Special Interest Tourism - Case Study Example

1. Introduction The rapid growth of markets internationally has been related with the introduction and promotion of innovative products; firms that have managed to appropriately update their strategies – meeting the customers’ preferences – have been able to increase their competitiveness towards their rivals. On the other hand, the development and change of a firm’s existing products/ services has been proved to offer a significant support to the organizational performance; the level at which the promotion of new products/ services benefit a firm’s profitability is related with the appropriateness of the marketing policies employed but also with the existing market trends – i.e. only products/ services that respond to the needs of the targeted market are expected to have a role in the increase of a firm’s performance. At the same time, products/ services that have been tested in a specific market and have been proved to be particularly successful – referring to the level of the profits achieved – are likely to be preferred by firms that need to increase their performance without putting their position in the market in risk. Tourism industry is an extremely competitive one. Under current market conditions, the survival of the firms operating in this industry is depended on their ability to develop innovative products/ services and to update their marketing strategies meeting the customer preferences – as identified through relevant market research. Current paper focuses on the examination of the potential entrance of Starlight Tours, a major competitor in the British tourist industry, in the area of ‘niche tourism’; the benefits of this type of tourism have been identified; the marketing policies required for the promotion of the relevant packages are evaluated. It is concluded that the development and promotion by the firms of products/ services of the specific tourism sector could help to the increase of organizational performance; however, it is required that measures are taken for the limitation of relevant risk. 2. Starlight Tours – company overview Starlight Tours operates in the British market for about 15 years; since its establishment, the firm has managed to achieve a continuous growth; currently, the firm continuous its efforts to keep its profitability at high levels; however, under the influence of the global crisis the performance of the firm faces delays and significant pressure – in the last 3 months, i.e. the first quarter of 2010, the performance of the firm has been decreased by a percentage of 15% compared the same period in 2009. It is clear that measures are needed for the improvement of the firm’s performance; measures chosen need to be in accordance with current market conditions; the firm’s ability to respond to the needs of the suggested projects - referring to the availability of resources for the update of the firm’s existing policies – will be depended on its readiness to respond to the challenges of the global and the British market (Raina et al., 2004, p.38). The development by the firm of products/ services related with the niche tourism is of high importance for the stabilization of the firm’s position in the British market; however, it is necessary that appropriate marketing strategies are used aiming to align the new products/ services with the firm’s existing products/ services; at the next level, the ability of the firm to match products with its customers will be crucial for the performance of these products/ services in regard to the specific organization. 3. Methods by which the firm can match products to customers The firm should try to match the products to its customers; this target could be achieved primarily by identifying the needs of customers – influenced by the market trends; at the next level, appropriate products/ services could be developed that best suit to those needs (Panda, 2007, p.12). Often, the customer needs are reflected in customer preferences. These preferences have been identified and evaluated in the literature – see next section. The holiday-makers need to take into consideration a series of factors when planning the holiday packages which are going to be offered to their customers; these factors could be summarized to the following ones: a) the external economic environment, i.e. the market’s financial conditions, b) the buying power of travelers in the specific market – as identified by relevant statistics and market research, c) the costs/ expenses of various projects of niche tourism – in case that this cost is high, a solution could be the promotion of niche tourism packages that involve in activities abroad and d) the firm’s existing resources – referring both to the funds and the employees available for the realization of the relevant projects. Under these terms, the firm could use the following methods for matching products to customers: a) develop packages the cost of which is of an average level, b) use marketing strategies that have been already tested and plans of promotion that are innovative; the cooperation with groups that activate in the areas of interest would be of particular importance for making the involvement of the firm in the niche industry known to existing and to potential customers (Williams, 2004, p.28), c) improve its relationship with existing customers; the firm’s customer basis could be used in order to develop projects that could be used just as tests towards the final package; in this context, free packages – short in duration - of niche tourism could be given to the firm’s existing customers in order for the firm to test its potential performance in the specific sector. 4. Explanation of the growth of niche tourism – factors that could affect customers to prefer the specific types of packages Niche tourism is a type of tourism that faces a continuous growth; in the literature, the preferences of tourists on specific types of holidays have been explained using appropriately customized theoretical frameworks. A primary approach has been the theory of Laing) who ‘argued that holidaying is a matter of habit’, in other words no relationship exists between past and future holidays; holidays are considered to be rather an issue of habit. A similar approach is that of Ryan (1994) who supported that the preferences of customers on holidays are depended on their past experiences on holidays; in this context, the firms that operate in the specific sector are likely to invest on the same products emphasizing on the satisfaction of customers in the past. However, most of theorists accept that the preferences of tourists in regard to their holidays can be differentiated under the influence of a series of factors. Ryan (2002) has tried to explain the expected satisfaction of customers in regard to future holidays taking into consideration their satisfaction on other holidays; the above relationship can be justified using the theory of travel ladder developed by Pearce (1988, in Ryan, 2002, p.73); the specific theory ‘assumes a developmental