THEORY BACKGROUND OF MARKETING AND MARKETING
CONCEPT OF MARKETING
There are many different concepts of marketing which change by each period, each scholars I would indicate here some of them:
Marketing involves the strategic planning and implementation of ideas, pricing, promotion, and distribution of products and services Its primary goal is to facilitate exchanges that meet the needs of both individuals and organizations, as defined by the American Marketing Association.
The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably
Marketing is the set of human activities directed at facilitating and consummating exchanges by Marketing Management, 2nd edn, 1972 - Prof Philip Kotler
Marketing decisions are typically categorized into four controllable elements: Product, Price, Place (distribution), and Promotion The concept of the "marketing mix" gained prominence following Neil H Borden's 1964 article, which E Jerome McCarthy later condensed into the four categories now recognized as the 4 P's of marketing.
Marketing is frequently defined as "the art of selling products," yet many are surprised to learn that selling is merely the surface of marketing In reality, the most crucial aspect of marketing lies beyond selling, representing only a small fraction of the broader marketing landscape.
By Peter Ducker, a leading management theorist said that:
The primary goal of marketing is to eliminate the need for selling by deeply understanding the customer When marketing is executed effectively, products and services align perfectly with customer needs, leading to a situation where they essentially sell themselves Ultimately, successful marketing creates customers who are eager and prepared to make a purchase.
In this thesis, I will use the first concept to develop my topic For service marketing
Marketing involves the strategic planning and execution of various elements such as conception, pricing, promotion, distribution, and physical evidence to facilitate exchanges that fulfill both individual and organizational goals.
In the tourism industry, a marketing manager must make seven key decisions—Product, Price, Promotion, Place, People, Process, and Physical Evidence—to effectively attract customers, meet their needs, and generate profits for the business.
CONCEPT OF MARKETING IN THE SERVICE IN DUSTRY
In the service industry, the core focus of marketing revolves around people and customer relationship factors, as services are intangible and require the active participation of both customers and producers Unlike product marketing, which follows the traditional 4 P's, service marketing is characterized by an extended marketing mix known as the 7 P's This framework treats the service itself as a product while incorporating three additional P's essential for optimal service delivery, making it a crucial element of effective service blueprint design.
The product marketing mix consists of the 4 P‘s which are Product, Pricing, Promotion and Place
The service marketing places 3 further P which includes People, Process and Physical evidence
In the tourism marketing mix, I would like to mentioned here 3 more Ps (Partnership, Programming, Packaging) which indicated by Alastair Morrison
The additional Ps will be:
Partnership plays a crucial role in shaping a company's marketing activities, significantly influencing the effectiveness of its marketing plan As highlighted in section 2.2, the success of marketing strategies is closely tied to the strength and quality of partnerships.
In the tourism industry, effective programming is essential for travel companies to deliver well-organized trips, often exceeding five days A well-structured tour program that aligns with customers' budgets and schedules enhances their understanding of the itinerary while enabling the company to manage services efficiently Many travelers, particularly those arriving in Vietnam, may lack a clear plan regarding their destinations and activities, making expert advice from tour sellers crucial Consequently, programming plays a significant role in the selling process, directly influencing customers' purchasing decisions.
A tour package encompasses essential components such as transportation tickets, accommodation fees, entrance tickets, guide services, and meals, all designed to enhance the travel experience Including package offerings in the marketing mix is crucial, as customers prefer the convenience of booking with a single provider for their trips This preference stems from their desire for relaxation and a worry-free experience, allowing them to trust one entity for all arrangements in a specific destination Additionally, both buyers and sellers often perceive that package prices should be more economical than purchasing individual services separately, making packages an attractive option for travelers.
However, in this thesis, I just want to go with 7 Ps Marketing mix Let us discuss the same in further detail
The first element of the marketing mix is the product, which encompasses any combination of goods and services designed to meet consumer needs and wants Products can be tangible, like a computer that can be physically touched, or intangible, such as services like computer repair or income tax preparation Additionally, products can include places and ideas, with cities often marketing themselves as desirable locations to live and work Generally, products are categorized into three basic levels.
The core product represents the fundamental benefits that consumers seek when making a purchase For instance, when purchasing a mobile phone, customers are not merely buying the device itself; they are investing in the advantages it provides, such as internet access and the ability to perform various tasks beyond just making calls and sending messages.
The second level of a product, known as the actual product, encompasses essential elements such as the brand name, features, packaging, parts, and styling that enhance the core product For instance, guests are drawn to the Sofitel Metropole Hanoi Hotel not only for its accommodations and amenities but also for its prestigious brand reputation.
The augmented component represents the final level of a product, encompassing additional services and benefits that enhance the core product and its features This includes offerings such as technical assistance for product operation and service agreements, which provide added value to the customer experience.
