Marketing Theories and Its Application at Contiki Company - Case Study Example

 Tables of Contents 1. Executive Summary………………………………………….……………….……1 2. Situation Analysis …………………………………………….………….………...1 2.1 Introduction and Background ……..…………………….…………….……1 2.2 Analysis……………………………………...………………….….…………1 3. Evaluation of alternative managerial decisions from situation analysis……...2 3.1 marketing mix …...…………........................…..………………………….…3 3.1. 1 Place……………………………………..……………………………..…...3 3.1.2 Product or Services...............................................................................3 3.1. 3 Prices …………………….…….………..…………………………….……3 3.1. 4. Promotion ……………………………………………………………..…..3 4. Recommendation…………………..…………………………….……….………4 5. Bibliography…………………………...…...…….…..……………………………5 1. Executive Summary Contiki Company is one of the biggest companies in Australia which have segmented their market so that they can target an age group which consists of people aged 18 to 35 years. It is attracted to this age group because of many benefits which they offer to its market segment. Some of the benefits include the high quality services with affordable prices that are offered to customers who are travelling to various locations across the world and the opportunity to associate with knowledgeable staffs while travelling (Bennett 2001, p 85). The main purpose of this report is to analyse the Contiki Company, its background, marketing theories and its application and the way company deals with competitors in the market. In addition, it analyses on how the company utilises the effectiveness of the marketing mix in the company, strength of competitors and the bargaining power of buyers/sellers. Lastly, this report has reviewed various recommendations which the company should apply so as to improve its competitive advantage in the market. Such recommendations include the advanced way of booking online, carrying out market research and using prices as marketing strategies (Pierre & Pendergast, 2010, p 120). 2. Situation Analysis 2.1 Introduction and Background Contiki is a coach tour holiday company that operates in various parts of the world such as North America, Europe, Asia, New Zealand, Egypt, Russia and Australia. This company was formed in 1962 and as remained as a market leader due to high quality services which they offer to its customers. Because of high competition in the market the management of this company, after researching its market extensively, decided to segment its market and focus on that segment. The company has also utilised technology in marketing itself so that it can be known globally. Furthermore the company has established a website (www.contiki.com) which emphasises the reason why you cannot afford, as a customer, to miss spending your holiday with the company (Mylneand and Llewellyn 2009, p 70). 2.2 Analysis The company has been loosing customers because of various reasons. Such reasons include the increasing number of competitors in the market. After carrying out market research which was done by interviewing customers and observations, the researchers found out that the competitors in the market was focusing on customer satisfaction as their first priority. More to the point, the company did not apply marketing strategies which could prevent these competitors from entering the market. The second reason which made the company to loose it customers was because of the poor corporation and thus their employees end up handling customers carelessly. Besides, customers were not satisfied with the quality of the products and services they receive making them to prefer other alternatives. Employees were not well motivated and thus they were not committed in offering faster and quality services in the market. On the other side the competitors were offering quality and faster services to the customers making the company to loose its customers to emerging competitors in the market segment they serve. Other reason which had caused such a trend in the company was ineffective promotional tools which the company was using, for example the company was using the traditional way of advertising through the TV. These advertisements fail to address the factors which the customers are looking for. Such elements which customers are looking for include the conformability, safety, professional drivers and possibility of booking in advance through internet (Oja & Parsons, 2009 p 79) This made the company to be less popular in the market especially when the competitors had flooded the market and confusing the customers by naming their company’s products close to that of Contiki. Lastly, competitors had used strong marketing skills so that they could increase their market share they serve in the market, some of the strategies used comprise of penetration pricing and loss leader pricing because demand in the market is highly elastic. The market is made up of young people who are sensitive to prices; they prefer companies who offer lower prices (Saunders, & Armstrong, 2008 p 83) Through this strategy the competitors was in a position to influence many customers to leave Contiki buses. However, the company had stick to it prices since they had used higher prices to signify the quality of their services thus attracting loyal customers who have been using the services of the company for along time. 3. Evaluation of alternative managerial decisions arising from situation analysis Following the results in the situational analysis as shown above (2.2), the company has applied various marketing mix theories in their segment they serve so as to rectifying the problem and restore it initial glory in the market (Hunt, 2002, p 59). Such marketing theories used in the company include marketing mix which comprise of promotion, product, place and price. The company has preferred these elements of promotional mix because it assists the company in meeting the customers’ needs effectively i.e. they could use as a benchmark of developing products which satisfy the customers, set the correct price, take the goods to the consumers’ premises and inform the customers about the existence of these products and services through promotions. 