Travel and Tourism in Sri Lanka - Essay Example

Travel and Tourism in Sri Lanka Executive Summary The report highlights a marketing plan that could be taken into account by a travel organization of Sri Lanka while commencing its operations in the lucrative business market of the United Kingdom. The discussion in the marketing plan includes the strategic objectives to be set, the demand of the people around the business area, the type of marketing mix that should help the organization, the appropriate marketing budget to start the operations, the critical issues that could affect the business, the promotional strategies and the analysis of the market to start a new business initially. It also reflects the barriers and the difficulties that the travel organization can face in its endeavour to expand the business globally. Table of Contents Executive Summary 2 Introduction 4 Strategic Objectives 5 Assessment of the Environment 6 Market Identification 8 Marketing Strategies 9 Action Plan 10 Marketing Budget 13 Monitoring and Evaluating 13 Critical Issues 15 Conclusion 16 References 17 Bibliography 18 18 Introduction The travel and tourism industry on a global basis has grown rapidly in the last few decades. This has been primarily due to the arrival of a borderless world and improved information broadcasting about the magnificent sceneries or destinations all throughout the world. The travel and tourism industry on a worldwide basis is on the point of being deemed as a profitable and rising industry. The objective of the paper is to create an effective marketing plan for a travel organization based in Sri Lanka which is planning to target the United Kingdom as an international market. The paper explains the strategic objectives to be made, to assess the internal and the external factors that affect the organisation, the marketing strategies and the marketing mix for the target market, the identification of the target market, a marketing budget for the business and the critical issues that can affect the intended new project. The paper explains the significance of global exposure of a business as well. Strategic Objectives Objectives are the goals that a company sets to achieve. Objectives are there in all levels in an organization from the top level to the bottom level or at the functional levels. Objectives can be explained in financial terms as well which signifies a company has to achieve the objectives by attaining financial growth. The financial objectives include profits, growth rate, total of the cash generated and value that lies within the business and the dividends paid. There are certain objectives that are important to achieve but are tough to determine. To accomplish the objectives the strategic objectives always demand a standard of measurement. Lack of standard to measure the objectives can create hindrances because the organisation will not be able to determine the growth. Strategic objectives are aimed at obtaining high profits for the business whereas other objectives are customer or public oriented (Dess & et. al., 2005). Measurable: Fulfilling of objectives requires having a pointer to determine the progress. The Sri Lankan travel company should have a measure to track the progress of the company in the UK market in terms of growth and consumer footfall. Specific: It gives a comprehensive significance regarding accomplishment of objectives. The company should have a specific objective to establish in the market. The specific objective would be to attain 10% increase in sales in the 1st year of service as well as to create awareness among the masses in the UK. Appropriate: The desired intentions must be within the objectives of the organization. As the company is making an expansion to the UK market, it should have a proper plan and objective. Realistic: The objectives should be feasible and has to be within the capabilities of the organization. The objectives and the processes of the Sri Lankan company should be realistic and feasible to attain the goals. Timely: The objectives must be achieved within a specified time period. Fulfilling the above mentioned criteria would help the organization and the employees to accomplish the goals as well as the objectives (Dess & et. al., 2005). Assessment of the Environment Internal factors that affect an organisation consist of physical, financial, technological and human resource factors. The job of the management is to make positive availability of resources and use the resources effectively and efficiently to be in competition in the industry with other organisations. The Sri Lankan company has to cope up with several factors that affect the success of the organisation internally and the measure to which the organisation controls the factors varies. The first pertinent aspect is globalisation factor which the Sri Lankan company has to adapt quickly or else it might find it hard to survive and will struggle to change and adapt with the globalisation opportunities that strengthen the organisation against the threats of the environment. The second factor is the technological factor which the Sri Lankan travel company has to deal with to formulate the work to be easier by adapting new methodologies. The impacts of ethics in an organisation are very essential. It is the study taken into consideration by the organisations to react to its ‘internal stimulus’. Structure has a great impact on the organisational success. An organisation divides its employees according to departments, roles and teams. If an organisation chooses a structure on the basis of contractual work, it will bank money on employees but will lose the command over the end products (Armstrong & Kotler, 2011). The external factors that affect the organisation in the UK market comprise sociological factors, economic as well as political factors and technological factors. Sociological factors include ethical values, culture, demographic features along with the new trends. Accomplishment of goals is highly influenced by this factor. The uniqueness of international market has to be adapted by the organisation to establish its market. The economic as well as political factors deal with the competitors, customers and the suppliers in the particular market. The next factor is the technological factor and it has a very drastic effect on the