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 is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges (with customers) that satisfy individual and organizational objectives by 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 generally fall into the following four controllable categories: Product, Price, Place (distribution) and Promotion The term "marketing mix" became popularized after Neil H Borden published his 1964 article E Jerome McCarthy later Summarized into the four categories that today are known as the 4 P's of marketing
For a managerial definition, marketing has often been described as ―the art of selling products‖, but people surprised when they hear that the most important part of marketing is not selling Selling is only the tip of marketing iceberg
By Peter Ducker, a leading management theorist said that:
―The aim of marketing is to make selling superfluous The aim of marketing is to know and understand the customer so well that product and service fit him and sell itself Ideally, Marketing should result in a customer who is ready to buy‖
In this thesis, I will use the first concept to develop my topic For service marketing
I will understand that: Marketing is the process of planning and executing the conception, pricing, promotion, distribution, people, process and physical evidence of ideas, goods and services to create exchanges (with customers) that satisfy individual and organizational objectives
In the tourism field, I suppose that: Things to do of a marketing manager are to make 7 decisions: Product, Price, Promotion, place, People, Process and Physical evidence which can help find customers, satisfy them and get profits for an enterprise.
CONCEPT OF MARKETING IN THE SERVICE IN DUSTRY
The key concept of Marketing in service industry is people and customer‘ relationship factors The reason is that, not like physical goods, service is intangible and need participation of both customers and producers The service marketing is also known as an extended marketing mix and is an integral part of a service blueprint design The service marketing consists of 7 P‘s as compared to the 4 P‘s of a product marketing mix Simply said, the service marketing assumes the service as a product itself However, it adds 3 more P‘s which are required for optimum service delivery
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: as mentioned in part 2.2 the factors influence on marketing activities of the company, we can see that Partnership is very important factor which affects on the success of a marketing plan
Programming: In tourism, a travel company serve the customers with a trip (can be more than 5 days long), so all of events, arrangement need to be scheduled carefully by the tour organizer A good tour program which matched with the customer‘s budget and time helps customer understand about their itinerary and helps company control well their service In many cases, customer before arrive Vietnam for instant do not have a clear plan where to go and what to see…At this time, they need the advices from the tour sellers In this case, programming is a very important factor in the selling process which affects on customer‘s purchasing decision
Packaging: a tour package means the combination of transportation tickets, accommodation fee, and entrance tickets, guide fees, meals…which to serve tourist in a trip Package factor should be included in marketing mix because, customer always want to book a package with 2 reasons The first is they do not want to work with many different providers in one trip A tour is for the relaxing purpose so tourists do not want to work and worry about it too much after they book They just want to trust one provider and believe it for all the arrangement during their trip in a curtain region The second reason is that, buyers and sellers always think that package price should be cheaper than an individual service price
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 in the marketing mix is the product A product is any combination of good and service offered to satisfy the needs and wants of consumers Thus, a product is anything tangible or intangible that can be offered for purchase or use by consumers A tangible product is one that consumers can actually touch, such as a computer An intangible product is a service that cannot be touched, such as computer repair, income tax preparation, or an office call Other examples of products include places and ideas Cities also promote themselves as great places to live and work Typically, a product is divided into three basic levels:
The first level is often called the core product, what the consumer actually buys in terms of benefits For example, consumers don't just buy a mobile phone, rather, customers buy the benefit that a mobile phone offer, like being able to access internet to do many other things, not only call and sending message
Next is the second level, or actual product, that is built around the core product The actual product consists of the brand name, features, packaging, parts, and styling level People want to stay in Sofitel Metropole Hanoi Hotel, not only because of its room and facility but also by its famous brand
The final, or third, level of the product is the augmented component The augmented component includes additional services and benefits that surround the first two levels of the product Examples of augmented product components are technical assistance in operating the product and service agreements
Products are classified by how long they can be used—durability—and their tangibility Products that can be used repeatedly over a long period of time are called durable goods Examples of durable goods include automobiles, furniture, and houses By contrast, goods that are normally used or consumed quickly are called nondurable goods Some examples of nondurable goods are food, soap, and soft drinks In addition, services are activities and benefits that are also involved in the exchange process but are intangible because they cannot be held or touched
