Evaluation of current situation linked to objectives
Inclusion of all aspects of marketing plan
Identified target, segmentation and positioning approach
Outline of key aspects of marketing mix (using the 7Ps model)
The Thomson Holiday Group is a travel operator from the United Kingdom and it is also a subsidiary of the TUI Group. Initially, the Thomson Corporation of Canada owned the company. It was then included in the London Stock Exchange and it has its headquarters in Luton, England (Holidays 2016).
Roy Thomson, the founder of the Thomson Company was born in Toronto in the year 1894. He belonged to a poor background. He worked in a coal yard and earned $5 per week. He tried to invest in many businesses. However, all his attempts failed. He started a radio station and later owned the newspaper ‘The Press’. By the year 1943, Roy owned four newspapers and he branched out into commercial television as well. In 1965, he started the travel business and with it, the Thomson Travel came into existence. The emergence of the Thomson Travel Group followed from the acquisition of four tour operators namely Riviera, Skytours, Gaytours, Luxitours and the British Airways airline. There was a tough competition among the four operators by Roy Thomson and as a result, the Clarksons Travel Group gained a competitive advantage and became the lead player in the target or the potential market. It brought down the sales of the Thomson group, as the group did not have an effective and reliable strategy to regain its position in the competitive market. However, the company regained its position with the appointment of Bryan Llewellyn, the seventh Managing Director. He created a separate and a new Board of Directors, which allowed the business to be rebranded under the name Thomson Holidays (Lumsdon 2016).
This particular report will deal with the analysis of the company in the competitive market. The analysis will include the PESTLE, PORTER and McKinsey analysis, which will provide a better view of the company. The report will also deal with the market segmentation, positioning and the strategic choice of the company. The values of the company will be evaluated by the use of Marketing Mix.
The Thomson Holiday Group is a company based in the United Kingdom. It deals in the travel business. Roy Thomson founded it in the year 1965 (Kudoshops.com 2016). It has its headquarters in Luton, England. The products offered by the company are package holidays, cruise lines, scheduled and charter passenger airlines, resorts and hotels. The main service provided by the company is travel agency. The owner started with many businesses before branching out into the travel business.
It is a vital part of the company. The company always tries to know their competitors and take necessary actions. The main competitor of this group is the Clarksons Travel Group. The Clarksons Group gained much profitability during the downturn in the British economy (Clarkson.cruiseholidays.com 2016). It slowed down the business of the Thomson Group. They suffered a huge loss. However, they were much capable of regaining their position and fighting against their rival, the Clarksons Travel Group.
Customers are the essential part of the group. It is because a company cannot run without its potential customers. The customers of the company were mainly the people who loved travelling. It is a travel agent and provides services to the customers interested in travelling (Major and McLeay 2014). The individuals planned their holidays by the attractive packages offered by the company. The businesspersons who went on went on official tours were also the potential customers of the company. The customers are regarded as the external stakeholders.
By the 1990s, the Thomson Group became the market leader in the travel business (Borodako and Rudnicki 2014). However, in 1998, the group was floated in the stock exchange and the parent company retained twenty percent of the total shareholding. The business was heavily dependent on the British market. The Air Tours Company challenged the market share of the Thomson Group. The companies had a price war between them and in the end, the Thomson Group transformed into a private Travel Company and it dominated the home or the local market. It occurred in the mid-2000s and the Thomson Group was taken over by the Preussag group.
The Thomson Group, under the guidance of the Preussag Group had grown and expanded. Numerous services like Britania Airways, Thomson and Lunn Poly came under the single name ‘Thomson.’ The group has over 750 retail stores in the United Kingdom and it has a market share of around twenty percent in the travel market of the United Kingdom (Schänzel and Smith 2014). The company sells over 2.7 flights and holidays per year.
The Thomson group is aware of the government policy of the country. The Thomson Group knows the political factors such as labour law, tariffs, taxation, local council law and environmental law (Ansari, Fiss and Zajac 2014). It also knows the economic factors like inflation rate, interest rates, and economic growth and takes necessary decisions. The social factors include the population growth rates, the cultural aspects. The company considers these factors and makes a huge profit. On the other hand, it is very important to know about the latest technologies that can help the company to deliver good and swift services. The use of high-speed internet services helps the company to deliver quick services to their potential customers. Another important element of the Thomson group is the environmental factors that include the weather, climate, waste issues and so on. Therefore, the company keeps special attention into these matters to provide the best services to the customers (Refer to Appendix 1). The company keeps a watch on the legal affairs of the business and has full-proof policies to face unavoidable circumstances.
