Travelocity Brand - Effectiveness of the Award-Winning Campaign - Coursework Example

?The effectiveness of the award winning campaign - "Travelo brand Contents Introduction 3 Background 4 Issues Identified 5 Brand Salience 5 Share of Voice 6 Differentiation 6 Business Strategies 7 Audience analysis 7 Brand positioning 8 Media 9 Results 9 Conclusion 10 Reference list 12 Introduction Marketing communication is a vital part of any business or non-business organization and has been continuously playing a significant role in overall business of firm. Marketing communication is an essential part of the overall marketing mix. Ouwersloot and Duncan (2008) defined marketing communications as “a collective term for all the various types of planned messages used to build a brand-advertising, public relations, sales promotion, direct marketing, personal selling, packaging, events and sponsorship, customer service and product placement.” In the current business environment, elements such as publicity and interactive marketing are also playing a vital role in overall marketing communications (Belch and Belch, 2007). In fact, many critiques have argued that marketing communication is an essential function connecting the consumers with the company, influencing stakeholder’s activities such as information processing and overall building of the brand (Blythe, 2006). The need of marketing communication arises as a result of various changes in markets, consumers as well as corporations. Market side As a result of globalization there is continuous change in the market place and increase in international competition. Thus, designing and selling of products is becoming really difficult for companies as the level of differentiation is decreasing. Homogenization of products, brands and product proliferation have made it extremely crucial to initiate innovative ways of communication with the consumers (Mahyari, 2010). In terms of reaching special target segments, traditional media has been ineffective. Huge amount of message clutter in communication advertising, information overflow are other factors which has increased the need for an integrated and comprehensive marketing communications (Niazi, Shah and Hunjra, 2012). Consumer side As a result of product and brand proliferation brand loyalty is decreasing and price sensitivity among consumers is increasing. In case of industrialized countries consumers are demanding more. Consumers now expect for better services, lower prices and better qualities. Consumer lifestyle has become diversified and customer empowerment is forcing advertisers and markers to make quick changes and bring new communications strategy on board (Barnes, 2007). Corporate side Apart from the external factors, contribution of internal factors is also critical for the successful implementation of integrated marketing communication. Corporate are now facing cost inefficiencies and brand communication inconsistencies as a result of increasing departmentalization of the organizations. This has complicated the overall communication channel between different department and functions in the organization. Also, mishandling of resources and misuse of communications has made it important to look for an integrated approach in marketing communications. The present study will critically evaluate the marketing communication strategies selected and implemented by the organization. The underlying issues will be discussed in detail and their approach to strategy making will be highlighted. Results and conclusions will demonstrate for estimating the success or failure rate of these campaigns and marketing communication strategies implemented by the company and how they can further improve their communications strategy by using innovative social media techniques. Background Launched in the year 1998, Travelocity is an online travel company. The company reported a tremendous growth rate in its early years of establishment. After the success of Travelocity in United States, the travel company was launched in United Kingdom in 1998. During that time, only 9 percent of households in UK were accessing internet. Also the interest in online booking was pretty low. However, by the end of 2003 the percentage rose to 48 and among them more than half were willingly purchasing tickets online. Even though Travelocity was posting a steady growth in its revenue and sales, it was way behind the big leagues in the travel industry and was considered as a minor player in online travel and tourism sector. As a result, the number of visitors was far less than the big competitors and consumers were less likely to consider Travelocity for final decisions. To evaluate the issues Travelocity was facing and to make strategies in order to increase its overall market share, the company initiated an advertising review with the aim of creating innovative ideas with strategic thinking. Issues Identified Through deep analysis of the facts and trends and present as well as future consideration of the plans, the review board was able to identify three key issues. Although these issues were serious in their own ways, the combination was expected to be dangerous in terms of affecting brand image and brand equity. These three issues will be critically analysed in detail; Brand Salience Brand salience is the degree to which a particular brand