Examples of intangible services included eye exams and lawyer services
Another way to categorize products is by their users Products are classified as either consumer or industrial goods Consumer goods are purchased by final consumers for their personal consumption Final consumers are sometimes called end users The shopping patterns of consumers are also used to classify products
Products sold to the final consumer are arranged as follows: convenience, shopping, specialty, and unsought goods Convenience goods are products and services that consumers buy frequently and with little effort Most convenience goods are easily obtainable and low-priced, items such as bread, candy, milk, and shampoo
Shopping goods are those products that consumers compare during the selection and purchase process Typically, factors such as price, quality, style, and suitability are used as bases of comparison With shopping goods, consumers usually take considerable time and effort in gathering information and making comparisons among products Major appliances such as refrigerators and televisions are typical shopping goods
Specialty goods are products with distinctive characteristics or brand identification for which consumers expend exceptional buying effort Specialty goods include specific brands and types of products Typically, buyers do not compare specialty goods with other similar products because the products are unique
Unsought goods are those products or services that consumers are not readily aware of or do not normally consider buying Life insurance policies and burial plots are examples of unsought goods Often, unsought goods require considerable promotional efforts on the part of the seller in order to attract the interest of consumers
Industrial goods are those products used in the production of other goods Examples of industrial goods include accessory equipment, component parts, installations, operating supplies, raw materials, and services Accessory equipment refers to movable items and small office equipment items that never become part of a final product Office furniture and fax machines are examples of accessory equipment
CONCEPT OF TOURISM
Tourism comprises the activities of persons travelling to and staying in places outside the usual environment for not more than one consecutive year for leisure, business and other purposes (World Tourism Organization, 1992)
CHARACTERISTICS OF TOURISM PRODUCTS
Like the other service industry‘ products, Tourism products have some characteristics as below:
The tourism industry is highly inflexible in terms of capacity The number of beds in a hotel or seats on a flight is fixed so it is not possible to meet sudden upsurges in demand similarly restaurants tables, hotels beds and flights seats remain empty and unused in periods of low demand
Services are deeds, performance or act whose consumption take place simultaneously; they tend to perish me the absence of consumption Hence, services cannot be stored The services go waste if they are not consumed simultaneously i.e value of service exists at the point when it is required
The perishable character of services adds to the service marketer's problems The inability of service sector to regulate supply with the changes in demand; poses many quality management problems Hence, service quality level deteriorates during peak hours in restaurants, banks, transportation etc This is a challenge for a service marketer Therefore, a marketer should effectively utilize the capacity without deteriorating the quality to meet the demand
It is related to the fact that travel products are intended to be consumed as they are produced For example, an airline has seats to sell on each flight; a hotel has rooms to sell for each night If the airline is not able to sell all its seats on its flight, or a hotel is not able to sell its rooms for the night then the opportunity to sell the product is lost forever Service sector cannot keep inventory like products To overcome this problem, the travel industry has come up with various marketing strategies One is to overbook An airline overbooks its seats to a certain extent in fully seated Another strategy is multiple distributions For example a customer can buy an airline ticket from an airline, tour operator or from a travel agent The chances of perishability are reduced If the tourist cannot visit the place, the opportunity is lost Hence, this becomes one of its important characteristics
A general norm is that in Travel and Tourism industry the product or the package of the tourism can be standardized i.e for example of 2 days 3 night in so and so hotel, but the actual experience of consuming this package is highly inconsistent There is high level of inconsistency prevailing A quality of a tourism product can be depends on the weather, health status of consumers, surrounding ambience… so they are not consistent
Services are activities performed by the provider, unlike physical products they cannot be seen, tasted, felt, heard or smelt before they are consumed Since, services are not tangibles, they do not have features that appeal to the customer‘s senses, their evaluation, unlike goods, is not possible before actual purchase and consumption The marketer of service cannot rely on product-based clues that the buyer generally employs in alternative evaluation prior to purchase So, as a result of this, the services are not known to the customer before they take them The service provider has to follow certain things to improve the confidence of the client:
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
Not all the service product has similar intangibility Some services are highly intangible, while the others are low i.e the goods (or the tangible component) in the service product may vary from low to high