Products are categorized based on their durability and tangibility Durable goods, such as automobiles, furniture, and houses, are designed for long-term use, while nondurable goods, including food, soap, and soft drinks, are typically consumed quickly Additionally, services represent intangible offerings that provide benefits but cannot be physically touched, with examples including eye exams and legal assistance.
Products can be categorized based on their users, distinguishing between consumer goods and industrial goods Consumer goods are intended for personal use by final consumers, also known as end users Additionally, products are classified according to shopping patterns, which include convenience, shopping, specialty, and unsought goods Convenience goods are frequently purchased items that require minimal effort, typically low-priced and easily accessible, such as bread, candy, milk, and shampoo.
Shopping goods are products that consumers evaluate and compare before making a purchase decision, often considering factors like price, quality, style, and suitability The selection process for these items typically involves significant time and effort spent on gathering information and comparing options Common examples of shopping goods include major appliances such as refrigerators and televisions.
Specialty goods are unique products distinguished by specific characteristics or brand identities, prompting consumers to invest significant effort in their purchase These goods encompass particular brands and types that stand out in the market As a result, buyers often do not compare specialty goods with similar products due to their distinctiveness.
Unsought goods are products or services that consumers typically do not think about or recognize, such as life insurance policies and burial plots To generate interest in these items, sellers often need to invest significant promotional efforts.
Industrial goods are essential products utilized in the production of other goods, encompassing accessory equipment, component parts, installations, operating supplies, raw materials, and services Accessory equipment includes movable items and small office tools, such as office furniture and fax machines, which do not become part of the final product Component parts are custom-made products that integrate into the final product without requiring further processing, like a computer chip manufactured for use in various computers Installations refer to expensive capital goods with a long lifespan, including trucks, power generators, and mainframe computers Operating supplies, akin to accessory equipment, are necessary for maintaining business operations and include items like cleaners, file folders, and pens Raw materials are goods in their original state, such as crops, crude oil, iron ore, and logs, that require further processing before incorporation into other products Lastly, services are also a vital category of industrial goods, as organizations often seek various services to support their operations.
In the service marketing mix, products are inherently intangible, making them difficult to measure compared to physical goods like books or candy Industries such as tourism and education exemplify this intangibility, as service products are also heterogeneous, perishable, and cannot be owned Therefore, careful design of the service product is essential, often achieved through service blueprints For instance, a restaurant blueprint is created prior to launching a restaurant business, clearly outlining the intended structure and offerings of the service.
In the earlier times, the price was determined through a barter process between sellers and purchasers In modern times, pricing methods and strategies have taken a number of forms
CONCEPT OF TOURISM
Tourism involves the activities of individuals who travel to and stay in locations outside their usual surroundings for a duration of up to one year, primarily for leisure, business, or other purposes, according to the World Tourism Organization (1992).
CHARACTERISTICS OF TOURISM PRODUCTS
Like the other service industry‘ products, Tourism products have some characteristics as below:
The tourism industry faces significant inflexibility in capacity management, as the number of hotel beds and flight seats is fixed This limitation prevents the industry from accommodating sudden increases in demand, while also leading to underutilization of resources, such as empty hotel rooms and vacant restaurant tables during low-demand periods.
Services are actions or performances that are consumed at the moment they are delivered, making them perishable and impossible to store If not utilized simultaneously, their value diminishes, highlighting that the worth of a service is realized only when it is needed.
The perishable nature of services presents significant challenges for service marketers, particularly in managing quality during peak demand times in sectors such as restaurants, banks, and transportation The inability to adjust supply in response to fluctuating demand often leads to a decline in service quality To address this issue, marketers must strategically optimize capacity while maintaining high standards of service quality to effectively meet customer demand.
Travel products are unique in that they must be consumed as they are produced, with airlines selling seats and hotels offering rooms for specific times If these services go unsold, the opportunity is permanently lost, as the service sector cannot maintain inventory like tangible products To address this challenge, the travel industry employs various marketing strategies, such as overbooking flights to maximize seat occupancy and utilizing multiple distribution channels, allowing customers to purchase tickets from airlines, tour operators, or travel agents This approach reduces the risk of perishability, as unsold opportunities for tourism cannot be reclaimed Thus, the perishability of travel services is a critical characteristic of the industry.
In the Travel and Tourism industry, while tourism packages, such as a 2-day, 3-night stay at a specific hotel, can be standardized, the actual experience of these packages often varies significantly Factors such as weather, the health of consumers, and the surrounding ambiance contribute to a high level of inconsistency in the quality of tourism products This variability highlights the challenges in ensuring a uniform experience for travelers.
Services are intangible activities provided by a service provider, making them impossible for customers to evaluate through sensory experiences before consumption Unlike physical products, services lack tangible features that attract customers, which complicates the pre-purchase evaluation process Consequently, potential buyers cannot rely on traditional product-based indicators to assess services prior to their use To enhance client confidence, service providers must implement specific strategies to effectively communicate the value and quality of their offerings.
