Background information on Tourism in Slovakia from the 1990’s and the establishment of Vector
Tourism in Slovakia has recovered after Slovakia gained its independence. The demand and the sales volume has raised and many new companies started up their activities within the travel industry. Slovakia became a member of World-Tourism Organization. WTO has altogether 142 members and it is the leading international organization responsible for travel and tourism. It has a strong role in the promotion and development of tourism in international basis. It also gives special aids to member countries in order to help them to develop their tourism in a great extent. Slovakia has therefore received huge amount of aids and used it to attract foreign visitors to come to visit the country. Ref: 1
The establishment of new travel agencies in the late 90’s created a strong competition on the market. Unfortunately many small companies had to close down because of strong pushing attitude of competitors. They simply couldn’t cope with incredibly low prices that big companies offered. In 1999 and in 2000/01 the situation changed to the benefit of small companies. Due to huge price decreases in the previous years, big companies had to face huge losses, which often lead them to bankruptcy.
Nowadays the situation is even more colorful. All companies have to go through long decision making processes and they also have to adjust themselves to their marketing strategies in order to stay competitive and successful.
Vector is a large travel agency in Slovakia. It was established in 1992. The main field of interest is round trips and luxury (exotic) journeys. In the year of its establishment the situation on market was very convincing because due to various reasons many new companies had the chance to open offices and start working within not very competitive conditions. Problems occurred when the market became oversaturated and the competition rose to very high extent. Large companies tried to play with their prices and many of them had to face the closing down of their offices. Vector did well and survived the battle. Now it is one of the most prestigious travel agencies in Slovakia.
Marketing Audit:
Macro environment
Analyzing new possibilities, one has to make a research based on macro environmental issues as demand, prices, political influence and many others.
First of all the demand needs to be created or if it already exists, then customers need to be convinced about the success of the service.
Vector wants to open 2 offices in the city of Budapest in Hungary. They are aware of the fact that the demand for such trips is high but the prices usually make people postpone their decisions. What they want to create and show to customers is the fact that they can offer exotic holidays within a normal price range. Hungary is a developing country where people only start their traveling habits and they become even more willing to go abroad discovering new places.
Marketing Audit:
Micro environment
When talking about micro environmental factors, we have to consider issues as competition or the ability to cope with new situations.
There are many competitors in the tourism industry. Many of them are small players but most of the companies are strong enough to fight for customers.
However there are many competitors on the market there are only few ones offering luxury and exotic trips. Therefore it can be stated that out of the more than 200 agencies there are approximately 13 in Budapest that are potential competitors in this field. These agencies are the followings:
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Agra tours ()
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Marton travel ()
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ETS travel agency ()
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Baobab travel agency ()
5. Air-Porttravel ()
6. Congress travel ()
7. Air Tourist ()
8. West Travel ()
9. Pegazus travel ()
10. Eorotours ()
11. Tensi Tours ()
12. Sunday tours ()
13. Car-Tour ()
Objectives
Vector has set both long term and short term objectives considering opening of the 2 offices in Hungary.
Firstly it has created a new mission statement that says: We are here to take people to the land of their dreams, where they fell like kings and act like goods.
This mission statement reflects the idea of luxury trips where people get what they expect and they do not have to face disappointing factors.
Short term objectives:
Making the company known in Budapest and areas located near to it. Offering luxury trips to every country that people want. Therefore being in contact with other travel agencies when some help is needed.
Continuously educating customers and training employees.
Long term objectives:
Gaining market share and becoming the leader in this field of the tourism industry. Opening new offices in Miskolc, Szeged, Sopron, etc.
SWOT analysis
As the SWOT analysis shows the opportunities are compatible enough with threats. Therefore the agency with a good image and credible background should be able to face the new possibilities even in a foreign country.
Segmentation
Segmenting a travel agency on market is a crucial issue because segmentation gives the way to success. Vector should choose segmentation where they meet the preferences for product characteristics. For the reason that other agencies my offer the very same trips, Vector needs to concentrate on service requirements and quality as the most vital issue. Furthermore price is also a feature that may turn people choosing a particular trip. Therefore Vector should concentrate on its quality and should take into consideration issues as price and special features.
