Forty Travel and Tourism Agency - Dissertation Example

Forty Travel and Tourism Agency Introduction Personal selling is the personal presentation of products and services by the firm’s sales force for the purpose of making sales and building customer relationships (Kotler & Armstrong, 2004). Thus, personal selling is a tool used in the marketing communications mix and is regarded as the most effective at certain stages of buying process, particularly in building up buyer’s preferences, convictions as well as actions. This strategy is seen as most effective given that it involves personal interaction between two or more people so each person is better positioned to observe the other person’s needs. The effective salesperson needs to keep the interests of the customers at heart in order to build a long term relationship. As such, this sales report seeks to analyse the significance of personal selling in the operations of Forty Travel and Tourism Agency (FTTA). It also seeks to suggest a sales strategy proposal for the growth of business by about 30 per cent. The sales report is divided into different categories which include the following: the organisation’s short history, analysis of the organisation’s key players, overview of resources (people, premises, equipment, financial strength, intangibles, description of the products/services offered as well analysing the market structure. The last part of the report will outline a sales brief for the organisation and the strategies that can be implemented in order for it to gain a competitive advantage. History of the company Forty Travel and Tourism Agency (FTTA) was established on 18 February 2001 in Fujairah, United Arab Emirates (UAE) by Intekhab Jamal. The company has two offices at present and it specifically deals with offering services related to travelling and tourism. This can be categorised as a small to medium enterprise (SME) by virtue of its size compared to the other actors in the same industry. Like any other SME of this nature, FTTA operates on a small scale and it particularly targets individual travellers in its operations and much of the business is conducted through personal interaction with the customers though the company also uses other tools such as the internet and phones. Intekhab who is The President and the founder of FTTA is the major player in the company though he often consults with the branch managers. He established this business with the main aim of satisfying the private and individual segments of customers in the travel and tourism industry that were not fully covered by the large commercial organisations. Intekhab is a very creative and energetic person and he possesses great communication skills. The founder of this organisation has a strong background in marketing and the core business of the company is to market travel and tourism services such as flight and hotel bookings. FTTA is comprised of 19 employees and the Head office is located in the city of Fujaira. It also has another office at the Airport of Fujaira and this office works as a Call Centre which is operational for 24 hours. The organisation has 17 computers, five printers, three copiers, three fax machines and six landline telephones. However, like any other organisation, FTTA was not spared from the negative impacts of the global financial crisis that gripped the whole world about two years ago. On a positive note, the company’s net profits began to increase gradually from the beginning of 2010. The company has a strong brand image that has been developed over time through networking and communication skills possessed by the employees. The organisation is primarily concerned with quality processes and procedures in a bid to create good reputation since this is seen as the major source of gaining a competitive advantage in this particular industry. FTTA is a travel company which is mainly concerned with offering intangible services such transport and hotel bookings to different people who will be travelling for business, leisure or study. The company offers services that include boat cruises, hotel bookings, car rentals, travel insurances, conferences, flight bookings and cargo services. As the name suggests, this is an agency which acts as an intermediary between the travellers and service providers such as hotels since they are mainly concerned with handling all the booking processes on behalf of the customers. As far as segmentation is concerned, the organisation mainly serves two market segments. Basically, “market segmentation is the division of a heterogeneous market into fairly homogeneous subsets or segments of customers who normally have similar needs and likely to respond in a similar way to the market offering.” (Strydom, 2000, p. 35) In this particular case, the main targeted segments of customers are the citizens and foreigners in Fujairah. FTTA also segments its markets on the basis of geographical location, prices as well as size of the market given that it is located in only one city. In an interview with the President and Founder of FTTA, he suggested that customers chose their organisation because they offer personalised services which could allow the consumers to make their bookings online through their company. However, the organisation does not use prospecting strategy to find the customers. The manager also said that it was easier to keep the customers than finding them. This area needs to be revised in order to improve the viability of the organisation in terms of attracting customers