activities generated better gross sales and profits than enterprises that prioritized product marketing strategies, as was also studied by [49]. This is especially true when it comes to developing services that meet international standards and generating accepted and respectable brands. On the other hand, the implementation of pricing and location strategies had no meaningful impact on the success of enterprises [49]. Promotion of products and services seems to be another significant approach for business success. In this regard, enterprises who ran more/most public relations efforts (using new media such as the Internet or online network media for public relations) had better revenues and profits than those that did not. Regularly conducting promotional events and ads through various media, disseminating information about service items, and developing systems that allowed for quick online access to information about service products were all part of these enterprises, also studied by [50]. Enterprises that used such channels established storefront websites and sold products/services online generated better sales and profits than those who did not.

Our study emphasizes that the direct sales of enterprises increase their income. The failure of company owners to establish higher prices was due to a lack of marketing tactics, particularly in terms of pricing, and a lack of emphasis on service/product development plans [51]. Although small stores were earning maximum profits as compared to the restaurants, after investigation, those were still in a good profit. Regarding 3Ps, according to our study, the enterprises which invest in the development/training of their staff earns more revenue than those which do not invest in their staff. It means that enterprises that prioritized the creation of tangible proof while delivering services are more likely to produce higher revenue and profit results than those that did not, as studied earlier by [52]. However, because each product has unique service characteristics, recognizing variances in service marketing tactics in each region based solely on preliminary information does not constitute a thorough statistical study. Furthermore, each type of service has its employment and service patterns and the needed specialized standards for managing and developing distinct staff. As a result, the current study, which simply compares the means, is biased and inaccurate. It lacks a needed controlled variable and estimation using an econometric model.

As studied by [53], employee training or development encouragement increases sales. According to the analysis in our study, the other 3P techniques (people, process, and physical proof) all have a considerable beneficial influence on the profits of tourist businesses. Furthermore, enterprises that implemented brand/marketing development saw a 52% increase in income, as the same study presented by [54]. These findings support Stan Shih’s smiling curve theory, which states that activity expansions in both upstream (service product research) and downstream (brand/marketing development) constitute a “process” that helps the business sector produce additional value. Physical proof, the fourth P, had a beneficial impact on income. In this regard, service enterprises with a pleasant product/service distribution environment tended to earn greater revenues by up to 97% (compared to enterprises with a less friendly environment). Our analysis is related to the study by [55]; factors that lead to increased revenue suggest implementing a knowledge management strategy to allow team building, as well as process development in both upstream (service product research) and downstream (brand/marketing development), constituting a value-adding “process” for the business sector. Fundamental techniques, such as internet marketing and a focus on services that satisfy consumers’ basic needs, on the other hand, make significant contributions and positively impact corporate revenues. Our study has explored that for every 2% increase in an enterprise’s dependence on technology, costs/expenses climbed by around 14%.

Regarding business costs/expenses, we found that the “age of establishments” was the first control variable that led to an increase in tourism enterprise costs/expenses, similar to previous studies [24,56]. According to our calculations, an enterprise’s expenses/costs climbed by around 4% each year as it grew older. Meanwhile, gender characteristics and the owner’s educational degree (group president) did not impact expenses/costs. Furthermore, it was found that receiving an extra star (moving a company up a level) increased costs/expenses [56]. According to our sales and marketing research, the higher the operating expenses, the more clients were from Molise, whether from neighboring regions or other countries. On the other hand, prices and expenses for supplying customers from nearby provinces were reduced (or Molise itself). Furthermore, enterprises would face higher costs/expenses if they sold/promoted services online or at other events than if they sold via distributors.

Regarding marketing strategy, each plan can have a statistically significant impact on expenses. Maintaining a service system following international standards may result in a 56% increase in product strategy costs/expenses. Costs/expenses rose by 22% for enterprises constantly expanding their products. Creating acceptable and dependable brands resulted in a 7% rise in costs/expenses compared to enterprises that could not do so. Reference [57] found that product strategy had a bigger impact than pricing strategy, which had a smaller impact. Furthermore, the pricing strategy only increases costs/expenses a little. When it comes to location strategy, having a service in a handy location has an additive effect on costs/expenses. This is because desirable locations, such as those near a major highway or heavily populated area, often result in higher rents or land prices, which raise service costs. Public relations/websites/sales promotion channels and sales promotion management raise costs/expenses in the promotion strategy. Meanwhile, utilizing an online or internet marketing strategy might save expenditures.

Although, enterprises that focus on team building can be able to boost sales by implementing this strategy. Our study identified that enterprises that offer less skill development/training, skill development/personnel training only increased costs/expenses. The final P, physical evidence, has an added effect on costs and expenditures. According to the research by [58], service enterprises whose product/service distributions offer an appealing atmosphere for consumers bear expenditures (compared to enterprises whose locations are less appealing). Two control variables have the greatest influence on the profitability of Molise’s tourist enterprises. When a service provider receives an additional star rating, its revenues increase (pushing it up another level). Second, internet sales/service marketing increases revenues compared to sales through agents [24]. Revenues increase annually as businesses grew older; the proportion of customers from outside the region increases and companies became more dependent on technology, all of which contribute to an increase in revenues and, thus, an increase in profits (revenues tended to increase if technology dependency increases) [24].

Each marketing strategy contributed greatly to Molise’s tourism industry’s success. The strategy that had the most influence was product strategy [59]. Due to having a service that reflected local expertise and identity, the enterprise’s revenues improved by 49%. Furthermore, newly unique services based on a creative idea increased revenue by 46%. Other service product strategies that increased company profitability included regular development of service patterns and making trusted brands more accessible [60]. On the other hand, price strategy positively influenced profitability, but not as much as product strategy [54]. Simultaneously, various pricing strategies resulted in a 2–6% rise in costs/expenses. Setting appropriate pricing without exploiting clients (which boosted earnings by 2%) and clearly stated selling prices were two of the strategies used (which increased profits by 6%).

6. Conclusions

Overall, we found that service sector marketing methods improve revenues but also raise costs. So, it is vital to “weigh” and estimate the “profit” effect. While convenient locations reduced costs/expenses, they also increased profit margins by around 9%. Accessible sites frequently have expensive rents or land prices, but greater gross sales and profits offset this. Earnings were benefited by marketing on websites and social media. These included making product information freely available online and increasing profits by 109% by using websites instead of advertising (a profit increase of 26%). Enterprises that put a high priority on team development have seen an 80% boost in profits. However, using this method resulted in an 84% rise in costs. Skill development/training increased costs/expenses by just 10% (relative to enterprises providing less skill development/training). Profitability increased (by around 10%) as a result of training compared to enterprises that did not invest in employee training. The service product research method had the biggest incremental impact on costs/expenses of creative services of enterprises in Molise, increasing profits by 164%. Enterprises using branding/marketing development strategies increased profitability by around 54%. According to Stan Shih’s smiling curve notion, upstream activity expansions (service product research) and downstream (brand/marketing development) provide value-added to the company sector. In this scenario, service enterprises with a customer-friendly distribution center are likely to make up to 104% more profit (compared to the enterprises whose places were less attractive).

7. Policy Proposals

In order to improve the potential of service operators in this small province, relevant government agencies should take into account offering support throughout the development process from upstream to downstream. This can be performed by incorporating local identities used to create service products and by supporting marketing and sales promotions, whether by organizing various exhibitions events, generating publicity via the Internet, or using other methods. Additionally, competitive events should be created to inspire business owners to continually develop their own original concepts.