Service Analysis in Tourism Sphere - Report Example

Service Analysis Report Executive Summary The initiation of a new venture means beginning of a new hope, new dreams and new challenges. It is basically a fresh start to the professional career with the aim of fulfilling some unfulfilled desires. Although there are various risks associated with it, but once the risks are mitigated it is a great source of realizing long cherished dreams. However, it is important to careful thoughts, and consider the possible scenarios that might arise in the future before actually selecting venture. In this context, Paige Turner is recommended to cater to the tourism sector as the analysis of growth data shows that this industry is growing at a robust rate and will continue to maintain the curve in the years to come. The key findings of the study were that the tourism sector is one of the potential sectors of the world economy and the industry is growing rapidly. In order to achieve success in this sector the company has been recommended to carry out service packaging & offer add-on facilities, carry out marketing activities for the intended service, ensuring proper distribution channel and offer facilities to the customers in the form of discounts or instalment facilities. Introduction The service sector has played imperative roles in the growth of the world economy. The growth of the services sector can be traced back to the early 1970s, when the concept of outsourcing business came into the limelight (Blazey, 2009). However, the notion of the service sector has been evident since immortal time. The best example of the service sector is the financial institutions or banks. The service industry has always been hit with numbers of issues such as trade regulations and as a result of that the growth rate has been slow in the past. The industry recommended to the client is travel and tourism sector. Hence, a brief synopsis of the industry will be provided (Lawler and Bilson, 2006). Tourism not only acts as a growth engine for the firms, but also plays a pivotal role in the generation of employment opportunities. As a result of that government of the respective countries are very much supportive of such businesses. Economic Survey 2011-12 has highlighted that this sector has the ability to offer large scale employment opportunities and hence its importance to the government is enormous (Hollensen, 2007). Therefore venturing into this sector will not be troublesome and can be instigated with ease. The global travel and tourism industry has been experiencing growth at a robust rate and is adjudged as one of the fastest growing sector of the business world. In the last ten years, the face of the industry has literally changed and is now adjudged as the fastest growing sector of the world. As per the statistics, the numbers of international travelers have crossed 1 billion in the year 2012. Industry experts state that the number of global visitors has double in the past 20 years. It is estimated that the tours and travelling industry contributes about 9.3 to the global GDP and the same time provides 3.4% employment (Alexander, 2013). Thus, from the perspective of a firm, travel and tourism is a profitable venture. (Source: Lamb, Hair and McDaniel, 2011) The data above clearly show that the industry is growing rapidly. Hence, Paige Turner can go ahead with this service. In this consulting report, a brief overview of the industry alongside with useful insights of the industry will be provided in order to justify the choice and understand the industry and its opportunities in a better way. In addition, the theories associated with services marketing (since tourism is a service sector) will be elaborated. Lastly, on the basis of the findings and analysis, few recommendations will be provided to the client. Discussion of the Theories In this section of the study, the theories associated with the service marketing will be elaborated. The four key concepts of services marketing that will be stressed are target marketing and positioning, developing service products, service delivery and services cape and pricing and revenue management. These concepts are useful in understanding the scope and vitality of a service business and at the same time these things can be applied to get better results. The theories related to the concepts are detailed below. Target Marketing and Positioning Marketers have recognized that the target customer base of every product or service is not the same and in the similar way they have also identified that the target audience for a particular product or service is not same. The differences arise in the form of attitudes, demographics, needs, social affiliations and locations. Most of the markets comprises of submarkets, individual customers and individual business customer segments (Nazarko, 2004). The theory of segmentation, targeting and position comes into play when a market is characterized by diverse customer base or when a company sells a product or service to target various groups of customers. A target market is dubbed as the group of customers towards which a company has decided to intend its marketing efforts and at the same time merchandise the offerings. Well defined target market is considered as the fundamental element towards the formulation of marketing strategy. The target market is separated by various distinguishable characteristics or any other noticeable aspects. Some of the common factors used for segregating the market are geographic psychographic factors, demographic factors and behavioural factors and target marketing defined as the activities intended to these individual groups (Poynter, 2010). Figure 1 – Example of market segmentation (Source: Smartcompany, 2013) Segmentation and targeting allow companies to deliver a product that satisfies the need of every individual. Furthermore, various scholars have highlighted that it is a necessity for the companies to establish the values and needs of the target customers within every segment for the aim of promoting the products, services and brands of the company (Lovelock, Patterson, and Wirthz, 2010). As a result of that often it has been found that companies offer different variants of a particular product. The concept of positioning is somewhat different from that of segmentation and targeting. It refers to “the way by which