This marketing report is going to look at the internal and external analysis of Mark Warner Holidays Ltd. It will identify the strengths and weaknesses of the business and look at potential opportunities or remedies for the main problem it may have.

Authors Avatar

MARK WARNER HOLIDAYS LTD

MK280 Marketing Applications

Hand-In Date: 22nd January 2009


Mark Warner Holidays

Aim

This marketing report is going to look at the internal and external analysis of Mark Warner Holidays Ltd. It will identify the strengths and weaknesses of the business and look at potential opportunities or remedies for the main problem it may have.

Company Background

Mark Chitty set up Mark Warner in 1974 as he saw a gap in the market for singles and couples activity holidays. Chitty borrowed the £1000 he needed to secure their first chalet in Verbier, Switzerland and Mark Warner Holidays was founded. It was largely family run as Mark himself took to ski hosting, and his mother dealt with all of the bookings, and organised the cooking and cleaning of the chalet.

The following year, Chitty wanted to expand his business into Val D’Isère in France, but needed more money to do this. He called upon his school friend, Andrew Searle, to help with the finances.

In 1982, the Mark Warner Summer Programme was introduced with beach holidays and water-sports replacing the chalets and skiing.

Mark Warner’s philosophy is to combines great locations, good company, friendly staff and a relaxed environment to offer unique holidays. With Chitty and Searle’s entrepreneurial skills, the business has developed into ‘one of the most highly regarded independent travel companies in the UK’ with nearly 55,000 passengers using them to jet of on either ski or beach holidays. They rely mainly on word of mouth recommendations. Each year, more than 75% of business is repeat bookings.

Mark Warner Holidays Ltd has over the years started to facilitate for the family holidays. They have invested heavily in better comprehensive accommodation and childcare facilities whilst also keeping their original ideas of singles and couples only holidays by still reserving some hotels and ski chalets for adults only.

Financial Background

Since the inception of the company in 1974, the accounts has been very profitable but  we going to be focusing on the company’s financial performance and operation for the last 10 years, 1998 – 2007.

The turnover of the company from 1998 rose steadily from £25.625million to almost £40million in 2001. The turnover for the reaming years from 2002 kept on rising and dipping and ended at £46.281million by 2007 (Fig 1). Turnover for competitors for year 2007 were between £45.038m and £47.997m showing Mark Warner has a very strong market share of the tour operator sector.

(Fig 1) Source: Fame

The cost of sales has risen steadily from £-18.696m in 1997 to £38.434 in 2003. In 2004 the cost fell to down to £-34.924 but rose to £-42.157 by the end of 2007(fig 2). The cost of sales depends on where Mark Warner procures its holiday services from and this varies from vendor to vendor. The fees paid to the airline operators e.g. XL.com, leasing of accommodation resorts etc. The cost of sales for competitors varies depending on the kind of resorts they operate, the length of lease and the cost agreed. Keeping this cost down would increase the profit margins for Mark Warner.

 

(Fig 2) Source: Fame

The company has made substantial profit of £7million in 1998 down to over £4million in 2007. The company had retained profit ranging from between £2,217million in 1997 to £711,000 in 2002. There was a deficit of £-850,000 in 2000.  By the end of 2007, loses had grown to £-2.803million (fig 3).  In 2007 Sunsport tours with 55 employees made a profit of £2.487million, Mark Warner made a loss in the same year of £-2.803 with a 577 employees.

(Fig 3) Source: Fame

To examine the stability/success of the company, a QuiScore is used to measure this. This is software used to monitor various factors in the company’s financial report taking into account turnover and profitability and other factors like the short and long term liquidity, gearing, return on capital employed. The higher the QuiScore, the greater the stability of the company and its likelihood of success (emeraldinsight.com). We can see that the QuiScore was 92 in 1998 and had fallen to 52 by 2007 from (fig 4). This is still high score which indicates that the business is in a very sound financial position and would be able to meet all its financial obligations.