For example: Teaching, Consulting, Legal advices are services which have almost nil tangible components; While restaurants, fast food centers, hotels and hospitals offer services in which their services are combined with product (tangible objective) , such as food in restaurants, or medicines in hospitals etc
Travel products cannot be touched as they include flight experience on an airplane, cruise on an ocean liner, a night's rest in a hotel, view of the mountains, a visit to a museum, a good time in a night club and much more These products are experiences Once they have taken place they can only be recalled and relished
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
It is characteristic of most leisure tourism markets that demand fluctuates greatly between seasons of the years High season of a beach resort is summer is an example Around one week, week day or weekend also affect on occupancy of a city restaurant or a nightclub
1.4.6 High fixed costs of service operations
When the profit and loss accounts of service businesses in the tourism industry are analyze, It is generally the case that they are reveal relatively high fixed costs of fixed cost is one that have to be paid for in advanced in order for a business to be opened to receive customers; A variable cost is one that is incurred in relation to the number of customers received at any given time What this means in practice may easily be understood in the case of a airline, which must fund the following main costs in order to be able to provide its flights such as fleet costs and premises, fuel charges and heating and lighting cost and salary for full time employees and marketing cost
1.4.7 Interdependence or inseparability of tourism products:
Services are typically produced and consumed simultaneously Incase of physical goods, they are manufactured into products, distributed through multiple resellers, and consumed later But, incase of services, it cannot be separated from the service provider Thus, the service provider would become a part of a service
For example: Taxi operator drives taxi, and the passenger uses it The presence of taxi driver is essential to provide the service The services cannot be produced now for consumption at a later stage / time This produces a new dimension to service marketing The physical presence of customer is essential in services For example: to use the services of an airline, hotel, doctor, etc a customer must be physically present
Inseparability of production and consumption increases the importance of the quality in services Therefore, service marketers not only need to develop task- related, technical competence of service personnel , but also , require a great input of skilled personnel to improve their marketing and inter personal skills
Most visitors need to combines several products in the trip decisions, not just one A business visitor needs transport, accommodation, food and beverage and may be car rental and conference facilities
MARKETING MIX FOR TOURISM INDUSTRY
Products in tourism industry include accommodation like hotel, motel, hostel, resort, restaurants for tourist: Transportation like airport transfer, tourist bus, train ticket, flight ticket; Tour operator for domestic, inbound and outbound travelers;
Travel Agencies for tour tickets, transportation tickets; Travel site operators for entrance tickets, Entertainment centers for a game tickets…
Product is still very important factors of marketing mix in tourism Thing a marketer need to do is find out suitable product to satisfy customer‘s need and which product will match with which chosen customer segmentation
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…
If you were a restaurant owner, you can price people only for the food you are serving But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music?
For a travel agency or a tour operator, Pricing depends on provider‘s price, how much they plan to mark up, competitor‘s price and season Season factor in tourism industry is very important so pricing is highly based on the season (low or high
Promotions have become a critical factor in the service marketing mix For tourism products, tourists normally go to a destination for one or two times and they cannot see, cannot touch what they want to buy so they have to be careful before booking a tour That why promotion is a critical factor to make a marketing plan successful
Take advantage of internet, tourism company establish/ accomplish a strong online adverting campaign like website, search engine optimization (SEO), banner, and email advertising….to promote their products and services quicker, broader and more economical
Most of Travel Company chooses a big city to locate or put branch offices, customer can reach and buy very easy Nowadays, e-commerce (online sales) helps them to distribute their products easier and broader There are some excellent examples for this case Expedia.com, Agoda.com, Vietnam airline e- tickets They distribute their product worldwide and round the clock
People play a key role in service marketing and in tourism industry also People define a service If you have a restaurant, your chef and service staff defines you If you are a tour operator, your staff (tour guides, tour consultants) defines you In case of service marketing, people can make or break an organization People in tourism industry are required to be skillful, customer – oriented, open – minded to create a service or product which satisfies customers
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 last element in the service marketing mix is a very important element As said before, services are intangible in nature However, to create a better customer experience tangible elements are also delivered with the service Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food Which one will you prefer? That‘s physical evidence
Several times, physical evidence is used as a differentiator in service marketing
Imagine a private hospital and a government hospital Thus physical evidence acts as a differentiator
For some hotels in Hanoi, they differentiate by swimming pool And they get a lot of customers.