The provider can try to increase the tangibility of services For example, by displaying a plastic or a clay model showing patients an expected state after a plastic surgery
The provider can emphasize on the benefits of the service rather than just describing the features
Service products exhibit varying degrees of intangibility, with some services being highly intangible while others possess a lower level of intangibility This variation is influenced by the tangible components associated with the service, which can range from minimal to substantial.
Services like teaching, consulting, and legal advice primarily lack tangible components, whereas establishments such as restaurants, fast food centers, hotels, and hospitals provide services that are intertwined with tangible products, including food in restaurants and medicines in hospitals.
Travel products are intangible experiences that encompass activities such as flying on an airplane, cruising on an ocean liner, spending a night in a hotel, enjoying mountain views, visiting museums, and having fun in nightclubs Once these experiences occur, they can only be remembered and cherished.
Associated with the basic or generic characteristics common to all services, there are at least 3 further features that are particularly relevant to marketing travel and tourism services These are
- Seasonality and other major variations in the pattern of demand
- The high fixed costs of operation, allied to fixed capacity at any point in times
- The interdependence of tourism products
1.4.5 Seasonality: peaks and troughs in demand
Leisure tourism markets often experience significant fluctuations in demand throughout the year, with summer being the peak season for beach resorts Additionally, factors such as weekdays versus weekends can greatly influence the occupancy rates of city restaurants and nightclubs.
1.4.6 High fixed costs of service operations
In the tourism industry, particularly within service businesses, profit and loss accounts typically reveal significant fixed costs that must be paid upfront to operate and attract customers Fixed costs include essential expenditures such as fleet maintenance, premises, and salaries for full-time employees, while variable costs fluctuate based on the number of customers served For instance, airlines must cover substantial fixed expenses like fuel, heating, lighting, and marketing to ensure they can provide their flight services effectively.
1.4.7 Interdependence or inseparability of tourism products:
Services are unique in that they are produced and consumed simultaneously, unlike physical goods, which are manufactured, distributed, and consumed at a later time In the case of services, the service provider is inherently part of the service experience, making it impossible to separate the two.
In the service industry, the physical presence of both the provider and the customer is crucial, as illustrated by the example of a taxi operator and passenger The taxi driver plays an essential role in delivering the service, which cannot be produced for future consumption This highlights a unique aspect of service marketing, where customers must be physically present to access services such as those offered by airlines, hotels, and medical professionals.
The close relationship between production and consumption highlights the critical role of quality in services As a result, service marketers must focus on enhancing the technical skills of their personnel while also investing in the development of their marketing and interpersonal abilities to ensure effective service delivery.
Most travelers require a combination of services when planning their trips, rather than relying on a single option Business visitors, in particular, need to consider transportation, accommodation, dining, car rental, and conference facilities to ensure a successful trip.
MARKETING MIX FOR TOURISM INDUSTRY
The tourism industry encompasses a variety of products, including accommodations such as hotels, motels, hostels, and resorts, as well as dining options like restaurants for tourists It also involves transportation services, including airport transfers, tourist buses, train tickets, and flight tickets Additionally, tour operators cater to domestic, inbound, and outbound travelers, while travel agencies provide tour and transportation tickets Furthermore, travel site operators offer entrance tickets, and entertainment centers sell tickets for various games and events.
In tourism marketing, the product remains a crucial element of the marketing mix Marketers must identify suitable products that meet customer needs and align with specific customer segments to ensure satisfaction and engagement.
Pricing in case of services is rather more difficult than in case of products
Price for a tour package is very sensitive as it depends on how many people in a group, what kinds of hotels/ car they plan to use…
As a restaurant owner, pricing your menu solely for the food may overlook the value of the inviting ambiance and live music that enhance the dining experience It's essential to consider how these elements contribute to customer satisfaction and justify the overall cost of dining out.
Pricing for travel agencies and tour operators is influenced by several key factors, including the provider's cost, desired markup, competitor pricing, and seasonal variations The tourism industry places significant emphasis on the seasonality aspect, making it crucial for pricing strategies to reflect whether it is a low or high season.
Promotions play a vital role in the service marketing mix, especially in the tourism sector, where travelers often visit a destination only once or twice Since tourists cannot physically experience or evaluate the products before purchasing, they must exercise caution when booking tours Therefore, effective promotions are essential for creating a successful marketing plan in the tourism industry.
Tourism companies can leverage the internet to implement effective online advertising campaigns through strategies such as website development, search engine optimization (SEO), banner ads, and email marketing These approaches enable them to promote their products and services more quickly, reach a wider audience, and do so at a lower cost.
