Marketing Strategy for a World Travel Agency - Case Study Example

Marketing Strategy for a Travel Agency Name: Institution: Date: 1. Marketing objectives World Travel Agency marketing objectives is to ensure the growth of sales to achieve breakeven within eight months of operation. The third quarter of operation will target at least 10% profit of the operation costs. The industry agency in Australia depends on the robust tourism industry for its growth. Competition is stiff and requires vigorous marketing and promotion. The company will target to grow the market share by 5% every year and become one of the market leaders in the next seven years. The agency will target to retain its customers through loyalty programs and discounts. The company will target to retain at least half of its first-time users of its services and become a favourite option within four years (Martin, 2014). Points will be accumulated for the reuse of the agency’s services and can be redeemed for prizes. Discounts will be given for subsequent use of the agency’s services. The agency will target to be acceptable by the local community through engagement in corporate social responsibility like awareness programs on health and safety. The agency will aim to be among the popular travel agencies in Australia within the first ten months of its operation. 2. Product Strategy Product differentiation Product differentiation is important in order to serve a variety of existing and new markets. The agency’s services will target both the high end market for high income earners and low end market for the middle income earners. Product differentiation ensures that the firm covers the entire market and is not adversely affected by seasonal factors that may affects members of a certain group of buyers (Parul, 2014). Product differentiation through provision of a variety of services and products provides customers with a wide option to choose from. Positioning World Travel Agency will position its services as high quality services that are affordable by customers with different economic backgrounds. It is important to emphasize on quality, convenience and affordability of the services to be provided by world travel agency. Customers appreciate quality for their money and when the services are affordable in promotes repeat sales. Appropriate positioning is important for both branding and promotion of the products and services in the market (Pujari, 2015). Branding World travel agency will be branded as the superior quality service provider in the travel industry. Aggressive advertising and promotion will be used to familiarize the customers with the types of services that the agency will be offering. The World Travel Agency brand will be aggressively marketed across Canberra and the rest of Australia. Quality, affordability and convenience will be emphasized efforts of branding the agency. A strong brand will lead to increased market share and customer loyalty. A strong brand promote to high sales of the company’s services and products. Product life cycle implications The product life cycle implication will translate to aggressive and vigorous marketing and promotion prior to the launch of the travel agency. The customers have to be aware of the travel agency before they try out its services. High budget has to be allocated for advertising and marketing in the early years of the travel agency inception in order to push the products and services into the market (Lanee', 2015). The advertising budget will be reduced once the service and products attain maturity stage. When the product and services of the agency reach maturity it requires diversification and product line extensions to ensure growth of sales. 3. Pricing Strategy Pricing Methods World Travel Agency will use penetration pricing to break into the current travel industry in Australia. The price will be lower to ensure the firm captures part of the market share of the travel industry market. Cost plus pricing will be used to ensure that the costs of providing the services have been covered in the price. The agency will also use competition pricing as a pricing strategy. It is important to know what the competitors are charging to avoid appearing as exorbitant to the customers. The company will eventually use premium pricing when the quality of its services is well known to the customers (Martin, 2014). Premium pricing allows setting of a high price on the basis of the exclusiveness of the product. Suitable pricing methods will be used to target specific market niches in Australia. Competition considerations It will be important for World Travel Agency to consider what the competitors are charging before setting its price for services. With zero market share to begin with, it is crucial to charge lower than competitors in the Australia travel market before gaining customers’ loyalty. It is not easy to penetrate the monopolistic competition that exists in the Australian travel industry but it can be done with the right strategy. Penetrating certain market niches will require charging a price that is fairer that the competitors’ price to penetrate into the market (Vuuren & Slabbert, 2011). It is crucial to keep abreast of competitors strategies in order to avoid being exploited by established brands. Pricing tactics The agency will use price skimming to capture new customers from the high end market. This tactic can be used after four years of operation in the market. The agency sets a high price to profit from premium users and then