There are policy and steps in place to deal with the following aspects:
- Talking (and listening) to people
- Working with partners
- Working overseas
- Charitable work
- Sustainable aviation
- The environment
There are many policies in place to achieve what Thomas Cook have stated in their mission statement, and every section of the Thomas Cook company can help out in some way or another.
Market Research
Thomas Cook conducted market research to find out how popular gift vouchers were. They did this to find out whether it was a good idea to continue selling gift vouchers at their travel agencies. The market research proved that gift vouchers are highly popular rewards, second after cash. It was also established that to travel the world was one of the main incentives people would most like to receive. This means that the Thomas Cook gift vouchers are a good idea and are very popular. The gift vouchers are available in the following denominations:
They can be used to pay or part pay for the following products:
- Holidays in the UK
- Holidays across the world
- Flights
- Hotels
- Car hire
- Cruises
There are four places where the vouchers can be spent, they are:
- Thomas Cook travel agencies
- Direct on the phone to Thomas Cook
- Thomas Cook TV
Product
There are many products sold at Thomas Cook but the product that gets sold the most is a package holiday which includes flights, accommodation and transfers. Cruises are also a popular product sold at Thomas Cook however this is like a package holiday as accommodation and flights if needed are included in the cost. Flights are sold however not many of these are sold on their own as many people now purchase flights off the internet or phone at a cheaper rate. Accommodation within the UK is also available and is popular for weekend breaks or theatre breaks. Foreign exchange is a big income to Thomas Cook in Huntingdon, customers who have booked their holiday through Thomas Cook get a special rate where buying currency. Other products available from Thomas Cook can be shown in the product breadth matrix on the following pages.
Core Product Diagram for a Package Holiday
The core benefit of a package holiday is to have a good time no matter what type of holiday it is. Thomas Cook has a range of holidays with something to suit everyone. So the main benefit is to have a good time whilst you’re on holiday.
The actual product of a package holiday is the accommodation, flights and transfers. The accommodation depends on which package holiday is chosen it can be a hotel room, apartment or villa. Meals with accommodation depend on which board basis is chosen and this is included in the price of the holiday. The flight is included in the price off the package holiday as well as 5kg of hand luggage and 20kg of hold luggage. The transfers take the customers from the airport to their accommodation, this is usually a bus, however villa package holidays provide car hire from the airport which is included in the cost.
The extras of a package holiday are what customers can purchase to make their holiday more special or comfortable for them. Extras that can be bought include:
- Meals on a flight
- Extra baggage allowance
- Taxi transfers rather than a bus
- Car hire
- Airport parking
- Meet and greet parking
- Airport hotels
- Airport lounges
- Excursions
- Attraction tickets
- Welcome packs
- Room upgrades
- Board basis upgrades
- Late check-out of accommodation
- Air conditioning in accommodation
Product Life Cycle for Holidays to Sardinia
Sales
Sept Oct Nov Dec Jan Feb Mar Apr
Month
The product life cycle above shows the sales for a package holiday in Sardinia this summer. The brochure featuring the holiday which is new for summer 2007 was only released in September 2006. Between September and December the sales will have a slow growth as this is a quiet spell for bookings due to Christmas. The holidays will then have a rapid growth between January and March before maturing in April/May.
Price
The reason for the different prices in brochures for a package holiday is the differences in demand that occur at different times and places. Thomas Cook set these prices to ensure that as many aircraft seats and hotel beds are used as possible.
Season pricing – Package holidays are mostly organised into two seasons, summer (May to October) and winter (November to April). In the summer it is known that more people want to go on holiday in August than in May this could be because of warmer weather and time off work and school. However tour operators need to keep their holidays selling throughout both seasons, this is why the prices are varied to reflect the demand for holidays. The summer season is the main time to travel due to the reasons stated above. Because of this demand and the fact that it is not just people in the UK wishing to travel to these destinations as these times the prices must rise for these periods. This is because Thomas Cook commits to beds and seats for a 6 month season. During the quieter months of May and the beginning of October, Thomas Cook often sells holidays at, or below the cost price to ensure that the flights and hotels are filled.