(fig 4) Source: Fame

Significant Developments

Entry into new market 

Mark Warner had brochure outside Europe for the first time featuring two resorts in Canada, including the option of heliskiing at Ravelstoke in the Canadian Rockies in October 2007. Heliskiing is within the reach of intermediate skiers and we are finding there is an ever increasing demand for this type of activities says head of marketing Nigel Ragg. A week at the five star Coast Hillcrest Hotel including two days of heliskiing starts at £1,726 per person including flights (travelweekly). More people are looking for that ultimate ski experience  and expansion into new niche markets is a strategy mark warner is exploring to broaden their customer base and keep their competitive advantage in the travel industry. this also contributes greatly to the company’s total turnover.

 Change in marketing and sales

Mark Warner in 2006 meet with Triton in a bid to increase the amount of business it does through agents. The operator typically deals with about 1,000 agencies annually but hopes by becoming a Triton preferred supplier it can simplify its marketing and concentrate on its most productive retailers. Mark Warner currently pays commission upwards of 13% to agents but wants the level of commission paid to reflect the business they get. Agents accounts for between a quarter and a third of the operator’s sales and have proved particularly strong in shifting discounted stock in the late market.

Mergers and Acquisition

Upmarket all-inclusive operator Mark Warner was thought to be up for sale in 2006. First Choice’s (big competitor in the travel/tour sector) was interested in buying Mark Warner to expand its Sunsail operation which was attempting to expand its land-based operation.This indicates the strong market share the company controls.

Marketing Organisational Structure

Mark Warner is a small private limited company and therefore has a relatively small organisational structure. Mark Chitty’s mother originally had his mum accepting bookings from her London home for ski holidays. This was moved to a small office in West London, when the company started to grow, and in 2001 was re-located to a much larger office, with separate floors for the marketing and sales departments. Mark Warner employs around 500 people in the London headquarters and over 1,500 staff to work abroad at the resorts.

The office headquarters is made up of the following departments: marketing, sales, finance, payments, customer service, after-sales queries, recruitment, press, graphics, administration and I.T. The range of different departments shows the growth the company has achieved and also shows the diversity of areas involved. The fact that Mark Warner has a separate sales, customer service and after-sales queries department shows that it invests extensively and prides itself about the quality of customer care it offers.

The marketing staff consists of: a marketing director (Nigel Ragg), an associate marketing director (Andy Furlong), a head of online marketing (Gill Black), two marketing assistants, two people in database organisation and two people in promotions. This shows that Mark Warner heavily invests in marketing and planning to help their business can grow and develop further. Typical functions of the marketing team include: advertising and promotions management, new product development and market research, and sales management. The marketing team also handles the different geographic markets Mark Warner caters in, and explores possibilities of branching out in different countries.

The sales department have very flexible hours, being open Monday-Thursday from 9am to 8pm, Friday from 9am to 6pm, giving people who work during the day an opportunity to call and book their holiday in the evening. They are even open on the weekends, on Saturday from 9am to 5pm and Sunday from 10am to 3pm. This gives Mark Warner a competitive advantage as not all competitors offer this service.

Mark Warner claims that much of its success is due to the excellent quality of service it offers to customers. Their trained and polite staff helps organise and package holidays suitable for the customer depending on their needs, and are there to help answer any queries or concerns customers may have. The after-sales service includes calling customers back after their holidays and asking them to rate their services, and to encourage them to book again in the future. Mark Warner keeps a record of all previous customers’ details on a database and regularly sends offers and newsletters via email. At the holiday resorts, Mark Warner employs fully qualified instructors to teach ski and water activities, such as snowboarding and sailing. Mark Warner also offers childcare facilities, which run for children aged 4 months to 17 years old. All the nannies are qualified in childcare and speak in English at all the resorts (www.markwarner.co.uk). The childcare services at Mark Warner have, however, been questioned recently, when it was found that they recruited un-referenced and under-qualified nannies. Mark Warner has since reviewed their recruitment procedures and offer training to all staff, making them more qualified and adding quality to customer service.

