Thomson Holidays Travel Group: A Case Study Of Effective Marketing Management Strategies

Situation Analysis based on Thomas Holidays Travel Group

Describe about the Case Study for Thomson Holidays Need to Develop Strategies.

This particular study provides an in-depth insight on the essence of effective marketing management structure within an organization. Marketing management is a systematic process that controls the entire process of business by designing, planning and analysing various activities in order to reach the target audience. An effective marketing management structure is very important in order to run an organization successfully. By implementing effective marketing management, the organization gets the scope to know their position in the market. Moreover, the organization can be aware of competitor’s business strategy and policy for generating the demand in market. As per the competitor’s strategy, the organization likes to change their marketing management policy so that they can throw a challenge can generate demand in the market by defeating the competitors.

This particular study has focused to choose Thomsons Holidays Travel Group, one of the most popular travel operators, founded in the year 1965. Roy Thomson is the founder of this particular company, based on Toronto. Coming from a backward society, Roy Thomson was initially an owner of Radio station. He has followed every step of business strategy and policy skilfully and finally established a travel operating company named Thomsons Holidays Travel Group. After implementing innovative marketing management strategy and policy, this particular company has achieved a huge success among the travelling organizations. Now, Thomsons Holidays Travel Group is able to receive international glory and success by expanding their business in the multinational countries. For that purpose, various situation analysis of this particular organization, their objectives regarding effective marketing management system, their marketing mix strategy have been pointed out.

Figure1: Logo of Thomsons Holidays Travel Group

(Source: thomson.co.uk 2016)

Situation analysis allows the marketing managers to implement various methods into the process of business so that they can understand and analyse the internal and the external environment of the organization (Beverland et al. 2010). By implementing various theatrical models as well as framework, marketing managers are able to understand how the organization should proceed in order to communicate with the customers by providing them quality product and service for satisfying their needs and demand. The marketing mangers of Thomsons Holidays Travel Group have decided to follow situation analysis based on Michael Porter’s five forces, SWOT analysis and PESTEL analysis.

Porter’s five forces:

The business analysis framework of porter’s five forces is one of the effect tools for understanding a business situation. With the help of this particular model, Thomsons Holidays Travel Group is able to understand the competitive situation and the position of their brand in the market. Poter’s five forces models is based on based on five key elements based on which this particular organization is able to realize their actual position in the market and their areas of improvement in marketing strategy in order to survive in the travel industry (De Chernatony 2010). Thomsons Holidays Travel Group has enhanced their marketing management strategy by using Porter’s five forces.

Porter’s five forces	Key points
Supplier Power	·         The bargaining power of the suppliers is high ·          Supplies of Thomsons Holidays Travel Group are able to create market urgency.
Buyer Power	·         The bargaining power of the buyers are low ·         Consumers intend to drive down product. As a result, they are able to purchase product in low prices. ·         As the competitors market of Thomsons Holidays Travel Group is high, the managers have decided to allow the customers for diving down the cost of their product so that they can show their interest to purchase the product.
Competitive Rivalry	·         Competitors’ rivalry implies the capability of the competitors for creating demand in the market. ·         Thomsons Holidays Travel Group have many competitors such as Carrier Holidays, Ampersand Travel, Expedia UK, Divequest and so on. ·         This particular organization has to face many challenges in order to maintain their image in the travel industry ·         As the position of the competitors of Thomsons Holidays Travel Group, the marketing managers have to change their business strategy and policy.
Threat for Substitution	·         It is very easy for the customers to switch their decision for purchasing their product from one organization to its substitutes or to the competitors. ·         In order to overcome this sort of threats, Thomsons Holidays Travel Group has planned to implement some innovative strategies in their service qualities for drawing the attention of the customers.
Threat of New entry	·         Thomsons Holidays Travel Group has been established their business in 1965 ·         This specific organization has to face immense challenges thrown by the competitors in order to survive in the travel industry. ·         After that, the marketing managers of Thomsons Holidays Travel Group have decided to follow effective promotional activity mentioning their quality service and product by utilizing the popularity of media.

Porter’s Five Forces

Table 1: Situation analysis on Porter’s five forces

(Source: Hutt and Speh 2012)

Figure 2: Porter’s five forces

(Source: Johanson and Mattsson 2012)

PESTEL Analysis:

With the help of a PESTEL analysis, the marketing managers are able to analyse the external environment and factors of a business process that affect highly in order to maintain a rhythmic flow of an organization. The factors that have a greater impact on the marketing business policy of Thomsons Holidays Travel Group are as follows:

Political:

The political environment of UK supports Thomsons Holidays Travel Group to run their business systematically. Thomas Holidays Group tends to perform their business following the systematic manner. One of the major aspects followed by the organization is their participations in forming the marketing policies with help of rules and regulations imposed by the government. These regulations include social welfare policies, environmental policies, trading policies, etc.