ANALYZING TOOLS USED IN THIS THESIS
To understand subject in this study – Go Asia Travel in the context of high competition and changing business environment, I would use external and internal analysis method to give out suitable recommendation for marketing decision of Go Asia Travel
Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate Some following factors are samples: tax policy, employment laws, environmental regulations, trade restrictions and tariffs, political stability
Those factors are very important and highly effect on an enterprise More than that, a travel company is very sensitive with those factors as it works mainly with foreigners They arrive from the other places, stay overnight in an unusual place In the most case, a travel company has to follow strictly the international disciplines like visa process, travel insurance…
Economic factors affect the purchasing power of potential customers and the firm's cost of capital Economic factor includes exchange rate, inflation issue, average income and economic condition worldwide This factor affects a lot on a travel company in some decisions for price and promotion Vietnam now is a member of WTO from 2006 We can see international trading exchange is growing up Number of foreigner tourist arriving Vietnam for business and leisure purpose is increased after that Number of foreign tourists to Vietnam is increasing from this event
However, it is also affected by many other factors in the big picture Below figure can show something about it:
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 consist of cultural characteristics, health consciousness, scale of population, life style and language factor in the worldwide context Enterprises normally base on customers‘ behavior and needs to formulate a product, distribution channel and sales promotion methods According to the definition of tourist, they are a person who travelling and staying in an unusual place But they always still bring with them the original culture and habits in to a new place So we can say travelling is exchanging culture Social factor analyzing can help an enterprise find out the potential market
Technology factors are one of external factor affects on a travel company a lot
People nowadays use internet to search and purchase a travel service Mean of transportation, payment method and many other technology applications are modernized All of them affect on enterprise in the way of distribution and promotion a product
1.6.2 Internal and external environment analysis:
For a curtain enterprise, it possesses an advantage (Strength) or disadvantage (weakness) of man power, finance or market Analyzing strength and weakness of an enterprise is to figure out what need to focus on and what need to overcome or avoid
In the other side, an enterprise need to find out which is an opportunity to catch and what is a thread to avoid In practical case, some factors are weakness for a company but they are strength for the other At the same time, some event or accidents are opportunity for a company but they bring risk for the others In each situation, a marketing manager has to analyze and make the right decision based on SWOT model
A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage Examples of such strengths can be strong brand names, a favorable 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…
In some cases, a weakness may be the flip side of strength Take the case in which a firm has a large amount of manufacturing capacity While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment
The external environmental analysis may reveal certain new opportunities for profit and growth Some examples of such opportunities include: an unfulfilled customer need, arrival of new technologies, loosening of regulations, and removal of international trade barriers
Changes in the external environmental also may present threats to the firm Some examples of such threats include: shifts in consumer tastes away from the firm's products, emergence of substitute products, new regulations, and global economic crisis
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:
Determine the purpose of survey: Identify the information needed and from whom it will be collected There is little research available on the value and application of small business and nonprofit leaders' resources (e.g business association membership, enrolling in classes online or in person, networking, seek advice/guidance from professionals or peers, etc.) How much are each of these resources used? How strong an influence do these resources have on an enterprise leader and what is the impact to their organizations?
Choose the method for survey: How you conduct your survey depends on availability of lists for the market you want to research (email lists), response rate (rates are dropping for mail and phone), timing (mail surveys take longer to field and tabulate) and your budget (telephone surveys are the most expensive and online the least expensive) To save time and money, I chose to conduct survey through direct tourists and through online
Determine the sample: You can use your own internal lists or buy them from a broker If you are conducting an online survey, you can select the participants yourself (advertising on Web site pages, newsgroups or traditional media to find participants) or randomly (in which the sample is emailed a survey because it‘s representative of the population being surveyed)
MARKETING MIX IN GO ASIA TRAVEL COMPANY
Introduction of Go Asia Travel Company
Go Asia Travel (GAT) was established in 3/2010 by 2 members –which have long time experience and big ambition in travel field GAT now has 20 office staff and tens of guides and drivers GAT is being partners with many hotels, travel agencies, and other travel service providers from Vietnam, Laos to Cambodia GAT is also working as land tour providers for some travel firms in Singapore, Malaysia and Belgium
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
International Tour Operator License: 01-425/2011 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: Including one day and overnight tours Halong bay was stated as the main product and the most important which brings the biggest revenue and reputation to company Halong, not far from Hanoi was recognized as the world heritage site that why it attracts thousands of tourist every month Most of the
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: normally in 3 nights and 2 day or 4 nights and 3 days Sapa is the second must –see destination for the tourists who arrive the North of Vietnam Sapa Tour products normally include train tickets, transfer bus, hotels, guide, meals and entrance fee
- 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, company will also co-ordinate with some partners in Cambodia and Laos to expand its services into these countries This way will help creating Indochina package tours to get bigger revenue and reputation.
