The paper "Club Med Competition, Pricing Strategy, Differentiation and Strategies Change" is a perfect example of a marketing case study. An increase in a number of hospitality facilities including hotels, restaurants and resorts have made the existing one to rethink their strategies so as to sustain competition (AbuKhalifeh & Mat Som 2012, p. 355). Majorly, competition has been increased on the basis of branding, pricing, differentiation and expansion. In so doing, the hospitality firms have been forced to use much money to achieve such competitive strategies. While others have been successful, others have failed because of the ever-changing needs of the consumers.
Cassedy (2014) claims that Club Med is one of the vacation companies that found it hard to make profits because the customer preferences had changed. Therefore, this report will assess Club Med current issues, including current problems, why the company is unable to provide competitive prices, how the company can differentiate and justify the use of high expenditures during the change process. 2.0 Club Med issues analysis Club Med is a multinational chain of resort that was first established in 1950 in France (Cassedy 2014).
The company has expanded over the years and now found in numerous countries across the globe. Club Med (2014) contends that today, it has more than 100 resort outlets in Mediterranean, island, tropical and snow place in 40 nations across the world. The resort provides all-inclusive leisure experience in exotic places to its customers. Some of the service offered by Club Med comprise of food, lodging, sports and game activities, and shows among others (Club Med 2014). Cassedy (2014) asserts that the company expanded to the Spain, Switzerland, Malaysia, China, the US and Tahiti among others.
Club Med became very competitive and one of the fastest-growing from its early years the to late 1990s in the tourism and hospitality sector both in France and worldwide. In 2000, the competition had become very stiff company and its market position started to decline (Anderson 2010, p. 6). The situation got even worse when market players consisting of Carnival Corporation, SuperClubs, Sandals Hotels and Sol Meliá , began to have similar products (Quester & Fleck 2010, p. 97). It is this time when the management of Club Med realized they required to rethink and re-strategize so as to improve the image of the resort. 2.1 Pricing According to Cassedy (2014), Pricing has been a great problem for Med Club in the recent years.
The company implements a standardized price which has become very difficult for them to sell. The situation has made the company lose its customers to competitors who are offering the same products, but at a lower price (Anderson 2010) 2.2 Consumer preferences Consumer preferences had changed due to economic conditions. The customers were keen not spend large sum of money for resorts which involved numerous activities that they were not enjoying like before (Cassedy 2014).
The shift in preference has been posing a severe concern to Med Club, since its rivals had already created package to satisfy new customer demands 3.0 Case questions answer 3.1 The company’ s current problems and whether it could have avoided its pricing scheme Over the years, the company had a competitive advantage due to its exemplary customer service (Club Med 2014). They also introduced various packages where they ensured the accumulated large customer base.
Club Med (2014) claims that it enabled their customers to join the resort as members through paying an introduction fee and also the annual fee. In that manner, they ensured customers would come back. The process made the company to create a monopoly in France (Daun & Klinger 2006, p. 248). They expanded to several countries and continued with the process. The company adopted a standardized pricing for its customers all over the world. Even with this form of pricing, it was the cheapest compared to their rivals. The strategy created some sort of barrier to entry.
All this time, the Med Club maintained great competitive from its good relationship with the French government and other foreign government (Cunha, Rego & Kamoche 2009). Solnet & Kandampully (2008, p. 180) argue that the company also owed its competitive advantage to economies of scale, strong brand identity and cheap labour.
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