The threat of new entrants is medium in the company. It is because it will be very expensive for a new company to enter the market. The existing company has the capability of being the chief operator in the tourism business. It is the market leader and therefore, the new entrants do not have much effect on the smooth functioning of the business. The bargaining power of the buyers is quite high. It is because the tourism industry experiences a fluctuation with the changing needs and demands of the buyers. The buyers have a variety of services to choose, with the increase in competition. The buyers also have the capability to eliminate the tour operators and deal directly with the suppliers. On the other hand, the bargaining power of the suppliers is quite low (Refer to Appendix 2). The company uses backward integration. It means that the company acts as its supplier. The threat from the substitutes is also very high (Kärcher 2013). The demand for strategic differentiation increases with the growing tourism world. The customers look for new and innovative experiences. The widespread of the company in the United Kingdom increases the substitute threat in other parts of the world. The competitive rivalry can be considered medium. The tourism industry includes some competitors to deliver their best performances and services. The level of competition increases because of the market distribution. The Thomson group has attained a competitive advantage because of its leadership and brand in the potential market.
The McKensey Analysis uses the 7-S model (Pitt and Koufopoulos 2012). These factors are interdependent and categorized as either ‘hard’ or ‘soft.’ The hard elements are usually easier to identify and define and the management has the power to influence them directly. On the other hand, the soft elements are difficult to describe. They are more influenced by culture and are less tangible. The soft elements are equally important as that of the hard elements. The strategy adopted by the company has helped it to maintain, as well as, build a competitive advantage over their competitors in the potential market. The backward integrated structure of the organization helped it to maintain its suppliers. The system of the organization is quite modern and it has helped the company to maintain a competitive advantage. The core values of the company have helped the company to gain a larger portion of the market share in the United Kingdom. The leadership style of the company has helped the company to increase their sales by expanding their business to different countries. The staffs of the company are quite able and skilled and therefore, they deliver their best services to maintain the reputation of the company in the target market (Refer to Appendix 3).
SMART Objective 1
Specific- the specific goal for Thomson Holiday Group would be “To increase the company market share by 5% at the end of 2016 due to the opportunity of expanding our holiday package in Europe.”
Measurable- Thomson Group should try to attract the majority of the customers into the market by giving discounts and offers on the packages in Europe
Attainable- the company should focus on modifying the products and services to attain the specific goal in Europe with proper promotional strategies.
Relevant- The desired goal is quite relevant and it is easy for the company to attain it if proper strategies are adopted.
Time-Bound- the company should try to attain its objectives within 5 months and this would help the company to gain a competitive advantage in the target market.
SMART Objective 2
Specific- the specific goal for Thomson Holiday Group would be “To increase the customer satisfaction by 10% at the beginning of 2017 by giving different categories of packages such as summer vacation family package, couple package or adventurous trip package in UK.”
Measurable- Thomson Group should try to attract the majority of the customers in the home country UK
Attainable- The Company should focus on modifying the packages to attain the specific goal set by it.
Relevant- The goal is relevant for the masses for upcoming vacations and the company can afford it
Time-Bound- the company should try to attain its objectives within a year and that would add to competitive advantage in the target market.
SMART Objective 3
Specific- the specific goal for Thomson Holiday Group would be “To increase the company market share on a whole by 10% at the end of 2017 with customer retention and new products strategies.”
Measurable- The Company can provide as number of packages all over the world.
Attainable- The Company will be able to achieve the targets if it devises a plan of packages given in each quarter or on a half yearly basis to the premium as well new customers
Relevant- The desired goal is tedious but efficient and relevant for the company on growing expansion of market and to gather more market across the world.
Time-Bound- the company should try to attain its objectives within a span of 2 years.