Many travel companies opt to establish their branch offices in major cities for easy customer access and convenience With the rise of e-commerce, these companies can now distribute their products more efficiently and on a global scale Notable examples include Expedia.com, Agoda.com, and Vietnam Airlines e-tickets, which offer 24/7 access to their services worldwide.
In the tourism industry, people are essential to service marketing, as they directly define the quality of the service offered For instance, in a restaurant, the chef and service staff are pivotal to the dining experience, while in tour operations, the expertise of tour guides and consultants shapes customer satisfaction Skilled, customer-oriented, and open-minded personnel are crucial for creating services and products that meet the needs of travelers, as they can significantly influence an organization's reputation and success.
Serving process is how serve deliver to customer It should be quick and correct with a warm manner
Example in a hotel, check - in and check-out processes are very important which help ensure customer satisfaction
The final element of the service marketing mix is crucial, as services are inherently intangible To enhance customer experience, tangible elements are incorporated alongside the service For instance, consider two restaurants: one with only basic seating and food, and another featuring ambient lighting, pleasant music, and comfortable seating in addition to quality food The latter creates a more appealing environment, highlighting the importance of physical evidence This tangible aspect often serves as a key differentiator in service marketing, as seen when comparing a private hospital to a government hospital, where physical evidence plays a significant role in shaping customer perceptions and preferences.
For some hotels in Hanoi, they differentiate by swimming pool And they get a lot of customers.
ANALYZING TOOLS USED IN THIS THESIS
In analyzing Go Asia Travel amidst a competitive and dynamic business landscape, I will employ both external and internal analysis methods to provide effective marketing recommendations tailored for the company.
Political factors encompass government regulations and legal considerations that shape the operational framework for businesses Key elements include tax policies, employment laws, environmental regulations, trade restrictions, tariffs, and the overall political stability of a region These factors dictate both formal and informal rules that companies must adhere to in order to thrive in their respective markets.
Key factors significantly impact enterprises, particularly travel companies that cater to foreign clients These companies must navigate the complexities of international protocols, including visa processing and travel insurance, as they accommodate visitors who are staying in unfamiliar locations.
Economic factors significantly influence both the purchasing power of potential customers and a firm's cost of capital Key economic elements include exchange rates, inflation, average income, and global economic conditions, all of which play a critical role in a travel company's pricing and promotional strategies Since becoming a member of the WTO in 2006, Vietnam has experienced a surge in international trade and a notable increase in foreign tourists visiting for both business and leisure However, the growth in tourism is also impacted by various other broader factors.
Table 1.1: Statistics of foreign tourists to Vietnam before and after WTO Event Year Number of foreign tourists to Vietnam Percent of increasing
Increased15,8% comparing to the same period of 201, based on the first ten months
Source: VNAT: http://www.vietnamtourism.gov.vn/index.php?cat 20
Social factors encompass cultural characteristics, health consciousness, population scale, lifestyle, and language on a global scale Businesses typically rely on customer behavior and needs to develop products, distribution channels, and sales promotion strategies Tourists, defined as individuals traveling and staying in unfamiliar locations, carry their original culture and habits with them, making travel a form of cultural exchange Analyzing social factors can assist enterprises in identifying potential markets.
Technological factors significantly impact travel companies, as consumers increasingly rely on the internet to search for and purchase travel services Modern advancements in transportation, payment methods, and various technology applications have transformed how businesses distribute and promote their products.
1.6.2 Internal and external environment analysis:
Analyzing the strengths and weaknesses of a curtain enterprise is essential for identifying key areas of focus and improvement Strengths, such as skilled manpower and financial resources, can provide a competitive edge, while weaknesses may include limited market reach or insufficient funding By understanding these factors, the enterprise can strategically enhance its operations and mitigate potential challenges.
To succeed, businesses must identify opportunities to pursue and threats to evade Factors that may be weaknesses for one company can serve as strengths for another, while certain events may present opportunities for some but pose risks for others In such scenarios, marketing managers must conduct thorough analyses and make informed decisions using the SWOT model.
A company's strengths, including its resources and capabilities, serve as the foundation for establishing a competitive advantage Key examples of these strengths are powerful brand names and advantageous access to distribution networks.
The absence of certain strengths may be viewed as a weakness For example, each of the following may be considered weaknesses: a weak brand name, not professional staff, lack of capital…
A firm's extensive manufacturing capacity can serve as both a strength and a weakness While this capacity may provide a competitive advantage, it can also hinder the firm's ability to adapt swiftly to shifts in the strategic landscape due to the significant investment involved.
Conducting an external environmental analysis can uncover valuable opportunities for profit and growth, such as identifying unmet customer needs, leveraging emerging technologies, benefiting from relaxed regulations, and capitalizing on the removal of international trade barriers.
