Situation Analysis
Company
Trip advisor is a US Based Company the offers guide and review services to travelers seeking information on various travel destinations. The advice and reviews are on a wide range of services including flights, hotels, resorts and travel packages among others. The business’ key operations are online based and entail an interactive platform (TripAdvisor, 2016a).
Goals
The major goals of the Company are to offer trusted service as well as a variety of choices for travelers across the globe (TripAdvisor, 2016c).
Resources
The key resources of the Trip advisor are its online platform and skilled personnel that determine its ability to meet market demand.
Macroeconomic factors
Macroeconomic factors are the aspects that have the potential to impact on the company’s operations, and performance and the following is a list of the key factors most relevant to Trip Advisor
Economic: The rising disposable income in emerging markets such as China is crucial for the company performance as it enhances demand for travel.
Technology: Technology advance provides more efficient channels for the business to reach its target segment. It also provides better capabilities to effectively serve the target segments through the company website.
Social: The social, economic status influences people’s preferences for leisure and travel and is a key determiner for the company’s service (Euromonitor, 2015).
SWOT Analysis
Given the internal and external factors influencing the Company’s operations, the following is a SWOT analysis summarizing the strengths and opportunities that can be utilized as well as the weaknesses and threats that need to be addressed for the business success
Strengths
Well known brand
Weaknesses
Too much focus on travel services
Does not charge the travelers for reviews
Opportunities
Advanced technology
Increasing travelers’ needs for destination and service reviews
Emerging markets
Threats
Increasing competition (Bakos and Erik, 2000).
Given the above analysis, there are two proposals. First is product development where transportation (car rental) booking will be added to the company’s website services. The second is market development where the company will seek to promote its existing services and products to the emerging markets mainly focusing on Chinese travelers.
Marketing goal
The marketing goal for the Trip advisor is to add transportation (Car rental) to the portfolio of services that customers can book from the company website in addition to increasing marketing in the emerging markets.
Marketing Strategy
Given the proposed car rental booking service and market development, the following is a summary of the target customers that the company seeks to serve with the added service and in the emerging markets as well as the value proposition.
Target Customers
The Company’s target market entails people in need for information and reviews on travel choices ranging from destinations and accommodation to flights services. In that respect, the target segments can be described as comprising of people who are excited about travel and who would have a need to maximize on their trips regarding value for their money. With that, the first target segment for this marketing plan entail the Asians of middle age with a substantial income in addition to being technologically savvy. The target segment is informed by the rising demand for travel by the Asian communities with a focus on China that has had a substantial rise in income and whose people are increasingly seeking international travel services (Trading Economics, 2016). The other targets segment for the added service (car rental) would be the companies that offer the rental services. With that, the business will be seeking to offer the companies a platform to easily distribute their rental service to the market. In that respect, the second segment will comprise of corporate clients seeking to serve the end users in the travel business.
Value Proposition
Given the variety of choices that the company offers the targets segments, it makes it easier for the customers to plan their trips and identify destinations as well as services that effectively serve their needs regarding preferences, value for money and experience (TripAdvisor, 2016b). In that view, added car rental service will have better value in providing customers with an opportunity to choose the best choices for transportation in addition to the current flight services. Considering the nature of the target segment that they are mainly people who would prefer transportation that suits their travel needs, the car rental service would provide access to customized services where the travelers can book for cars’ use during their trips to various destinations. Further, the online booking service would mean that the customers can have a coordinated single system that reduces the need to visit various websites seeking to book the services they review through the company’s website. Further, the booking service would provide better information to customers given that the customers accessing the service through the website would be more likely to provide feedback on the services they receive from the rental companies.
Marketing tactics
The following is the summary of the key strategies based on an effective marketing mix that seeks to utilize the company’s strengths to maximize on available opportunities while addressing the weaknesses as well as averting possible threats (Cambell-Hunt, 2000).
Product
The proposed service is an addition of transportation service regarding car rental booking that can be done through the Company website. With that, the service will be crucial for the company that seeks to serve the increasing demand for a variety of choices for transportations services mainly serving customers in short distance travels. Also, the added service will be a way of addressing a weakness in the company’s operations given that it would enhance utilization of the resources that are currently focused on providing reviews and information on travel destinations, accommodation and flights. Finally, the added service to the company’s portfolio would be a means of differentiating it with the competitors, hence enhancing its competitiveness in a market that is increasingly experiencing increased entry given the technology advance that allows companies to easily operate service and products’ review websites (Czinkota and Ronkainen, 2013).