The company follows the geographic segmentation strategy (Diamantopoulos et al. 2014). The diversified segmentation of the company has helped it to achieve larger economies of scale. They have penetrated into the markets of India, China and Europe. They have diversified their segments of business in logistics of the container-shipping department to gain a competitive advantage in the potential market. However, to meet the marketing plan strategy, the company will first expand in Europe, than UK and later adopting to the cost effective strategy that will help in achieving and expanding the customer base in the world. The company has adopted consolidation for their brand development in the global sector. They have also done this (consolidation) to ensure cash flow from the developed economies and ensure the long-term growth of the tourism business of the company.
The company aims at the individuals who prefer travelling. The family men and the people from the corporate sector are considered the potential or the key target of the company. The key targets are the families, couples as well as children who wish to spend some time with their spouse or families out of their busy schedules. The company aims at providing the best services to its potential customers (Mariani et al. 2014). The customers are the asset of the company. Therefore, the company takes every possible measure to keep their customers satisfied. It offers various pricing strategies and discounts to attract the potential customers.
The company holds the market position at the top level. It has gained the leading position in the target market because of its unique business strategy and leadership skills. The company has built a brand image and has also gained a respectable position in the target market. This has helped the company to maintain the top position in the target market. The company has the highest shares of tourism business in the market of the United Kingdom (McKercher, Mak and Wong 2014). The company aimed at controlling the cost and differentiating its product in the market. The use of Hybrid strategy (a combination of cost control, price and differentiation) by the company has helped it to gain a competitive advantage in the potential market and maintain the leading position in the target or the potential market The Thomson brand can lead to repositioning of the strategy in Europe as well as the world according to the response in the home country.
The company delivers its values quite efficiently to the target customers. The company uses its marketing mix to deliver the best services to their potential customers. The marketing mix includes the analysis of seven factors namely, Product, Price, Place, Promotion, Physical Evidence, People and Process. The analysis of seven Ps is as follows:
Product- the product sold by the company is products of tourism. It includes the hotels and resorts package, the airline packages and the food packages. The tourism industry in the United Kingdom is quite popular and hence, the company has gained a competitive advantage to expand their business in the said industry. The company also offers cruise lines, which is an innovative way of expanding the business (Stangl, Kastner and Polsterer 2012).
Price- the company has adopted customer and the competitor pricing strategy to increase their market share. They know that customers always look for discounts, offers and low prices. They keep low prices to attract the customers. They also keep a note on the prices offered by the competitors. They try to keep low prices than their competitors (Falzon 2012). On the other hand, they try to provide better services than that of their customers. Therefore, the company has adopted unique pricing strategy to attract new customers and retain the existing customers (Refer to Appendix 5).
Place- the place is a very important factor of the marketing mix. The sale of products depends on the place of selling of the products. Therefore, it is very necessary for the companies to decide their place of selling the products. This helps them to approach the potential customers and increase their sales. The Thomson Group is a UK-based tourism company. The company has gained much importance in the market of the United Kingdom (Budeanu 2012). The country is beautiful and therefore, the demand of the tourism industry has increased in the past decade. The palace is suitable for the company to expand and increase their market share (Refer to Appendix 5).
Promotion- the promotional mix of the Thomson group is a very important part of the marketing mix. The Thomson group uses all the promotional elements, which helps in promoting their services and products in the potential market. The main element of promotional mix adopted by the company is advertising (Aziri and Nedelea 2013). The company uses advertisement methods such as radio, television, magazine, newspaper, social network, cinema and billboards to promote the services and products of their organization. Personal selling is the next method for promotion, adopted by the company. The company holds sales meetings, sales presentations and training, as well as, incentive programs for the salespeople. This helps them to interact smoothly with the customers. Sales Promotion is another method of promotion (Llodrà-Riera et al. 2015). The company uses coupons, sweepstakes, rebates, exhibitions, contests, product samples and so on to attract the customers. Public Relation is another method of making the public aware of the products of the company. The company has adopted various plans to make relation with the public and this helps them in building a brand position in the target market. The plans may include press conferences, press releases, corporate logos, sponsorships and exhibitions. Direct Marketing is another method of promoting the products and services of the company (Charnykh 2015). The Thomson Group do direct marketing like a telephone conversation, e-mail, sends leaflets and vouchers to the houses of the customers. It helps the company to maintain a good and a healthy relationship with the customers (Refer to Appendix 5).
