Best marketing practices in travel trade industry - Essay Example

Best marketing practices in travel trade industry Problem ment: How successfully the travel industry has eliminated the complexities to be ableto implement a sound and sophisticated marketing practice through the internet. Challenge/ Opportunity: Challenges: According to many top line industrial analysts the gradual process of globalization along with the advancements in the technological world has changed the dynamics of the various industries. (Fyall, Garrod, 2005, p.12). This advancement especially in the fields of technology is somehow forcing all the global companies to “act local and think global”. (Fyall, Garrod, 2005, p.12). If we now discuss about the global reach of technology the foremost representative would definitely be the Internet. The Internet is supposed to connect almost four hundred and fifty million people throughout the globe and the number is ever increasing. . (Fyall, Garrod, 2005, p.12). This level of increase in the number of users in the Internet has actually opened a vast market for the service industries where Internet became a place for connecting to several consumers at once. This process created a new form of business to business as well as business to consumer exchanges through the websites. Travel and tourism industry being a major part of the global service industry is not lagging far behind as they also have considered the Internet as their major marketing tool. But there are few critical factors which are mostly unsolved and also appear in form of major obstacles in the way of adapting the Internet as the main channel for marketing in the tourism industry. The first and foremost issue is of course the concern of the customers about the level of security of transaction. As the customers have to reveal their bank details over the Web for making the payments the risk always remains. (Middleton, Fyall, Morgan. Ranchhod, 2009, p.253). Though a constant battle is being fought between the two segments of experts; the one who is aiming for a secured network and the others who are trying to break it, the problem still remains. It is common for almost all the service industries that have chosen the path of online marketing. For that reason though the problem is very critical in nature it is definitely not unique. Rather if the companies successfully provides secured network in their marketing channel their level of acceptability among the consumers will increase. There are also other challenges that the travel industry is facing in their path of producing a more sophisticated online marketing solution. Though the major companies are trying to shift their base to a more internet oriented marketing channel the basic travel agencies are itself a complex domain to deal with. The drastic pace of industry expansion backed with the minute industry specific elements has made the process more difficult to deal with. Till date any customer who are looking for any kind of tour packages mostly depend on their travel agents who will in turn show them the available solutions according to the customers affordability and interest. (Velasquez, Rios, Howlett, Jain, 2009, p.103). In practice there are various aspects related to the travel industry that causes the actual hindrance. The industry specific issue is of course the highly fragmented sources of supply of the necessary elements which requires major coordination. . (Pollock, Benjamin, 2001, p.16). Any travel company should well remember the fact that the main element of their service is the “total customer experience”. But if the service providers are not well coordinated it is very difficult to choose a single marketing channel like the Internet. The other level of challenge come from the issue that even if the service providers coordinate they will compete to gain maximum attention of the end user. (Pollock, Benjamin, 2001, p.16). This makes the coordination more problematic as the space and time is limited and the number of adjoining service providers (hotels, car rentals, airlines) are more. On the part of the travel company itself (or in some cases the agency) it should be remembered that their main objective is providing the customers with the excellent experience. This is because of the fact that the end customers only count the “trip experience” to evaluate the companies. For that reason while marketing through the internet the travel company also have to keep in mind that they should convey the right message and are ready to provide a solution according to the desired level of customer perception. (Pollock, Benjamin, 2001, p.16). Designing the marketing channel keeping all these parameters into consideration is indeed a challenge for the travel firms but there is indeed a huge level of opportunity for them. Opportunities: There is definite amount of opportunities and possibilities that a travel or any service company for that matter can exploit through the online marketing channel. The first and foremost point is that the online marketing trend helps the companies to build on a successful long-term relationship with the customers as they get more opportunity to interact with them.