The factors influence on Marketing Activities of the company
For a curtain travel company, customer can be from many different ways, In the case of GAT, I would divide into three main sources of customers coming to GAT
Based on that, I will indicate its characteristics which effect on GAT marketing activities
Local agents here are inclusive of hotels in Hanoi, tours sellers in other travel companies
They get the booking from their clients and sending to GAT for operation This kinds of users are normally get on tours for Halong bay, Hoa Lu Tam Coc , Perfume pagoda and Sapa
Is this case, the direct buyer is local agents Almost buyers have tens of options for the same same tours to sell for their clients They have many options from many different providers so they have big bargaining powers into GAT and other providers
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
However, it is not easy to be on top of internet search results, for hot key words like Vietnam tours, Halong bay tours you may have to spend 2000 USD/ month to get top ranking on Google For the organic high ranking position, a website owner need to spend a lot of time, money to do SEO activity for the times These issues require GAT to perform a good advertising campaign to be easily appeared online to reach the potential customers
But before choose any provider, customer choose some of them first They now have quite enough info about a destination and a package tour cost They normally base on the review (online comments), friend‘s recommendation carefully before sending the request to some of 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
At first, a travel company have segment the global market in to the each region or each country, and choose one of some of them, and them plan to join the trade fairs in these countries or regions This activity costs a lot of money for joining fees, printing fees, transportation fee and so on For further working with the Travel firms, GAT will contact (directly or online) to offer a contract with rate and products IFT will perform a FAM trip for inspectors, and test with some small group booking After some successful tour transactions with them, company can be chosen as the role of local operator By this hard and costly process, GAT can get the customer from ITF
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 joining WTO, Vietnam travel market is a playground of only Vietnamese enterprises, but now after 6 years joining WTO, GAT and other companies have to compete with several international companies such as Exotissimo travel, JTB travel, Agoda, Expedia…
Almost of them are giants with strong brand, investment and professional human resources (HR) In the past, they normally choose a local provider, but now they did open their own branch company in Vietnam to handle with their business here So they leave Vietnam local provider in the other sides
In the other way, example of agoda.com and expedis.com, they expend their online booking system into Vietnam This kind of business is new trend in 21 century; they have been very successful with their online system in Vietnam Customer now can book tours, hotels, and transportations from their own country through online system like Agoda and Expedia.com…
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 a scope of Hanoi, GAT‘ competitors is too much but I just want to show our hereunder three direct competitors including 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
They have grown from the cheap customers with very low service cost that make them get difficult to be middle range tour providers now In the mind of almost are a backpackers company, so they could not believe that APT now have some up market product lines
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 the high competition ambience, GAT needs to find out a specific way in a strategic view to survive and develop which can be improving service quality strictly, expending client sources, focusing on HR…
As mentioned in previous chapter, tour product is formed by series of services like transportation, accommodation, restaurant…so the partnership always plays an important role to create a tour product Customers normally buy a package with all or almost above elements Partnership is an essential part in all marketing activity which creates a product and its quality and price
If you do not have good relationship with an airline ticket provider, you may not arrange a big booking of more than 100 clients In the case of high season in Cat Ba Island for example, it is not easy to get 10 rooms at a summer weekends for your customers
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
GAT travel started in 2010 with 3 daily departure tours They are Halong bay one tour, Hoa Lu Tam Coc tour, Perfume pagoda tour They are all one day tours from Hanoi They have been the first and the one product line of GAT for 6 months
GAT put many efforts for them to position its self in Hanoi; as a result, it is quickly become top 3 companies in Hanoi for one day tours
So what GAT did with their first products? As a rule, a successful product is the results of many internal and external factors In this part, I would focus on the quality improvement of GAT on their products
At first, they had staff inspect other similar products and note for what we can improve Secondly they made a survey at some featured hotels in Hanoi to understand more the need of local agencies
Hereunder is the daily customers‘ characteristics found by GAT:
* Customer care about the quality more than the price
When they plan to book a tour in a local agent, they are normally ready to pay a higher price to get better tour service But it is must exactly the same or value to what you pay for
In Hanoi market, at this time, almost of one day tours was very cheap ones and of course bad quality In many cases, customer was terribly surprised with what they get from the tours All of them only have one chance to travel to one place So they was not satisfied with the tour organizers They wish to have better providers
* Small details can destroy the customer‘ satisfaction
Tourists are subject for travel company to serve well They are very sensitive to each tiny detail GAT listens to customers and agents to find out some details which need to attend to such as umbrella on sunny or rainy time, uniform and serving attitude of guides and drivers, cool water on bus…
* Customers expect a good meal on tours
For an exciting day, they need to have a full lunch on tour, if not they will feel hungry GAT received many complaints from customers that: I could not believe that in a farming country like Vietnam, we do not have enough rice and meat to eat