stands out visually from its major competitors. While competing for shelf space, it is a vital element. However, it is extremely difficult to achieve brand salience in real practice. It has been seen than most of the companies which have achieved a commendable amount of brand salience have been the front runners of their respective industries. These firms and organisation have been in the industry for a long time and have established themselves as industry leaders. Thus, it is clear that achieving brand salience is all the more difficult for newer companies. Strong brand boasts high amount of brand salience while it might be even missing in weak brands. Brand salience is different from top of mind awareness as the latter comes into the mind of a consumer when he/she is making a purchase decision, unlike top of mind awareness which is simple recognition of brands (Anderson, 2001). The major drivers of brand salience are quality and quantity. Experts have found a strong correlation between brand salience and success. A comparison of the consumer brand awareness of Travelocity with the various metrics of salience revealed that Travelocity was lagging far behind major competitors. In order to increase its brand salience and connect with the consumers in a more effective way, Travelocity will have to evaluate its media strategies. Brand salience is highly influenced by memory structures. This means that a person’s needs or demands are influenced by associations, which the person can relate with. For example, if a person is hungry and wants to eat an affordable meal, those brands having an image of providing affordable and low cost-meals will be top preferences. In the same manner, Travelocity will have to identify the factors which can trigger connection between its target customers. Share of Voice Share of voice is a term generally used in online advertising. It is represented as revenue of advertisement model in order to differentiate from competitors. It is the advertisement percentage of a particular brand for a particular category of product as compared to same category products for other brands. For example, there are five different brand names in one product category. Out of the total advertising volume, one of the products has 60 percent advertising percentage. This product will have the highest share of voice. Share of voice is also relative to other communications methods. In case of Travelocity, the share of voice was lower compared to other major competitors in the market. This was attributed to the low salience of the online travel agent. It was assumed that other online travel companies had invested hugely in the marketing and branding campaigns and activities. This has helped them achieve high level of awareness and brand salience over time. Since Travelocity was comparatively new in the market, its investments in branding and marketing activities were comparatively lower. As such, the overall brand awareness, salience and share of voice were lower than major players in the market. Thus Travelocity was burdened with extra pressure of achieving a sustainable share of voice within a short span in order to survive and thrive in the market. Differentiation Another major roadblock for Travelocity was lack of differentiation. In the present economy, every other day a new product or service is launched. As a result of this image cluttering has increased. When a company is able to sell its services and products even in a market stuffed with similar products and services, they are known be differentiated. A differentiated product is different from a commodity. Commodities are exactly like one another and cannot be differentiated easily. A differentiated product stands out even in the same product or service category (Hofstrand, 2007). Thus, service or product differentiation is critical in order to achieve competitive advantage and build as long term barrier for the competitors as well as new entrants. This was a major issue which Travelocity needed to address. The problem of differentiation was faced by other competitors also. Majority of the services and products offered by these travel agents were almost similar and consumers felt that there was little to differentiate between them. Due to lack of brand awareness among consumers, Travelocity fared worst in them. However, in order to differentiate it from other competitions, Travelocity has a better advantage as it is comparatively new. Thus it can position itself according to the latest demands and changing preferences of the consumers. In the next section the methodologies and strategies implemented by the online travel company will be discussed and evaluated. Business Strategies In order to solve the challenges which were defined by the review board, the online travel company outlined various tasks. These tasks included a step by step marketing and communication planning in order to achieve the desired results. The various action plans and their implementations are described below. Audience analysis Most of the times, audience are referred to as the end-users of a product or service. All kinds of marketing communications are directed towards a defined target audience. In order to define the audience or target segment many factors are taken into considerations. These can be culture, age, sex, knowledge, geographies etc. Travelocity