(Kotler, Armstrong, 1998). This interaction is not necessarily is only confined to transaction processing and negotiation but it helps the company to know more about the interests and the perception of the customers. This eventually makes it possible for the companies to build on a solid customer data base which is an essential requirement for this kind of industries. (Kotler, Armstrong, 1998). Once the customer trust is gained and if the customers get a desired “trip experience” then the possibility of long term relationship arises. This is indeed a tremendous scope for the travel companies. According to a survey done by a research group, it is being observed that fifty seven percent of time the online web browsers throughout the world look for travel related products and services. (“Hotel Website Marketing”, 2009). Considering the amount of internet users this figure is huge and it is indeed a major opportunity for the travel companies who are choosing internet marketing as their major marketing channel. There are other levels of opportunities as well as eventually the extra costs of cooperation will get reduced as the process continues. (Alexander, 2000). The cost reduction can also be achieved if the company decides to be fully integrated through internet. The expenses related to the establishment of physical store and other costs like rent, insurance can be removed from the scenario. (Kotler, Armstrong, 1998). It should also be noticed that the promotional cost also get reduced as the digital catalogs are much cheaper than actual paper catalogs. (Kotler, Armstrong, 1998). There is also no doubt about the fact that the accuracy and personalization of the promotional packages also increases as the travel company can send offers directly to its target customers by various measures like email, mobile phones, website etc. The online marketing channel also provides the companies with adequate amount of flexibility in their promotional activities. (Kotler, Armstrong, 1998). The change in service packages and their respective prices can more easily be conveyed to the customers with a greater speed. This speed might be daily or in an hourly basis, so that the customers remain updated throughout the entire process of change. (Kotler, Armstrong, 1998). This is helpful in the sense that the information about the change in the promotional packages is reaching the customer at the right time. Lastly the important opportunity that the travel companies may seek through online marketing is the exposure to the global markets. Through internet the companies will have an access to most of the international consumers which is a very critical factor for this particular business. (Kotler, Armstrong, 1998). For that reason to capture both the domestic market as well as the international market of tourism, internet can evolve as major solution. Few online tourism companies have recorded increase in searches or hits as they have shifted to a more internet based marketing channel. Hotels.com an Irish travel company has revealed that their domestic searches have increased by 40 percent as they started promoting online. (“Hotel Website Marketing”, 2009). This shows the level of influence that internet do actually exert on the target customers of the tourism industry. Management Solution: Before providing a management level solution it is important to estimate the issues which the online travel companies are dealing with currently apart from the basic level of challenges and obstacles. The fist and foremost factor that is affecting the online travel world is the issue of value marketing. (“Online Marketing Strategies for Travel USA 2009”, 2009) The companies are constantly seeking ways and measures by which they can maximize the impact of promotion with a limited budget, which will in return ensure greater sales revenue. The second major issue is the conversion rates. The online travel marketers at this present stage are bothered about the conversion rates, i.e. the number of browsers who actually becomes a potential customer for the company. (“Online Marketing Strategies for Travel USA 2009”, 2009) The other issues are like the use of video marketing and also how the companies can utilize the mobile phone network to reach to the customers. The actual collaboration of B2B marketing is mostly done along the supply chain of any organization where the various service or product suppliers interact to gain a certain level of understanding. (Turban, 2006, p.224) But prior to that, the partners or the associating bodies of the collaboration must agree upon some specified standard of operation. The standard specification is designed so that the service providers require less time for implementation, and also they can achieve cost optimization so that the business becomes more responsive and reactive in nature. (Perini, 2007, p.4) To get an idea about the optimal and more advanced way of travel marketing through internet an example of YellowstonePark.com is cited. The online travel company YellowstonePark.com is voted the number one tourism site of the world with about 60 million hits recorded. (“Online Marketing Strategies for Travel