Sales are obviously a crucial aspect of Mark Warner as they have to sell people holidays in order to make a profit. The sales team are friendly and professional and will try and offer customers a holiday package that is best suited to their needs and demands.

Mark Warner’s promotional budget has decreased since 2003, when it decided to spend £600,000 moving to the internet. The reason for this was that Mark Warner realised the increasing trend of people researching and booking their holidays via the web. In previous years Mark Warner used to spend its budget on national press and advertising, which has now completely disappeared, and resulted in the internet being the only medium to promote the company. Occasionally, they will advertise in the Sunday Times newspaper (a small advertisement that takes a fifth of the page) and give leaflets as supplements. From their website, , brochures can be requested for their ski and summer holiday packages, which are delivered by post within 3 working days. This rapid service adds to customer value. Mark Warner’s website is a good medium for promotion and making the public aware of the company name and the services they offer. Nigel Ragg, the marketing director for Mark Warner has said that “50% of calls to Mark Warner’s call centre now result from the telephone number advertised on its website.” (www.brandrepublic.com)       

Mark Warner caters for a range of different holidays, which include singles, couples, family and activity holidays, during the summer and the winter. Mark Warner has 9 beach resorts in countries such as Corsica, Egypt, Greece, Mauritius, Portugal and the Alps. They also have 11 chalet-hotels for the ski season in countries such as France, Italy, Austria and Canada. Of the two holiday seasons offered, Mark Warner’s winter holidays are the most popular. In all the resorts Mark Warner employ professional and friendly staff, who includes sport instructors, nannies, chefs, customer service, and chalet and beach resort maintenance and management. All the staff are required to speak English which is a great advantage to customers as there are no communication barriers in foreign countries.

As an extension of Mark Warner Holidays, there is also Mark Warner Transportation Limited, which is involved in air transport. As this is also a small private limited company, information on its structure is very limited and unpublished.

Main Brands and Services

Originally founding the company looking at adults only, and couples activity holidays, Mark Warner has expanded offering a range of different services to try and cater for everyone. They offer different holidays from skiing, to beach, half-board, full-board, family holidays and package holidays. They extended outside of Europe in March 2005 to Egypt and Sri Lanka as part of their Worldwide Programme.

A couple booking with Mark Warner would has the choice of going to a ‘child-free’ hotel or one where there are ‘child-free zones’ implemented, so they could still enjoy a romantic, peaceful getaway. If you choose to go away during school term-time, Mark Warner offers mainly ‘adult-only’ holidays, which limits your choice but keeps the holiday peaceful and obviously ‘child-free’. These adult-only holidays are available to families with children over the age of 16. Mark Warner can also offer a single room with a supplement if you wished to go away on your own. If you went with the intention of meeting new people, they can offer you a shared room with someone of the same sex and of a similar age to yourself which would allow you to meet someone easier.

With their family holidays, Mark Warner provides childcare facilities from 4 months up to 17 years. They provide sports packages and offer tuition for all ages and salons for parents to relax and get pampered in whilst the kids are being occupied elsewhere. With all of the recent headlines about obesity, Mark Warner ensures that they employ top chefs to work in their hotel kitchens, who prepare fresh, healthy foods for everyone, with a wide variety of choice. This is looked upon quite highly with people who have been before, according to customer reviews found on www.tripadvisor.com

Join now!

 They also take care of everything for you, from the flights and accommodation, to booking your transfers for you as well. This offers peace of mind to the family orientated holidays, as parents know that once they have paid for the holiday, Mark Warner will deal with the rest of the details that they might have to look into with another tour operator.

Although you normally have to pay for water-sports with other tour operators, Mark Warner offers these for free along with other sporting activities, mainly tennis. They also know the best people to offer you tuition if you ...

This is a preview of the whole essay