Flight times – If people are wishing to travel during the day time they are likely to pay more than someone going on a night flight. This is because of the demand for day flights, people want to travel in the day time that the night time. So Thomas Cook puts the price up on day flights compared to night flights to meet this demand. For example a holiday to Ibiza from Manchester in the same hotel on the 4th July costs £229 per person for a 08:00 leaving flight. The same holiday but a night flight leaving at 00:15 costs £189 per person.
Regional Departures – The prices for flights from regional airports are set to keep aircraft as full as possible. Thomas Cook is keen to provide regional departures for people who like to travel from their local airport. However if the local airport is only a small airport these could incur an added cost. The cheapest airports to fly from if using Thomas Cook is Gatwick and Birmingham, so most other departure airports have an added departure cost. However in the last two months Thomas Cook has taken off some off the departure costs in some holidays to keep in competitions with other tour operators such as Thomson who do not charge for fuel supplements.
Accommodation supplements – Thomas Cook’s contracts with hotels and apartments are based on a price per room, however in their brochures its price per person. So if a room bought by Thomas Cook cost £400 and could sleep two people the brochure cost would be £200 per person. However if a single person wanted to stay in that room they would have to pay the whole £400. Rooms are allocated according to the size of the party travelling. However if there is a party of three and the hotel only has a room that sleeps 2 or 4, the party would have to have the sleeps 4 room and pay a supplement as they are not filling that room.
Exchange rates – a high proportion on the costs incurred by Thomas Cook is in foreign currencies for accommodation, transfers, airport charges etc. in the country where the holiday is to be taken. Aviation fuel is also priced in $ (American dollars). As holiday prices are advertised a long time before Thomas Cook has to pay for these products the exchange rates could have a major impact on their profit. For example a £500 holiday, £300 may be payable in foreign currency. Thomas Cook expects to earn around 2-3% profit. However if the exchange rate changes by as little as 5%, Thomas Cook will either be at a loss or making double the profit depending on whether the exchange rate went up or down.
Below are two comparison tables showing the price comparison for a short haul and a long haul holiday between the big four tour operators.
Discounting holidays is up to the head office of Thomas Cook. Many holidays have some discount on them to match the price on the internet. Late deals are also down to the tour operator (head office) and this are shown when the travel agent looks at a holiday for someone on the viewdata system. The head office discounts the last minute holidays as its better to sell the holiday at a cut price than not sell it at all. Sometimes the travel agent can discount a holiday to get the booking; this will involve them cutting their commission, so this price is taken off the holiday.
Place
Thomas Cook in Huntingdon is situated on the High Street in the town centre and is about 5 minutes from the A14 and 10 minutes from the A1. Thomas Cook in Huntingdon is also only a 5 minute walk away from the bus station and a 15 minute walk away from the train station. The bullet points below show the distance from the neighbouring towns and villages to Thomas Cook in Huntingdon.
- Brampton 1.9 miles
- Godmanchester 1.5 miles
- Alconbury 5.9 miles
- Bluntisham 9.6 miles
- Earith 10.9 miles
- Fenstanton 7 miles
- Hilton 7.1 miles
- Hemingford Abbots 4.2 miles
- Kimbolton 12 miles
- Somersham 11.4 miles
- Ramsey 11.6 miles
- Warboys 8.2 miles
- St Ives 5.9 miles
- St Neots 12.3 miles
- Cambridge 16.4 miles
- Peterborough 23.5 miles
- Bedford 22.5 miles
Thomas Cook does not have its own car park for customers only for staff, however there are many car parks in the local area to park in. These are shown on the map below.
There are many bus services to Huntingdon the following bus routes are provided by Huntingdon and District buses:
- Huntingdon – St Ives – Cambridge via Fenstanton and either RAF Wyton, Houghton or Oxmoor.
- Huntingdon – Brampton – St Neots – Eaton Socon via Hinchingbrooke, Buckden and the Offords.
- Huntingdon – Oxmoor.
- Brampton – Huntingdon – Oxmoor – Hartford.
- Huntingdon – Oxmoor – Tesco.
- Huntingdon – Catworth – Keyston.
- Huntingdon – Spaldwick – Grafham.
- St Ives – Huntingdon – Spaldwick – Ellington.
- Huntingdon – St Ives – Cambridge Science Park.
- Huntingdon – Ramsey via RAF Wyton, Warboys and Bury.
- Hinchingbrooke – Huntingdon – March.
