Over the past few decades, the tourism industry in Australia has undergone rampant growth (Antonio, 2006, p.1). This has increased the number of investors venturing into the industry. For example, Environmental Encounters Australia (EEA) is a tour and travel firm that is privately owned. The firm was established in 1977 in Australia and has been providing various tourism products in Western Australia. Currently, the operation of EEA involves organizing adventures to Western Australian deserts.
The discussion of this paper relates to the development and marketing of a new experience-based tourism product. The objective of the discussion is to illustrate how the firm can effectively launch the product in the market and attain a higher competitive advantage both in the domestic and foreign markets. The first part of the paper relates to a description of the new tourism product. It also illustrates the desired financial and non-financial objectives. The processes involved in the development of the new product together with the features of the product are also analyzed. The second part involves an analysis of customer segmentation and the target market. The third part of the paper is an analysis of the major competitors within Australia. Finally, the promotion strategy to be adopted by the management in launching the product in the market is analyzed.
New product proposal
The management of the firm intends to expand the operations of the firm. One of the strategies that the management of the firm has considered is expanding its tourism products both in the domestic and international markets. In order to accomplish this, the management of the firm has considered developing a new experience-based tourism product. The product will involve organizing tours and travel to various historical sites in Australia.
The motive of designing this product was to enable the firm to maximize its level of profit. By launching the new product in the market, the management of the firm intends to increase the firm’s level of revenue by 25%. The timeline of attaining this objective is expected to be one year. In addition, the management of the firm intends to develop a higher competitive advantage compared to its competitors. Through the new product, the management of the firm intends that the firm will gain a market share of approximately 40% in the domestic market within the first year of launching the product.
In developing the new product, the management of the firm is committed to ensuring that there is maximum customer satisfaction. This is through delivering a variety of tourism products thus giving the Australians a new experience of its tourism products. In addition, the management of the firm also intended to inculcate a culture of preserving historical sites amongst the Australians. The new product developed by the management of the firm is in line with the firm’s mission which relates to enhancing historical and cultural awareness of the Australian wilderness areas. In addition, the operation of the firm is geared towards promoting the theme of environmental conservation amongst Australians (Helcate, 2009). According to Imitiaz (2009, p.1), touring historical sites can significantly contribute to their maintenance by the general public.
Process of product development
In developing this product, the management of the firm conducted a comprehensive scanning of the environment to identify potential opportunities. In addition, the idea resulted from consumer market research within the tourism industry. The findings indicated that the historical sites in Australia were being destroyed by human activity. This is asserted by research that indicated that there was an emergence of a trend of ‘building boom’ (George & Unwin, 1980). George and Unwin (1980, p.1) assert that the building boom has destroyed Australia’s heritage. This is due to the fact the most of the individuals were seeking space. The effect is that most of the structures that are being constructed do not consider the destruction caused to the landscape and historical sites. In addition, the findings indicated that Australia had undergone a rampant generational change. The effect is that there is a lack of information concerning the historical sites in Australia especially amongst generation X and Y. According to Dean (2002, p.3), these generations form the largest percentage of the Australian population.
The findings of the consumer market research also indicated a change of trend amongst the Australians in reference to their consumption pattern. According to knowledge-intensive services activities in tourism (Anon., 2007), Australia has experienced a steady rate of economic growth over the past decade. This has resulted in an increase in the level of disposable income amongst the consumers and hence the change in their consumption pattern. In addition, there is a change of perception in relation to tourism amongst Australians. Most Australians are incorporating tourism as a consumption item. By considering these factors, the management of the firm identified a high probability of the product succeeding both in the domestic and foreign markets.
The new experienced-based tourism product will include touring various historical sites and heritage locations. One of the areas that the management of the firm has considered in developing the new experience-based tourism product is South West Australia. According to Australia’s historical site and heritage locations directory (Anon., 2009), this region is composed of numerous historical sites that date back to approximately 50,000 years. The historical and heritage sites that the tour package will be composed of include touring various landmarks, ancient historical buildings, national parks, game reserves, historic mines and various natural attraction sites.
For the new package to result in maximum customer satisfaction, the management of the firm will ensure that the tour guides have extensive knowledge of the product. This will enable the tour guides to provide comprehensive information to the tourists. South West Australian historical sites that the management of the firm has considered in developing the product include those located at Albany, Augusta, Bunbury, Collie, Denmark, Harvey, Manjimup, Mount Barker, Busselton and Duns borough.
The new experience-based tour product is designed to incorporate a six-day tour to the various destinations. In developing the product, the management of the firm has designed a comprehensive program. The program will ensure that the product is provided all year round. This will enable the customers to be flexible in planning their vacations.
