Product available - Sample Essay
TD’s competition is any independent business travel company. There is no main rival or competitor; all business travel agencies are our competitors. We gain competitive advantage by providing better service than any of our competitors to maintain customers and to introduce new customers. The threat of substitute products such as internet booking companies like expedia. co. uk and opodo. co. uk can also be looked upon as a benefit as it is an extra tool for us to use to ensure we obtain the best possible prices for the clients.
Some clients may prefer to book direct on the Internet, but at some point we know these clients will come back to us respecting the service we provide them with as no internet booking company can match with the personalised service we can offer. Technological change is rapid, TD prides itself on making the right decisions early thus giving us competitive advantage as by having the best computer systems we can provide the best service. There are some things, which TD cannot control such as the economic state of the world.
A perfect example of this is the terrorist attacks of September 11th, Iraqi war and SARS; which were discussed earlier in the report. As a response to this TD Travel Group has to take certain steps to control costs. New policies have been put in place and it is hoped that these policies will hold off more serious cutbacks, until a clearer picture emerges of the full affect these events will have on TD Travel group. The new policies include a total ban on all overtime, including Saturday opening hours where time off in lieu is to be taken as opposed to pay, thus creating a better balance by distribution of the work we have.
Telephone calls have to be cut considerably by making greater use of the computerised systems we have available to us, making quotations when clients initially call the office rather than ringing them back and reducing personal calls and calls to mobile phones and 0870 prefixed numbers as these are the most expensive calls. TD has also offered all employees the option to take unpaid leave whilst it is quiet, instead of using up their holiday entitlement. The national environment affects all practically all businesses. Growth inflation unemployment, interest rates, taxation rates and the level of personal saving are all relevant.
Another factor, which affects the long-term national economic prospects, is the makeup of the population. In some countries the retired population is increasing faster than the working population, because people are living longer but having fewer children. This may mean that economic growth will slow down, because too small a proportion of the population is making things to sell. The political environment can also affect businesses like TD travel group. Businesses, like everyone else, have to work within the law. Laws are made by parliament for the good of the society as a whole.
What laws are made depends on which political party holds power. Therefore the political environment is important to businesses. Ways in which it can affect companies such as TD Travel group are: Dealings with customers – can be affected by laws on the sale of goods and services, on advertising and on trade descriptions. How a business treats its employees – is affected by employment legislation and trade union law, largely designed to protect employee’s rights. Dealings with shareholders – are affected by the Companies Acts, which law down how information must be given in published accounts and what dividends may be paid.
The criminal law – can affect companies. Companies as separate legal persons distinct from their directors and employees can commit some offences. Part 2 – The marketing mix The marketing mix is the organisation’s overall offer, or value, to the customer. ‘The basic marketing mix is often nicknamed: “The 4Ps” (product, place/distribution, pricing, promotion); these are elements in the marketers armoury – aspects that can be manipulated to keep ahead of the competition’ Dibb & Simkin, 1994. Successful organisations need to focus on marketing rather than selling.
They realise that the organisation as a whole needs to direct its efforts at providing the customer with what is required (the product) at the right time (place), the right price and in the right manner (promotion). In this way a customer is likely to be satisfied; they will keep the product, pay the bill, buy again and recommend to others. An organisation that thinks solely in terms of selling may find itself unable to compete in the marketplace. A target market consists of a group of customers (people or organisations) at whom the seller directs a marketing program.
Target market selection must be based on careful analysis of market opportunities. Usually the selection process involves some form of research and market segmentation. When target markets have been selected, the company can then proceed to the next step in strategic marketing planning – designing an appealing Marketing Mix. TD Travel Groups target market is any business in the North West area with any sort of travel needs. The combination of the four primary elements that comprise a company’s marketing program is termed the marketing mix.
The design, implementation and evaluation of the marketing mix constitute the bulk of a firms marketing effort. The four elements of the marketing mix are: Product – A product is anything offered for attention, acquisition, use, or consumption that might satisfy a want or need. Products can be physical objects, services, persons, places, organisations, and ideas. Managing the product ingredient includes planning and developing the right goods/services to be marketed by the company. Strategies are needed for changing existing products, adding new ones, and taking other actions that affect the assortment of products carried.
Strategic decisions are also needed regarding branding, packaging and various other product features. These features can include new product development, product management, product features and benefits, branding, packaging and after sales service. A product has a finite life. We would be hard-pressed to identify any product older than five years that exists today in its original form. Although many simple products appear to change little, if at all, closer scrutiny would show that at least one aspect of the product has changed over time.
Products have both tangible and intangible benefits. Tangible benefits include benefits, which can be measured such as the top speed of a car. Intangible benefits are benefits that cannot be measured such as the enjoyment the customer will get from the product. It is important that the product is changed as necessary to bring it up to date and prevent it from being overtaken by competitors. Price – Management must determine the right base price for its products by considering the demand for the service, the production, marketing and administration costs, and influence of the competition.