to its organisation. On the other hand, the consumers interviewed suggested that they preferred using this agency because the prices are relatively cheaper compared to the other big commercial organisations. The other consumers particularly the foreigners suggested that the location of FTTA is convenient given that it has offices at the airport which makes it easier to book for their destinations since they have little knowledge about the country. Analysis of market, customers and competitors FTTA is involved in travel and tourism business and they offer services such as flight tickets bookings, transport as well as hotel bookings to different customers. The firm uses the B2C and B2B channels of business. These routes are ideal in that B2C mainly links the company with its customers while B2B links the organisation with other businesses such as hotels, transport operators as well as other players in the industry. The main competitors in this market are Travellink and Fujairah travel agencies. There are also about 15 indirect competitors that offer flight services such as bookings for flight tickets. It can be noted that the competition is a bit intense in this industry since FTTA is a small player compared to the other established agencies. There are also private companies that offer flight tickets as well as conference facilities to different customers on business work. However, the prices of the competitors are usually higher compared to those offered by FTTA which is often viewed as an advantage by the customers. The quality procedures and process of the organisation are excellent and they intend to offer new services such as booking for conferences mainly to small and medium business enterprises which will result in the growth of the company. Though the company has only two branches, its financial support is very good. The company mainly pursues a segment comprised of private and individual travellers for leisure unlike other competitors who mainly target big organisations and other consumers who are on business. FTTA uses social websites such as Face book as well as Twitter to link with its customers and it offers its services for 24 hours a day, seven days a week. However, of concern is the fact that the company does not have loyalty schemes in place to retain its customers. The other problem is that the company does not prospect for new customers in business. Essentially, the purpose of business is to satisfy the needs of as many customers as possible in such a way that the organisation will also be able to generate profits to meet its goals as well as objectives. This can be done through establishing good relationships with the existing customers as well as attracting new consumers to the organisation. According to Ferrazzi (2006), the viability and survival of an organisation in the long run is mainly dependent on the relationship that exists between it and the customers. During the contemporary period, it can be noted that the business environment in which organisations operate is dynamic and is constantly changing hence the need for companies to establish long lasting relationships with the customers. For instance, consumer tastes are constantly changing and it is imperative for a company that is concerned about its profitability to keep pace with all the changes obtaining in the environment. Sales strategy for growth As noted in this particular case, the main weakness for FTTA is that it does not prospect for new customers and it does not have loyalty schemes for the old customers. Essentially, a business that is concerned about its long term survival should ensure that it puts some measures to attract as well as retain the old customers. In this type of business, there are no tangible products sold but only services that are exchanged for a certain fee. As such, it is imperative for the organisation to be aggressive in looking for more customers. This kind of business is also mainly done through direct interaction with the customers hence personal selling is an effective marketing tool that can be fully utilised in order to attract as many customers as possible. However, in pursuit of personal selling in this case, the following steps must be followed by FTTA in order to implement a sales strategy for growth. It should carefully segment its market, it must utilise the strategy of personal selling and it must strive to create customer relationship marketing as a way of promoting sales growth. Segmentation In a business of this nature, the consumers can be segmented on the basis of their lifestyles given that this industry is closely related to leisure and luxury whereby the people can live without them. As such, Kotler (1999) suggests that psychographic segmentation deals with characteristics such as personality, attitudes, opinions as well as life styles and this company should use this strategy to segment its customers. There is need to break the market into smaller segments and particular emphasis must be on small to medium enterprises given that it is still a small organisation which at the present moment cannot match the competition by the other big and established organisations discussed above. In most instances as is the case in UAE, small market segments are often overlooked by big companies since the mainly specialise on targeting big organisations and business people who can afford to pay more. In this regard, FTTA must try to persuade the customers and offer a range of services that should also include offering conference