The exotic holidays and round trips do not belong to cheap trips, therefore the demand is lower.
Geographic segmentation
As mentioned previously, Vector has decided to open 2 offices in Budapest. Therefore the geographic segmentation in the short term will be based on cities and neighborhoods. The size of the city is enough to satisfy the agency.
Demographic segmentation
For the reason that demographic variables are the easiest to measure, all companies create for themselves a demographic segmentation. Vector as an agency offering luxury trips, concentrates its activities on middle age people with high income level
Psychographic segmentation
Due to high prices, Vector offers its services mostly to people belonging to the upper middle- and upper class people.
Behavioral segmentation
Vector creates its services for people who are completely aware of their destination; they are informed and enthusiastic about the trip they are choosing (even if they are choosing it with the help of the employee).
Targeting
Target audience can be drawn from the segmentation discussed above. Naturally people cannot be categorized because everyone has the chance and the opportunity to visit the agency but only those people can take part on the trips being offered by the agency who have the appropriate financial background, because these trips belong to expensive ones.
Positioning
The positioning strategy is a crucial issue in marketing strategy. For this reason Vector should position itself to high quality and high priced agencies. Doing that, the competition will be strong with other similar agencies, but offering good services and something more may lead the company to attract more customers.
Market research
Hungary as a developing country and a member of the EU, possess a huge tourism built on history and recreation.
The big boom in tourism started after 1989 when people were vested with rights and opportunities. Many travel agencies were opened, to satisfy the huge demand.
The situation has changed in a great extent over the years. People became more educated and demanding. Having better financial background they could afford more expensive trips to more exciting places. It could be said that the world became opened for them.
From the middle 90’s travel agencies started to specialize themselves and created segments with target audiences. Therefore people now can find everything starting from low prices to high price and high quality trips.
In Budapest there exist approximately 200 travel agencies. All of them are working hard to offer more than they competitors do. There are specialized for young travelers, offering cheap and low comfort trips to various place within the country and abroad. Next there are the ones having middle priced journeys for middle class people or families. And there are some agencies offering the high quality trips within the country (e.g.: Castles: Parádsasvár, Dunakiliti or wellness recreation programmes) and abroad (e.g.: round trips to Africa, India, America, Asia, etc).
Nowadays almost all agencies have a WWW access. Many of them offer on-line shopping of various trips or tickets. Moreover one can subscribe for a newsletter where he can receive all the relevant information about last minute tours or new offers.
Marketing Mix
Product
As the matter of fact that tourism belong to services industry, the product cannot be clearly defined. It can be a plane or a train ticket or the whole trip as well. Let’s assume that in this case the product refers to the trip itself. The features of the trip (product) play an important role because when adding something more to the value we can raise the value of the product itself. At the case of luxury trips innovations and unique features are taken as positive aspects. People not only buy the trip, they also expect something more on the side of services. In tourism product can be defined by having different stages. One may say that the documents that people get before traveling also belong to product. Vector has a view on product as the whole trip with all the documents that the customer receives.
More precisely, people may choose from various product categories depending on where they travel, how long they stay there, how they travel, etc.
Ordering a round trip to Egypt has different stages. One can order a round trip in the desert seeing all the historical monuments inside the country. On the other hand one can order the same trip with little difference as combining the trip to desert with a journey on a ship on the Nile. And this is only one of the many differences among various products (in these case journeys)
Knowing that Vector is an agency specialized on round trips and exotic journeys, it offers various trips to all continents. Therefore one can find in the product range round trips to America. These differ in length and places, because America is too big to generalize. There are journeys to the USA and to South America as well. In Europe one can choose round trips to almost all countries. To Asia the agency has various solutions as well. Customers may visit the beautiful Dubai in the UAE or meet the history of China and India. This is only a small piece of the huge range of trips, the agency offers for its clients.