* Customers want to be picked up on time
Tourist like all of us does not want to wait But all of daily departure tours in Hanoi are joining group ones, tourist bus and guide come to collect each customer from each agent around Hanoi It normally takes from 30 to 45 minutes to pick up 16 person to be picked Generally they have to wait from 7.45 to 8.30 some time until 8.45 in the morning at the hotel lobby or travel agency‘s entrance It can make them bored and start to get angry with the guide So GAT understands they need to have a quick and on time pick up method
* Customer expect too much from the tour guide
Customers are almost foreigners, they are new in Vietnam They want to understand about destination information like history, culture, geography and much other information they want to ask So the tour guide must be an open and knowledgeable person
* 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
In this case, customer does not want to talk with the serving staff, they normally require to see the top leader/ manager GAT know about it, they have 2 top managers includes director of sales and general manager They are always ready to see customer who complaint and their mobile phone are always available on their websites
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 are featured tour services of Go Asia Travel providing overnight cruise for Halong Bay Visitor Alova Cruise – a Vessel consists of 12 luxury cabins decorated in classic Asian style is the best choice for discovering Halong bay – one of 7 new world wonders in Vietnam Being launched in Nov.2011, Go asia travel would like to offer a chain of great values to Halong‘visitors Alova cruise is designed and built for the couple; family and small group with the most convenient itinerary, comfortable restaurant, luxuriant room as well as exciting bar Besides, with professional, skilled staff and a Dutch manager, we commit to satisfy all the guests even the strictest ones! A package tour can be in two or three days departs from Hanoi at 8 A.m or from 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:
At first, remind the local agencies that GAT has plan to provide overnight cruise, not only one day tours Secondly, want to find out what kind of cruise will be best selling in Hanoi at this moment After survey, they decided to make an cruise with some featured details as below:
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 is managed by a Dutch manager, He have been in Vietnam for 5 years with many experience in restaurant and travel fields He can speak well in English and French, Ducth as native, moderate at Vietnamese Alova is the first 3 star cruise in Halong bay have a foreign cruise manager
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
The third product line is Vietnam package tours including eco tours, adventure tours, charity tours, honeymoon tour, family tours, beach tours and golf tours All above tour products are sold for the direct customers who book in advance 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
With good human resources and policy, GAT has a good team working in good conditions During the research, I also have chance to talk with the staff in this company, all of them are happy with their job and company Their performance is getting better and better after the training and working time
The process factor is also reasonable which help GAT‘ service quick and correct
Especially, the complaint handling process is excellent that make staff control the situation and make customer happy and make the fault lesser
The pricing method is very flexible which is well matched with each product in different time of product life circle Pricing to cut high commission is a smart way for the Hanoi old quarter‘ market Value-based pricing is also good way to enter the marketing for a new product
In Product factor, GAT also does well in general Their products include Hanoi one day tours, Halong bay overnight cruise, Vietnam package tours For the first 2 products, they identify customer and product well which matches with the customer, their strength and creates profit However, they have not done really well in Vietnam package tours
Based on the result of review and questionnaire (interview and questionnaire result in the appendix part), I have found those customers are almost happy with the service of GAT They are almost happy with the tour guide, the itinerary, and the
22% put the good mark for alova cruise tours And 77,7% of customers who will recommend for your friends to use GAT‘s services It is an amazingly result which reflects GAT service quality
2.4.2 Negative Sides 2.4.2.1 In 7 Ps marketing mix activities
Based on the analysis of 7Ps factor above, I can conclude that GAT still has something to improve in some P factor like P – product (for the product line of Vietnam package tour only), P- Promotion, P – Physical evidence and P – Place
For the product of Vietnam package tour, GAT had a clear type of tours, however in each of them is quite poor in options This is big in number but not deep in the 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 P- Promotion, GAT chooses the right way of sales promotion and personal selling However, they need to pay attention to public relation and advertising
Especially they should spend more effort on online advertising which will help GAT save money and reach their targeted customers sooner than the traditional ways
In the P of Physical evidence, GAT did not do well as the limitation of capital The boat on Halong bay is excellent, but the cars, buses they use are not excellent They do not have their own car and bus, so the quality of them is quite hard to control In the cases of high season, they have a few options of bus to rent so the quality of them is complained of customers
In P of Place, GAT has had some good channels of distribution already However, it is just a few ITFs sending them the clients and just a few booking is made directly between customer 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
2 say bad, the rest say average for the reasonability of the tour itinerary So we have about 31% people say that the itinerary of GAT tours is not excellent So the GAT needs to consider this factor to make it more interesting and suitable to the customer‘ need
In the question 5, there are 70 people say that they will recommend for their friends to use GAT‘ services So we have 22,2 % customer do not want to recommend GAT This is quite remarkable numbers that make GAT has to analyze and improve it.