External environmental changes can pose significant threats to a firm, including shifts in consumer preferences away from its products, the emergence of substitute products, the introduction of new regulations, and the impact of global economic crises.
In many cases, changed situation can bring opportunity to some enterprises and also become the thread to others
Two more analyzing tools, I used in this research are interview and questionnaire Below are some things to remember for making a good questionnaire:
To effectively conduct a survey, it is essential to define its purpose by pinpointing the specific information required and identifying the target respondents Limited research exists on the utilization and effectiveness of resources available to small business and nonprofit leaders, such as membership in business associations, participation in online or in-person classes, networking opportunities, and seeking professional or peer advice Understanding the extent of usage of these resources and their influence on enterprise leaders, as well as the subsequent impact on their organizations, is crucial for informed decision-making.
When selecting a survey method, consider factors such as the availability of email lists, declining response rates for mail and phone surveys, the time required for mail surveys, and your budget, with telephone surveys being the most costly and online surveys the most affordable To optimize both time and costs, I opted to conduct the survey directly with tourists and through online platforms.
To determine your survey sample, you can utilize internal lists or purchase them from a broker For online surveys, you have the option to select participants through advertising on websites, newsgroups, or traditional media, or you can randomly choose a representative sample to receive the survey via email.
MARKETING MIX IN GO ASIA TRAVEL COMPANY
Introduction of Go Asia Travel Company
2.1.1 Overview of Go Asia Travel Company
Go Asia Travel (GAT), founded in March 2010 by two experienced travel professionals, has grown to include a dedicated team of 20 office staff along with numerous guides and drivers The company has established partnerships with a variety of hotels, travel agencies, and service providers across Vietnam, Laos, and Cambodia Additionally, GAT serves as a land tour provider for travel firms in Singapore, Malaysia, and Belgium, showcasing its extensive network and commitment to quality travel experiences.
It was licensed as an International Tour Operator Company (Code: 01- 425/2011) who can organize tours for travelers all over Vietnam and Worldwide
In Vietnam, This Company owns a brand for one day tour to Halong bay named
―Halong Alova Sails‖ and for Halong overnight boat named ―Alova Halong Cruise‖ It serves 15-25 tourists from Hanoi to Halong Bay every day
This is some official information of Go Asia Travel from its website:
Company Name: Go Asia Trading and Travel Company Limited (GAT Travel) Address: 17A Hang Dong Street, Hoan Kiem District, Hanoi, Vietnam
Email: info@goasiatravel.com Web: www.goasiatravel.com
General Manager: Mr Bui Van Nghiem
Issued by Vietnam National Administration of Tourism
2.1.3 Products of Go Asia Travel Company
For the first five years, Go Asia travel concentrates to provide some main services as below:
Halong Bay Tours offer both one-day and overnight experiences, making it a key attraction for travelers Recognized as a UNESCO World Heritage site, Halong Bay is located near Hanoi and significantly contributes to the company's revenue and reputation Its stunning natural beauty draws thousands of tourists each month, solidifying its status as a premier destination.
Purchasing Manager tourist who arrive Hanoi will get to Halong Bay for a visit Halong Tour products normally include bus, boat, guide, meals and entrance fee
Sapa Tours typically last for either 3 days and 2 nights or 4 days and 3 nights, making it the second most popular destination for travelers visiting northern Vietnam These tour packages generally encompass train tickets, bus transfers, accommodations, guided tours, meals, and entrance fees, ensuring a comprehensive and enjoyable experience for all visitors.
- Vietnam Beach Tours: the one to visit all the beaches of Vietnam like Halong, Hoi an, Nha Trang, Mui ne, Con Dao and Phu Quoc island
- Vietnam Golf Tour: The ones for golf players travelling to Vietnam for business and relaxing on the golf courses
- Vietnam Eco Tours: The tours to visit national parks or remote countryside by the less – pollution transportation like sails, kayaking, bicycle and trek
- Hotel booking services at all hotels in Vietnam
In the future, the company plans to collaborate with partners in Cambodia and Laos to expand its services into these regions This strategic partnership aims to create Indochina package tours, enhancing revenue potential and boosting the company's reputation.
The factors influence on Marketing Activities of the company
For a curtain travel company like GAT, customers can originate from various channels I categorize these into three primary sources, each with distinct characteristics that influence GAT's marketing strategies.
Local agents here are inclusive of hotels in Hanoi, tours sellers in other travel companies
Clients book tours to popular destinations such as Halong Bay, Hoa Lu Tam Coc, Perfume Pagoda, and Sapa, which are then processed by GAT for operational arrangements.
In this scenario, local agents serve as the primary buyers, offering clients a multitude of tour options With numerous providers available, these agents possess significant bargaining power over GAT and other suppliers, allowing them to negotiate favorable terms for their clients.