Price
The service pricing will seek to reflect the value that the Company offers its target segments and considers the target segment ability to pay. In that view, the pricing will be premium pricing that reflects the added value that the service offers to the travelers (Clay, Ramayya and Eric, 2001). Further, the premium pricing will be a means of serving a psychological need for the customers given that there is a tendency to place relatively higher value on services that are charged a premium price compared to the low-cost services that would be considered cheap and less desirable. Finally, the premium pricing would take into consideration the differentiation that the added service would provide the Trip Advisor; setting it apart from the competitors in the market (Baker, Mike, and Craig, 2000).
Distribution
The key distribution channels for the Trip Advisor is its website that acts as an interactive platform where the targets customers can access reviews on destinations, services, and a variety of travel choices. With that the use of the company website as a means of providing the car rental service will be most suited as the people visiting the site can easily review the information on the rental service as well as a book for the cars without having to deal directly with the rental companies. In that respect, although the company will not be the direct provider of the transport service, it will provide an avenue to a third party where travelers can access best car rental services helping them effectively address their needs for convenience and saved costs (Coughlan, Louis and Adel, 2001).
Promotion
Considering the technologically savvy segments that the travel advisory services targets, the key promotion strategy will entail advertisement through the social media (Berthon, Leyland and Richard, 1996). That also considers the increased adoption of the social media platforms, hence providing channels where the segment can be easily and effectively reached (Hanson, 2000). In that respect, the key IMC tool to be applied by the Company is the advertising strategy that that seeks to inform the customers and the potential customers of the added service and its value regarding easier access to the car rental services as well as reviews.
The other key promotion strategy will be offering discounts to loyal customers based on repeated use of the service. With that, the company will devise the site to reward customers who repeatedly use the car rental booking service with cash discounts in their next booking payments. With that, the customers will be more inclined to keep using the Company’s service for repeated booking to get the discounts. That will also seek to address the competition issue as it will increase their switching cost (Capon and James, Hulbert, 2001).
Further the company would be involved in direct marketing of the added service to the car rental businesses that it would consider suitable for enlisting in the website. With that, the company’s resources including skilled personnel will be utilized in seeking to enhance the online platform’s ability to met travelers needs.
Finally, the company would employ relationship management as a way of promoting the added car rental service to the rental companies that would need to use its website for as a platform through which the travelers can book the cars.
Given the above promotion strategies, the IMC campaign budget is estimated to be about AUD 50,000 covering all the tasks involved in promoting the added service and in enhancing the company’s reach to the emerging markets.
With the above strategic tactics, the Company is likely to achieve its objective of effectively expanding its service portfolio to included added transportation service that seeks to maximize the company’s existing capabilities, address the weakness of specialization as well as utilize the company resources that include the website and the skilled personnel (Vorhies and Morgan, 2003).
References
Baker, W., Mike M. and Craig Z. (2000). Pricing Smarter on the Net. Harvard Business Review, (February), 122-127.
Bakos, Y. and Erik B. (2000). Bundling and Competition on the Internet. Marketing Science, 19(1), 63-82.
Berthon, P., Leyland F. and Richard T. W. (1996). The World Wide Web as an Advertising Medium: Toward an Understanding of Conversion Efficiency. Journal of Advertising Research, 43-54.
Cambell-Hunt, C. (2000). What have we learn about generic competitive strategy? A meta-analysis. Strategic Management Journal, 21(2), 127–54.
Capon, N. and James M. Hulbert (2001). Marketing Management in the 21st Century. Upper Saddle River, New Jersey: Prentice-Hall.
Clay, K., Ramayya K., and Eric W. (2001). Prices and Price Dispersion on the Web: Evidence From the Online Book Industry. The Journal of Industrial Economics, 521-39.
Coughlan, Erin A., Louis W. and Adel I. (2001). Marketing Channels. 6th Ed. Upper Saddle River. New Jersey: Prentice-Hall.
Czinkota, R. and Ronkainen, A. (2013). International marketing. 10th Ed. Boulevard: South-Western, Cengage Learning.
Hanson, W. (2000). Principles of Internet Marketing, Cincinnati, Ohio: South-Western College Publishing.
Euromonitor. (2015). Travel in China. Retrieved 18 May 2016 from, http://www.euromonitor.com/travel-in-china/report
Trading Economics. (2016). China Disposable Income per Capita. Retrieved 18 May 2016 from, http://www.tradingeconomics.com/china/disposable-personal-income
TripAdvisor. (2016a). The Company. Retrieved 18 May 2016 from, https://www.tripadvisor.com/
TripAdvisor. (2016b). Help center. Retrieved 18 May 2016 from, https://www.tripadvisorsupport.com/hc/en-us
TripAdvisor (2016c). Investor Relations. Retrieved 18 May 2016 from, http://ir.tripadvisor.com/
Vorhies, D. and Morgan, N. (2003). A configuration theory assessment of marketing organization fit with business strategy and its relationship with marketing performance. Journal of Marketing, 67(1), 100–15.