Economic:

The economic status of UK at the current scenario is high that helps various tourism companies including Thomsons Holidays Travel Group to expand their business process (Kapferer 2012). In a market research made by the marketing managers of this specific organization, it has been observed that the average income of the target customers of Thomsons Holidays Travel Group allows purchasing the product of this company. From the report published in the previous year, it has been observed that the current state of UK economy is feasible, thus, it provides sustainability to the tourism organization in the dynamic environment. It has been observed that Thomson Holidays Group insists on some particular factors like taxation policies, marketing trade cycles and overseas financial trends and policies of unemployment for deriving supremacy in the competitive market.

Social:

As Thomsons Holidays Travel Group has implemented diversity management inside the organization, they have chosen their target customers beyond going any geographical boundary and any particular religion and culture. As a result, this organization would not give any priority to the specific society. Automatically, the number of customers would increase in order to purchase their product. In addition, it has been identified that due to the increasing popularity in the market, the buying behaviour of the customers get influenced and purchase the products and services.

Technological:

UK being a developed country is possessed with the technological advancements with the help of which Thomsons Holidays Travel Group is able to make effective marketing mix strategy inside the business. In addition, based on current report it is identified that as the country UK is a developing nation, the technological innovation helps the organization to satisfy the requirements of the customers in an effective manner. The marketing managers of the organization take the help of social media to assess the significant information regarding the customers. Lastly, with the help of public forum and the influence of social media Thomson Group of Holidays increase the profit margin.

PESTEL Analysis

Environmental:

As the organization Thomson Holidays Group is running the business in tourism sector, the natural disasters and changes in the climate could slow down the business of the company. Nevertheless, it can be added that environmental situation is not entirely possible to predict. Thomson Holidays is not in the state of dealing with the changes in climate.

Legal:

Some of the relevant legislations like health and safety act, right to information act, data protection act should be maintain at the workplace so that both the employees and the customers of Thomsons Holidays Travel Group can take an effective legal steps if required (Peter 2010).

Figure 3: PESTEL analysis

(Source: Kotler and Armstrong 2010)

SWOT Analysis:

By conducting SWOT analysis, the organization like Thomsons Holidays Travel Group is able to understand different factors like the strength, weakness, opportunity and threats.  Through the implementation of SWOT analysis, it has been identified that organization maintains an effective customer services systems. The organization analyzes the feedbacks provided by the customers. Based on the analysis, they do further modifications in the services. The customer’s complaints are recorded and thereafter speedy solutions are provided. On the other side, the managers of Thomson Holidays Group have poor decision making skills; thus, they fail in implementing the global strategies like expanding the business and setting pricing strategies. In addition, the promotional strategies are not effective enough to gain popularity in global market. On the other hand, the organization has the opportunity to expand the business in global market as it takes the franchises. Unlike the opportunities, Thomson Group has to deal with some external and internal threats like aggressive marketing strategies and poor experience of employees in using the technologies.

Strength ·         Effective customer service system ·         Direct marketing ·         Providing effective feedback to the customer’s queries and needs	Weakness ·         Communication gap inside the marketing management team ·         Lack of effective decision making
Opportunity ·         Expanding business in the international field with the help of changing business policy	Threat ·         Competitor’s market strategy ·         Becoming unaccustomed with the changing technology

Table 2: SWOT Analysis

(Source: Michaelidou et al. 2011)

Figure 4: SWOT Analysis

(Source: Moutinho 2011)

Thomsons Holiday Group intends to implement an effective marketing management plan for reaching several objectives (Mudie and Pirrie 2012). The purpose of setting an objective is to promote the product of this organization to the target customers directly. Objectives have been made following the Smart Model:

Specific	·         To enhance the sale of tourism package by next year
Measureable	·         To expand the business in the global market in next two years
Attainable	·         To initiate five innovative strategy for providing effective service to the customers within next years
Relevant	·         To maintain the loyalty of the brand by interacting with the customers more effectively in future
Times bound	·         To increase the margin of profit by selling more products in the coming years

As per the statistical data available in the official website of Thomson holiday, it has been observed that the monthly income of almost fifty percent customers of Thomson holidays is more that £ 50,000 per year. As a result, they have made their holiday packages based on the target customers. In order to create a market demand Thomson holidays has launched a ‘sensatori resort surrounded with swimming suits’. As per the survey report made by Thomson holiday group in the year 2009, it has been pointed out that people have considered the holiday destinations as a part of their necessity rather than luxury (thomson.co.uk 2016).