the marketers attempt to create a distinct impression in the customers mind” (Weinberg, 2009, p.11). Effective positioning of a brand or a product is dependent upon the identification and communication of the Brand’s uniqueness verifiable value and differentiation. Blarr (2012) emphasizes that after the selection of the target market, the next vital task is positioning. It is a vital part of a firm’s marketing mix. Ghodeswar (2008) define positioning as “the part of the brand identity and value proposition that is to be actively communicated to the target audience and that demonstrates an advantage over competing brands” (p.4). In the similar way, Judge and Blocker (2008) refer positioning as the unique selling proposition of the company. Hence in simple words, positioning can be dubbed as the point where bundle of attributes amalgamates to form one notion that aims at capturing the target segment in the product category. In the context of application of these theories in the travel and tourism sector, it can be used to segment the customer base and according tourism packages can be developed (Blarr, 2012). For example, the market can be segmented on the basis of the type of tourism such as ethnic tourism, medical tourism, leisure tourism, luxury tourism, business tourism etc. In the similar way, after segmenting the market the company can design proper tour packages and can use it to target those segments. An example of the same is given below: - Segment/Target Market Offering Business people Business tourism such as short to and fro trip, which are customized and as per the need. Likewise target marketing, positioning is also important as it directly influences the perception consumers about the firm. In this context, positioning will help the company to portray its objective as well as offerings. For example, the company can develop a positioning statement that reflects its offering of various types of tourism. An example can be: “Let’s go with us!! We will ensure your needs are fulfilled and all your pains are healed. Developing Service Products The development of a service product involves identification of the opportunities and chances and capitalizing on it. Authors such as Weinberg (2009) believes that the notion of service development can be split into two parts i.e. service and development. When splitting the notion into two parts the first thing that comes into mind is the type of service that a firm intends to develop. Service appears in various form such as financial, economical, managerial activities etc. On the contrary, the keyword development is very nonfigurative and can be associated with key activities such as technological up-gradation, general welfare, cost reduction etc. A number of scholars and practitioners have highlighted the fact that development of the new services is becoming increasingly important, more specifically in this rapidly changing business environment. Literature pertaining to the development of new product has ginned enormous popularity and attention of the scholars in the last few decades, but the area of new service development has remained unexplored to a great extent. The notion of new service development is viewed as an organizational process that links the operational and marketing capabilities to design, conceive and implement a service that are valued by the customers. It is believed that an integrated and multidisciplinary perspective is very much necessary for the purpose of fundamentally addressing cross functional activities. The development of service products is concerned with all the activities involved in the process of realizing the new service opportunities that include service design, marketing of the services and business model design. According to Lovelock and Wirtz (2004) the development of a new service product refers to the modification of an existing service by means of changing the type of offering, bringing some innovation into it or through any other mechanism. Literature pertaining to the subject of concern has confirmed that, likewise any physical product, service needs development and marketing activities. The new service development process consists of three main activities, namely service system development, service concept development and service process development. The service concept development encompasses strategy and objectives, screening, generation of new idea, concept development as well as testing. It related to the ideas about the ways of meeting the needs of the consumer. Service system development is another concept that concentrates on the infrastructural requirement for successfully delivering. On the contrary, service process development builds up a sequence of activities which must take place for ensuring effective delivery and at the same time also ensuring proper functioning of the service. This concept is applicable to the business through various ways. For example, a new type of service in this sector can be instigated and that in turn can act as a competitive advantage for the firm. To cite an example, the company can offer packed tour service that includes other facilities. Moreover, this theory will also allow the firm to continue with its innovative approaches. Hence, the notion of Developing Service Products is necessary for a start-up tours and travelling business. Service Delivery and Servicescape Likewise the importance of product development and marketing, the significance of delivering the product is equally important. However, for a service industry, the significance of service delivery is far more. The notion of service delivery is highlighted as getting the services quickly and effectively delivering the intended recipient. In most of the cases, service delivery refers to the level of excellence of the organization pertaining to the service delivery mechanism used by the organization. According to renowned practitioners and scholars across the world, achieving excellence in the field of service delivery endows company with high level of customer satisfaction and hence it should be on the top of the business agenda of any corporate house. Strengthening the service delivery is a key towards the achievement of business excellence. The notion of service delivery is highly applicable in the field of travel and tourism industry. The quality and effectiveness of the service delivery