To ensure sufficient customer satisfaction, the management of the firm has liaised with various hotels and restaurants in South West Australia. This will enable the management to make prior reservations for their customers. The restaurants will enable the effective provision of lodging and catering facilities to the customers.
Customer segmentation and Target market
The management of the firm has targeted the leisure market in developing the new experience-based tourism product. According to Tourism Australia corporate plan (Anon., 2009), this market consists of both domestic and international markets. The domestic market consists of experience seekers while the international market will consist of foreigners who tour Australia for major events. To be able to reach these customers, the management of the firm will liaise with the hotels which provide reservations to these customers.
In developing the product, the management of the firm targeted two categories of customers. These include institutional and individual customers. The institutional customers that the management of the firm has targeted include schools and business organizations. The objective of targeting schools is to enable the youth to gain more knowledge of the historical sites in Australia. The business customers include organizations that have developed tour package as motivational incentives to the employees.
The management of the firm has also segmented its customers in relation to demographics. This is through consideration of age, income level and customer characteristics. Examples of these customers include independent travelers and package holidaymakers (Gareth, 2005). The independent travelers consist of customers who are above 35 years, have an average income of approximately AUSD 22, 150, and prefer touring in small groups. These customers compose approximately 22% of the total population (Norm, 2008).
By targeting these customers, the management of the firm will be able to customize their new product more effectively. This is due to the fact that this customer category has got unique requirements for tourism products. According to Gareth (2009, p.1), these customers like new experiences and tend to reject traditional tourism packages. In addition, these customers demand comprehensive information in relation to the tour destination. The other customer segment is the cosmopolitans who are approximately 15% of the total population (Gareth, 2009). This customer category is composed of individuals who are relatively young and have the desire for gaining new experiences. The other customer category considered by the management is the discoverers. These are individuals whose ages range from 26 to 35 years. Customer segmentation is also composed of the traditional whose age is 56 to 65 years. These customers value historical experiences and intellectual knowledge of tradition.
Environmental Encounters Australia faces competition from other firms within the domestic market. The competition comes from both the domestic and foreign firms operating within Australia. One of the foreign competitors that present intense competition to EEA is Qantas Vacation. This is an international firm that was established in 1985 within the travel agency industry. The firm has its headquarters in Boulevard, California. According to the best down under vacation (Anon., 2009), the firm has undertaken foreign direct investment in Australia and provides various tourism products within this market. It also has a strong financial base from its international operation. For instance, the firm’s annual sales range from $10 to $15. This enables the management of the firm to price their products competitively in comparison with other firms in the industry.
Qantas Vacations offers diverse experienced-based tourism products within the Australian domestic market. These include group and individual exploration of Australian historical sites and heritage locations. The firm has experienced human resource that provides comprehensive information to the tourists. The firm also offers a variety of products such as sightseeing expeditions to independent travelers. According to the best Australian vacations (Anon., 2009), the firm has developed a website through which it conducts online marketing.
Domestic competitor firms in Australia include Adventure Tours Australia. This firm was founded in 1993. In its marketing strategy, the management of the firm has incorporated a comprehensive distributional strategy. This is by establishing offices in various regions to enable the customers’ access their products more efficiently. According to agent resources (Anon., 2009), the management of the firm also incorporates the services of travel agents in marketing its products. This enables the firm to market its products more effectively. The firm offers adventurous tour products to various regions of Australia. Some of the regions that the management of Adventure Tours Australia has included in developing its product include South Australia, Northern Territory, Victoria, New South Wales, Tasmania and Queensland. The firm’s tour products are designed to cover approximately 1-18 days. This gives the customers maximum flexibility in designing their vacations.
The American Marketing Association defined marketing to include all the processes that are involved in ensuring the effective flow of products or services to the consumer (Chang, 1996). In tourism, marketing is more complicated due to the unique characteristics of the tourism products. Promotion plays an important role in marketing tourism products. This is due to the fact that it results in the elimination of the perceived risk by the consumers. According to Kim, Daniel and Yeong (2005, p. 43), risk arises from the fact that the consumers pay for the product before experiencing it. To ensure that the product is effectively launched in the market, the management of the firm has developed a comprehensive promotional strategy. This will enable the firm to effectively create product awareness in the market.
To create awareness in the market, the management of the firm will incorporate the use of various promotional strategies. One of these strategies includes an advertisement. The advertisements will be conducted through various mediums such as television, radio, print media such as newspapers, magazines and catalogs (Chang, 1996). The management will ensure that the advertisements adopted to communicate the desired message effectively. According to Kim, et al (2005, p.45), television advertisements are more effective in informative advertising. This is due to the fact that the message is timely received by the desired customer. In addition, television advertisements will enable the management to overcome the intangibility problem. This is due to the fact that the consumers will familiarize themselves with the intended travel destinations since they will be featured in the advertisement.