lowers it to make the services acceptable to all other users. Opportunistic pricing can be used when customers attach more value on World Travel Agency’s services hence allowing charging of a premium price (McLean, 2002). Price discrimination will be used in different market segments in order to reach out to customers from all walks of life. 4. Promotion Strategy Objectives of Promotion The promotion objectives will be to persuade and convince customers to try out services from World Travel agency. The agency will target to use direct marketing, personal selling and referral from other customers to reach to more customers. The promotion will push the services of the agency to the market and ensure that customers are aware of its existence within the first three months of its operation. The agency aims to be recognized as a reputable quality service provider in the Australian travel industry. Promotional Mix The promotion mix involves the synchronization of marketing activities like sales promotion, publicity, direct marketing, advertising and personal selling. World travel agency appreciates the changes in the trends in the industry and the blossoming of the digital age. Consequently advertising will be done through the internet and encourage internet booking. Social media advertising through the agency’s group and a twitter handle will enable customers to get a glimpse of the kind of services offered by the agency and any other updates about the agency. Print media and television advertising will also be used to popularize the services of the company across the city of Canberra (Lanee', 2015). The agency will exploit relationship marketing to ensure that customer’s loyalty is encouraged to enhance its market share. 5. Distribution Strategy World travel agency will have offices opened in various convenient points within Canberra and beyond. Sales agents with a passion in marketing will be employed to sell the services of the agency to the public. The travel will target neglected market niches to fill in the gap in the existing market. World travel Agency will ensure that its services are accessed easily by customers whenever they are in need (Smith, 2009). The world travel agency will encourage online booking and there will sales people standby online to ensure that customers are served at their convenient time. Direct marketing and personal selling will be used to reach out to potential customers and convince them to use the agency’s services. A toll free communication line will be available for any potential customer wishing to make his booking within Canberra. 6. Implementation and Evaluation World Travel agency will start its operations once it satisfies all registration requirements and obtained a trading license from the relevant authorities. Marketing scanning and research will be done prior to launching the agency’s products and services in the market (Thomson, 2014). Being aware of the factors in the uncontrollable environment is important to making sure the company uses appropriate strategies to penetrate in the market and sustain its operation. World travel agency will evaluate its performance after six months to determine its progress and workability of its strategies. It is important to ensure that targets set are met at every stage of implementation of strategies in the agency. Promotion, distribution, and marketing objectives will be evaluated to determine whether they have been achieved within the first year since inception of the travel agency. Thorough evaluation of World Travel agency progress will determine the continued use of some of strategies employed by the firm and contemplate changes where necessary. References Lanee', B. (2015). What Is the Difference between a Marketing Mix & a Promotional Mix? Demand Media, retrieved on 14th May, 2015 from: http://smallbusiness.chron.com/difference-between-marketing-mix-promotional-mix-24142.html Martin (August 7, 2014). Pricing: Marketing Mix | Pricing in Four P’s, Entrepreneurial Insight, retrieved on 14th May, 2015 from: http://www.entrepreneurial-insights.com/pricing-four-ps-marketing-mix/ McLean, R. (2002). The 4 C's versus the 4 P's of marketing. Custom Fit Online. Retrieved from http://www.customfitonline.com/news/2012/10/19/4-cs-versus-the-4-ps-of-marketing/ Parul. (2014). Consumer Behavior and Recent Trends for the Expansion of Tourist Attractions. Global Journal of Finance and Management, 6(5), 413-418. Retrieved from http://www.ripublication.com/gjfm-spl/gjfmv6n5_04.pdf Pujari, S. (2015). 4 Most Important Elements of Promotion Mix | Business Marketing, Marketing, retrieved from http://www.yourarticlelibrary.com/marketing/4-most-important-elements-of-promotion-mix-business-marketing/8796/ Smith, H. (2009). Adelaide & South Australia. Retrieved from https://books.google.com.au/books?id=AXrVAAAAQBAJ&pg=PP1&lpg=PP1&dq=adelaide+%26+south+australia+hunter+publishing&source=bl&ots=gr--7z4zi1&sig=lKExsJQow2sRWiqkfzxOxYp68lA&hl=en&sa=X&ei=na0wVZL_CIOtmAXT74GQBg&ved=0CCwQ6AEwAg#v=onepage&q=adelaide%20%26%20south%20australia%20hunter%20publishing&f=false Thomson, B. (2014). Creating a Strategic Product Plan, Pragmatic Marketing, retrieved from: http://pragmaticmarketing.com/resources/creating-a-strategic-product-plan Vuuren, C. V., & Slabbert, E. (2011). Travel motivations and behaviour of tourists to a South African resort. International conference on tourism & management studies, 1, 295-304. Retrieved from http://tmstudies.net/index.php/ectms/article/viewFile/196/252%20) Read More