used the theories of target group index in order to build a rough model for targeting the market place. According to the model pyramid, the various categories were differentiated as follows Pleasure seeking travellers (1.3 millions) Internet users for two years and more (3.1 millions) Daily internet users (4.4 millions) Buyers of online travel services (5.6 millions) Looking for online travel services (8.4 millions) The figures on the left indicated the total number of target consumers falling in each category. From the evaluation, it was clear that pleasure seeking travellers, travelled minimum 2.3 times a year. The overall objective of Travelocity’s business was to create a positive change in sales and visits. Thus, according to the current objectives the online travel company first decided to choose customers from the bottom of the pyramid. The first reason was the high numbers of prospective clients. The online travel company is new and it needs to acquire a large base of customers. The other reason was that these prospective clients did not build any strong preferences yet. Thus, the company thought it was easier to enter into their mind and build brand loyalty in them. However, after further review and consideration, the online travel agent decided to follow a completely opposite set of target segment. During the second and final decision, the travel company decided to target ‘aficionados’ or the tip of the pyramid instead. The target segment consisted of young urban professionals in the age group 25-35, who were willing to append money and were confident about buying services online. The two major reasons behind this target segment were; 1. Product differentiation- the chosen target group is very hard to please. These professionals are knowledgeable and perform ample research before making purchase decisions. But once they have developed confidence on a particular service or product and are satisfied by its product or services, they become loyal customers. The company expects that not only these consumers will become brand loyal; they will also work as brand ambassadors spreading positive word of mouth among consumers who are less knowledgeable about the brand and its services. 2. Niche marketing- Travelocity also observed that most of its competitors were focusing on customers from the bottom of the pyramid and majority of them where ignoring the experienced users. Thus, the company found an opportunity of niche marketing, where there will be less clutter and more penetration. Thus, the company relied an opportunity neglected by majority of its competitors. Brand positioning After deciding the target audience, the next step was brand positioning. After proper research the mindset of target customer base was evaluated. It was found that these customers wanted thrill, adventure and innovation in their services. For this they were ready to pay an extra price. Experience and adventure was their motto while travelling to leisure destinations. In order to differentiate itself from the other competitors that were thrusting on a more gentle approach, Travelocity opted for a more adventurous approach. In order to evaluate this positioning strategy, the company established a series of dinner parties in city hotels and also invited these customers to share their opinions and desire about new experiences and adventures (Tauder, 2005). Thus, inspired by the lively spirit of these young groups, the company positioned its brand as well as tagline. Media Handling media in a tactical way was extremely important as the company operated in lesser budgets that it’s well known competitors. Travelocity went for an integrated marketing approach in order to establish a message which was direct, comprehensive and approachable. Eight television advertisements were used in order to generate awareness and quick reach. This was followed by radio announcements and advertisements in order to increase the effect of television advertising. In order to build brand awareness around travel oriented places, the online travel agent implemented outdoor advertising. Billboards and flyers were places in locations like trains, buses, railway stations and airports. The company also utilised press in order to improve its awareness among specific groups. Another major communication strategy followed was online marketing. The company used personalised emails, user friendly website in order to attract and generate interest among the target group. The final strategic act was guerrilla marketing. With the help of viral ads, unique dolls and airport stunts, the company successfully created a buzz for its campaign (Yang et al., 2006). Results The business started with immediate results within few days of the launch of campaign. Visits to websites doubled and there was an improvement in year on year comparison. Unique users visiting the website increased to 86 percent and there was an eight times increase in the page views (McCabe, 2009). As a result of the above strategies the business of Travelocity boomed and sales grew up to 135 percent compared to previous year. The creativity as well as the positing strategy worked well for the company and Travelocity was able to increase its brand salience among the target group of customers. Advertising had a crucial role in driving the overall business of Travelocity. The