organisation as an organisation such as a travel company needs to acclimatise itself quickly with the updated innovations in the field of technology. Flexibility in decision making is the key to adapt or achieve the technological changes (Armstrong & Kotler, 2011). Security matters have grown rapidly and have made a great impact on tourism sector in the UK. Therefore, it has been a big challenge to protect the travellers. Terrorism has caused an immense fall in air transport as the people are afraid. Political issues prevent global reaction to risks. The security measures to check terrorism can make certain travellers uncomfortable to travel on. Foot and mouth disease also has affected tourism in the UK. Technological factors such as better communication; safety and improved transport system have encouraged the consumers in the industry. The fulfilment of demands of the customers regarding tourism has been through effective use of technology (Hearst Communication Inc, 2012). Market Identification Every business operation requires an intense marketing plan to formulate its business. A well organised plan contains market identification, product strategy, pricing strategy, distributing channels, promotion plan, and public relations and budgeting. Target market identification is a process to recognise the market and the population that can be approached as a potential prospect for purchasing a service/product. To identify what are the needs of the customers, a target market should be segmented depending on the needs, uniqueness and behaviour of the buyers. The segmentation might require different products and diverse marketing mixes for a particular group of buyers. The target market is selected for a specific group of people, where the needs as well as the characteristics of all people are almost the same. The similarities are based on the demographic information that includes age, gender, location, education and income. The target market for the company in the UK market can be business travellers, education based travellers and holiday seekers among others. Identification of the market will allow the Sri Lankan company to determine the pricing and the promotional policies and advertising of their project and also allows reaching the audience it targeted. Identification is important because a company can never establish in a market where it does not know about its customers and their needs. The process of identification is based on the size and the growth of the population. A company then comes across the attractiveness of each of the segments. At last, a company cautiously watches its own objectives and resources for determining the profits to have against the targeted market (Hearst Communication Inc, 2012). Marketing Strategies Marketing strategy should be associated to the corporate and business strategies and should be consistent in directing competitive thrust on superior management level. As marketing has a large number of activities it has to decide on how it will serve its targeted customers. The marketing strategies should be a guide to achieve goals and objectives in an organisation. It is the base on which marketing decisions are made. These strategies are to be mixed appropriately which helps to achieve the goals in an easier way in an organisation. This mix is known as ‘Marketing Mix’ (University of Pennsylvania, 2012). Marketing mix consists of four primary components. These are: Product: Product refers to the goods as well as services which an organisation offers to the consumers of the product and in return it charges certain amount of price. The buyer pays not for the product but for the satisfaction the product will give. The Sri Lankan company may place its travel packages as their product in the UK market. Price: Price refers to the amount that is charged against the products and the services the organisation offers. Pricing mix is an important element as it influences the demand of a product and the profitability of the organisation. While deciding upon the price of the product, an organisation has to keep the demand, buyers’ capability to pay for the product, government policies, substitutes or competitors pricing in mind. The company should charge a reasonable price which should be 10-15% less than the other companies to capture the market initially. Place: The goods must be available in a place where it is convenient for the consumers to purchase. For this the organisation involves wholesalers, distributors or retailers. They act as a chain for the organisation to make the product available in the proposed market. They are also known as channels of distribution. The various globally favoured tourist places would be made available for the travellers by the company. The places would include destinations from Asian region, African, Central and South American regions that boast of major global tourist attractions. Promotion: Promotion is a process of informing the consumer about the product regarding its features, value and availability. Advertising, sales promotion and publicity of the product are certain modes of promotion that would be employed in the UK market. It helps to attract consumers and grow interest of the consumers towards the product. The Sri Lankan tourism company could use the facility of the media to inform the consumers in the UK market about their company as well as the travelling options such as the holiday destinations. The print and the electronic media have influenced the process of promotion by a large extent (University of Pennsylvania, 2012). Action Plan Action How Sensible Measurable Achievable Realistic Timed Strategic Objectives By analysing organisational capabilities It will help to succeed in its operations It can be measured by organisational stabilities Aimed at obtaining high profits Reasonable cost Within 2 months Assessment of market environment Determining internal and external factors It will help to adapt the changes in the industry It can be measured by analysing the factors affecting the environment Helps in determining the needs of the people. Reasonable cost Within 1 month Market Identification By segmenting the target market. It will help to launch a new project easily It can be measured by analysing the needs, characteristics and the behaviour of the buyer Helps an organisation to establish in