Purpose and Mission - Dissertation Example

Marketing Communications Table of Contents Purpose & Mission 2. Contextual Analysis 2 Industry 2.2 Company 2.3 Product Introduction 2.4 Environment 2.5 Competitive Landscape 2.6 Understanding the customer 3. Target Profile 3.1 Segmentation Profile 4. SWOT Analysis 4.1 Strength 4.2 Weakness 4.3 Opportunity 4.4 Threats 5. Promotional Objective 5.1 Corporate Objective 5.2 Marketing Objective 5.3 Communications Objective 6. Marketing Communications Strategy 6.1 Positioning and USP 6.2 Branding and Packaging 6.3 Push Strategies 6.4 Pull Strategies 7. Promotional Communications Mix 7.1 Advertisements 7.2 Magazine Advertisements 7.3 Sales Promotion 8. Scheduling 9. Budget 10. Limitations 11. Evaluations and Conclusion References Appendix. 1. Purpose and Mission This paper aims at performing marketing plan for a new venture creation, namely the Travel Agency in Canterbury, Kent, England. The report contains a justification for selecting the specific market segments, the marketing communication tools and a marketing communications plan. The mission of the proposal is to gain an in-depth understanding and visibility of the marketing concepts. The mission is accomplished and is reflected in the documentation of the report. It does it through three main parts: the first part of the paper includes the product, its equipments and its features evaluate the target group sufficient for this business. The external factors influencing the success of the travel agency. The ways of segmentations, such as demographics, geographic, psychographics and behaviors were applied in order to define the target group. The second part designs a market research study and establishes possible demand and consumer needs for the proposed travel agency. This includes the type of data to be collected, the target population, sample size and method of data collection (quantitative, qualitative). The third part evaluates how the demand patterns for promotional mix(advertising, direct sales promotion) the scheduling and the budget involved in opening the venture and also recommendations were given how those variations can be managed effectively. Finally the report makes short conclusion, by highlighting the scope and limitations of a travel agency in such a place. 2. Contextual Analysis 2.1 Industry: Tourism is largely an information business prior to and through the actual sale of the services. It is one of the fastest growing industries in the world. The positive effects of tourism are varied. For tourists, a holiday means satisfaction as travel gives them the opportunity to bring their hopes and dreams to life. Furthermore, by holidaying outside their usual surroundings, tourists increase their knowledge of other cultures and ways of life be it knowingly or unknowingly. As far as the UK national economy is concerned, the tourism industry achieved such a leading position that it gets counted as one of the most important sources of income and foreign exchange (Sinclair, 1991). 2.2 Company: The main objective of any travel agency is to sell the temporary use of transport (air, rail, coach, car), accommodation (hotel, motel, lodge) and other related services (foreign exchange, insurance). To be specific, a travel agency needs to ensure the planning, booking, organizing and documenting of all the travel requirements for its clients. Many a times, it as well involves advising, reassuring, explaining and encouraging the customers to opt for specific packages. 2.3 Product Information: Besides providing the basic services and products offered by any travel agency, the firm would aim at providing few distinguishable leisure features in order to attract new customers. These features would include the following: Domestic Tourism: This includes the services to be offered to the resident visitors, i.e. people willing to travel within the geographical boundaries of the country.  Inbound Tourism: This includes the services to be offered to the non-resident visitors who are willing to travel within the geographical boundaries of the United Kingdom.  Outbound Tourism: This includes services to be offered to the resident visitors willing to travel or visit outside the boundaries of UK. 2.4 Environment: The environmental factors of any new firm or venture consists of the following: Although all the three features – internal factors, external factors and management commitment are equally important, it is the external factors which play a vital role in the establishment of a new venture. Thus, we would be discussing about the external factors, their influence upon the success and the changes which they may acquire over a period of time. The first and the foremost external factor is the: -> Market potential (Size and Growth): The whole concept of focused marketing is based on gaining major market shares while expending minimum resources. A market’s size and growth potential depends on the current and projected demand for a given product. Both the current status of a market and its future potential should be recognized as basic criteria for continuing or expanding market penetration. Never equate the customer demand with customer need when launching something new. It may be logically argued that customers need a new product or service, but if they are unwilling to buy it, their need for it is irrelevant. As such in the case of Travel Agencies, the market has been showing great fluctuations in the last decade (Sinclair, 1991). The consumer need is increasing whereas the demand is constant as many people prefer the web-based online services to the travel agency. Thus, it is highly essential to make people aware of the specific services offered and the beneficiaries provided by the firm. -> Competition: Generally speaking, if the objective of entering a new market niche is to gain a controlling share, picking a niche that already has a market leader could be a very expensive proposition (Richard 2002, Lowe 2002). Thus in order to be sustain the cut throat competition in the travel agency market, it is highly essential to formulate and