Marketing Plan for Thomson Holiday Group
This report aims to improve the marketing practices of Thomson Holiday Group’s managers so that they can design an effective marketing strategy to expand profitability of the travel and tours business. The report begins with an investigation of Thomson’s Travel industry and market surroundings. In addition, a review of marketing strategies will be carried out together with the marketing objectives of Thomson. The report also considers how the marketing and promotional strategy of Thomson assisted in its success.
A common resource in marketing planning and strategy, the situational analysis entails an in-depth analysis of the internal, macro-environmental, and micro-environmental marketing environments of the organization (Alstete 2014).
Thomson Holiday Group is among the largest and best tour operators in the world. The company was originally founded by Roy Thomson in 1965 under the name Thomson Travel Group and renamed in 1997. The headquarters of Thomson Holidays is in Luton, England. The main operations of the company involve travel, tourism and hospitality where they offer transportation of their customers, provide accommodation in their hotels with high quality services and food and have excellent locations for the customers to visit.
Thomson Holiday Group’s image in the market is largely positive with a corporate history spanning more than one century. Additionally, the organization is known for high quality offerings that more often than not leave its millions of customers satisfied. Such a positive image in the market emanates from a sound marketing practice which relies on a keen understanding of the market, its dynamics, and most importantly, the customers’ needs (Kennedy 2011). Additionally, the company’s positive image also emanates from the high level of innovation that the company invests in complementing the customers’ experiences as demonstrated by its airline department. Thomson Airlines offers a no-frills package that not only seeks to keep the customers focused on their holiday, but also keeps costs low for them to fully enjoy their planned holidays.
As mentioned herein above, Thomson Holiday Group has made great investments in complementing its customers’ experiences. Much of these investments are technological in nature with the latest computer applications rolled out to make choosing holiday destinations easier. Additionally, the company offers bundled holiday packages through its flight department that runs modern jetliners and turbo-props, for fast seamless integration into exotic destinations. The company’s interaction with its customer, both existing and potential, is further optimized by the existence of state-of-the-art customer feedback and communication infrastructure (Zeithaml 1990).
From the perspective of goals and culture, Thomson Holiday Group is poised to achieve more of the former while maintaining the latter. Already, the company has established itself as a leader in holiday, travel and tours planning and partnerships. The company has also continued to be among the trendsetting sources of the best cultural practices in the global tourist and travel industry.
An industry is a group of companies whose goods are close substitutes of each other. Industries are categorized based on the number of involved sellers as well as the extent of product differentiation (Barich and Kotler 1991). Other aspects that characterize the structure of an industry include exit/entry barriers, extent of vertical integration, cost structure as well as degree of globalization (Kotler 2003). Based on a market view, instead of looking at companies that offer the same services as its only competitors, Thomson Holidays has to look for its competitors among those companies that meet the same client need. In order to avoid falling into the trap of marketing myopia and include all real and possible competitors (Armstrong et al 2014), Thomson has to define this need as widely as possible. Though in the Travel and Hospitality business, Thomson envisions as its direct competitors companies that offer travel and tourism services such as Airtours Company it ought to take into account its indirect competitors. These would encompass any travel and hospitality companies in the UK travel market competing with Thomson’s services.
Thomson Holiday group’s first collaborator is the alliances it has with strategic partners. These include travel agencies, premium hotels and resorts, tourism management companies, as well as the various tourism agencies present in the UK alone. The suppliers are also collaborators without whose efforts and input, Thomson would not achieve the level of success it has today. From the perspective of the company at hand, this supplier list is vast given that the company operates a big range of business functions. However, concentrating on the context of travels and tourism, we find that aircraft manufacturers, food processors, interior décor, and a wide array of other partners with which Thomson Holiday Group works.
Distributors are a major part of the marketing planning and execution system. In the tourism management sector, distributors enable companies such as Thomson Holiday Group to extend its wide range of services and offers to the potential markets it is yet to tap into. Therefore, the most significant distributors of the same would naturally include its sales force and independent travel agencies.
The scope of existing and possible competitors is wide. Based on the extent of product substitution, Thomson can face industry competition, brand competition, generic competition, and form competition. Porter’s Five Forces Model (Roger et al. 2003) can show Thomson’s analysis clearly:
Thomson Group’s brand being among the best brands in the UK and globally faces the danger of competitors. However, until now, all the rivals that it has faced, the brand has remained among the best due to its outstanding marketing plans as well as high quality services. In the mid-1990s, Thomson held onto its title as the market leader in the travel business with the rise in sales of package holidays. However, by May 1998, the Thomson Travel Group was floated into the stock exchange. The portfolio of Airtours global was compared to that of Thomson’s. The share prices of the company started falling with the price wars between the companies looming making Thomson transform from a private buoyant travel company dominating the home market, to a weak public company ripe for take-over. However, by the year 2000, the Preussag group took over the Thomson Travel Group and consolidated it to fast growth.
