Michelles Express Travel Agency - Example

Marketing Plan Name Name of Institution Marketing Plan Introduction Michelle’s Express Travel Agency is a business that will have its base in the Tuggeranong area of Canberra. The situation analysis of the wider Australian travel industry presents a complicated market for travel agencies. To begin with, Australians are undertaking more travels to both international and travel destinations. Additionally, economic and cultural factors have made Australia an attractive destination for international travellers. These factors might have secured the prospects of the travel agency in the past, but technology is having a considerable impact on the travel agency industry. The advent of the internet has meant that airlines, cruise lines, and other transport firms have a direct way of marketing and selling their tickets. Competition between these transport providers has also meant that they are increasingly offering cheaper fares as a means of retaining market share. Therefore, travel agencies have been placed in a situation where they compete with other agencies as well as airlines and cruise lines. Despite these challenges, the travel agencies have found a means to survive through create products. These include package tours where the agency comes up with a complete package that includes travel and accommodation (Euromonitor 2014). Michelle’s Express Travel Agency will adopt such strategies in its bid to become the preferred travel agency for its target market of 34,624 married couples and 14,945 senior citizens in Tuggeranong (ABS Quick Stats 2013). The presence of competitors like Flight Centre will complicate the entry into the Canberra market, but a comprehensive product, pricing, promotion, and distribution strategy will increase the chances of success. The objective of this marketing plan is to allow Michelle’s Express Travel Agency to capture 20% of the market within the first year of operation. Product Strategy Product Concept As stated, the internet has ensured that travel agencies have to offer unique products in order to compete. While the cheap prices offered by airlines might be attractive to business, family and individual travel for leisure has more demands. These travellers want to leave their homes with their travel and accommodation details confirmed. Moreover, they want detailed information on what they will be doing for the duration of the travel. It is evident that it is difficult for many first-time travellers to know about the best hotels and best activities in a new city or country. Michelle’s Express Travel Agency will seek to fill this gap by providing travellers with detailed travel plans. The firm will partner with hotel chains, airlines, cruise ships, and independent tour guides to ensure that clients get a top class experience at affordable prices. As stated, the target market will be composed of married couples and senior citizens. The travel agency will create different packages to suit the differences in the client base. For instance, newly married couples will be offered hard adventure tours that will involve a significant degree of physical activity. In the same way, couples with young children will get family themed packages while the elderly will be guided in creating or selecting packages that are less physically demanding. Finally, the agency will offer fully guided tours to the high-end market. This will offer a high degree of satisfaction to clients who can afford the extra cost of the service. Product Differentiation The level of competition within the travel industry means that Michelle’s travel agency will have to offer a unique product. One aspect of product differentiation will come from the location of the business. The firm will begin by targeting the resident of Tuggeranong, who want affordable travel packages. The initial concentration on one area will mean that the business will have the chance to develop intimate relationships with its potential and established customers. The business will offer a service where a representative will visit prospective clients to plan for tours. These representatives will have a minimum of five years’ experience in the travel industry to guarantee that they can create solutions for varying client demands. Additionally, the clients will have comprehensive support from the agency for the duration of their travels. This level of personalized services, convenience, and affordable prices will differentiate the business from the main competitors who are corporate entities that seek to serve the highest number of clients without regard to their unique needs. Positioning Michelle’s Express Travel Agency will be positioned as the firm that offers affordable prices while guaranteeing the highest quality of service to travellers and tourists. The firm will seek to understand the needs of its broad target market in Tuggeranong while ensuring that it offers services that surpass those of the larger travel agencies that are established in the market. Branding Michelle’s Express Travel Agency is named after its owner who will also manage day to day operations. The branding will communicate the message that quality will be given the highest consideration as the failure of the business will have a direct consequence for the owner. The inclusion of ‘Express’ service communicates the message that the business will be able to meet unique client demands in a quick and effective manner. Product Life Cycle Implications One of the core findings from the situation analysis is that the travel agency business is at the mature stage of the product life cycle. One of the features of a mature industry is the presence