implement effective strategies which would prove to be beneficial both in monetary and non – monetary terms over a period of time. ->Ease of entry: As a corollary to competitive saturation, ease of market entry determines to a large extent how long a firm can remain in control to a niche market. In this case it can be compared to the effects on the opening of a new travel agency on the residents of Canterbury i.e., how long can the firm attract and satisfy its consumers. It requires good service, low cost, good promotion, innovation and all such related things which would make it possible to maintain the existing consumers and attract the new consumers. All the strategies need to be formulated is it related to financial or non financial matters. Resource requirements: Of the four major criteria, the resources required to capture new market niches can often be the most difficult to achieve. By developing a comprehensive forecasting model based on cost/sales/ asset functional relationships we would be in a good position to determine with a high degree of certainty those resources that must be obtained and when they must come online to meet strategic plans. 2.5 Competitive landscape: Systematic analysis of industry attractiveness is important for all types of business. In order to open a travel agency in a particular location one should analyze the attractiveness of that local market in terms of:  The number of competitors  The extent to which they offer differential services  Their service capacity relative to market demand  The power of local property landlords  The power of corporate customers to demand discounts  The likelihood of additional entrants. 2.6: Understanding the customer: It is highly essential to understand the needs and requirements of the customer (Girden, 1996). On the other, it is equally required to make the people or the target market aware about the benefits of the product and at the same time it is also highly required to maintain providing good service and get in innovations in order to satisfy the existing customer’s needs and attracting the new customers. 3. Target Profile Once the conceptual analysis is done it is required to evaluate the different segments and decide how many and which one to target. While evaluating segments, three factors should be considered. They are segment size and growth, segment structural attractiveness, and our objectives and resources (N. Sangameshwar, 2003). There is no single way to segment a market. It is required to understand the composition of the market in order to provide products and services that meet client needs. Business can be more effective if marketing efforts are directed toward a limited number of well- defined market segments (Dickson & Ginter 1987; Stynes, 1985). 3.1: Segmentation Profile Market segmentation has been considered as one of the concepts to understand the market efficiently. Market segmentation is the process of partitioning markets into segments of potential customers with similar characteristics (Frank, Massy & Wind 1978; Morrison, 1989; Stynes, 1985). This strategy will adjust a product or service and its price, promotion and distribution to meet the needs and wants of discrete target segments. Segmentation usually results in a more efficient allocation of marketing resources and a more precise setting of marketing objectives. Therefore, market segmentation can offer significant advantages as a competitive strategy and as a guide to market planning and analysis. In general a market can be segmented in many ways with a variety of variables. We have to determine different segmentation variables, alone and in combination to find the best way to view the profitable structure. Here the three types of segmentation can be followed:  Demographic segmentation: It indicates dividing the structure based on variables such as age, gender, family size, income, education, religion, race and nationality. Demographic factors are the popular bases for segmenting customer groups largely because consumer needs, wants and usage rates often vary closely with demographic variables and these are easier to measure than most other type of variables.  Psychographic segmentation: It refers to dividing a market into different groups based on social class, life styles or personality characteristics. A large number of personality variables that may be used in psychographic segmentation are: self - image, interests, impulsiveness, sociability, hobbies, self confidence, leisure activities, adventurous and risk taking and health consciousness. Life style descriptors attempts to define a customer segment in terms of the attitudes, interests, and activities of the consumer. This is an attempt to go further than demographic descriptors to really get inside the consumer’s mind.  Behavioral segmentation: It refers to the division based on consumer knowledge, attitude and use or response to a product. It requires determining the major benefits that people look for in the product class like intensive preference. E.g., taste, level of performance, snob appeal, price, reputation etc. the kinds of people who look for each benefit and the major brands that delivers each benefit. It is highly advisable and would prove to be beneficial to the design group if they follow the above discussed segmentation strategies either solely or in combinations so that a clear picture can be withdrawn as of to understand which one would prove to be highly profitable in the long run. It is highly impossible to appeal all the buyers in the same way. Buyers are too numerous and too varied in their needs and consuming practices. The travel agency would be opened to attract a large number of masses it is required to follow different strategies to attract a different mass. The following steps must be followed in target marketing : Identify bases for segmenting the market Develop profiles for resulting segments Evaluate the attractiveness of each segment Select the target segment(s) Develop positioning for each target segment Develop marketing mix for each target segment Thus target your