Improving the Performance of the Ngai Tahu Tourism Division - Case Study Example

Improving the Performance of the Ngai Tahu Tourism Division: The Marketing Strategy Name School Word Count: 2099 Table of Contents Table of Contents 2 Executive Summary 3 Brief and Terms of Reference 4 Ngai Tahu Holdings Background 4 Ngai Tahu Structure and Governance 5 Financial Performance of Ngai Tahu 6 Ngai Tahu Tourism (NTT) 7 SWOT Analysis of Ngai Tahu Tourism 7 Recommendations 8 Summary of Benefits 11 Conclusion 11 References 13 Improving the Performance of the Ngai Tahu Tourism Division: The Marketing Strategy Executive Summary Background: Ngai Tahu’s survival in the global market is contingent on its ability to stay relevant in every way conceivable. One way through which the organization has been able to garner success is through the marketing strategy. The Ngai Tahu Tourism division in particular saw a marked improvement in performance from the last fiscal year. Even so, an analysis of the division’s marketing strategy revealed that there is room for further improvement in performance. Method: SWOT analysis Analysis and findings: It is emerges that while Ngai Tahu is dynamic and adaptable to changing conditions, the nature of its marketing initiatives is not one that encourages results. The division could obtain a bigger edge over its competitors by adopting the right kind of marketing initiatives. Recommendations: Given the dynamism of the division, is for NTT to adopt an intelligent marketing strategy, one that is entirely customer-oriented. We also recommend that Ngai Tahu Tourism keeps in touch with clients that have already employed the services of the division, increases the company’s social media presence to keep potential clients enticed, creates a system that rewards customers that refer other people to Ngai Tahu Tourism, and offers services in a package that would be difficult for clients to resist. Brief and Terms of Reference Purpose of the assignment: As management consultants, the group, has been mandated with looking into ways by which to improve Ngai Tahu’s performance. Membership: The management consultancy team is comprised of three individuals. Accountability: The team leader will be expected to report the pertinent activities and findings of the team to the CEO of Ngai Tahu, Mr. Mike Sang. Working Methods: To achieve the best outcome, the group has chosen to focus on the company’s marketing strategy. This will be applied specifically and initially to Ngai Tahu Tourism, with hopes that the other divisions (Capital, Farming, Property, and Seafood) will deem the group’s recommendation relevant to improving their marketing strategies as well. Sharing of information and resources: The group will come up with a written report of the recommendations. The team leader will hand this confidential report to the Ngai Tahu CEO. Definition of terms: NTT-Ngai Tahu Tourism Ngai Tahu Holdings Background Ngai Tahu Holdings is an a venture by a long term investor, paying particular heed to governance, investment, and the management of assets. Ngai Tahu’s commercial success dates back by hundreds of years (Ngai Tahu, 2016). The group’s pre-colonial success was based on inter-tribal trade, along with its involvement in whaling and agricultural activities. The corporation’s contemporary operations revolve around four key goals. The first is expanding the corporation’s asset base while simultaneously raising the equity of its shareholders. The second goal has do with the provision of annual cash returns to Te Rūnanga via the Ngāi Tahu Charitable Trust in order to lend a hand in their environmental, cultural, and social initiatives. Thirdly, the group aims to grow the business for future generations. Lastly, the group aims to assess further opportunities and strategies for growth across its four subsidiary companies. Along with the goals of the corporation, its values are key to success. They include: respect to the customers and staff, fostering and maintaining important relationships, the pursuit of knowledge and ideas that encourage growth, and the protection of the people, environment, knowledge, culture, language and resources important to Ngāi Tahu for future generations (Ngai Tahu, 2016). Ngai Tahu Structure and Governance Ngai Tahu is governed by a board of six directors. The role of the board is to ensure that the business is able to realize profits and maximum efficiency by effectively managing and guarding the assets of the group. The directors include Trevor Burt, Catherine Drayton, Sandy Maier, Quentin Hix, Tutehounuku Korako, and Paul Silk. The structure of the corporation is as summed up in Figure 1 below Figure 