Even though Thomson experienced the risk of falling into a weak public company that did not offer efficient tours and travel services offered by its main rival Airtours Company in the 1990s, the parent company chose to be taken over by Preussag group to form a larger umbrella group composed of Lunn Poly, Britania Airways and Thomson and part of the TUI group. The group now named Thomson as a whole, includes over 750 travel retail stores in the UK and accounts for 20% of the travel market in the UK, selling over 2.7 million flights and holidays a yea. This offers its services to many more customers in the whole UK market.
The fall of Thomson was put into public knowledge as it transformed from a private buoyant travel company dominating the home market, to a weak public company ripe for take-over. However, when it was taken over by Preussag Company, it was consolidated and grown to form a greater company with bigger companies and a larger market segment. This left its competitors lagging behind.
Thomson’s management plan implements fascination of the development of the business. By offering its clients with quality services, the company needs to have suppliers that are efficient in its transportation, accommodation and food services. If such huge suppliers feel that their incomes are being reduced because of any change or reason in the promotion plan, they increase their bargaining power. Therefore, in such a case, Thomson does not apply any kind of force on the suppliers to reduce their price, but attempts its level best to eradicate all such issues that raise the prices.
The main competitor of Thomson is Airtours Company. Their services are just like those offered by Thomson but are not as effective. Therefore, due to its high quality services and loyal customers, Thomson has remained at the top as a market leader in Travel, Tourism and Hospitality services.
Whether or not Thomson’s competitors can carry out their strategies and objectives rely on their capabilities and resources. Thus, SWOT analysis offers an effective tool to analyze the corresponding weaknesses and strengths that constitute important information (Boulding et al. 2005) for Thomson to analyze its competitors.
- Market leader as well as globally recognized brand
- High market share and market leader in tours and travel:
- Offers packages and flights that competitors do not offer
- Offers “pay & forget” tourist packages
- Package flexibility leads to some customer dissatisfaction
- Revenue is mainly from the tourism services that are dependent on the economy
- The company is present in a potential consumer industry
- The consumer base is growing worldwide
- Tourism occurring internationally can be tapped with tieups
- Forming contracts with other private corporations
- There is an opportunity to integrate new tourist destinations for high load factor of tourists
- It faces competition from other companies offering tours and travel services
- Threats of terrorism lead to reduction in tourist travel
- Increase in the costs of operation
The marketing goal of Thomson is to offer travel and tours services to tourists in the UK. Its target includes people of all types as indicated by the variety in its product range, offering tours to suit the age/destination/quality of their clientele. The marketing goal of Thomson is to promote the services of tourism and activities that can be done during tours. Such an objective necessitates a lot of planning as well as research and needs prudent thinking (Calantone & Josef 1991). Due to its success in execution of its marketing plans, the company has grown to earn large profit margins and maintain its position as a market leader.
The company has positioned itself mainly towards travellers and tourists. The primary focus is towards the main target clients who are tourists travelling and getting accommodation through all the services of Thomson. These tourists are its target market is due to the customer-purchasing trend as well as the characteristics. The choice of target market is an important process and necessitates research as well as examination (Kotler and Armstrong 2010). In terms of segmentation, Thomson segments its market based on demographics. Demographically, it considers working tourists with high income so they can afford the services offered. This also covers the different tourists according to age, destination and quality of clientele.
Strong competition, brand extension, emerging markets, acquisitions as well as other events have left firms with a confusion of items to make as well as brands to manage (Kotler 1994). Currently it is not sufficient just to understand how to manage brands. It is more important to understand how to manage the group of brand identities in a company’s portfolio (Paley 2006). Thus, the management of Thomson had to find out how to address this fresh situation as well as to design abilities to coordinate their actions with other foreign companies, while maintaining their knowledge of the inherited diversity in the different domestic markets (Kotler and Armstrong 2010). The marketing plan of Thomson is to offer services to a variety clients accompanied with a competitive price, extensive workforce to obtain revenues in a sustainable as well as systematic manner. Its marketing strategies include market penetration, market development, diversification, marketing based on demographics and market research.
Thomson focuses mainly on market development by incorporating new technologies and innovations just like they had done with computerized reservations. In order to attain this plan, Thomson has invested in finding new ways and services to offer to clients so that they can remain loyal and gain more clients.
In order to enhance Thomson’s market penetration, the service line possess a distinct plan that entails sending its representatives to different market segments as well as offer them a role to identify the wants and needs of the various market segments. Among the most famous method utilized for this purpose comprises sampling (Payne and Frow 2005). In turn, this assists Thomson to let its clients think that it cares for them and thus, it penetrates into fresh market segments.