market, focus your efforts on that market, and prosper. Besides customer focus forces strategies to succeed. There are two ways to view customer focus. First, adopt your customers (actual or prospective) focus on your product and services. Second, all your efforts would be based on meeting your customer needs. If we target our market effectively, we will have a manageable number of customers who we can learn a great deal about – how they think, why they buy, when they buy, what their preferences might be. We will be able to know what benefits they seek and so we can choose to address those demands. In a wider sense customer focus would help us to make strategically helpful decisions in all aspects. As an example : putting the consumers preference first for quick location by opening the travel agency in the central place would prove to be very beneficial in attracting those sect of consumers who have less time to locate for their needs. Here is an example of a target market profile: 1. Geographics: Lives within Canterbury (includes permanent residents and non-residents) 2. Demographics: Gender Age-group (All aged people) Earning a combined annual family income of 50,000 pounds or greater 3. Psychographics: Values time and considers it their single most limited resource. Excited about making adventurous trips. Highly health conscious. 4. Behaviors: These group defend the decisions under most any circumstances and will adamantly “sell” those that ask why they use the product and why the choice they make they did. These groups can be a powerful, unpaid sales force resulting from the referral network they build and use. The more detail you know about the “ ideal” customers , the better you will be able to make them aware about our products and services. Target marketing allows us to reach, create awareness in, and ultimately influence, that group of people most likely to select our products and services as a solution to their needs, while using fewer resources and generating greater returns. 4. SWOT Analysis A SWOT analysis is a universal tool in strategic planning. During the SWOT analysis, one can assess the Strength, Weakness, Opportunities and Threats in a firm. In this case, while opening a new travel agency it becomes essential to do a SWOT analysis at initial stages in order to start the smooth and effective functioning of the business: 4.1: Strength: Located in the central market place. Ambience and outlook attracts attention. Promotional offers – new venture. Excellent marketing and operations staff. 4.2: Weakness: National in approach Poor labor relations High cost operation Bureaucratic management culture 4.3: Opportunities: Growth in market after recession Development of specialist products to meet demand e.g. holiday based on special interest and activities Market entry in other European countries Rebranding to reposition the product range 4.4: Threats: Entrance of major European tour operators into the UK market Loss of consumer interest in traditional package holidays The potential competition represented by virtual reality New European Union Legislation. 5. Promotional Objective 5.1: Corporate Objectives – The corporate objective of the firm would be to provide the most comprehensive personalized travel services. In monetary matters, the firm aims to do a business of 10% on invested capital and further aims at achieving an average annual sales growth rate of at least 25% per year. Besides aiming at the desired sales volume and profit, the firm is also looking forward to product-line contributions over a period of time. 5.2: Marketing Objectives – The basic marketing objective would be maximize the profit and at the same time minimizing the cost involved. Thus formulation and implementation of cost-effective strategies are required in order to attain these objectives. Besides aiming at maximization of profits, the firm also aims at proposing activities which would result as long term investments paying dividends over a longer period – for example creating the customer database, increasing referrals and sales leads and so on. 5.3: Communications Objectives - Communication objectives include creating awareness of the vision, role, values, business principles that drive the agency, the profits, services and products offered. This could be achieved by encouraging trial use in the target audience, stimulating additional purchase, prompting repeat usage and developing word-of-mouth recommendation to increase the business. 6. Marketing Communications Strategy 6.1: Positioning and USP - Position is a process of designing an image and value so that consumers within the target segment understand what the company or brand stands for in relation to its competitors. In doing this, the firm is sending a message to consumers and trying to establish a competitive advantage that it hopes will appeal to customers in the target segment. In essence, therefore, the marketing mix can be seen as the tactical details of the organization’s positioning strategy (Bangs,2002). Multidimensional scaling and correspondence analysis can be used to build perceptual maps. These procedures involve algorithms that start with measure of similarity between pairs of product and try to find a geometric representation of the brands in the product category. These techniques position products that are perceived a similar close to one another and locate dissimilar products far apart. In this way, positioning is not actually something that is done to the product, rather it is something that marketers do to the minds of customers. It relates to how consumers perceive the product in terms of image relative to competing offerings (Smith & Thorpe, 2002). The below figure is a layout of how the positioning is being planned for this travel agency. This suggests that the segments of customers labeled “specialist’, ‘price buster’ and so on requires differing degrees of (a) control over the travel/tour buying process and (b) with the degree of specialized or standardized ‘package’ the agency provides. This approach would prove to be significant and worthwhile in determining how a specific customer needs to be treated. Fig: Market positioning plan for Travel Agency A unique selling proposition enables products to stand out from competitors. It is a distinct and appealing idea that sets the products apart. The USP for this firm would be its location – that is being in the central point in the market it has the ability to attract large number of customers. 