It must then decide upon strategies concerning discounts and other price-related factors. These factors can include costs, profitability and value for money, competitiveness and incentives. TD has a set service fee band for most clients; every ticket we issue has a service fee added onto it. TD sets these prices by determining what profit we need to make and what customers are prepared to pay. For example service fees for any booking done with BA are more than the service fees with any other airline as BA pay us less commission than any other airline.
Easyjet and Ryanair bookings that are made on the Internet we charge 25. 00 per booking, as we don’t make any commission on these bookings. Certain companies have bespoke tailor made service fees to better suit their needs, these are decided on by the travel manager of the company and our marketing manager. Our job is to supply customer needs as profitably as possible. All profit organisations, and many non-profit organisations, must set prices on their goods or services. Price is the only element in the marketing mix that produces revenue; all other elements represent costs. In the narrowest sense, price is the amount of money charged for a product.
More broadly, price is the sum of all the values that consumers exchange for the benefits of having or using the product. At the same time, pricing and price competition is the number one problem facing many marketing executives. Yet, many companies do not handle pricing well. The most common mistakes are: Pricing that is too cost oriented; Prices that are not revised often enough to reflect changes in the market; Prices that do not take the entire marketing mix into account; Prices that are not varied enough for different products, different market segments, and different purchase occasions.
Historically, price has been the major factor affecting buyer choice. This is still true in poorer nations, among poorer groups, and with commodity products. However, non-price factors have become more important in buyer-choice behavior in recent years. It is very important that the correct price is charged for a product. If the price is too high consumers will avoid the product, as they will believe it to be too expensive yet if the product is priced too low they may believe that there is something wrong with the product for it to be so cheap. Also if the company charges too low a price, it may not cover its costs.
There are many different pricing strategies that companies can use to decide on a price for their product. “Skimming” refers to setting initially high prices, and slowly lowering them over time to maximize profits at every price-sensitive layer in the market. As initial sales slow down, and/or as competitors threaten to introduce similar products, the price is lowered just enough to make it worthwhile for the next segment to buy. Several industries use this pricing strategy very effectively. Examples include: fashion (designer originals and beginning-of-season sales vs. copycat designs and end-of-season sales); publishing (hard cover vs.
paperback books); and sports equipment (new golf club innovations are slowly reduced in price each season as new models are introduced). “Penetration” involves setting a low initial price to enter the market quickly and deeply, attract a large number of buyers, and win a large market share. The resulting high sales volume often means lower costs, as the company moves quickly down the production experience curve, allowing a further reduction in price. Several conditions favor setting a low price: 1. the market must be highly price sensitive so that a low price produces more market growth; 2. production and distribution costs must fall as sales volume increases; 3. the low price should serve as a barrier to entry for competitors — otherwise the price advantage may be only temporary.
Place – Place includes all company activities involved in making the product available to target consumers. It includes: channels of distribution, the extent of market coverage, managing discrepancies of quantity and assortment, retail locations, and the management of inventory, transportation, and logistics. Ultimately, Place is involved in making the product convenient for the target customers to purchase.
Management’s responsibility is to select and manage the trade channels through which the product will reach the right market at the right time. They must also develop a distribution system for physically handling and transporting the products through these channels. A distribution channel moves goods from producers to consumers. It overcomes the major time, place, and possession gaps that separate goods and services from those who would use them. Features can include access to target market, channel structure & management, retailer image & logistics.
TD Travel Group provides same day delivery of any travel products or we can arrange for tickets to be collected at the airport electronically, we send tickets special delivery or we will even meet clients at the airport to ensure they have their travel documents with them when they need them. There is no extra charge for these services as they are all included in the price of the service fees. Service channels in general are simpler and more direct than those for products – this is largely because of the intangibility of services. The concept of distribution channels is not limited to the distribution of physical goods.
Producers of services and ideas also face the problem of making their output available to target populations. In the private sector, department stores, hotels, banks, and other service providers take great care to place their outlets in locations convenient to target customers. In the public sector, service organizations and agencies develop “educational distribution systems” and “health delivery systems” for reaching sometimes widely spread populations. Hospitals must be located geographically to serve various patient populations with complete medical care, and schools must be located close to the children who need to be taught.
Communities must locate their fire stations to provide rapid coverage of fires in every neighborhood, and polling stations must be placed where people can vote without spending excessive time and effort. In today’s global marketplace, selling a product is sometimes easier than getting it to customers. Companies must decide on the best way to store, handle, and move their products and services so that they are available to customers in the right assortments and quantities, in the right place, and at the right time.
Logistics effectiveness will have a major impact on both customer satisfaction and company costs. A poor distribution system can destroy an otherwise good marketing effort. Physical distribution, or marketing logistics, involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit. Logistics involves the management of entire supply chains, or value-added flows from suppliers to final users.