Strategic Management in Tourism - Positioning HIFI China - Case Study Example

HIFI CHINA TRAVEL AGENCY Name: Institution affiliated: Date of submission: Tutor: Positioning HIFI China Many different definitions have been developed to explain the term brand positioning. However, the most common definition that has been developed is the one that tries to explain the market niche of the products or services provided by the brand. This means that the positioning of the brand entails the traditional marketing strategies that have been developed that factor in factors like price, promotion, packaging, distribution and competition. Positioning tries to explain how the marketers of the brand try to paint a positive image of the brand thus creating a lasting impression on the products and services of the brand to improve on their competitiveness in any given market. Positioning thus refers to the marketing activity that companies use to identify their problems and opportunities and offer solutions to them to increase their competitive nature. HIFI China has identified a gap in the country such that the Chinese culture has not been supported and developed well in the country. HIFI China was started to promote the Chinese culture in Australia and provide travel services to the Chinese travellers into the country as well as other foreigners who wish to have a taste of the Chinese culture in their travelling adventures. HIFI China will enjoy positive results as they have taken advantage of the opportunity that presented itself in the country. Although the organization has tried to differentiate their services from those of their competitors, competition still remains a major challenge to the organization. The organization has only established a few physical addresses for the customers to have their issues listened to and solved as opposed to the other competitors in the same industry. To improve the organizations positioning power, the setting up of new addresses could be a better opportunity for HIFI China to grow and increase their performance through an increase in the market base for customers. Marketing analysis As competition in the market continues to increase, the competition continues to thrive, the pressure from consumers on the pricing of the products push the margins lower and their product quality is demanded to improve over time. The simple management structure for HIFI China allows them to interact together and provide a good quality line of services while at the same time improving the flexibility of production of the services and cost efficiency through enhancing accuracy in production of their services. Marketing analysis entails an understanding of the market with reference to the products and services that they provide. Marketing analysis helps the organization to understand their competitive perspective with the different products and services that they provide. It also helps the organization to understand how the products and services provided by the organization are fairing on in the market. The BCG growth –share matrix provides an understanding of the competitiveness of the products and services in the market. The BCG growth –share matrix is a strategic guide to the allocation of the company’s resources for maintains a competitive advantage. The BCG matrix allows products to be split into four platforms that are the stars, cash cows, dogs and question marks. The stars are characterized by huge amounts of returns on cash, high market share and are in most cases considered to be the leaders in the business and market. The cash cows are of lower performance than the stars. The company records profits and cash generation is equally high. This stage is usually the foundation of the company. The dogs are a stage where the company records lows growth rate and low market share. In such an instance, it is better for the company to be liquidated, and such products that are dogs in a company should be avoided. The question marks stage means that there is high growth rate of the product due to high demand only that there is a low market share for the product [Kot09]. The SWOT analysis identified that HIFI China provides a wide range of services as one of their strengths. HIFI China should thus divide the services into the BCG matrix to identify which of the services should have more resources focused to it and which should have fewer resources focussed towards it. The SWOT table provided for HIFI China identifies service development and market development as one of the strengths of the company. The product development strategy has already been well established in the country as the tourism sector has already been using these services for a long time. What is left is for the organization to develop their market for the services that they offer to consumers. Growth in the size of the market for HIFI China would allow them to record their desired revenues as it will enhance the performance of the organization. Whereas HIFI China focuses on improving the size of the market to increase the revenue collection, they need to device means through which they can reduce the costs that they incur so as to increase their profits. HIFI China’s objectives, Sales and marketing strategy The sales strategy for HIFI china are reliant on the satisfaction of the already existing customers and ensuring that they maintain them and even attract more customers through quality services. Customer satisfaction remains the major reason why businesses come into existence. When they satisfy their customers, profits are realized as more and more customers continue to flock into the business premises to enjoy the services rendered by the business. The emerging trends that impact on the operations of the organization are the customer needs and requirements. The consumer needs keep on changing every single day and it is up to the corporation to ensure they meet the demand of all the consumers through the production of improved services and support services. HIFI China is determined to increase the sales revenue and profits through increased market share to help curb the competition that the company faces from other competitors [Gar05]. The sales and marketing strategy for HIFI China focuses on the customers in a number of ways among them being creating awareness about the organization, encouraging trial purchases, encouraging repeat customers, finding new prospective customers and evaluating the service delivery of the organization. To create awareness for HIFI China to the different customers around the world, the organization uses the media, the internet and word of mouth from other customers that they have already served before. The media is increasingly being used by many people around the world and placing your add on the media will help create awareness of the product. As the world becomes a global village, setting up a website for the organization will help as people will gain information about the services of the company through the internet and will reach more people than any other means of creating awareness. The organization should also encourage the customers who have already enjoyed the service by the organization to pass on the word of the good services that the organization offered them. To encourage trial purchases HIFI China should offer discounts, Promotional activities like gift rewards and reward cards and create market segregation. Although promotion provides an increased expenditure for the corporation, the services are a part of the marketing strategies as they encourage the consumers to use the company’s products. Considering the disposable income of households, the corporation should consider the prices at which they set their products. Where the income is higher the corporation should consider market segregation and charge higher prices and where the income is lower, they should charge lower prices and provide classes for the type of services that they provide. To