Kim et al (2005, p.45), asserts that the print media is most effective in persuasive advertising. By combining these two advertising methods, the management of the firm will effectively create product awareness for a large number of potential customers. The advertisements conducted through these mediums will be continuous. According to Kim, et al (2005, p. 45), the television will result in increased product familiarity of the product in the market. This will enable the management to reinforce a positive experience to the potential customers. On the other hand, print media will result in positive behavioral change towards the product.
To reach the global market more effectively, the management of the firm will integrate electronic marketing. This will be through designing a website that will be integrated into the internet. In addition, the management will enter into a contract with various search engines such as Yahoo and Google. This will enable the management of the firm to post its advertisement of the new experience-based tourism product on these sites. This will ensure that there is effective creation of product awareness in the international market.
The incorporation of electronic marketing will also enable the management of the firm to overcome the problem of intangibility. This is due to the fact that the management of the firm will post the product’s advertisement on YouTube. This will allow the potential customers to see the various historical sites and heritage locations that form the features of the tourism product.
The firm will also incorporate personal selling in promoting the product to institutional customers such as schools and business organizations. According to Jafar (2003, p.434), personal selling involves the process of identifying specific customers and creating a business relationship with the identified party. By incorporating the concept of personal selling, the management of the firm will be able to identify the tourism needs of these customer categories more effectively. This is due to the fact that personal selling will ensure direct interaction between the organization and the institutional customer. This will enable the management of the firm to effectively customize the product. (Marsha & William, 2007).
To ensure effective promotion in the domestic market, the management of the firm will incorporate cooperative marketing. According to the introduction to inbound tourism (Anon., 2008), there are numerous cooperative marketing opportunities offered by various organizations in Australia. These include Tourism Australia, Regional Tourist Associations (RTA), Local Tourism Association (LTA) and the State Tourism Organization (STO).
To distribute the product in the market by creating awareness the management of the firm will form an alliance with the major restaurants in South West Australia. The management of the firm will continuously supply brochures to these restaurants containing the details of the tourism product. This will enable the holiday markers to have access to sufficient information concerning the new product.
Developing a new product by firms in the tourism industry is paramount in the process of developing a high competitive advantage. This is due to the fact that the industry is characterized by intense competition. In addition, consumers in the tourism industry seek new experiences. In developing the new product, the management of EEA undertook comprehensive market research to identify a feasible opportunity within the environment. The management of the firm considered the theme of environmental and historical site conservation which is in line with the firm’s mission. The market research enabled the management of the firm to develop a product that would meet the consumers’ demands. This is due to the fact that the product will include features that will result in customers having new experiences. The product is designed to incorporate touring to various historical sites in South West Australia. This will give the customers new experiences. The product is designed to be provided in the market all year round. This will give the customers flexibility in planning their vacations.
Through identifying the target market and customer segmentation, the management of the firm is able to customize the product to meet the needs of these customers. Knowledge of the competitor enabled the management of EEA to analyze the products offered by competitor firms and their marketing strategies. This will enable the management to differentiate the new product from that of the competitors. It will also enable the management to develop effective marketing strategies.
To effectively launch the product in the market, the management has developed a comprehensive marketing strategy in relation to the promotion. Various promotion methods have been incorporated to create product awareness in the market and to overcome the intangibility problem. The promotional strategy involves the use of advertisements through mediums such as television, radio, newspapers, magazines and brochures. Information technology has also been integrated into promoting the new product. This is by conducting online advertising which will ensure that there is international awareness in the international market. Online advertising is also enhanced by forming alliances with major search engines such as Google and Yahoo and other online marketing agents such as YouTube.
To promote the product to the institutional customers, the personal selling method will be used. The management of the firm has also integrated cooperative marketing to ensure there is an increase in market awareness. This is through the formation of an alliance with organizations such as STO, RTA, and Tourism Australia.
The management of the firm forecasts that the product will be effectively developed and launched in the market within two to three months. This will ensure effectiveness in the development of the product
The table below illustrates the cost that will be involved in the process of developing and launching the new product in the market.
|Cost item||Cost in $|
|Cost of market research||100,000|
|Cost of promotion (Television, Radio, Print media)||400,000|
|Cost of training the tour guides||150,000|
|Cost of contract between the firm and the search engine firms (Google and Yahoo)||500,000|
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