They normally sellect a tours with the highest commission and the one who satisfy their clients
Therefore, GAT has to thinks about pricing policy and how to control the service quality
Nowadays, with the highly development of internet technology, It is more and more tourist who book their trip online
The buying process will be:
Clarify need: customer will figure out some main factor for their trip like: number of day, number of people, destination, budget…
After that, this customer will search for a tour advisor and to set their trip itinerary Some of them have clear plan to go they will book a fixed package tours
For example: The have 10 days for Vietnam trip, they will search and book a Vietnam tours in 10 days with the suitable budget
Achieving top rankings in internet search results for competitive keywords like "Vietnam tours" and "Halong Bay tours" can be costly, often requiring an investment of around $2,000 per month To attain organic high rankings, website owners must dedicate significant time and resources to SEO efforts Therefore, GAT needs to implement an effective advertising campaign to enhance online visibility and connect with potential customers.
Before selecting a provider, customers typically research several options, gathering ample information about their desired destination and the cost of package tours They often rely on online reviews and recommendations from friends to make informed decisions before submitting requests to their chosen providers.
Customer now has full right to shop online around by sending requests to several providers for the same request and at the same time
In some cases, customer send request to a provider and use received proposed price and program to negotiate with the other providers
Customer will book their trip with the best providers they may talk with
Customer from international travel firms (ITF)
ITF is will send the big volume of clients, who travel from their country to Vietnam
To get these kinds of customer, GAT has to spend a lot of time and expenses for joining international tourism trade fairs
Initially, a travel company segments the global market by region or country and selects specific areas to participate in trade fairs This process incurs significant expenses, including joining fees, printing costs, and transportation To collaborate with travel firms, GAT reaches out directly or online to propose contracts detailing rates and products IFT organizes familiarization (FAM) trips for inspectors and conducts small group bookings for testing Following successful tour transactions, the company may be designated as a local operator Through this challenging and costly process, GAT successfully acquires customers from IFT.
ITF, like customers, they always have a lot of options, however, the most important things they require are price and operation ability of a local service provider
Therefore, GAT, to get this kind of customers, has to set a competitive price and improve its operation ability
At the time of 2010 and 2011, it is very high competition in travel field as some reasons below:
Before Vietnam joined the WTO, its travel market was dominated by local enterprises However, six years post-WTO accession, companies like GAT now face competition from international players such as Exotissimo Travel, JTB Travel, Agoda, and Expedia.
Many large companies with strong brands, significant investments, and professional human resources are now establishing their own branches in Vietnam, moving away from reliance on local providers This shift indicates a growing trend of multinational corporations taking direct control of their operations in the Vietnamese market.
Agoda.com and Expedia.com have successfully expanded their online booking systems into Vietnam, showcasing a new trend in the 21st century This innovative approach allows customers to conveniently book tours, hotels, and transportation from their home countries through these platforms.
All of above issues that make Vietnamese enterprise‘ market share smaller
When the market share is smaller, there is higher competition among Vietnamese companies including GAT
In the competitive landscape of Hanoi's travel industry, GAT faces significant rivalry from three main competitors: South Pacific Travel (SPT), Asia Pacific International Travel (APT), and Vietlong Travel (VLT).
Address: 1st floor South Pacific Building, 73 Ly Nam De Str , Hoan Kiem Dist , Hanoi, Vietnam
5 years of Hanoi and Halong bay market
Famous and successful with 3 cruises named:
Have plan for develop their bis in all Vietnam and getting customer from international travel firms
Hang Chieu Str, Hoan Kiem, Ha Noi, Viet Nam
8 years of Hanoi, Halong and Sapa market
APT has evolved from catering to budget-conscious travelers with minimal service costs to becoming a competitive player in the mid-range tour market Previously perceived primarily as a backpackers' company, APT is now surprising many by offering upscale product lines that appeal to a more discerning clientele.
Have long list of local agencies in Hanoi which provide them clients
Some investment like Cat ba island resort and Hanoi hotel are appeared not effective in finance
Doing biz not only in tour organizer but also in hotel and restaurant fields, Apt also have working in outbound and domestic fields
Investment on various fields makes them big in size but they could not control their service quality
Address: 32 / Le Ngoc Han Str, Hai
Have a good online selling system that makes VLT get much customer directly from the oversea New on market
Have plan for develop their bis in all Indochina area and getting customer from in'tl travel firms
Rely mainly on online customers that make VLT work weakly in the low season (in Summer)
Combine tours with event‘s organizers that make VLT get a big volume of revenue and famous with Vietnamese people in brand image
Just a few local agencies working with them
In a highly competitive environment, GAT must adopt a strategic approach to ensure survival and growth by enhancing service quality, expanding client resources, and prioritizing human resources development.