encourage repeat customers, it will be important for HIFI China to create physical addresses in different areas within the country where the customers can have their issues listened to and solved first hand. Two major ways may be used by HIFI China to find new prospective customers; the studying of successful competitors and the sponsoring of events that might encourage new prospects to attend. Finally, in order to evaluate the service delivery by HIFI China and iron out weaknesses that may be available, the organization would request the customers to provide their feedback and rate the quality of services that they have been provided with. Ansoff identifies four main marketing strategies that corporations can successfully use to increase their revenue collections and recorded profits through each financial period. Market development, product development, market penetration and diversification are the major marketing strategies that can be used [Pan12].HIFI China is a newly established organization that seeks to attract and maintain customers touring Australia from all over the world. The organization is a service providing agency and thus it requires having direct interaction with its customers all through the year. Currently, the organization has only set up its offices in Melbourne, Australia making it vulnerable to competition from the other well established organizations in the country. The main strategies that HIFI China can use include the market development, product and service development and later they can accommodate market penetration and diversification to increase the geographical area that the organization covers. HIFI China will first be obliged to conduct a marketing research for the new service. Marketing research provides businesses with a broad picture of the performance of the products that they provide to the public. Marketing research provides the researcher with the specific information that is required to assist in addressing the issues and methods that determine the processes used to provide for the good and services available. Marketing research is a set of processes set by a given company to help link the consumers of the company’s product to the marketer. The marketing research process provides the marketer with information that is used to identify opportunities that may arise in the market, the problems available and how to generate, refine, monitor and evaluate the performance of the goods and services for decision making purposes. [Placeholder1]. Pricing and advertisements Management should set the prices charged to each goods and services to only include the explicit costs incurred in the production, normal profits and the economic profits. A push for bigger profits would only mean that the demand for goods would reduce. The fixed income for household would only allow them to purchase goods and services to the extent that their income can finance [Rob10]. To encourage the competitiveness of the products and services being offered by HIFI China, the organization should set the prices of their products and services to be as low as possible such they the customers will be encouraged to leave the services of the competitor companies to try out the services of HIFI China. However, it is important for the organization to ensure that the prices they set will provide them with revenue enough to pay for the expenses that the organization incurs and encourage normal profits within the organization. Over the years, companies have been using the strategy of advertising to communicate to their customers. It is the best known strategy that organizations use to communicate to customers about the goods and services that they offer them. HIFI China can use advertisements for their products and services to encourage trial purchases, continuity in purchasing of the products and services that they are offering and encourage brand switch. Trial purchasing involves convincing customers to make purchases for the products or services being offered for the first time. The use of advertisements will attract more customers into the organization to make trial purchase for the products and services that they offer. Risk analysis The risks that new start up organizations faces are usually vast and thus they should be considered and strategies set up to indentify means through which they can be reduced or completely eradicated. The major identifiable risks that HIFI China is likely to face are the reporting risks, strategic risks, compliance risk and operational risks. The strategic risks usually arise from the business environment, transactions that the organization makes and the organizations’ relationship with its investors [Jer13]. The strategic risks associated with the business environment arise from the strategies that the organizations undertake to maximize their objectives. Under the strategic risks, a number of risks for the organization usually come in. With reference to the economic status of the country within which the organization operates in the organization faces economic risks. Political and legal risks also come into play in the organization as they are influenced by the stability of the country politically. Technological risks are usually brought about by the advancements in technology. The organizations with the least advancements in technology usually suffer from this risk as their competitors use the better technology that they have to increase their customer base for better revenues. Other strategic risks that affect the organization include industry risk, organizational systems risk, transactional risks and social risks [Sin04]. The operational risks in a business usually arise from the daily activities that the organization considers as part of its daily operations. Among the different types of operations risks include environmental risks, financial risks, innovation risks, project risks, commercial risks, property risks and reputation risks. The reporting risks are usually considering the accounts of the organization. They focus on the truthfulness of the accounts that are prepared and presented to the stakeholders of the organization to pass on information about the current status of the organization. The types of reporting risks that are available for the organization are information risks and reporting risks. Finally, the compliance risks are the risks that the organizations face are usually the risks that arise from the different requirements of the organization from other stakeholders. Among the different types of compliance risks that organizations face include the legal risks, professional risks, control risks and regulatory risks [Rut10]. It is important for HIFI China to understand the different types of risks it faces and identify how to manage them to help them conveniently achieve the objectives of the business. While considering the type of service that the organization wishes to undertake, it is important to check the input that is required for the services and compare them with the output that is expected. Positive returns would mean that there are fewer risks that are encountered for the inputs, processes and outcomes of the services within the organization. While preparing their final reports HIFI China should report on the organizational risk that is faces to provide insights in better informed decisions within the organization. The processing on internal and external risks facing the organization allows the organization to critically assess the success factors within their organization for better quality and improved decisions. Improved internal decision making for HIFI China would provide the organization with an opportunity for growth in the organization. REFERENCES Kot09: , (Kotler & Keller, 2009), Gar05: , (Gary, 2005), Pan12: , (Panos, 2012), Placeholder1: , (Suja, 2009), Rob10: , (Roberto & Luis, 2010, p. 20), Jer13: , (Jerome & Radford, 2013), Sin04: , (Sinan & Philip, 2004), Rut10: , (Ruth, 2010), Read More