process play a crucial role in driving new customers towards a company. Furthermore, if the company delivers quality service, i.e. provides better hospitality services coupled with better packaging it is obvious that the company will achieve success (Andriopoulos and Lewis, 2009). The concept of Services cape is somewhat different and unique. It enlightens about the impact of the physical environment in the service delivery process. The idea of servicescape greatly helps in assessing the differences between the two companies (one large and one small or two different types of companies) involved in the delivery of similar services. For example, it helps in the assessing the differences in service quality of a restaurant which is family-run and a large chain restaurant house. Although, the food quality may be similar, yet customer can draw more value in one of the particular restaurants for many reasons such as better environment, relaxing ambience, etc. The concept of servicescape is applicable to this business and has high value because through this concept the company can improve its own offering by carefully assessing and contrasting the offerings with the competitors. Therefore, from the discussion, it is evident that the notion of service delivery and servicescape is vital and is applicable to the industry. Pricing and Revenue Management Pricing and revenue are the two most vital concepts for any kind of business. A company initiates a new venture with the aim of earning more adequate profits and generate high revenue. Hence, for an entrepreneur the concept of pricing and revenue management is paramount. At the end of the pricing strategy pursued by the firm will be responsible for generating higher profits for a firm. Pricing is a concept which is used in valuing and accordingly pricing a particular product or service. In simple terms, it is the process of determining what the company will receive after exchanging its products or service. Pricing depends upon a number of factors, i.e. various things are considered before pricing a particular product or service. Some of the common ones are the trend of the marketplace, manufacturing cost, the situation of the market, competition levels, and quality of the product and also the brand value associated with it. It is the only strategy through which a company can earn revenue. The application of pricing strategy is extremely important as follows this strategy the company will price its tour packages. Moreover, its significance is also high as pricing will act as a key factor in the target marketing process (Conway and Steward, 2009). The category of revenue management is the application of disciplined analytics that aids in the process of predicating the behaviour of the consumers. The principal aim of revenue management is to sell the right product to the right customer. In addition, selling the products at the right time and at a right price is another crucial factor. This concept is also applicable to the company as follows this theory the company can design the appropriate services and can deliver the same to the right place and the right time. Hence, the concept of pricing and revenue management is imperative for a business involved in tours and travelling business. Recommendations On the basis of the findings and analysis of the concepts of the theory, following are the recommendations to the company: - 1. Service Packaging & add-on facilities: - The Company is strongly recommended to package the offerings i.e. can offer packaged services to the customers. The packaged can be differentiated by the factors such as duration of stay and location. In addition, packaging can be also done on the basis of the types of tourism the company intends to offer. This will greatly help the company to drive customers and cater to a diversified customer base. In order to create competitive advantage for itself the company is recommended to offer customized services to the customers. 2. Marketing of the Services: -The Company is strongly recommended to allocate more resources for the purpose of carrying out marketing activities. Both human resource and monetary resources must be utilized for this purpose. With the help of marketing activity awareness about the offerings can be created and can be helpful in selling services to the customers. Furthermore, the visibility of the company will greatly increase in the market place. The communication mediums that can be used by the company in this context are social networking sites and printed medium such as newspaper and magazines. 3. Ensuring Proper Distribution Channel: - It is also necessary to ensure the presence of proper distribution channel. Hence, the company is recommended to appoint booking agents at various places so as to remain within the reach of the customers. In addition, initiation of online booking services is also a viable option for the firm. 4. Pricing Strategy: - In order to create competitive advantages for itself, companies try out various options. In this context also the company is recommended to bring some difference in the mode of payment. The company can allow instalment facilities to the customers where they pay the amount in two or three installments. In addition, the company can also enter into a treaty with the financial institutions and offer loan services to the potential customers. 5. Customer Loyalty Programs: - The Company is strongly recommended to initiate customer loyalty programs where the company should offer discounts to the existing customers. This approach can be helpful in ensuring repeat sales. Reference List Alexander, M., 2013. Management Planning for Nature Conservation: A Theoretical Basis and Practical Guide. 2nd ed. Berlin: Springer. Andriopoulos, C. and Lewis, M. W., 2009. Exploitation-exploration tensions and organizational ambidexterity: Managing paradoxes of innovation. Organization Science, 20 (4), pp. 696–717. Blarr, W. H., 2012. Organizational ambidexterity: Implications for the strategy-performance linkage. Berlin: Springer. Blazey, M. L., 2009. Insights to Performance Excellence, 2009-2010: An Inside Look at the 2009-2010 Baldrige Award Criteria. Milwaukee: ASQ Quality Press. Conway, S. and Steward, F., 2009. Managing and shaping innovation. Oxford: Oxford University Press. Ghodeswar, B. M., 2008. 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