relationship-tourists progress from one holiday to another type’ (Ryan, 2002, p.73); however, the terms of the above relationship are not clearly defined. It can be assumed that under specific circumstances tourists that used to prefer a specific type of holidays can change their preferences and choose a different one. The relationship between the previous and the new type of holidays will be strong. Towards the same direction, the combination of the views of Pearce (1988) and Argyle et al. (1981) can lead to the assumption that ‘holiday - makers make their vacations work for them to achieve fulfillment of needs’ (Ryan, 2002, p.74). In other words, the needs of tourists are likely to be the basis for the development of specific products/ services in the tourism industry. The literature presented above can be used in order to explain the behaviour of tourists in regard to specific types of holidays. The growth of niche tourism can be explained by referring to the above theories but also to specific factors and events – that are likely to influence their preferences on their holidays. The expansion of niche tourism has been explained by referring primarily to the preference of tourists for the urban environment (Ryan, 2002, 136). It should be noted that niche tourism refers not only to holidays related with the urban environment but also to activities of different types, including festivals, carnivals and celebrations of various types. Tourists who like entertainment are likely to prefer the above activities that (in accordance to Getz, 1991) ‘have become one of the most common forms of modern special events’ (in Ryan, 2002, 138). Other activities to which the special interest tourism refers can be the following ones: the photography, the gastronomy, the geology and so on. The success of the special interest tourism cannot be denied; in accordance with Novelli (2005) ‘with the growth and popularity of special interest holidays the danger is not that group sizes will increase but rather that several providers of photographic tours will embark on the same destination at the same time’ (Novelli, 2005, 20); the above view refers particularly to the photographic tourism – as a special interest tourism; however, it could be used as an indication of the growth of special interest tourism internationally. 5. Problems in developing packages related to niche tourism in terms of logistics In order to understand the problems that could appear in relation with the engagement of the firm to the niche tourism (or special interest tourism) it would be important to describe the general framework of the specific tourism sector. In accordance with Derret (2001) special interest tourism can be defined as ‘the provision of customised leisure and recreational experiences driven by the specific expressed interests of individuals and groups’ (Derret, 2001, 3, in Novelli, 2005, p.16); in other words, the needs of special interest tourism can be many – referring especially to the logistics part of the specific activity. In this context, the firm’s managers need to develop mechanisms that will ensure the appropriate flow of information and resources across the organization; in practice, this means that the firm’s information systems should be updated and employees should be hired in the customer services section; employees would be skilled in the special interest tourism; cooperation would be also developed with local authorities and agents – those involving in the activities included in the special tourism packages that the firm will develop (Gunn et al., 2002, p.13). In other words, in case that the firm chooses to enter the specific tourism sector it has to develop methods in order to face the following problems: a) a high number of customers can be interested in the same package; mistakes should be avoided in making the reservations – it would be difficult to make last minutes arrangements because of the time of preparation that the specific holidays packages require, b) specific information systems are necessary for handling the products related with the special interest tourism; the flow of information when handling the relevant activities need to be rapid and accurate – mistakes could damage the whole project; existing information systems should be updated making sure that no failures will take place during a critical period – for instance, when arrangements are made on the various activities of a particular package (referring to holidays packages involving in special interest tourism)., c) extra funds should be available in advance – compared to the common holidays packages – in order to book the activities included in the firm’s niche tourism packages. 6. Conclusion - Constraints that the firm is likely to encounter The firm has not engaged to the specific activity in the past; this means that there is no available net of coordinators for the arrangement of the relevant activities; relationships should be developed with local agents in areas where the niche tourism activities are likely to take place. It should be made sure that these activities are in accordance with the law and the local ethics/ practices otherwise there is the risk of opposition from the local authorities. On the other hand, since there is no experience in arranging similar activities it could be expected that for a specific – initial – period mistakes appear; in order to minimize the relevant risk it would be necessary to have in place an alternative plan of action – which could be activated if the ordinary plans were led to a failure (because of unexpected delays or other factors). On the other hand, the local agents and authorities – referring to the areas where the activities of niche tourism will be developed – may not tend to show cooperation or they just don’t have the willingness to participate in such projects; it is necessary that before planning a schedule of such activities a relationship is developed with the local authorities making sure that the attempted initiative will not face severe constraints; otherwise, the most appropriate solution would be the change of the place or the change of the type of the activities included in the firm’s package on niche tourism. The success of the firm’s initiative to enter the niche tourism sector is depended on its ability to face the above constraints and identify the marketing methods that would be most appropriate in order to promote the specific products to its customers. References Gunn, C., Var, T., 2002. Tourism planning: basics, concepts, cases. Routledge Novelli, M., 2005. Niche tourism: contemporary issues, trends and cases. Butterworth-Heinemann Panda, T., 2007. Tourism Marketing. ICFAI Books Pearce, P., 2005. Tourist behaviour: themes and conceptual schemes. Channel View Publications Raina, A., Agarwal, S., 2004. The essence of tourism development: dynamics, philosophy, and strategies. Sarup & Sons Ryan, C., 2002. The tourist experience. Cengage Learning EMEA Williams, S., 2004. Tourism: The nature and structure of tourism. Taylor & Francis Read More