- Huntingdon – St Ives – Bar Hill – Cambridge via Godmanchester, the Hemingfords, Fenstanton, Oakington and Girton.
- Huntingdon – Bedford via Ellington, Spaldwick, Leighton Bromswold, Upton, Alconbury and Perry.
- Huntingdon – St Ives – Somersham via Godmanchester, the Hemingfords, Earith, Needingworth and Bluntisham.
- Huntingdon to Upwood via Kings Ripton, Abbots Ripton and Wood Walton.
The following bus routes are provided by Whippet Coaches:
- Huntingdon – St Ives – Cambridge via Godmanchester, the Hemingfords and Bar Hill.
- Huntingdon – Sawtry – Peterborough via Alconbury, Stukeley, Yaxley and Hampton.
- Huntingdon – Papworth via Godmanchester, Hilton and Graveley.
- Huntingdon – Godmanchester.
- Huntingdon – Oxmoor.
The following bus routes are provided by Stagecoach:
- Huntingdon – Sawtry – Peterborough via Alconbury, Connington, Stilton, Yaxley and Hampton.
- Huntingdon – St Ives – Cambridge via Hartford, Fenstanton and Fen Drayton.
The following bus routes are provided by Cavalier Travel:
- Huntingdon – Warboys – Chatteris – March via RAF Wyton, Old Hurst, Bury, Ramsey and Doddington.
There is also a train station in Huntingdon and the map on the following page shows the routes that can be taken from Huntingdon train station.
Promotion
Again most of the promotion for Thomas Cook is done through Head Office the only promoting that the travel agent does is displaying brochures, window displays and phoning existing customers during quiet times to see if they have booked a holiday this year, if they haven’t the member of staff will tell them about current offers available
Advertising - Thomas Cook does this through the TV (mainly after Christmas), Magazines, Newspapers (both local and national), Internet, Billboards, banners at sporting events and football shirt sponsorship.
Thomas Cook had a TV advert on the screens in late December/January which is the most popular time to buy holidays. The tagline of the advert was “Our world revolves around you”. The advert also showed customers there new price promise. If you find any Thomas Cook holiday cheaper the customer would get the holiday for free. However this advert was not seen very often on the television compared to Thomson and Airtours adverts, which means many potential customers did not know about the Thomas Cook price promise. Also at the moment two of the big four tour operators have adverts on the television which are seen frequently but there is no Thomas Cook advert on the television.
Thomas Cook advertises a lot through magazines and newspapers. One promotion from three years ago advertised the fact that they have good quality control over its hotels, beaches and gold courses. These advertisements have been produced to reassure consumers that they do check their products they provide. These adverts can be seen in appendix 3.
Another advertising campaign that Thomas Cook did was on the London Underground. It involved using all the picture boards that are on the walls that people will see when going up and down on the escalators. It would grab people’s attention as its takes up the whole wall and people will read each poster wondering what company it is for. This can be seen in appendix 4. Thomas cook advertised their cruise deals in the Southampton Echo weekend magazine. This advertising campaign ran for 4 weeks in April and May 2006. The Newspaper Society then went on to interview 441 people about the advert. From the interviews it was calculated that the awareness of Thomas Cook had increased by 16% and intent to purchase following the advertisement had increased by 29%. The whole article can be seen in appendix 3.
Thomas Cook also sends out a email newsletter to people that signs up for this on the website. The newsletter shows what the latest offers are both in store and online. An example of a newsletter they send can be seen in appendix 7.
Sales Promotions - The window displays at Thomas Cook travel agencies is a sales promotion. People will often stop and look at the window cards to see what offers are available, and if they see a good offer this will prompt them to walk into the travel agency and enquire about the deal in the window. The window display must be updated daily as the prices are always changing, or the holiday could no longer be available. At Thomas Cook in Huntingdon the window cards can now be printed off so this saves times as before they had to be hand written every day.
There is also a display in the window showing the latest air fares. These get changed weekly as the prices don’t change as often as holidays do. The cheapest fare is shown in the window so restrictions may apply.
Foreign Exchange also has a board in the window showing the exchange rates for the most popular currencies such as US Dollars and Euros. The board shows the buying rate and the selling rate.
Publicity - As Thomas Cook is a large company its get its share off good and bad publicity. Appendix 5 is an article about Thomas Cook’s first ever Celebrity Golf Challenge. It goes on to state that the event raised over £17,000 for charity. This is good publicity for Thomas Cook it shows the company in a good light and that they will help charities and go out their way to do this.