Physical Evidence- the physical evidence is the most important element of the operating service of the Thomson Group (Mitchell, Font and Li 2015). Physical evidence is all about the decoration of the as well as the services that it provides to its customers. Thomson is very particular in these aspects and this has helped the company to attract more customers (Refer to Appendix 5).
People- people refer to the employees, customers, management and public. The staffs and employees of the company are quite skilled and effective (Kleeman 2014). They believe in providing the best services to the customers. They see to the fact that the customers do not face any difficulty while dealing with their company. This helps the company to gain the trust of the customers and increase their sales (Refer to Appendix 5).
Process- the systems and processes adopted by the company have proved beneficial for the customers of the company. The employees of the company are provided with proper training and it helps them to execute their services to the potential customers in a proper way (Modica 2016). This increases the reputation of the company in the potential market. The Thomson Group use high-speed internet service to provide swift and best services to their customers (Refer to Appendix 5). The company has a good communication level with all its branches, which helps in maintaining a good process.
The Ansoff Matrix is used to analyse the implementation of the business and the corporate strategies for the companies to grow and expand (Refer to Appendix 6). During the years of 1997-1999, the Thomson Group saw a scope of penetration of their business into the German market with their existing products (Burghouwt and de Wit 2015). The main aim of the company was to increase their market share. The group entered the European market in the year 2000 with a very strong market share. They focused on developing their products and introducing low-cost travel airlines in the year 2003 with the setting up of TUI China. They increased their cash flow by agreeing to sign the joint venture in Russia. The introduction of the virtual tour operator helped the company to gain top position in the tourism industry and develop a respectable position in the target market. The tourism industry of the group was subdivided into five sectors namely Northern Europe, Central Europe, Western Europe, other tourism activities and destinations. The growth of the company has helped the other individual countries to compensate their difficulties and problems. Moreover, the company can achieve its cost effective strategy by making some cost initially to gain higher returns as it already holds the market but with growing market, the company is in need to expand its customer base as well. They have extended their business segments in India, China and Europe. Consolidation is one of their main market strategies to develop the brand image and earn high returns on investment (Busby and Huang 2012).
The Porter’s Generic Strategies can be based on the efficiency of the products and packages elaborated in the market. Moreover, the cost effective yet cost differentiated strategy of the company helps in providing a base for the company to expand its customer base and market share. The cost leadership will be achieved in home country at the first followed by a broader view on the world. Though, the cost will not be considered at first while developing holiday packages to do marketing globally but later with the use of offers to retain and expand the new customer base, the cost effecting strategy will be applied. On the other hand, differentiation strategy can be achieved based on the different kinds of holiday packages offered to the customers in the home as well as foreign country (Refer Appendix 7). The differentiation focus will be expanding globally with offers and discounts that only help the company to achieve competitive advantage but also help in building the reputation of Thomson Holiday Group (Nordin, Radzi, Ismail and Ahmad 2013)
The actions and controls taken should highlight the effectiveness of the Thomson Holiday Group are given as:
Thomson should always provide quality of high merchandise to its customers. Conversely the company should keep in mind the promotional strategies that the company has adopted so that there is no ill scheduling of the product.
The cost effective (reduction) strategy should be kept in mind while devising holiday packages in home country as well because the customers might me more demanding in opting for the packages.
The costs of vertical integration are effectively made in elaborating the strategy while adopting the risky ventures of going global.
The products should be launched right before the venet to get maximum attention of the public. Moreover, retrenchment strategy should be applied in achieving suitable as well as feasible financial performance by take advantage of the core competencies at a different level and side by side strengthening the balance of activities.
Conclusion
At the end of the report, it is clear that that the Thomson Group has gained a competitive advantage in the potential market because of its leadership and brand image. The company has worked hard to gain the brand image and reputation in the potential market. The company has kept in mind the political, economic, social, technological, and environmental and the legal factors to ensure smooth functioning of their business. The company has the efficient and skilled personnel to deliver swift and best services to the potential customers of the company. The company uses various promotional strategies to make people aware of the products and services of the company. They have been successful in maintaining a good and a healthy relationship with the customers. This helped them to expand their business and increase their market share. The company has gained the leading position in the potential market. They have been adopting various unique strategies to maintain their leading position in the market. The company is very effective in delivering its services to the customers and therefore, it is the best tour operator in the United Kingdom. They have penetrated to other markets and have gained higher returns on investment from the individual markets.
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