1: Ngai Tahu Structure Source: Ngai Tahu (2016) Financial Performance of Ngai Tahu As of 30 June, 2015, the group’s net operating surplus stood at $76.25m. The table below lays out the trends in the corporation’s net operating surplus over the past 4 years. As is apparent, there was a sharp drop in in financial performance, moving from the 2013/2014 period to 2014/2015. Table 1: Ngai Tahu’s Financial Performance by Net Operating Surplus ($000s) Year Performance by Net Operating Surplus ($000s) 2011/2012 55,150 2012/2013 50,859 2013/2014 83,452 2014/2015 76,245 Ngai Tahu Tourism (NTT) Ngai Tahu Tourism over the reported the 2014/2015 period reported an EBIT of $9.11m, a growth from the 2013/2014 EBIT of $6.16m. The division attributes the improved performance to improved stability in the financial markets, an influx in international visitor markets, and strategic positioning of the business in order to benefit from the shift in the winds (Ngai Tahu Annual Reports, 2016). It is at this point to point out a few facts that will be instrumental to making recommendations. The first is that majority of the clients to the Ngai Tahu Tourism Division are from China, contributing up to 26% of its revenue. Secondly, the biggest Ngai Tahu Tourism attraction to is Agrodome. Thirdly, the division is targeting emerging markets, namely Indonesia, India, and South America. SWOT Analysis of Ngai Tahu Tourism The potential for growth for this division of Ngai Tahu is endless. The key strength of the division lies in its ability adapt to changing environmental factors. For example, following the retreat of the glacier at Franz Josef, leading to loss in access to it, the division found new ways to entertain tourists that would have loved to explore the glacier. Secondly, the tourism division is comprised of highly skilled persons. The major weakness of the tourism division lies in limited publicity about the services offered. There seems to be minimal use of a wide range of advertising channels at the disposal of the unit. Further, while there have been efforts towards accessing emerging markets, the results of this effort are largely intangible. One of the glaring opportunities to NTT still lies within the emerging markets they have been trying to access. It is evident that a more rigorous and focused marketing drive would benefit performance. In addition, the division is able to forecast and weather changing physical and economic environments. This is an ability lacking in the rivals of the NTT. The biggest threat to NTT is the emergence of a number of potentially strong competitors in the region over the past few years. They threaten to reduce NTT’s market share. Recommendations In order to maintain a competitive advantage over its rivals, the marketing strategy of the NTT has so far been to combine two broad approaches. The first is based on its resource capability and the second is based on the nature of the market at the time. Traditionally, these two taken together would be useful, not only in the case of the NTT, but for all businesses (Hooley et al., 2008; Sirvastava et al., 2010). This is because using these strategies have been enough to create value for prospective clients, attract them and satisfy their demands. The division’s competitive advantage therefore emanates from this. The recommendations of the report towards improving the performance of Ngai Tahu Tourism are therefore discussed in this section 1. Adopting an Intelligent Marketing Strategy In the view of this report, while it is necessary for NTT to keep applying these strategies, it is barely adequate if the aim is to achieve sustainable competitive advantage and dominate the competition (Barney, 2010; Vorhies and Morgan, 2005; Calof and Wright, 2008). A sustainable competitive advantage is, according to Saloner et al. (2011), be achieved if the organization is able to adopt strategies that are valuable, rare, and inimitable by the competition. The NTT ought to adopt a marketing strategy that is almost entirely customer oriented to go beyond satisfying the immediate tourism-related needs of their clients, but to, further, maintain a relationship with them in the long term (Teece et al. 2007; Sharkie, 2003). This will be achieved by having the NTT maintain a competitive advantage based on its own knowledge, that is, an intelligent marketing strategy (Perreaultt and McCarthy, 2012; Harmsen and Jensen, 2013; Laazlo et al., 2010)). This entails keeping a database of confidential (Kottler, 2003) client information in order to inform decisions on the what specific marketing strategies would apply best to whichever demographic group, in terms of age, gender, and race (Homburg et al., 2009). This is expected to take about a year to research and implement. 