However when it comes to Thomas Cook for every good bit of publicity there is a ton of bad publicity. One article (appendix 6) that was in the Telegraph newspaper and on the website is about how a mother of two children who died whilst on holiday in Corfu with carbon monoxide poisoning holds Thomas Cook responsible. This was bad publicity for Thomas Cook and it made the headlines in all the national newspapers and was on the news. However Thomas Cook released a statement saying that the accommodation had been checked and that the case was unprecedented.
Finally another piece of bad publicity that was featured in the Sunderland Echo (appendix 8) is about a family suing Thomas Cook after their holiday to Cuba turned into a nightmare. The article states how the accommodation had dirty beds, the toilets were overflowing and the food was covered in flies. The article is all one sided and only talked to the family who went on holiday. Thomas Cook was not allowed to comment on the matter as legal proceedings were already under way. The article however only made the local newspaper so it did not affect Thomas Cook when it came to bookings.
Sponsorship – Thomas Cook sponsors Manchester City, so they get to have their name on the Manchester City shirts when they play a game. Thomas Cook is Manchester City’s football club main sponsor. Because of this Thomas Cook provides holiday offers and discounts to the club’s supporters. Thomas Cook also supports the first team with their travel requirements.
McDonalds Promotion – Thomas Cook have offered to donate prizes toward the McDonalds Monopoly promotion that is taking place in store at the moment. Thomas Cook has provided 1 million prizes off £100 off holiday per couple. The company has also provided 200 free holidays to Spain, Turkey, Greece and Brazil. By doing this they are likely to get more people to book with them if they have won £100 off a holiday. People that have won a free holiday may decide to travel with them again if they have had such a good time. It is also good publicity by donated prizes and offering people the chance to win a holiday.
The External Marketing Environment
Demographic
70% of the population in Huntingdon work either full time, part time or are self employed. These are the people who are likely to book holidays especially the people working full time. 12% of people have retired in Huntingdon, so they have more time on their hands to go on holidays, so Thomas Cook will look at how to market their products to these people. 27% of people own their house outright and 49% of people have a mortgage, which means that people are in good jobs to be able to own their own house and hopefully have enough money to spend on holidays. Most people living in Huntingdonshire are aged between 28 and 56 years old, so Thomas Cook promotes a wide range of holidays to attract them. However there is also a lot of over 60’s living in Huntingdon as well. This is good for Thomas Cook as older retired people are more likely to go on holiday as they have savings and more time and they prefer to deal and book in a shop rather than using the internet. 70,162 people out of a population in Huntingdonshire of 121,243 either work in a managerial or supervisory position; this means they should earn more money than someone who works as a manual worker, so they should have more disposable income to spend on things such as a holiday. Most people in Huntingdonshire who have children at least two children, this is good for Thomas Cook who can promote family holidays and Disney holidays where kids go free. From the demographics above, Thomas Cook in Huntingdon has a wide range of people who might purchase a product of them, so they have to promote a wide range of products so they attract all these different types of people. They promote a wide range of holidays in their window displays from family holidays, ski holidays, long haul and city breaks. They have a wide selection of brochures available Thomas Cook SummerSun and JMC are good for families, Prime Time and cruises are good for the older generation, Club 18-30 is for the young generation and Select and Escape are good for couples. They offer discounts on all their holidays and try to find their customers the best value for money holiday they can, if that is what the customer is looking for. They advertise the kids go free and two weeks for the price of one on the front of their brochures if the offer is available within the selected brochure.
Economic
The gross disposable household income in Cambridgeshire per head is £12,555 to £15,999. This means people who have a high disposable income are more likely to go on holiday as they have the spare money to do so. However many bills have gone up recently such as water, so this disposable income may decrease. The minimum wage increased at the end of last year by 30p so the new minimum wage is now £5.35, this could mean that people earning more than the minimum wage will get a rise to, as some companies do this. This means people may have more disposable income if they have had a pay rise, and bills have not increased. Prices of holidays and flights however have both increased, so people will need more money to afford a holiday. This is because on average package holidays increase by 5% each year due to the hotel rates and flights going out of the UK will now be more expensive due to increased tax. The interest rate went up in January 2007 to 5.25% and has stayed there ever since; this means people may not have as much money as normal due to the interest they have to pay. So may not be able to go on holiday. Thomas Cook can not do much when it comes to economic activities as it affects them as well, they cannot lower their holiday prices if they have been raised, however they can use the store discount if there is any left (as they only get a certain amount a month) to try and get that booking.