In the previous chapter, we discussed how a tour product is comprised of various services, including transportation, accommodation, and dining The role of partnerships is crucial in developing a comprehensive tour package that combines these elements Customers typically purchase packages that encompass most, if not all, of these services Therefore, effective partnerships are vital in all marketing activities, as they significantly influence the quality and pricing of the tour product.
Establishing a strong relationship with an airline ticket provider is essential for managing large bookings, especially when accommodating over 100 clients For instance, during the peak season on Cat Ba Island, securing 10 rooms for customers on summer weekends can be quite challenging.
A good connection with your suppliers can help your company not only get a good rate, a good product but also the company‘s reputation.
Marketing mix decisions of GAT travel
The marketing is very large concept and including a lot of things to do for a marketing manager In this thesis, I would focus on 7 marketing decisions in GAT travel
There are some characteristic of GAT‘ products as below:
- Tours are divided into clear groups of traveler: Example: Tours for golf players, tours for family group, tours for honeymooners…
- Use Halong bay cruise and Sapa tours as the core of Vietnam tour products
- Tour at the middle range of price, allocated in 3 and 4 star hotel and other services
Therefore, GAT‘ products are quite various like day tours, eco tours, charity tours, honeymoon tours, beach holiday, golf tours, family tours and adventure tours
Founded in 2010, GAT Travel initially offered three daily one-day tours from Hanoi: Halong Bay, Hoa Lu Tam Coc, and Perfume Pagoda These tours quickly became the cornerstone of GAT's offerings, allowing the company to establish a strong presence in the Hanoi tourism market Within just six months, GAT Travel rose to become one of the top three companies in Hanoi for one-day tours, thanks to their dedicated efforts in positioning and promoting their services.
GAT's initial product offerings exemplify how success is influenced by a combination of internal and external factors This section emphasizes GAT's commitment to enhancing product quality, which has been pivotal in establishing their reputation in the market.
Initially, the team conducted an inspection of comparable products to identify areas for improvement Following this, they carried out a survey at select hotels in Hanoi to gain insights into the needs of local agencies.
Hereunder is the daily customers‘ characteristics found by GAT:
* Customer care about the quality more than the price
When booking a tour through a local agent, travelers often expect to pay a premium for superior service However, it's essential to ensure that the quality of the tour matches the price paid, delivering true value for the investment.
In Hanoi, many one-day tours are offered at low prices, but they often lack quality, leaving customers disappointed with their experiences Travelers, who typically have only one opportunity to explore a destination, frequently express dissatisfaction with the tour organizers and desire better service providers for a more fulfilling journey.
* Small details can destroy the customer‘ satisfaction
Tourists are highly attentive to every detail during their travels, making it essential for travel companies to provide exceptional service GAT prioritizes customer feedback and agent insights to enhance their offerings, addressing important aspects such as providing umbrellas for sunny or rainy weather, ensuring guides and drivers maintain a professional uniform and positive attitude, and offering cool water on buses.
* Customers expect a good meal on tours
To ensure an enjoyable tour experience, it's essential for travelers to have a satisfying lunch, as hunger can detract from their day Many customers have expressed their surprise at the lack of sufficient rice and meat in a farming country like Vietnam, highlighting the need for better meal provisions during tours.
* Customers want to be picked up on time
Tourists often dislike waiting, and in Hanoi, group tours require a lengthy pickup process that can take 30 to 45 minutes to gather all participants This typically results in guests waiting from 7:45 to 8:30, and sometimes even until 8:45, at their hotel lobbies or travel agency entrances Such delays can lead to frustration and dissatisfaction with the guide Recognizing this issue, GAT is committed to providing a quick and punctual pickup solution for a more enjoyable travel experience.
* Customer expect too much from the tour guide
Travelers in Vietnam often feel like outsiders, seeking to learn about the country's rich history, vibrant culture, and diverse geography To enhance their experience, it is essential for tour guides to be approachable and well-informed, ready to answer a variety of questions and provide valuable insights into the destination.
* Customers need to have someone to complain when necessary
Service industry in general and travel service in particular, we could not satisfy 100% customers, so sometimes customers will complain about some things
Customers often prefer to speak directly with top management rather than serving staff when addressing complaints GAT understands this need and has two key managers, including the Director of Sales and the General Manager, who are readily available to assist customers Their contact information is easily accessible on the company's website, ensuring prompt communication and resolution of issues.
The second product line of GAT is Halong bay overnight cruise named: Alova Halong Cruises
These are some words introducing about Alova Cruise:
Alova Halong Cruises, a premier offering from Go Asia Travel, provides unforgettable overnight experiences for visitors to Halong Bay, one of the New Seven Wonders of Nature Launched in November 2011, Alova Cruise features 12 luxury cabins elegantly designed in classic Asian style, making it an ideal choice for couples, families, and small groups The cruise boasts a comfortable restaurant, lush accommodations, and an exciting bar, all managed by a skilled Dutch team dedicated to ensuring guest satisfaction Tour packages are available for two or three days, departing from Hanoi at 8 A.M or from the Halong Bay tourist wharf at 12 P.M.