While running business in a competitive market, it is necessary for the organization to target a particular audience for its specific products and services. From the researches done on the markets, it has been observed that target audience of a particular products and services are not alike. The market could differ with respect to demographic, attitude, needs, social affiliation and location. However, as mentioned by Kaynak et al. (2010) most of the markets are made of different types of customers, segments or sub-market. In addition, it has also been identified that segmentation and targeting of buyers could allow the market to provide a product and service within a target audience requirements and demands. Thus, it is compulsory for the organization to form the needs and values of target audience within each segment while promoting products or launching a new product in the market (Saraniemi and Kylänen, 2010).

Geographic Segmentation:

This segmentation may require the organization to divide the market into several geographical units like region, states, neighborhoods and states. Thomson Holidays is known as worldwide travel retailer and it provides services to people around the globe. Thus, the organization needs to separate its customers into multiple groups in accordance to different countries regions. Thus, the organization could meet needs and demands of customers. In addition, from the previous annual report, it is identified that the organization has experienced a considerable amount of growth due to its strategies implementation in terms of meeting the needs of customers as stated by Alebaki and Iakovidou (2011). Therefore, it can be added that the organization may not find it difficult to develop its service geographically.

Demographic Segmentation:

In this particular segmentation, the market is divided into several groups based on different variables such as gender, age, and family life cycle, disposal income (Hinch and Higham 2011). The organization is more concerned with dividing its market demographically. Thus, it can be added that Thomson Holidays could attract all people and it must have to consider some of its services meet the needs of both men and women. In addition, the company has to design its services on the culture of modern families that have the tendency to travel the world. On the other side, it has to develop its products and services on the trends of retired people. The retired people could choose large packages for their families (Inoue and Lee 2011). Therefore, the organization needs should provide more options in the packages for those people.

Psychographic Segmentation:

As mentioned by Ashworth and Page (2011) this segmentation could divide the customers into various groups based on social class, lifestyle and personality characteristics. This can be appropriately observed while running the business globally. The life style of people may differ based on the society, class, education, generation, etc.  It has been analyzed that due to multiple economic states people prefer to differentiate the benefits, which could be a significant factor for Thomas Holidays in terms of designing the travel types. For example, it can be added that organization needs to design the pricing structure based on preference of people. Furthermore, it can be added organization could use premium pricing strategies for its products and services for the people of UK as the country has stable economy. Thus, the people of UK maintain a trendy life style (Pesonen et al.2011).

Behavioural segmentation:

This segmentation could divide the customers based on their experience, knowledge, attitude, reaction to a product, etc. For example, it can be mentioned that some people could like to shop in metropolis. On the contrary, other people may like to have some rest in countryside (Assaker et al. 2011). Therefore, the organization Thomson Holidays should have to project travel routes for different types of people. In addition, it can also be added that while offering the services to knowledgeable people, it is necessary for the organization to charge equal prices for the packages. The experienced people could switch to other luxury brands due to issue of pricing. On this particular context, Thomson Holidays could provide some additional deals and offers with the same packages for these experienced customers.

Targeting:

Thomson Holidays have segregated the target customers in two categories that include differentiated and undifferentiated. Differentiated customers are those who have been provided primary importance as their target audience.  For This particular organization like Thomson Holidays, differentiated customers are family members, retired persons mainly. As per their experience through the market survey, family members pay attention for going various holiday destinations for spending their leisure. Moreover, retired persons have also been treated with equal priority as they wish to enjoy the beauty of nature after their retirement. Among the undifferentiated target customers, Thomson has paid their attention to newly married couple, young generations, friend circles, middle-aged persons and so on.

Positioning:

Thomson holiday group is eager to provide a good service to the customers. For that purpose, they wish to position their brand in such a way that it can easily draw the attention of the customers. In order to position their brand in the market Thomson holidays has primarily focused on three factors that include Quality, price and premium. They have intended to focus on the quality of the product. Customers have been offered quality product with effective services in order to draw the attention of the customers. While promoting the brand in the market, the marketing managers of Thomson holidays have decided to mention their process of customer service system and the ingredients of their product to create a market demand.

‘Thomson holidays’ has intended to set the price package for both the customers such as premium customers and lower customers. The target group of this particular organization is very high. They are enough successful to draw the attention of the diverse people. They have selected their target group beyond going any specific geographical boundary. Therefore, different price package systems have been prepared for the people. They can purchase the product as per their economic strength.