Huntingdon town centre is also going under a major redevelopment which is costing millions of pounds but ill increase the amount of people coming into the town according to the local council as there will be more shops and bus routes won’t take as long as they will have their own designated bus lane around the town centre ring road.
Natural
When it comes to the environment Thomas Cook in Huntingdon is not really affecting it, its Thomas Cook as a whole by operating flights and cruises. However to combat this, Thomas Cook has agreed to do the following to pioneer a sustainable future for the environment.
- Energy conversation at home and overseas. The company will continue to develop a policy on energy management, seeking methods of measuring our energy usage, then developing ways to maximise efficiency and minimise wastage.
- The company will continue to develop its policy on waste management, which incorporates the three principles of reducing, reusing and recycling.
- Airline emissions and noise pollution. The company will continue to develop an action plan to seek and, where possible, implement measures to minimise the impacts of both.
Technological
When it comes to Technology, one of Thomas Cook’s main competitors is the internet. Since the rise of internet bookings there has been a decline in the sales at the high street travel agents. The reason why people use the internet for bookings is that is it convenient, they don’t have to drive to the local town, and they can book a holiday from the comfort of their own home. The other reason is cost many people find that the internet is cheaper than the high street travel agent; this is because an internet travel agent does not have to pay costs such as rent on premises, so they can lower their prices. Another reason people book over the internet is flexibility. Tailor-made holidays are very popular now and the high street travel agent is still associated with package holidays. However Thomas cook was one of the first tour operators to launch a website, this was done in 1996. The website not only lets customers book Thomas Cook holidays but a range of products that are available in the high street stores such as cruises, short breaks, holiday money, airport car parking, airport hotels, car hire, insurance and more. Thomas Cook has also created the first website to offer free downloads, so customers can watch videos off hotels, beaches, local sights and the resorts. The website currently features:
- 42 destinations
- 68 resorts
- 632 hotels
The idea for this is almost like a try before you buy, customers can see what the resort and destination is like almost like they are there themselves as just seeing pictures in a brochure does not keep up with technology anymore. The high street travel agents of Thomas Cook do not have email, which would be a good idea as they could email customers if they opted for it rather than post and this would save on paper and the environment.
Political
Terrorism is still a factor in the world, and it is why some destinations are now unpopular and why others have become more popular. Last year there were terrorist’s bombs in both Turkey and Egypt. Bookings to turkey still seem to be on the up but in a different resort, this is because it is cheap and popular with families. Bookings for Egypt have gone down slightly but are still strong, however many people going to Egypt are now booking twin centres holidays so they spend one week on a cruise and a week in a hotel. Another political factor affecting the travel industry is the new tax being put on flights out of the UK; this is to do with the green issue and carbon emissions. Because of this tax hike people may travel less or look at alternative methods of travel such as train, ferry, Eurostar and/or Eurotunnel. There is nothing Thomas Cook can do about these issues except destinations that are affected by terrorism and are safe to travel to are promoted by the company to get the bookings and let the customers know that it is safe to travel.
Cultural
Many customers now, when booking a holiday go away for a cultural reason. This can be anything from religion to political. Thomas Cook has had to look at what it is customers want from a holiday and provide this for them or else the customers would go elsewhere. Many customers are now on going on holiday for cultural reasons due to their interests, things they have seen on the television or in a holiday guide or to try something new. Many people go on holiday for historical reasons. One major destination for history is Egypt, and Thomas Cook has a dedicated brochure just on Egypt. Customers can choose form a range off destinations including the historic Luxor. There are also many Nile cruises to choose from, which is a good way off seeing all the sights in Egypt. Customers can also choose to do a twin centre holiday which is a two week holiday, a week on a cruise and a week in a hotel. Even though Sharm El Sheikh is not a historical location customers staying here can go on excursions provided by Thomas Cook for an extra cost to the pyramids in Cairo or the Valley of the Kings in Luxor. Thomas Cook also provides many other historical excursions at other destinations too besides Egypt. Some customers go on holiday for scientific or technical reasons. For example many people going to Florida make a trip not only to the theme parks but also to the Kennedy Space Centre. Thomas Cook Signature offers a trip to the space centre as an excursion for customers going to Florida. There are two prices for this excursion one is for a normal two day pass and the other is for a Space Pass which gives guests the opportunity to dine with an astronaut. Other excursions that Thomas Cook Signature offers in America that comes under the scientific and technical culture are:
- A visit to Graceland and Sun Studios
- Visit to Universal Studios
- Guided tour of the CNN Studios
Political reasons also come under culture and many people go to countries to see political buildings or monuments. One of the best places for this in America is Washington D.C. It is featured in both the Thomas Cook Signature America and City Breaks brochures. Thomas Cook offers an excursion called the Washington D.C trolley tour. This is a two hour narrated tour and passes landmarks such as the White House, Capitol Hill, Washington National Cathedral and Arlington National Cemetery.