After 6 months, working well with Halong bay one day tour, GAT decided to launch overnight cruise on Halong bay GAT always put the Product factor in the central position for a success At this time, GAT also makes a survey with 2 purposes:
GAT is expanding its offerings to include overnight cruises in addition to one-day tours, and is seeking input from local agencies to identify the most marketable cruise options in Hanoi Following a thorough survey, they have decided to develop a cruise that incorporates several unique features tailored to current consumer preferences.
These are three featured factors of Alova Halong cruise differentiate with the others
It is brand new cruise with 10 cabins, following up all safety requirement of Halong bay management authority It is nice with modern facility and equipments
Alova Cruise, the first 3-star cruise in Halong Bay managed by a Dutch professional, boasts five years of experience in Vietnam's restaurant and travel sectors Fluent in English and French, with Dutch as his native language and moderate proficiency in Vietnamese, the manager enhances the cruise experience for international guests.
With the concept of fun and food, Alova cruise is the best choice for the people to get fun in many activities on Halong bay and tasteful Vietnamese food
This entire features help Alova be successful as the differentiation and customer‘ satisfaction
Vietnam offers a diverse range of package tours, including eco tours, adventure tours, charity tours, honeymoon tours, family tours, beach tours, and golf tours These exciting travel experiences are available for direct customers who make advance bookings online.
Assessment of GAT‘ marketing activities
2.4.1.1 In 7 Ps marketing mix activities
After reviewing all marketing activities of GAT in term of 7Ps, I have found out that they have been performing well in some factors like P - People, P- Process, and P- price
GAT boasts a strong team supported by effective human resources and policies, creating a positive work environment Conversations with staff reveal high job satisfaction and a strong connection to the company Continuous training and experience have led to significant improvements in their performance.
The efficient process factor significantly enhances GAT's service speed and accuracy Notably, the exceptional complaint handling process empowers staff to effectively manage situations, ensuring customer satisfaction and minimizing errors.
The pricing strategy is highly adaptable, aligning with each product's stage in its life cycle Implementing a pricing approach that reduces high commissions proves effective in the Hanoi Old Quarter market Additionally, value-based pricing serves as an excellent method for introducing new products into the market.
GAT excels in its product offerings, including Hanoi one-day tours and Halong Bay overnight cruises, effectively aligning customer needs with their strengths to generate profit However, their performance in Vietnam package tours has not met expectations.
According to the findings from the review and questionnaire (detailed in the appendix), customers express a high level of satisfaction with GAT's services, particularly appreciating the tour guides and the thoughtfully planned itineraries.
GAT's Alova cruise tours have received an impressive 22% positive rating, with 77.7% of customers expressing their willingness to recommend the service to friends, highlighting the exceptional quality of GAT's offerings.
2.4.2.1 In 7 Ps marketing mix activities
The analysis of the 7Ps reveals that GAT has opportunities for improvement in several key areas, specifically in the product line for Vietnam package tours, as well as in promotion, physical evidence, and placement strategies.
GAT offers a variety of Vietnam package tours, providing clear categories for travelers However, the options within each tour type are limited, resulting in a wide selection but lacking depth in quality.
The programs and destinations look similar to almost of other travel company websites
The product need to be different and selected That will help customers come back and believe to book online
In the promotion strategy, GAT focuses on effective sales promotion and personal selling, while also recognizing the importance of public relations and advertising To optimize their efforts, GAT should prioritize online advertising, as it not only reduces costs but also accelerates the process of reaching their target audience compared to traditional methods.
GAT faces challenges in the Physical Evidence aspect of their service due to limited capital While their boats on Halong Bay are of excellent quality, the cars and buses they use fall short Lacking their own vehicles makes it difficult for GAT to maintain consistent quality, leading to customer complaints, especially during high season when they have limited rental options.
GAT has established effective distribution channels, yet currently relies on a limited number of ITFs for client referrals, resulting in minimal direct bookings between customers and GAT.
Based on the result of review and questionnaire, I like to access somewhat about the things GAT did not perform well, relied on the customer‘s negative feedbacks
In total of 90 people, there are 62 People say excellent, 13 people say good and only
Approximately 31% of respondents rated the GAT tours itinerary as below average, indicating a need for improvement To enhance customer satisfaction, GAT should reevaluate and refine their tour itineraries, making them more engaging and better aligned with customer expectations.
In a recent survey, 70 respondents indicated they would recommend GAT's services to their friends, while 22.2% of customers expressed reluctance to do so These significant figures highlight the need for GAT to analyze customer feedback and implement improvements to enhance overall satisfaction.