The belief of Thomson is that diversification of its services constitute an important part for the success of its business. Due to this, Thomson specializes itself in offering new developments with a variety of product range in the new brochures like Far and Away, Lakes and Mountains, City Breaks, Freestyle, Young at Heart, A la Carte, Platinum, Gold etc. these cover the range of services in adult holidays, family holidays, and luxury holidays. Such diversification attracts new clients from a variety of market segments.
Thomson conducts several researches through different means such as questionnaires, surveys, interviews as well as data obtained from current data resources. The collected information is then analyzed, processed and interpreted systematically and objectively and assists in designing an efficient promotional program through utilization of tactical as well as accomplished research.
Thomson mostly considers the demographics where it anticipates marketing its services since a successful market cannot be achieved only by a national publicity but by taking care of the domestic customs and surroundings of that region. Thomson’s marketing division has numerous strategies but it will give local marketers a complete hand in promoting the travel and tours brand to a variety of tourists and locals since most customers are attracted to promotions in which their demographics are considered.
The company’s positions its Travel and Tours brand with a point of differentiation that meets the needs and requirements of a tourist in the UK that is Thomson’s market segment. This attribute is well catered for by Thomson, which gives different tourists product ranges as per their preferences. The aim of branding is to develop high brand familiarity as well as positive brand picture that contribute to the building of brand equity (Sheang Lee, Hua Lim, and Tan 2000). It has long been advocated by researchers that managers have to manage their brands like assets by increasing their value over time (Kotler 2003). Funds have to be invested in understanding a firm’s brand today in order to make better brand choices in future. The Thomson brand has numerous varieties of what is offered to meet the expectations of the client individually. This variation in brand is due to the goal of Thomson to meet the needs of each specific client. On the other hand, this appears inefficient in spite of the effectiveness of the Thomson brand.
This entails the combination of information, skills and entertainment as factors of consideration (Kerin et al. 2003). However, these are mainly the special features for the customer. Thomson will have to ensure that the image of their travel and tours brand to gain competitive advantage in the attraction of new clients. Thomson offers hotel services, flight services and holidays (luxury, family and adult). These offer a variety for the clients to choose from.
Initially, the services of Thomson were highly priced because as per the belief of Roy Thomson, it meant that the services offered were of the highest quality and the company needed to make money. However, this led to a decline in profits later on when the market had to have intense cost cutting and the quality of services fell. Thus, the company changed its pricing strategy by making its services less expensive. This attracted consumers from both the upper middle class as well as middle class clients. The company also conducts regular detailed analysis and research on rivals’ pricing strategies and offers its own pricing plans by considering its sustainable growth as well as brands image. This assists it to gain a competitive advantage.
The company’s presence internationally as well as a well-placed supply chain management creates numerous opportunities for it to take advantage of profit sanctuaries in emerging markets (Wicks, Bruce & Schuett 1991). Due to its economies of scale, Thomson can enter any market and gain a large market share from local producers. The company’s strategy when entering a market is to compete on low prices while offering its clients high quality services.
This refers to the process and method of providing high quality services to the customers (Woodside 1982). For Thomson, there is provision of high speed internet connections so that when customers check in or book for services, they are attended to quickly and efficiently. The company also has a good communication channel where the clients can reach whichever branch they would like to go to, increasing the efficiency of the process.
For Thomson Holiday group, a significant aspect involves physical evidence. However, this is an expensive venture for any organization as for Thomson; it involves lighting, furnishing, air conditioning, location maintenance etc. Therefore, the first impact that a customer receives from Thomson’s involves the physical evidence of its quality services.
This aspect refers to the management, employees, the customers and the general public being involved in Thomson’s travel and tours brand. Thomson values and takes care of its customers and employees to ensure that the company continues being at the top. They provide them with good opportunities that enrich the company.
The manner to reach clients has changed with the shifts in time and the thinking as well as activities of the customers. Thus, Thomson’s promotion strategy is to make the travel and tours brand famous in the market for the local and foreign tourists. Thomson markets its services highly on banners, print media, social media, signboards, TV commercials as well as social media. This makes it the strongest advertiser of its items in the market (Zeithaml, Bitner, and Gremler 2010). To attract more consumers, Thomson takes advantage of certain marketing tools such as recommendations from customers, over the counter advertising, and promotion counters. There is also use of the internet through social websites and exhibitions.
Although Thomson has established its brand name effectively and possess a market share of various services, some of its rivals in travel and tours like Airtours Company possess a similar market share. The company has to spend in complete factor productivity as well as innovation in technology rather than utilizing financial resources on marketing and promotion and make strategies to attract foreign and local clients. Thus, the company needs to align all its services with its pro-social and activity beliefs. The fundamental challenge is the attraction of new clients and maintenance of the old ones. Being a market leader, Thomson ought to aim at attracting new consumers by utilizing its R&D abilities, feedback from the consumers it already has, as well as new technology. To ensure it remains on top, Thomson has to defend its market by gradually improving its services, its cost structure and customer service.
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