6.2: Branding and Packaging – Companies that produce consumer goods spends considerable effort and money on the design of product packaging. Of course packaging is important because it protects the physical product until it is sold. However, the product package is also important because it communicates information to the consumer. Thus for a travel agency, packaging refers to the process of putting together, or bundling, the core tourist product with additional services desired by clients. The package is then promoted to the clients, who can then easily purchase their desired travel experience. Purchasing a package offers the potential tourist a number of advantages. Purchasing a package offers tourists convenience by reducing the amount of time they will need to spend researching what the city has to offer. Tourists also find packages attractive because with a single purchase everything they need for their visit are provided, including lodgings and attractions. A themed package is especially attractive to clients because all the components will appeal to their area of interest. With this type of package, the attractions, food, lodging, and other activities are all related to a specific interest, such as history or sports. A brand in the modern marketing sense offers the consumers relevant added values, a superior proposition that is distinctive form competitors and imparts meaning above and beyond the functional aspects. It is also a total entity developed by the integration of the resources, processes and marketing decision of a firm and much of the effort and input to developing a brand remains invisible to the consumer. A competitive brand is a live-asset, however, not a fixture and its value will depreciate over time if starved of investment and marketing management skill. Following are the few advantages of branding for a travel agency:  Branding helps reduce medium and long term vulnerability to the unforeseen external events that so beset the tourism industry. Recovery time after a crisis may be shorter, whilst resilience to price wars or occasional hiccups may be improved.  Branding reduces risk for the consumer at the point of purchase by signaling the expected quality and performance of an intangible product. It offers either an explicit or implicit guarantee to the consumer.  Branding facilitates accurate marketing segmentation by attracting some and repelling other consumer segments. For an inseparable product, on-site segment compatibility is an important issue. 6.3: Push strategies - Push strategy refers to the method by which an organization promotes directly to the intermediaries in the distribution chain, thereby hoping that it promotes the sales. It is essential to boost the morale of the employees or rather “push” them towards achieving the desired results. This could be done by using all the marketing instruments and different motivational techniques – including perks or hikes, incentive cash plans, and as well non-monetary benefits. 6.4: Pull strategies - The strategy to ‘pull’ customers into the travel agency is based on a series of tactical mail shots. These are sent out to a tightly targeted audience. Based on industry experience an initial response of 2 – 2.5 percent is expected. The first mail shot will have a major selling message, highlighting the benefits of a specific service. An incentive would be added to the respond to the mail shot in the form of a free camera pouch (costing to be considered). Each respondent would be given an option of returning reply-paid coupon or calling the firm on a free hot line number. Whichever response is made, important information consisting of name, address, type of holiday destination preferred, holiday budget etc would be obtained and used for getting in touch with the customers to persuade them to buy our products and services. However, it is highly recommended to use the combination of both push and pull strategies in order attain maximum benefits and effectiveness in the firm. 7. Promotional Communications Mix “Promotion involves two broad aspects – firstly communicating marketing information to consumers, users and resellers and secondly persuading and convincing consumers to use it” (David H Bangs, 2002). The promotional strategy which can be adopted by the design manager to promote the new venture – Travel Agency can be through different ways. The best way to promote it in the area is advertising by using print media i.e., brochures, pamphlets, hoardings, personnel and all such direct activities. Creating the awareness among the people about the launch and existence and about the usage and benefits and about the prices though hectic still highly required in order to gain new consumers. Fig: Promotion Plan All the miscellaneous expenditure involved could be recover in the long run. But the main emphasis is on the first six months whereby a good expenditure is likely to be incurred. Thus it is highly essential to provide capital stability in the first six months. Launch success can be enhanced with early, systematic feedback to diagnose performance drivers and identify appropriate course corrections. Selling involves achieving the right balance between the four different elements of what is known as the “marketing mix,” or the “four Ps”.  Product – having a marketable product or service to sell in the first place.  