awareness which was generated through advertising helped the company shift from the lowest to one of the most recognised travel companies in the market. The creative as well as message was accepted by the masses and as a result the overall share of voice increased to a great extent. Even though the overall travel industry was passing though a buoyant and volatile phase, Travelocity was successful in increasing its overall share in the market. In terms of differentiation too, the travel agent managed to get much recognition from the consumers as well as competitors. On a score of differentiation, Travelocity increased to 23 percent in June 2004 from 6 percent in November 2003. In terms of values such as knowledgeable, modern, inspiring and understanding the exact traveller’s needs, Travelocity has fared well. In spite of no change in the pricing strategy of the brand, Travelocity was able to pull off the campaign with huge success. It was also found out that many of the rival brands decreased their booking fees to 4 Euros from 10 Euros, which was the fare charged by Travelocity at the time. The claim of advertising in the overall success of the campaign was found to be 71 percent. According to the calculations it also meant that for every 1 euro spent on advertising, the return on investment was 5.6 Euros. Conclusion Travelocity has strategically placed itself for the future. Fame and recognition are important factors in the travel and tourism industry and with the success of the campaign; Travelocity has been able to successfully pull it. In order to find out the underlying problems, Travelocity investigated its brand awareness, equity and overall brand image. After pinpointing the exact issues, Travelocity developed advertising and promotional strategies with the help of management and review board. These strategies included defining a target audience, sending the right message through creative media channels and generation of overall brand awareness through innovative and creative media marketing such as guerrilla marketing, events and spot marketing. The campaign turned out to be a huge success giving a boost to its sales and revenue. The enormous increase in revenue and profits has enabled that company to invest more in advertising and promotions and the company is continuous trying to strengthen its overall brand equity. Branding has become more important than ever. Brands are science and psychology which are brought together as a promise in the form of products and services. Brands convey uniform values such as credibility, experience and quality (Business case studies, 2013). As a result of highly competitive environment, businesses are continuously trying to differentiate themselves from others in order to thrive and grow. In case of new products or services, brand awareness is the first step towards success. Consumers need to believe and put their trust in their brand. The way people are always suspicious about a stranger, they same way consumers are suspicious about new products and brands. In order to build confidence and trust among the consumers, it is extremely important to establish successful communication between the brand and target consumers. Thus when it comes to create a first impression, it is crucial that the marketer makes it the best impression. This is where advertising comes into action. The overall aim of advertising is to change the consumer attitude towards the brand or product to more favourable. Thus, advertising and brand promotion help in increasing the consumer confidence and trust over the brand. Reference list Anderson, P. H., 2001. Relationship development and marketing communication: An integrative model. The Journal of Business and Industrial Marketing, 16(3), pp.167 – 182. Barnes, S., 2007. Virtual worlds as a medium for advertising. Advances in Information Systems, 38 (4), 45-55. Belch, G. E. and Belch, M. A., 2007. Advertising and promotion. New York: McGraw-Hill. Blythe, J., 2006. Marketing. London: Sage Publications. Business case studies, 2013. The importance of building a strong brand image. [online] Available at < http://businesscasestudies.co.uk/corus/the-importance-of-building-a-strong-brand-image/the-importance-of-brand.html#axzz2dKh7lgZa> [Accessed 29 August 2013]. Hofstrand, D., 2007. Commodities versus differentiated products. [pdf] Available at < http://www.extension.iastate.edu/agdm/wholefarm/html/c5-203.html> [Accessed 28 August 2013]. Mahyari, P., 2010. The Effectiveness of marketing communication within the immersive environment. [pdf] Available at < http://eprints.qut.edu.au/33256/1/Parisa_Mahyari_Thesis.pdf> [Accessed 28 August 2013]. McCabe, S., 2009. Marketing communications in tourism and hospitality: Concepts, strategies and cases. Amsterdam: Elsevier. Niazi, G.S.K., Shah, B.A. and Hunjra, A.I., 2012. Effective advertising and its influence on consumer buying behaviour. Information Management and Business Review, 4(3), pp. 114-119. Ouwersloot, H. and Duncan, T., 2008. Integrated marketing communication. London: McGraw Hill. Tauder, A. R., 2005. Getting ready for the next generation of marketing communications. Journal of Advertising Research, 45(1), pp. 5 – 8. Yang, M., Roskos-Ewoldsen, D. R., Dinu, L. and Arpan, L. M., 2006. The effectiveness of 'in-game' advertising. Journal of Advertising, 34(5), pp. 143-152. Read More