facilities at affordable rates. Conducting marketing research about the needs of the customers is essential in this particular case so as to be better positioned to gain a competitive advantage. Having carefully segmented the targeted market, there will be need for FTTA to position itself strategically such that the customers will not struggle to access the organisation. This can be done through creating more links with other small to medium operators in the travel and tourism industry. Service marketing of this nature should be designed in such a way that is unique from the other competitors in order to effectively satisfy the needs of different customers in different market segments. Personal selling strategy According to Ashton (2004, p. 11), “selling is the process by which one person helps another to make the decision to buy something.” In most cases, personal selling is regarded as an effective marketing tool to generate sales for the organisation. Personal selling as defined above is direct communications between paid representatives and prospects that lead to transactions, customer satisfaction, account development and profitable relationships. As such the FTTA should prospect for customers through direct interaction or email services. The tactical plan for executing this strategy should mainly rely on the communication tools used and the internet in this particular case should be used as the main communication channel to reach the customers. The internet is increasingly playing a pivotal role in the travel and tourism industry since it can reach a lot of people instantaneously. There will also be need for the organisation to create contacts with the prospective customers whereby they are persuaded to buy the products and services offered. In this case, there is need for the organisation to appeal to the customers to show that their services are unique and they should also offer incentives for them to use the services offered by the company. The other approach that can be taken is the utilisation of word of mouth through interaction with different customers with the aim of attracting them to use the services offered. The organisation should strive to positively change the behaviour of the prospective consumers in order to ensure its viability. No business can survive without the customers hence there is need for FTTA to attract as many customers as possible. For example, The Ministry of education mainly offers flight tickets to students on scholarship at discounted rates through the utilisation of the personal selling strategy. On the other hand, Al Naboodah Group Company and the Fujaira government also offer flight tickets as well as conference service mainly to employees as well as other private customers. FTTA can contact them in their personal selling strategy to attract them as customers. It is also very important for FTTA to change the attitude of the customers in order to appeal to their interests. Consumers form relevant attitude to buying behaviour as a result of direct experience with the product. McCarthy & Perreault (1996, p. 66) define attitude as “a learned predisposition to behave in a consistently favourable or unfavourable way towards market related objects or situations.” In most cases, the products and services are developed over a long period of time and consumers tend to learn about the products through the way they are exposed to them. It is therefore imperative for this company to portray the services offered in the best way possible and the customers must be continuously reminded about the unique services offered. Attitude is a learned process which is directly related to the customers’ response to the products or services offered. Having attracted the customers, there will be need to create loyalty among them through establishing a long lasting relationship with them as well as putting concerted efforts to keep on prospecting for more customers. Customer relationship Creating customer loyalty is a very important aspect in running a business profitably and enlightened marketers have realised that there is need to establish customer relationship in order to ensure the viability and sustainability of the organisation. As such, customer relationship is a philosophy that emphasises on establishing long term partnerships with the customers such that they will return for the services or products again (Lamb et al 2008). This relationship is often built through offering valuable services that are satisfactory to the customers and the services ought to be constantly improved to meet the changing tastes of the customers. Thus, firms that forge a relationship with their customers stand to benefit from repeat sales. This creates loyalty among the customers and there can also be referrals to the other prospective customers by the old customers which will increase sales and this leads to an increase in sales, market share as well as profits (Strydom, 2004). When an organisation establishes customer relationship successfully, costs will fall since it is easy to retain the old customers than to attract new consumers. It is therefore imperative for FTTA to establish good customer relationships in order to generate more sales. On the other hand, the customers also stand better chances of benefiting from a stable relationship that may exist between them and a particular organisation. It will also be easier for the service provider to be quick in responding to the changing needs of the customers which should be a guiding principle for FTTA. Kotler (1999) suggests that loyalty among the customers is very important given that the business environment during the contemporary period is very dynamic and is often characterised by stiff competition as noted in this particular case of FTTA. Where there is loyalty among the customers, they will identify with a particular organisation and this social bond is very important in the survival of business in the long run. As noted FTTA has no loyalty schemes hence there is need to put these in place where for example frequent customers can be offered incentives such as discounts or any other token of appreciation that will strengthen the relationship that exists between the firm and the consumers. There would be likely chances for the customers to return for more business which gives the organisation the opportunity to retain all the loyal customers which can ensure its sustainability. This can be done through continuous talking to the customers and informing them about the new developments in services offered. The number of call centers can be increased and there is need for the organisation to continuously harness the use of the internet as a tool to reach the customers. FTTA should strive to design a special website that can create links with its customers since it provides a two way communication channel. Sales brief Forty Travel and Tourism Agency (FTTA) has two branches in Fujairah, United Arab Emirates (UAE). This sales brief highlights the business opportunity for the firm. HR Solutions is a consultancy company that specialises in offering short courses to people employed in different HR departments of different companies. This is a lucrative business given that they do not have their own venues so FTTA can capitalise on this opportunity through offering conference venues at subsidised rates since this consultancy company has many clients. HR Solutions is the name of the company. The buyer specialises in offering short courses to human resources personnel FTTA is located in a good position since the buyers also deal with clients within the same geographical location of Fujaira and is also better positioned to meet the needs of the clients. At the moment, there are no competitors who offer the same services and FTTA can capitalise on this opportunity. So far HR Solutions has confirmed 20 meetings to be conducted within a period of two weeks hence the company can make its first call for business since this opportunity is a continuous process. Conclusion Over and above, it can be noted that personal selling is the personal presentation of products and services by the firm’s sales force for the purpose of making sales and building customer relationships (Kotler & Armstrong, 2004). This is a very effective tool in establishing long lasting relationships between the organisation and its customers. A close analysis of the case of FTTA, an SME operating in Fujairah, United Arab Emirates (UAE) shows that the organisation needs to effectively use the personal selling strategy in order to promote growth of sales. This firm is in the travel and tourism industry and it offers services such as transport, flight and hotel bookings such as boat cruises. It has been noted that the firm does not prospect for customers which is its main weakness. In order for it to promote the growth of its sales, there is need to segment the market further, fully utilise personal selling as a strategic too as well as to create customer relationship. Bibliography Ashton, R 2004, How to Sell, Octopus Publishing, ISBN 0-600-6103-2. Cant, MC 2000, Marketing Management, 4th Edition, Juta and Co Ltd, CT. Ferrazzi, K 2006, ‘Wanted: Intimate Marketing Relationship,’ Brandweek; Oct 9, 2006; 47, 36; Research Library Core pg. 16 Girard, J 2006, How to sell anything to anybody ,Simon & Schuster Ltd, ISBN 0-743-2739-6. Kotler, P & Armstrong G 2004, Principles of Marketing, Pearson Education, Upper Saddle River: NJ. Kotler, P 1999, Kotler on Marketing: How to create, win and dominate Markets, Free Press, London. Lamb, CW et al 2000, Marketing, Oxford University Press, CT. Lancaster, G & Reynolds, P 1999, Introduction to Marketing: A step by step Guide to all the tools of Marketing, Kogan Page, London. McCarthy J.E & Perreault W. D. (1996), Basic Marketing: A Global Managerial Approach, 12th Edition, Irwin McGraw-Hill, USA. Randall, G 1994, Trade Marketing Strategies: The Partnership between manufacturers, brands and retailers, Butterworth-Heinemann, London. Smith, PR 1999, Great Answers to Tough Marketing Questions, Kogan Page, London. Strydom, J 2004, Marketing, 3rd Edition, Juta & Co Ltd, CT. Wang, Y, Hing Po Lo, Chi, R &Yang, Y 2004, ‘An integrated framework Managing Service Quality’ Volume 14, Number 2/3, 2004, pp. 169-182 Appendix 1 Interview questions Who are your customers? Our customers are mainly individual citizens residing in UAE as well as foreigners from other countries. How do you get your customers? We mainly attract our customers through face to face interaction? Do you prospect for customers? We do not prospect for customers. We assume that they know our services since we offer favourable prices. Do you have loyalty schemes? At the moment we do not have any. May be we can utilise that strategy in the future. How many customers do you have? The number is always changing so I cannot provide an exact figure. How do you intend to expand your business? We aim to offer more services such a catering to our catalogue. What are your main strengths? We have a unique brand name. Read More