The Adoption of marketing orientation by the Outback Queensland Tourism Authority - Case Study Example

Case Study The Adoption of marketing orientation by the Outback Queensland Tourism ity Table of Content Executive Summary 3 1. Introduction 4 2. Brief summary of case 4 3. Situation Analysis 4 4. Evaluation of alternate managerial decisions arising out of situation analysis 6 4.1 Market orientation 6 4.1.1 Market segmentation 6 5.2 Use of market metrics 7 6. Recommendations 8 References 9 Executive Summary In the contemporary times, the competitive environment of business paradigm consider customer as the most important factor for success and therefore, market strategies and managerial decisions are focused towards their needs and requirements. The paper addresses the market philosophy of Outback Queensland Tourism Authority or OQTA and the same has been evaluated in terms of alternative managerial decision. The factors that were responsible for decreasing tourism business during 1999-2003 were identified. The application of new market orientation that took due cognizance of changing customers’ requirements and used various market metrics to track customers were found to be the major facilitators for improved performance outcome of OQTA in 2004. Research Study 1. Introduction The fast changing socio-economic paradigms and advancing technology has tremendously changed the dynamics of market strategies. ‘Organizations must change because their environments change’ (Bateman, 1990). In the contemporary times, the customer has become much more informed and technology has provided him with more options within the similar product lines, but produced by different companies. The case study of Outback Queensland Tourism Authority or OQTA is a case in point where application of marketing theory significantly improved the performance outcome of IQTA. 2. Brief summary of the case Outback Queensland Tourism Authority or OQTA is a non profit premier organization of Queensland, Australia that is primarily responsible for the marketing, promotion and development of the tourism industry of Queensland’s Outback. OQTA promotes the interest of 21 government agencies and has around 230 members comprising of various stakeholders like tour operators, accommodation and transport providers etc It was observed that despite an intensive and focused mass communication campaign through brand building advertisements in television and radio, outback tourism saw 5% less visitors during 1999 to 2003. The present situation would be analyzed for the decreasing business and efforts would be made to identify the areas that lacked focus and new strategy that need to be pursued to turn it around and increase tourism activity in the outback. 3. Situation analysis Outback covers substantial 48% of Queensland. While the lack of funds might have contributed to low business to some extent but the major factors that were responsible for low turnout of visitors were primarily because OQTA market strategy lacked of market orientation and brand building rather than the customers was the main focus of the marketing activities. The most distinct feature of OQTA marketing was the inconsistent message to the customer without making efforts to understand their needs and requirement vis-à-vis their travel plans or their desires regarding travel and tours. Though OQTA’s market strategy heavily relied on creating its brand value that helped it maintain a low but steady inflow of visitors to the outback, the decreasing tourist data show that the mass media campaign not only failed to attract new customers but it was also not able to retain its existing customers. Kotler (2005) says that ‘brand building is needed because products are the same’ but OQTA failed to attract customers because it neither differentiated its product value nor made efforts to study the preferences and requirement of its customers. Thus the wider purpose of brand building did not serve its purpose in the case of OQTA. Market strategies try to promote goods and services by creating brands that fulfils customers’ demands of getting high quality goods and services that they want. The main objective of any business is profit making which it derives by making its products and services available to people. Hence, the core business strategy of any business heavily relies on the market strategy that facilitates its products and services to meet the needs and requirements of the people at large. Michael Rappa from North Carolina University considers that “A business model is the methods of doing business by which a company can sustain itself, that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain" (Rappa, 2005). OQTA totally failed to treat the organization as a business venture to attract customer and was misguided by its non-profit organization framework. OQTA’s market strategy depended largely on the advertisements which unfortunately did not corroborate with the products and the wide spectrum of customers. The contents of broad based advertisements were good but they did not focus on the target group for whom outback would have more appeal. Indeed the advertisements failed to deliver the right message to the right people because of lack of effective market orientation plans that did not match with the offers of the advertisements. Kotler et al (2007, p7) define market as ‘A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others’. Orientation plans provide a focused approach to the market strategy and offer a wide spectrum of informed choices to the various segments of the market, thus creating needs which are later fulfilled by the promised product and service. OQTA management was also indifferent to the changing requirements of the various segments of the society. The market strategy of OQTA was deficient in overcoming the people’s misperception of the outback and made no efforts to target population from specific group vis-à-vis age-wise, income-wise etc. Levitt (1960) says that the marketing takes into account the preferences of the customers and thereby builds a solid customer loyalty that result in sustainable customer base that has potential for growth because it continues to satisfy the changing requirements of their needs. OQTA did not target specific group of customers who would be more interested in the rugged vastness of outback. It also did not make efforts to retain its customers. 4. Evaluation of alternate managerial decisions arising out of situation analysis The market approach is vital to all organizations, including non-profit organizations and government agencies because effective market plans promote awareness amongst the stakeholders of the products and services offered by the organizations and facilitate easy to them by the people at large or prospective beneficiaries of those product and services. The new general manager of OQTA was able to turn the business around because he had realized early that customers are the mainstay of all business and effective market strategy must incorporate a well defined market oriented plan, backed by technology that would help provide customer feedback. The alternative managerial decisions were made around these points which greatly improved business performance of OQTA. 4.1 Market orientation The focused approach of the manager was important for a well defined market orientation plan that was able to address the changing compulsions of the business paradigms. The new market orientation helped optimise tourism opportunities for wide spectrum of tourists. The new strategy incorporated the following factors that significantly influenced the market strategy. 