This paper aims to outline the second part of a marketing plan for a travel planning company—Travel Supreme. The paper will discuss several target markets for the business and examine different segments of potential customers. It will also outline competitive, industry, and Strengths, Weaknesses, Opportunities, and Threats (SWOT) analyses for the company.
Segmentation and Target Market
Taking into consideration the fact that the travel industry is extremely large and diverse, it is essential to conduct effective segmentation of the market in order to understand how to better reach potential customers of the company. Segmentation approach to marketing presupposes that by identifying homogeneous groups of the mass market, it is possible to define characteristics of targeted segments more clearly (Pesonen, 2013). This approach deserves special merit because it allows analyzing a mix of metrics and correlation patterns for more effective marketing (Dolnicar, Grun, Leisch, & Schmidt, 2013).
Segmentation of the market for Travel Supreme is based on a data-driven segmentation analysis conducted by Yang and Chen (2012). An examination of browsing habits of travel websites’ users has allowed the scholars to establish four market segments: a group preferring travel information, a group preferring promotional information, a group preferring membership services, and a group preferring transaction and interactive services (Yang & Chen, 2012).
By focusing on broader categorical characteristics such as demographics, sought benefits, sociographic, and psychographics among others, it has been possible to identify three target markets for the company. The first target market is young and newly-wedded university graduates who are willing to find an affordable honeymoon getaway and are motivated by experience seeking (Pyo, 2015). The second market is senior tourists who are not restricted by income considerations and are driven by the following factors “cultural and historical attractions, travel arrangements and facilities, shipping and leisure activities and safety and cleanliness” (Nella & Christou, 2016, p. 38). This market is more sensitive to a location of accommodation than the first one (Esichaikul, 2012). The third target market is upper-middle age travelers who are interested in visiting European art galleries.
Competitive and Industry Analysis
Understanding competitors and the state of the industry are essential in marketing because it helps to avoid wasting resources on unpromising projects. The travel and hospitality industry has considerably grown during the last decade. A recent report issued by Deloitte (2017) shows that consumer demand for leisure travel broke a record in 2015 by reaching $341 billion. The growth of demand has been fueled by strengthening of the labor market. The report suggests that “travel companies should anticipate healthy demand for all types of trips throughout 2017” (Deloitte, 2017, p. 4). It is projected that the market size will approach $381 billion in 2017 (Deloitte, 2017). Moreover, during the recent years, many tourist destinations worldwide have removed travel barriers such as a traditional visa. Therefore, it is the right time to start the business.
There are many companies that provide their customers with travel consulting services. The biggest players in the market are TripAdvisor, Peek, Zaptravel, and Adioso. TripAdvisor is a company that reviews travel-related, user-generated content. The company also provides hotels booking services, which allows it to earn on direct sales and advertising (TripAdvisor, n.d.). Peek is a company that positions itself as a “part travel agent, part tour guide” (Drell, 2013, para. 1). The company’s website features itineraries and has a price comparison section. Zaptravel allows its customers to compare destinations, flight routes, and hotels among others. Unlike other companies, Adioso attracts customers who are not sure about their final travel destination. Also, it markets its services to cost-conscious travelers (Dean, 2013).
The main strength of Travel Supreme is its diversified customer base, which helps to reduce the company’s dependence on a particular market segment. Also, the company hires only well-qualified employees who are focused on innovative tourism trends. Extensive advertising and promotion are another strength of the startup that is essential for raising service awareness (Hackley & Hackley, 2014). Low overhead cost due to an efficient customer to employee ratio allows offering a competitive price, which provides the company with an additional advantage.
Lack of a reputation due to the fact that the company is not established in the market is a considerable weakness. A limited financial base is another weak point of the company (Blumberg, 2013). Furthermore, the company does not have strategic allies in the industry, which prevents it from offering lucrative deals to its customers.
The company can explore the recent trend of indigenous entrepreneurship in tourism, which is associated with competitive prices that might attract budget travelers (Carr, Ruhanen, & Whitford, 2016). Also, it is reasonable to take advantage of the rise of senior tourism in the US. It is especially important opportunity since elderly tourist are characterized by high purchasing power (Alen, Losada, & Dominquez, 2016; Esichaikul, 2012).
Established companies in the market present the most significant threat for Travel Supreme. Moreover, novel marketing strategies employed by the firm’s professionals can endanger the effectiveness of its marketing campaign.
The paper has presented the second part of a comprehensive marketing plan for the company. It has been argued that the ideal target markets for Travel Supreme are young and price-conscious newlyweds, upper-middle age travelers, and senior tourists. The paper has also delineated competitive, industry, and SWOT analyses for the startup.
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