On the other hand, the overarching term premium signifies the level of giving priority. The premium clients for this particular organization are family and retired persons. They have provided various discounts in their family holiday package so that the organization can easily draw the attention of the customers. Utilizing the popularity of media, this particular organization is able to draw the attention of the customers by positioning their brands and services in electronic media, print media as well as new media.

Figure 5: Financial position of Thomson holidays

(Source: thomson.co.uk 2016)

It is evident that marketing in tourism is slightly different than other market among different. In travelling industry, the major aim of tourism is the production and placement of services to meet the broad range of customers around the globe as mentioned by Good allss and Ashworth (2013). It needs to facilitate the exchange technique on the tourism business. Another significant thing, which needs to be considered in tourism marketing, is, final products do not have the physical product but it could be consumed at the time of production. This could lead to some certain benefits, which may be tangible and intangible for the customers.

Figure 6: 7P’s of marketing of Thomson Holidays

(Source: Morrison 2013)

Product:

It has been observed that tourism product is a set of complex activities like different physical resources, activities and service. For example, it can be added that the organization Thomson Groups could focus on the destination attractiveness. They should focus on natural and social characteristic of destination. They could aim the places like Maldives where they could add additional features like the honeymoon package, retirement package, and seasonal packages at less cost, which is slightly lower than competitors are. In addition, the organization Thomson Holidays needs to widen the types of tourism like adding medical tourism, urban tourism, and culture tourism. However, it has been observed that competitors in the industry are more focused on in expanding the types of products. On this particular context, the organization Thomson Holidays needs to provide some additional benefits like giving free transportation around the place the customers choose for travelling. In addition, in some of the packages, they need to provide food and beverage at free of cost.

Price of the products:

As argued by Morrison (2013) pricing of tourism of products is one of the difficult tasks to be performed. It is evident that under the state of competition, it will not be a smart approach to set high price for the products and services. In this particular case, the organization Thomson Holidays should charge the price of the products by analyzing the cost of running the business, intention to pay the demand  and price of the competitors in the  industry. Therefore, the organization should implement rack rate pricings strategies, on which they could charge the price based on the promotional materials without discounts. For example, in Asian market, especially in the countries like China, the price of seasonal product in urban tourism should be around $400-$600. However, while setting the price for these of products, the organization should be aware of fact that price has to cover production price and ensure benefits.

Promotion:

Bornhorst et al. (2010) commented that promotion is considered to provide support for the placement of product in the tourism industry and it could create awareness about the products. Therefore, it can be mentioned that goal of promotional mix is to provide an effective image of the tourism product to potential customers. The organization Thomson Holidays could participate in trade fair in different countries to convey the message about their products and services. Moreover, the company could collaborate with airline organizations, where they identify types of customers and their background. Based on the identifications they could develop the products and service. Lastly, the company could focus on the advertising strategies for promoting their products and services.

Positioning:

Product positioning is also one of the tricky tasks to be performed. Positioning of products is quite similar to distribution of product as mentioned by Keller et al. (2011). On this context, Thomson Holidays needs to provide the information about its products through different channels like trade show, reseller, and website pages. In addition to all these, they could focus on a particular place like China, Maldives, Malaysia and other Asian countries where the country’s economy is stabilized.

People:

The organization in tourism industry could focus on different types of people. As the organization Thomson Holidays is running the business globally, they should focus on the people like honeymoon couples, retired person, sports person, employees, etc.

Process:

Thomson Holidays could make an easier process, which customer could find it easy to access in terms of choosing destinations. The company should effectively develop its website portal where the customers could visit the page, access the flight details and airlines the sends the bookings reference and lastly the customers could catch the flight on time.

Physical evidence:

As discussed earlier, Thomson Holidays could provide all its information regarding the products and services on its website. The information like, transport cost, food cost, images of places, security, etc. Thus, the customers could be free from the risks.

Figure 7: Top ten holiday destinations offered by Thomson holidays travels

 (Source: thomson.co.uk 2016)

Based on the discussion on existing researches, it has been observed that Thomson’s strategies are not as effective as its competitors are. With the development of products, the company also needs to focus on developing the pricing strategies. As the rivals use aggressive pricing strategies, the Thomson Holidays needs to focus on penetrative pricing strategies for increasing market share.

Conclusion:

On the completion of the assignment, it can be mentioned that Thomson Holidays need to develop strategies since they run the business in dynamic market, where the economy of the countries could change with situation. In addition, the organization needs to widen its product ranges that meet the needs and demands of customers.  They should implement the pricing strategies based on the demands as high price in the state of uncertain economy could throw a decline in the profits.

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