2. Keeping in Touch with Clients A second strategy is to keep in touch with the clients that have already employed the services of the Ngai Tahu Tourism Division. According to Gordon (2008), it is considerably easier to keep an existing client than to attract a new one. The customers in the Division’s database should continue to hear from Ngai Tahu at least once every two months through emails or newsletters. A more aggressive strategy is recommended. An example would be to make a note of the birthdates and the contact information of previous clients and send them a gift on their birthdays. This would guarantee a huge database of repeat clients for Ngai Tahu Tourism. This plan can be rolled out over the next year to allow to Ngai Tahu to collect pertinent client information 3. Social Media Presence The use of social media is becoming popular marketing strategy for multiple companies and Ngai Tahu Tourism could benefit from this wave. While the company could use Twitter or Facebook to advertise their services, it is possible to take it a notch higher. For example, the division could keep posting interesting facts and photos of some tourist destinations within its area of jurisdiction. This will entice clients that may be looking for exciting places to visit. This can be implemented immediately after employing a suitable social media manager 4. Customer Referrals The Ngai Tahu Tourism Division could benefit from engaging in a reward system for customer referrals. It is easier to reach clients and convince them to utilize the services offered through people that have a direct connection to them. The division could look into giving incentives to clients that can get other people to employ the services of Ngai Tahu Tourism. An example of this would be to give a substantial discount to clients that bring other people on board. It is possible to implement this over the next six months given budgetary issues to consider. 5. Bundling With so many competitors, Ngai Tahu needs to figure out ways to attract ways to attract and retain clients by offering them value for their money without necessarily cutting prices. Bundling (Gordon, 2008) involves lumping together multiple services in a package in order to entice clients to go for the attractive package deal. Here, it might benefit Ngai Tahu Tourism to partners such a prestigious hotel that can put up clients as part of the package offered to clients. A successful bundling strategy is uncovered after a lot of trial and error. It is our recommendation that Ngai Tahu begin to test possible package combinations right away in order to find out which one works best in the shortest time possible. Summary of Benefits Should the intelligent marketing system be adopted, the drive is expected to have the following outcomes (Baker, 2014; Hart et al.,2003; Farrell et al., 2008): The capacity of the NTT to attract clientele across all demographies will be augmented due to their being privy to what appeals to individuals of a certain nature. There will be a higher incidence of customer retention at NTT due to the ability of the division to entice customers into returning. Conclusion For the Ngai Tahu Tourism division, there is no better solution for its growth than the adaptation of an intelligent marketing strategy. The strategy has proved beneficial in many cases, and done properly, there is no reason why the division would fail to meet newer and higher annual targets. In addition to intelligent marketing, Ngai Tahu Tourism has a variety of options that could improve the Division’s capacity to attract and retain clients. These include keeping in touch with clients that have already employed the services of the division, increasing the company’s social media presence to keep potential clients enticed, creating a system that rewards customers that refer other people to Ngai Tahu Tourism, and offering services in a package that would be difficult for clients to resist. These strategies, taken together, will create a sustainable competitive advantage, ridding the annual performance charts of sharp fluctuations. It is our recommendation that you take necessary steps towards considering the recommendations right away. References Aghazadeh, H., 2015. Strategic Marketing Management: Achieving Superior Business Performance through Intelligent Marketing Strategy. Procedia-Social and Behavioral Sciences, 207, 125-134. Annual Reports Ngai Tahu, 2016. Retrieved from http://ngaitahu.iwi.nz/investment/ngai-tahu-annual-reports/2015-annual-report/ Baker M.J., 2014. 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