of a few large players and a reduction in the growth rate whereby businesses mostly serve repeat clients (Lamb, Hair, & McDaniel 2010, p. 378). The implication is that the business will have to be prepared for a lot of competition from the established players. There is also a chance that the competitors can adopt aggressive pricing strategies to prevent the entry of the new business. Pricing Strategy Pricing Objectives Companies have to select between three categories of pricing objectives in order to survive in the present competitive market. These are the profit-oriented, status quo, and sales-oriented objectives (Lamb, Hair, & McDaniel 2010, p. 631). The travel agency will adopt a sales maximization objective that falls under the sales-oriented objectives. The rationale is that maximizing sales will lead to the acquisition of market share and eventual profitability. Pricing Methods The travel agency will utilize a cost-plus pricing method as it ensures profitability (Czinkota & Ronkainen 2012, p. 358). One of the advantages of the small size of the business is that costs can be kept at low levels. Therefore, the business can set a profit margin that is comparable to the competitors while offering a lower price to the clients. Competition Considerations The travel industry is extremely competitive. While Michelle’s Travel Agency wishes to offer low prices, it also intends to avoid the impression that it will offer substandard services. Therefore, the firm will seek to ensure that prices are close to those offered by the main competitors. Pricing Tactics Michelle’s Express Travel Agency will utilize a penetration pricing tactic. According to Baker (2010, p. 66), penetration prices do not have to be cheap but set at a level that is below a service’s value to clients. The tactic will allow the agency to attract clients and gain sufficient market share for long-term sustainability. Promotion Strategy Objectives of Promotion Product differentiation will be the main objective of promotion. Travel agencies have reached maturity as they all offer similar packages to consumers. A new firm will face considerable challenges when seeking to enter this market. Differentiation is a strategy that can eliminate such challenges, meaning that Michelle’s Express Travel Agency will need a promotional strategy that will communicate its differentiated products. Promotional Mix Sales promotion will be a key aspect of the promotional mix as it helps in creating intimate relationships with clients (Yeshin 2006, p. 20). First-time clients will be offered special discounts, and there will be a local competition where a Tuggeranong local will get a fully paid trip. This will stir excitement and announce that there is a new business in the area. There will also be direct marketing as the firm has a target market that can be reached with ease. Advertising will also play a pivotal role in meeting the promotional objectives. An interactive website and social media will be the key advertising channels as they will provide the agency with a cheap method of reaching a concentrated target market. Banners and Billboards will also be erected around Tuggeranong to help create awareness of the existence of a new firm. Finally, the agency will use public relations through press coverage to help in communicating its unique offerings. Distribution Strategy Channel Selection The firm will utilize a distribution strategy that will bridge the gap between airlines, cruise lines, tour providers, and hotels. The firm will acquire office space in Tuggeranong, and it will act as the main point of distributing the firm’s products. There will also be the option of visits to the homes and workplaces of potential clients. Moreover, the agency will establish a website that will offer select packages to clients. Implementation and Evaluation Implementation Schedule The firm realizes that it will not be in a position to compete on an equal footing with established firms. Therefore, it will adopt a short implementation schedule to minimize costs and to get the first clients as soon as possible. The business will hire employees, seek industry partners, build a website, and acquire facilities over a month-long period. The firm will begin operations in the second month, and this will signal the beginning of a targeted promotion campaign. The low prices will attract the initial clients, and this revenue will help to fund further promotional activities in Tuggeranong. More aggressive marketing will continue during the first year to ensure that the firm meets its target of capturing at least 20% of the market. Evaluation The most important aspect of the business will be the degree to which clients value the differentiated services. The firm will offer questionnaires to evaluate whether its strategies are satisfying the clients. The firm will also monitor the link promotional expenses and total revenue to eliminate unnecessary expenditure. The prices offered by competing firms will also be evaluated to guide the agency’s pricing tactics. Success in the first year will shift the focus to evaluating the profitability of the firm. References 2011 Census QuickStats: Tuggeranong. 2013. Australian Bureau of Statistics. Available from [15 May 2015] Baker, RJ 2010, Implementing value pricing: A radical business model for professional firms (Vol. 8). John Wiley & Sons. Czinkota, M & Ronkainen, I 2012, International marketing, Cengage Learning. Lamb, C Hair, J & McDaniel C 2010, Marketing, Cengage Learning, Mason, OH. Travel and Tourism in Australia, 2014, Euromonitor International. Available from [15 May 2015] Yeshin, T 2006, Sales promotion, Thomson Learning, London. Read More