Price
Pricing is a crucial issue in all businesses. Companies can differentiate themselves by choosing a good price strategy. At the case of Vector pricing also plays an important role but it is not the most crucial issue in its overall strategy. Tips offered by the agency are all luxury journeys which require high pricing. Prices differ in many aspects. People choosing a European journey will definitely pay less than customers choosing a trip to Dubai or Bali. Prices may go up till 2 000 000 HUF. Naturally the highest prices stand for the highest quality journeys in all inclusive hotels with many programs and extra services.
Place
A good placing strategy may improve the sales of a travel agency in a great extent. Therefore Vector must put big emphasis on deciding where the agency is going to be located and what distribution channel will it use. As the matter of fact that Vector is a brand new agency in Hungary, the distribution channel needs to be built out. Small companies are needed to help offering the trips of Vector. A good relationship is very important between the agency and customers and also between the agency and other smaller companies.
Promotion
In order to gain success several marketing communication tools need to be applied. The most relevant are advertising, because it attracts people and may lead them to choose the services of the agency. For the reason that the agency is new and not very known, the good reputation must be created with the help of advertising. After making the agency known and popular, the word of mouth must be taken very seriously. Actions destroying the good reputation must be avoided. The agency must work on continuous research for new potential customers but it must not forget about retaining the existing ones. This is very important because in the case of expensive tours, the customers usually remain the same.
People
Employees must be well trained and encouraged to make good business. In a top class travel agency the attitude of people plays an important role. The appearance of employees may show the quality of services inside the agency. Therefore their clothes must not only be clean but they have to wear exactly the same costumes. Appearance talk for itself and customers must have a good feeling when entering the place. Employees must be customer oriented and extremely helpful. If the customer cannot decide, they must help him without being pushy and rude.
Process
The procedures within the agency must be clearly defined. Customers are the decision maker and therefore they are involved in a great extent in the activities of the company. All the processes must be carried out in a very formal way. Rules must be clear for everyone.
Marketing strategy
Internal marketing
As it is known a company should spend the biggest part of its budget on developing its internal marketing. For this reason Vector focuses on its customers more than to its employees. Customers are the ones making the company known. Through clients the agency can develop but on the other hand it can also fail. In order to satisfy customers, the employees must be well trained and educated.
Developing the customer care programme
- Identify customer
Gathering information about potential customers may eas the work of the agency. As it has been mentioned Vector offers high quality services for mostly upper class people with high income level. All customers must feel that they are unique in a way and therefore they need a special treatment. A crucial issue at defining customers is the ability to say sorry if the employee has made a mistake. Vector trains its employees to be ready to say sorry and to be polite in all situations because the agency knows that courtesy is an important element in successful business life. Employees are educated to solve all the occurring problems effectively without harming the client.
The agency not only tries to find new customers but it also retains the existing ones. Furthermore it tries to attract new clients by creating relationship marketing.
- Written standards for tasks
Written standards at Vector are to help the employees to manage their tasks more effectively and faster. Therefore there are procedure manuals for how to fill in an ordering sheet, how to behave by doing a phone call or how to talk to customers when they have some problems.
When some changes are necessary to be made, employees must follow their manual in order to make the changes effectively.
In Budapest both offices will have a leader, who will be in charge of the manuals. One of their tasks will be to inform the employees about ways how various procedures need to be managed.
- Performance goals for tasks
Firstly Vector sets its quantitative goals. Therefore they set the maximum waiting time for customers. They also define what should be done when the rules are broken, how customers should be satisfied when something goes wrong. Another quantitative goal that Vector sets it’s the number of employees. There is a fixed number of employees over the year, but during the summer and winter when the most trips take place, extra people are employed in order to make the service faster and more efficient.
- Performance measures
In Vector and in almost every agency money plays an important role. For the reason that trips offered by Vector belong to luxury trips, people have to pay high amount of money. Therefore Vector tries to sell value and quality for the money it gets. The flow of the money paid is not complicated, because the customers pay directly in the office or they can order their trips on the internet (on the web site of Vector) and pay with the help of their credit cards.
Vector tries to make the queuing time zero, because the agency believes that people purchasing a luxury trip should be taken seriously. Therefore queuing is not allowed.