Price – Selling it at a competitive price  Place – ensuring that customers can find it easily  Promotion – presenting it in an attractive way. 7.1: Advertisement - Advertising is a crucial part of the promotion process, the other elements of which are personal selling, sales promotion (such as special offers, loyalty cards), and the wider business of public relations, which involves encouraging the media to distribute favorable information about a firm and its products or services. Advertisement for goods and services perform a large umber of different functions. Creating customer awareness of a new product or service. Constructing a “brand image” Announcing special offers of one kind or another Building long-term customer loyalty and confidence Combating the negative claims of the competitors Converting the customers of the rival brands. As in this case, the travel agency would be launched in a highly competitive market area and thus effective advertisement is the key to mark a great entry into the market. This could be done by the distribution of pamphlets, pasting the banners, hoardings and the most effective being WOM (Word Of Mouth) communication. 7.2: Magazine Advertisement- Advertising through newsletter and magazines comes under this criteria. This type of advertisement proves to be the major attractor in the tourism industry. The main benefit for such a type of advertisement for a travel agency would mean reaching a wider audience at a single instance. A thorough market research analysis was performed to gather information about the mostly read newspaper and magazine. Thus, advertising in these would prove to be beneficial, however, one need to consider the cost limitations as well. 7.3: Sales Promotion - Sales promotion is an important part of marketing mix. Leisure and recreation organizations target sales promotions at consumers (general public), and at trade (other companies). In both the cases, the aim is to:  raise awareness of new products or services, so they start to sell well.  Remind people of existing products and services, so that they go on to sell even better. Sales promotion is used by travel agencies to try to encourage the potential customer to try the product for the first time, or to attract repeat purchases. Sales promotion techniques could be used extensively in the marketing programmes to influence consumer behavior. Sales promotions such as “free child places” target certain markets segments at the beginning of the season and produce frenzied purchasing behavior because places are strictly limited. 8. Scheduling The best period to earn profits in tourism industry is the holiday’s season. December through March would be the best time to attract a large number of clients and thus it would be schedules for opening a month prior i.e. in the month of November. 9. Budget The following financials, budgets and forecasts would be applicable and reliable in opening the travel agency. The marketing budget for year one of operations would be taken from the start-up investment and is equivalent to approximately 6% of anticipated first year revenues. The marketing budget would be evaluated quarterly, and at the end of the year one, adjustments will be made to advertising schedules, media vehicles, effective frequency, etc. as necessary. A detailed review had been done to forecast the sales. As it is a new venture, sales are not expected to yield good results in the first annual year, however, specific action plans needs to get devised as soon as the first three months gets completed. This would help us in deriving more accurate and reachable targets. In the long-run, sales growth is estimated at 10% annually through year three. This estimation was concluded by reviewing and analysis the sales and profit figures of the competitors located in the same area. 10. Limitations The travel agency industry in Europe has been pushed to the brink of ruin by the growth of online-reservations systems operated by specialists such as Expedia and Travelocity and by the airlines directly. 11. Evaluations and Conclusions Looking at the current upward trend in the travel industry in UK, it is an apt decision to get into the tourism business. Opening a travel agency with all due considerations and factors would prove to be beneficial both in the short-run and long run. However, it is advised to formulate and implement corporate, marketing, communicating objectives and strategies, keeping in view the long-term. Although, there might be few obstacles in setting a marked entry due to the competitive nature of the market, but efficiency in the implementation would yield good results. REFERENCES -> American Psychological Association (1983). Publication manual of the American Psychological Association. -> David H Bangs – (2002) -The Market Planning Guide: Creating a Plan to successfully Market your Business, Product or Service -> David Rainey – 2004 – Product Innovation: Leading change through integrated product development -> Dickson. P.R. and. Ginter, J. L. – 1987 - Market Segmentation & Product Differentiation. -> Easterby-Smith, M., Richard Thorpe and Andy Lowe (2002) .Management Research and Introduction -> Girden, E.R. (1996).Evaluating Research Articles: From start to finish -> Hart, C. (1988).Doing a Literature review -> Kenneth Rolnicki – 1998 – Managing Channels of Distribution -> Lawrence W Toller - Finance for Non Financial Managers. -> Michael V. Marn, Eric V. Roegner, Craig C. Zawada - 2004 – The Price Advantage -> M Thea Sinclair, Mike Stabler – 1991 – The Tourism Industry: An International Analysis. -> N. Sangameshwar –2003 - Principles of Marketing. -> Rudestam, K.E and R.R Newton (1992).Surviving Your Dissertation: 8 Comprehensive Guide to Content and Process ->Saunders, M.P.lewis and A. Thomsil (2004).Research Methods for Business Students -> Stynes, D.J. 1985. Economic impacts of tourism on Greater Lansing Area Economy. Report to Greater Lansing CVB. June, 2001. East Lansing, MI: Department of Park, Recreation and Tourism Resources, Michigan State University. -> Tyler, K .and E.Stanley (1999).Financial Services Business Markets: A Critical Review International Journal of Bank Marketing. ->http://libraryucsc.edu/ref/howto/literaturereview.html. -> www.hometravelagency.com/ APPENDIX Figure 1: Environmental Factors Figure 2: Market positioning plan for travel agency Figure 3: Promotional communications mix - layout Read More