4.1.1 Market segmentation Segmentation is a major market strategy that helps to identify prospective customers for the existing and new products of the company. Another important fact is that by focusing on the niche market, the companies can be creative in their products and services and provide the niche market with products that would satisfy their changing requirements. ‘An increasing globalization and the emergence of new tourist destinations worldwide have created a changing nature of competition’ (Nordin, 2005). The new manager broadened the scope of outback tourism and used market segregation to showcase outback locations with various perspectives, each defining a new experience of living for different market segment. Segmentation also helped to develop different market strategy for different group of people. Since advertisements are the most prolific example of segmented marketing where the contents of advertisements are decided by the target group, the new management of OQTA was able to exploit the fact. The recent advertisements of OQTA have moved away from the traditional market and are trying to attract customers from a wider demographic segment that cuts across regional interests and encompasses national and global clientele. Understanding customers’ changing demands helped OQTA to create packages to draw them towards experiencing the delights of outback living for a short time 4.2 Use of market metrics Marketing metrics are important facilitators for gaining useful information that help to improve and expand current market. As such, one needs to focus on information. Indeed, ‘we realized that the “objects” of strategy – such as business units, industries, supply chains, customer relationships, organizational structure, and so forth – are held together by a “glue”, and that glue is essentially information’ (Evans, Wurster, 2000). Hence, market metrics become essential part of business strategy which have significant impact on the market. The new management used customer feedback to create, improve and improvise its market plans to suit their changing preferences thus building a sustained customer relationship that would not only retain existing customers but attract new customers. In the current scenario of competitive business, it is important to take cognizance of changing preferences of the customers. The new managerial decisions were focused towards creative inputs and efforts were made to develop better understanding with customers with regard to consumer demands and correlate it with the product so that appropriate advertisement strategy could be developed. It needs to adopt more aggressive approach to advertise its goods and services to meet the challenges of the changing time. Market oriented strategy, therefore, becomes crucial factor for maintaining an edge in the market. It successfully used the market segregation to advertise its wide spectrum of products and services that were focused on the target customers. OQTA was able to register 21% increase in the visitors in the 2004 it used the market metrics efficiently and ensured customer satisfaction through regular follow-up. Market metrics become important indicators of the successful implementation of market strategies of a company. Shultz say that it is the end-users who now control the markets rather than the marketers (Shultz, 2001). While the growth and the future prospects of the business depend on the input data as they are able to divulge vital information about the products and the customers, strategic marketing through widespread appealing advertisement is a vital factor that helped to bring in new clientele. By forming strategic partnership with various stakeholders to market its products and services, OQTA has maintained its individual brand with the wider objective of establishing its credibility in the global business. One can, therefore, conclude that the new market strategy has been successful. Recommendations Market orientation, consumer psychology and analysis of database of customers are important part of market strategy. Analysis and identification of the changing trends of the customer requirements are important ingredients to gain leverage against their rivals. Understanding of consumer psychology, therefore, plays a vital role in the development of marketing strategy and planning. To meet the challenges of the time, OQTA needs to incorporate the following modules into its overall business strategy. Development of effective tools and strategy to improve and improvise business by taking cognizance of the feedback systems and regular follow-up. Promoting the concept of sustainable development through environment preservation and conservation. Showcasing outback as human heritage and giving ‘packages’ that give on-hand experience of outback living. Poon has described special interest tourism has ‘The provision of customized leisure & recreational experiences driven by the specific expressed interests of individuals and groups’ (Poon, 1997). The exclusivity of the package has special appeal which has popularized the concept of special interest tourism (SIT). This type of tourism goes beyond the usual definition of the word and fulfils the extra demand that the body or the mind or sometimes, both, require. Today, tourism industry is highly competitive, necessitating development of more creative strategy that would reduce the cost without compromising on the quality and services. OQTA must incorporate the compulsions of cotemporary times to meet the challenges of recessive trends. Through strategic alliances, it should offer cost effective SIT packages to maintain a competitive edge in the cut-throat environment of globalization. (1861) Reference Bateman, Thomas S., and Carl P. Zeithaml. (1990). Management: Function and Strategy. Homewood, IL: Irwin, 1990. Case Study. Adoption of marketing orientation by the Outback Queensland Authority. Evans, Philip & Wurster, Thomas S. (2000). Blown to Bits: How the New Economics of Information Transforms Strategy. HBS Press. Levitt, Theodore.(1960). Marketing Myopia. Business Harvard School Review. Available from: [Accessed 20 September, 2009]. Kotler, Philip. (2005). Toward Stronger Marketing. unpublished presentation to the ARF, “Future of Advertising” Conference, Chicago, 10.24.05. Kotler, P., Brown, L., Adam, S. and Armstrong, G. (2007). Marketing, 7th Edition, Pearson Education Australia, ISBN 9781741034950, (Marketing BB Pack 7/e). Access code (ASBKM-QUIPU-NAPPY-COOMB-BRUSH-BALES) Nordin,Sara.(2005). 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