Office leaders at Vector evaluate their colleges in every quarter year. This evaluation serves as a motivation factor for employees. Customers at purchasing a trip receive a questionnaire about the quality of the service. The survey helps improving the agency and leads to efficient work.
- Review and evaluation of Personnel elements
Selection of new employees at Vector is taken very seriously. People applying for a job to Vector must speak at least 3 languages in advanced level. One of these languages must be English; the other two can be any other languages. Language skills are important because employees need to be in touch with hotels and services agencies worldwide. Furthermore good computer skills are required and single marital status counts as an advantage. Vector supports training courses for its employees. The purpose of such trainings is to make the work of employees effective and to make customers feel more comfortable when purchasing a holiday.
- The support systems
Travel catalogues are often playing an important part in decision making. Vector uses in Slovakia catalogues that are well designed in terms of showing how the places look like and they are also explanatory. This means that the catalogues are not only filled with bright and smart photos, but they also contains in information about the history or about things to avoid. Therefore it gives a short overview about the most important bits of the culture, people or expected behavior.
Vector also creates the good working environment in offices. Therefore the furnishing is high level and the appearance of the office shows trust and the quality. All employees have a computer with internet access. In the offices there is a copy machine, fax machine, TV with video and DVD player (Video and DVD serve for showing a little recording about hotels and places). All offices have a meeting room where business negotiations are held.
Interactive marketing
As for the second most crucial issue Vector concentrates on its interactive market marketing. This is important for the agency because the skills and the qualities of employees are put into the front light. Vector wants its customers to feel very comfortable. It is important to make customers trust the agency and people working there. Therefore the technical and functional qualities are playing an important role. Customers expect help in all fields from the employees of the agency. They not only expect courtesy but also need the inspiration of confidence. Customers expect fast serving and orientation to special needs. Employees must be well dressed because this is what customers see the first. Moreover the furniture and the technical equipment need to be up to date and fitting to the environment of the office.
To make employees more up to date, Vector organizes special trips for its employees to various places that the agency offers. This is important because employees can face the possible problems that may occur during holidays.
Marketing communication Plan
The target audience of Vector travel agency has been defined in the previous sections of this study. Therefore the potential customers are defined as upper middle- and upper class people with relatively high income level.
Therefore the marketing communication of the agency focuses on tools related to business.
Vector will use the printed media first. The main aim of the printed media is to catch people’s attention. Advertisements will be put to weekly or monthly business magazines.
Vector will also show up on business conferences where it will meet potentional customers. Sponsorship will be used as image building. Vector will sponsor conferences, events of big car suppliers or various events of big multinational companies in Hunagry.
For this year it s planning apply for the organization of the LG trip which is held every year. At this trip the 20 or 25 best distributor visit some very special and luxury places in the world. This trip is filled with various programmes and activities. It has a motivating purpose. For Vector this would be a great chance to begin its activities in Hungary because the LG trip would grant image to the agency.
After the agency becomes known, it would rely on the word of mouth. In order to have a good reputation, the agency must satisfy its customers. The positive word of mouth costs a fortune at the developing stage. After customers build up a good view in themselves about the agency, Vector only has to follow the needs of its clients.
The implementation of the marketing plan
In order to make Vector successful the marketing plan must be advantageously implemented.
As the matter of fact that Vector is a big travel agency, the tasks vary in great extent. There are the employees who sell the trips to customers. Their part in the marketing plan implementation is the precise work, courtesy. This refers to their dresses, skills in languages and technical skill as well.
Next there are sales people. In Hungary Vector has a 2-2 sales person. They are the ones communicating with companies and offering them the services of the agency. Usually these two people work together and have good communication skills and they are also very persuasive and polite. They sit with other employees to be know everything what is happening inside the office but they also travel a lot to various companies where they offer Vector’s trips.
And finally the office leaders check the work of employees. They are in charge of manuals and they are the ones presenting the achievements to the home company in Slovakia. Office leader sits in a separate office but on every end of the day he receives a written format of the sales. Therefore he is always informed.
Bibliography
Competitor travel agencies
Ref: 1: http://www.world-tourism.org/aboutwto/eng/menu.html