3. 1 marketing mix 3.1. 1 Place The first element of the promotional mix is the place. The company should use this element to position its services in the right market, at the right time i.e. in holidays so that the customers could use buses of Contiki on travelling. The company could ensure that the customers are aware of their services through advertisement and other promotional means (Hunt, 2002, p 60-61). In addition, the company should use effective channels considering the basic utilities such as time, possession and place. These basic utilities will ensure consumer satisfaction, right location of the products or services and quality services. Furthermore, the company should emphasise on these utilities when there is high competition in the market so that the customers could prefer services of the Contiki and avoid using competitors’ services. 3.1.2 Product or Services The services of the company should by all means be unique and very attractive to the market segment they serve. They should make customers feel that they are spending their money on worthy services which serve their needs and contain the things which the customers expect to get by using the services of Contiki Company. Contiki Company target specific segment and provide them with services which has always left the customers wondering and wishing to receive the same services again. Due to this, Company as remained to be unquestionable as a global leader in tours for people who are between the ages of 18 to 35 years (Hunt, 2002, p 62-64). 3.1. 3 Prices This is the third element of marketing mix which is very important when strategising on how to deal with many competitors in the market that offer a substitute products to the customers. It is therefore important for the Contiki Company to employ various strategies such as lowering their prices and to take advantage of their large economies of scales since it is impossible for the competitors to offer such prices because they will be running at a loss (Hunt, 2002, p 60-63). However, the company should priced there products or services using various strategies. Such strategies include market-penetration pricing which is commonly used for new products and price-skimming strategy. This is considered when the company wants to recover the amount used in advertising and other cost associated with development of a product or services (Ellingham & Garvey, 2009, p 50) 3.1. 4. Promotion This is the fourth element of promotional mix theory which the company has utilised because of high competition in market, the company have adopted various promotional strategies which make them to remain the market leader and maintained it competitive position (Hunt, 2002, p 65). Some of these promotional methods they use include advertisement, newsletters etc. They have design a very influential advertisement which emphasises their mission statement that is “Holidays is the worldwide leader in vacations for 18-35 year-olds”. This mission statement is normally explained in the advertisement which has attracted many customers. 4. Recommendation Since Conkiti is an international company, they should develop advanced way of booking online. This will attract young people because this age group is addicted to technology. Secondly, the company needs to carry out extensive research on their market segment so that they can identify their weaknesses and strengths. In addition, they should use a price as a marketing tool whereby they set the prices differently. For example, during holidays the company can set the prices for students to be lower than the normal prices. This will attract many students thereby increasing the number of its customers in their market (Kolb 2008, p 104). Thirdly, the company needs to train its employees on how to handle customers effectively and encourage customers to give suggestion concerning the services they receive from the company. Furthermore, they should try to find out what the competitors are doing in the market, their strategies and how they should react to them. This is very important for every profit making organization (Oliveira and Senivongse 2009, p 165). Lastly, the company should focus on customer satisfaction as the major aim so as to maintain their leadership position in the market. This will also help to create positive relationship with the customers in which they will have an opportunity to cross sell their products in the market. 5. Bibliography Bennett, A. J. 2001. Introduction to travel and tourism marketing. Jute and Company Ltd, (7), Page 83-86 Ellingham, M & Garvey, G. 2009. Andalucía. Rough Guides (6). Page 49-52 Hunt, S. D. 2002. Foundations of marketing theory: toward a general theory of marketing. M.E. Sharpe (4). Page 59-65 Kolb, B. 2008 Marketing Research: A Practical Approach. SAGE Publications Ltd. (4), Page 103-105 Kurtz, L. D. & Snow, K. 2009. Contemporary Marketing. Cengage Learning, (2), Page 88-91 Mooij, K. & Marieke, D. 2008. Global marketing and advertising: understanding cultural paradoxes. SAGE, (2), Page 92-94 Mylne, L. & Llewellyn, M. 2009. Frommer's Australia 2010 FROMMER'S AUSTRALIA. Frommer's, (5), Page 69-71 Oja, D. & Parsons, J. 2009. New Perspectives Computer Concepts 2010. Cengage Learning, (12), Page 78-80 Oliveira, R. & Senivongse, T. 2009. Distributed Applications and Interoperable Systems. Springer, (2), Page 162-166 Pierre, B. & Pendergast, D. 2010. Tourism and Generation Y. CAB International, (4). Page 119-122 Saunders, J. and Armstrong, G. 2008. Principles of marketing. Financial Times Prentice Hall, (5), Page 82-84 Read More