an unknown market Reasonable cost Within 2 months Marketing Strategies By determining the product, pricing, place and promotion. Helps in serving the target market and keeps the organisation on track By determining the growth of the business in the target market Improvement of the organisation and profit making Reasonable cost Within 2 months Marketing Budget Based on the marketing research Would facilitate to allocated revenues for various activities such as promotion By measuring the profitability ratio Profit for the organisation Reasonable cost Within 2 months Monitoring and Evaluation Regular checking of the progress Keeps the organisation alert when it goes off-beam By determining the working of the strategies of the organisation Success of the organisation Reasonable cost After 3 months Critical Issues Identifying the barriers Alerts the organisation about the marketing barriers Identifying the barriers to the business Reasonable cost Within 1 month Marketing Budget There are quite a few benefits of a marketing budget. The aim of an organisation is to control the expenses and project revenues. This is done by creating a marketing budget. A well intended marketing budget is an important tool for keeping the organisation on the target of achieving the goals and directs the organisation when there is a need to change or modify the marketing plan and strategies. The budget requires to be developed to make sure that the products and the services are out in the open to the target market. Cost of marketing is often underestimated by the marketing managers in order to cut through the cost of advertising for obtaining consumer awareness. This includes maintaining the costs more than the period of time. The travel and tourism organisation of Sri Lanka must have a practical percentage of revenue set for promotional expenditure and the range for this could be in between 15-30% of the total revenue depending on the criteria of product release quantity and the market competitiveness. Monitoring and Evaluating Monitoring: The collection and the assessment of the information in a systematic way with the progress of a plan are termed as monitoring. Monitoring is associated with the improvement of the organisation and its project in an efficient and effective way based on the goals and activities that had been set during planning phase. If monitoring is done properly then it helps to keep the organisation on track and keeps them alert as and when the process is going off beam. It also acts as a tool for quality management providing a solid base for evaluating the process of achieving the organisational goals (The World Bank Group, 2001). Evaluation: It is a process that compares the actual plan and the decided strategic plans that informs the organisation about the objectives as well as goals that have been set and what the organisation has achieved and how. Monitoring and evaluation are interrelated as both would help the travel company to keep them up-to-date with the process. Monitoring establishes the indicators of efficiency and effectiveness, sets up systematic ways for collecting information concerning the indicators, collection as well as keeping the record of the business in an organisation, uses the information of the indicators to inform the management (The World Bank Group, 2001). Evaluation is a process of getting informed about the project of the organisation and the accomplishment of the project. Evaluation helps to keep the organisation on track and analyse the utilisation of resources and the working of the strategies. The Sri Lankan company could evaluate the planning process by determining the company’s customer base that includes the number of customers the company have satisfied and the revenue earned (The World Bank Group, 2001). Critical Issues To operate a business in UK, an organisation has to deal with a few barriers. Political aspect is one of the most important factors as it prevents the business to respond to the global risk. A few countries have this kind of point of view regarding security. Security issues for travelling are a bit higher these days because of the terrorist attacks. The security measures in some of the travel options make the travellers uncomfortable. Security concerns lead to increase in business failures. Technological change is another issue that affects tourism in the UK. Nowadays, the demand of the consumer for cheaper and quicker services is fulfilled largely by the technology that has encouraged a noticeable amount of consumers in the tourism industry. Conclusion From the social perspective the tourism organisation based in Sri Lanka is planning to target the UK market to spread the culture of the country which is not known by the many. Being a small country Sri Lanka wants to expand its business from the business point of view. The organisation wants to expand its business to the UK to target the international market and to attract the people there to visit Sri Lanka which would help them to increase their customer base. Market development is another objective of this tourism company. It would help to develop the market and expand the business. References Armstrong, G. & Kotler, P., 2011. Marketing: An Introduction. Pearson. Dess, G. G. & et. al., 2005. Strategic Management. McGraw-Hill Irwin. Hearst Communication Inc., 2012. Target Market Identification. Characteristics. [Online]. Available at: http://smallbusiness.chron.com/target-market-identification-10304.html [Accessed June 30, 2012]. Ratnaningsih, A. & et. al., 2010. Analysis of Internal and External Factors for Competitive Advantage of Indonesian Contractors. Journal of Economics and Engineering, ISSN: 2078-0346, No. 4. The World Bank Group, 2001. Tools. Capturing Experience Monitoring and Evaluation. [Online] Available at: http://web.mit.edu/urbanupgrading/upgrading/issues-tools/tools/monitoring-eval.html [Accessed July 02, 2012]. University of Pennsylvania., 2012. Competitive Marketing Strategy. Marketing/Sales Programs. [Online] Available at: http://executiveeducation.wharton.upenn.edu/open-enrollment/marketing-sales-programs/competitive-marketing-strategy.cfm [Accessed June 30, 2012]. Bibliography NIOS, No Date. Marketing Mix. MODULE-5 Marketing. [Online] Available at: http://www.nios.ac.in/srsec319new/319EL20.pdf [Accessed July 02, 2012]. Read More