Customers
Customers rate Thomas Cook in Huntingdon highly, based on its good customer service. Staff members remember customers who come back again from the last time they went on holiday and have a chat with them on the holiday they have been on and the holiday they are going on. Thomas Cook in Huntingdon has a lot of repeat business especially with the over 50’s, who tend to book through a travel agent than online. The customers believe there is a wide range of products available at Thomas Cook, as it is a major tour operator that does not specialise in one area of the travel market. Most customers see Thomas Cook to be very similar to the other big tour operators First Choice and Thomson when it comes to the price and products available. Some customers who come into the store for a quote do find First Choice and Thomson cheaper and no amount of store discount will bring the cost down to match the quote they already have. Most customers say Thomas Cook is the best out of the three for customer service and that’s why many people come back to them even if they are slightly more expensive. Families tend to buy their holiday where they can get it the cheapest, so they are likely to use First Choice or Thomson if they shop around. However older people are likely to go somewhere that is convenient for them and will help them in making a decision such as Thomas Cook. Many people looking to go on a cruise go to Thomas Cook as there is a cruise window display and many different cruise operators sell their product at Thomas Cook. People in their late teens early twenties are likely to book through Thomas Cook to go on a Club 18-30 holiday as they know the name compared to the other three youth tour operators Freestyle, 2wentys and Escapades which are known but not as popular as Club 18-30. Couples are likely to book their holiday at the travel agent or internet site that offers them the product they want such as a certain hotel or a resort that has everything that they want.
Competitors
Thomas cook in Huntingdon has the following competitors:
- Premier Travel. Located across the road from Thomas Cook in Huntingdon so is in a good location and is a good size shop. Premier travel sells holidays from most tour operators and stocks a wide range of brochures. When it comes to worldwide holidays it will promote Premier Holidays as that is the tour operator that owns Premier Travel. When it comes to short haul holidays they can sell anyone’s products they wish to, which is an advantage over Thomas Cook and Going Places as they have to try and sell their tour operators holidays only if they can. However Premier Travel is only a small group of 12 shops and people are more likely to go to Thomas Cook as they know the name and will probably get a better price on that holiday.
- Going Places. Is pretty similar to Thomas Cook, how ever Thomas Cook is in a better location on the High Street, as Going Places is off the High Street in Huntingdon. Both Thomas Cook and Going Places have a similar size shop with foreign exchange, stocks a wide range of their tour operators brochures and these are the ones they try and sell the most off. Their prices are similar as well, with Going Places being slightly higher. The company has been around for 35 years and around 20 million people book a holiday through MyTavel (the tour operator that owns Going Places) each year.
- Thomson. Located in St Ives is another of the big 4 tour operators and has the advantage of being the travel agency out of the big four to be located in St Ives. The company as a whole have provided a range of travel products for over 40 years and sell around 5 million holidays and flights a year.
- First Choice. The nearest store to Huntingdon is in Bedford and there is also a First Choice Holiday Hypermarket in Peterborough. The company as a whole takes over 2.5 million customers on holiday a year and has provided a range of travel products since 1973.
- Internet. Booking holidays on the internet have increased and more people book holidays over the internet than in the travel agent. This is why the big four tour operators have got websites where holidays can be booked through. Many people now book over the internet due to the cost and convenience. They can book at any time they wish to; the internet does not shut at 5:00pm like a travel agent does.