USA 2009”, 2009) The company focuses on a policy where it does not only promotes the trip planning to the customers but eventually inspires them. The tourism site intelligently uses destination-focuses travel notes which engage the customers more. The average time spent by any customer is about 15 minutes. (“Online Marketing Strategies for Travel USA 2009”, 2009) The company also uses email as one of the major cost effective sources to turn the web browsers into actual visitors and finally converting them into customers. (“Online Marketing Strategies for Travel USA 2009”, 2009) The feedback process and the other interactive internet uses actually increase the popularity of the site and also for the company. It should be noted that the level of negotiation between the different service providers will influence the electronic business transactions to a significant level. (Velasquez, Rios, Howlett, Jain, 2009, p.103). Also as far as the flexibility of order and adaptability to customer’s expectation is concerned this process will prove well as the negotiation will be there between a set of agents and not single agents or other participating elements fighting independently for the space in the Internet. As a result of this whenever the requirements or promotional activities that are required to be changed there would be an intermediary agent who would communicate the same to the service providers, so that the later can adjust accordingly according to the customers demand. The following diagram shows the level of participants of the online travel marketing system. (Source: “Current Partners: Viator Tours, 2009). Lesson Learned: There is indeed a huge amount of opportunity as far as the online marketing is concerned. The travel agencies and the other travel related companies can utilize these scopes to its fullest to make out a more cost effective and efficient marketing channel. By using the internet and other online medium the companies can even widen their scope of operation and can eventually tap more customers at a time. But there are certain industry related and also technology specific challenges that these companies are currently facing. These issues can be resolved if the companies take a more focused approach towards integration and providing more customer centric solution. Marketing through internet will definitely give an edge to all the participating elements of the industry and they should come to some level of understanding to enjoy the long term benefits that can be gained from this approach. Why I care: The use of internet as a marketing medium is definitely feasible in case of the travel industry and with the advancements in the technological world this shift of base was inevitable. In other word for any kind of global service provider internet now have become the main and the most vital marketing channel. Thus it should be advisable for the travel agents and other travel related companies to change their marketing channel to a more sophisticated form. References 1. Alexander S. 2000. “Collaborative Commerce”. Computerworld.com. website: < http://www.computerworld.com/s/article/46547/Collaborative_Commerce?taxonomyId=18&pageNumber=1> (accessed on November 25, 2009). 2. “Current Partners. 2009”. Viator Tours. Website: < http://images.google.co.in/imgres?imgurl=http://cache.graphicslib.viator.com/graphicslib/aboutUs/partnerpagelogos_3857.gif&imgrefurl=http://www.viator.com/about/work-with-viator/current-distribution-partners&usg=__VaoBg6fZKCMmdSQ-s4o8o4vOFr4=&h=922&w=580&sz=73&hl=en&start=2&tbnid=XCeeUCasJ3LCqM:&tbnh=147&tbnw=92&prev=/images%3Fq%3Donline%2Btravel%2Bagencies%26gbv%3D2%26hl%3Den> (accessed on November 25, 2009). 3. Fyall A, Garrod B. 2005. Tourism marketing: a collaborative approach: Channel View Publications, UK 4. “Hotel Website Marketing”. June 30, 2009. IRISH INTERNATIONAL. Website: < http://www.slideshare.net/interactivemark/hotel-website-marketing-online-social-media-opportunities-for-the-hospitality-and-tourism-industry> (accessed on November 25, 2009). 5. Kotler P, Armstrong G. 1998. Principles of Marketing 8th edition : Prentice Hall, USA 6. Middleton VTC, Fyall A, Morgan M, Ranchhod A. 2009. Marketing in Travel and Tourism: Butterworth-Heinemann, UK. 7. “Online Marketing Strategies for Travel USA 2009”. 2009. Eyefortravel.com. website:< http://www.slideshare.net/wirebound21/eyefortravel-online-marketing-strategies-for-travel-usa-2009> (accessed on November 25, 2009). 8. Perini V. 2007. Leveraging Open Standards for Collaborative Commerce”. Opentravel.com. website:< http://www.opentravel.org/resources/uploads/pdf/uic_2007.pdf> (accessed on November 25, 2009). 9. Pollock A, Benjamin L. April 2001. Shifting sands: The Tourism Ecosystem in Transformation. Desticorp Limited. Website: < http://www.desticorp.com/whitepapers/TourismEcosystemwhitepaperWTM.pdf> (accessed on November 25, 2009). 10. Velasquez JD, Rios SA, Howlett RJ, Jain LC. 2009. Knowledge-Based Intelligent Information and Engineering Systems: 13th International Conference. Springer, Germany 11. Turban. 2006. Information Technology For Management: Transforming Organizations In The Digital Economy: Wiley, India Read More