RECOMMENDATION TO GO ASIA TRAVEL
Philosophy of GAT
During the researching time, and based on the exchanging with the manager of GAT, and the official information on their website, I would like to give out the business philosophy of GAT:
GAT is a tour operator for the location of Vietnam, Laos and Cambodia It is not directed to be a travel agency It will not expand their location in to the other countries
GAT is working under the slogan: ―We care about your trips‖ It means that, GAT has a customer –oriented mind In GAT, there is a other motto that ―customer is always right‖
- To customers: Was born to care for travelers to Vietnam, Laos, Cambodia
- To employees: Pay attention to employee's development
- To share holders: Reinvest owner's profit to perform other missions
- To community and environment: Responsible for community's benefit and protecting social and natural environment
- Innovation and Creativity GAT believes that with Innovation, Creativity and Customer – Orientation, they can reach all their missions and become top 50 Vietnam travel company on 2015.
Solutions to improve the effectiveness of marketing activities in GAT
Based on the analysis above, I would like to suggest some solutions which help GAT improve effectiveness their marketing activities These focuses only on some
P main factors includes: Products, Promotion and Places
3.2.1 Focus on some kinds of products
GAT should focus on some limited kinds of tours to make the products special or less competitive These products can be:
Halong bay package tours, Vietnam eco tours, Travel Vietnam with kids, Vietnam honeymoon tours
At the beginning, from now to the 2015, GAT should pay attention to all 4 mentioned kinds, but after that Vietnam eco tours should be the main products If GAT follows this way, after several years, people will call it as the best travel company of eco tours in Vietnam And this is the way to perform the forth mission statements: ―Responsible for community's benefit and protecting social and natural environment‖
Why it should change from ―all tours‖ company into ―selected tours‖ company and then ―only eco tours‖ company? The scope in term of product line should be narrower time by time As in the higher and higher competitive context, one enterprise should focus and do the best in a limited one product lines Based on the book: ―Focus: The Future of Your Company Depends on It‖ Public 2005, by the author: Al Ries
Based on the survey researcher made, Nature and local community responsibility or ecology travel trend is clearer and clearer There are more and more people with highly educated of environment; they prefer to take a tour with some or all eco – friendly actions In Vietnam at the moment, there are just a few companies which focus only in eco – friendly tours some example of Buffalo tours, Active travel,
Handspan travel…but in the future of 5 year, this kind of tourism will develop strongly
As the theory of Prof Philip Kotler, to win in the completion games, enterprise have to find out a good specific way to be the best and get profit At the moment, eco tourism is a niche market, but in near future it will be a big market for many companies to live
As the book named ―Blue ocean strategy: How to create uncontested market space and make competition irrelevant‖ by W Chan Kim and Renee Mauborgne, Public
Eco tourism currently is a ―blue ocean‖ for GAT to explore and develop The reasons are the number of customer is getting bigger, the direct competitor is less
However, to focus and develop in this way, GAT should take time and money to research and create more and more eco – friendly products
Some eco tour products can be:
Cycling tours: tour with main transportation is bicycle Homestay tours: come to visit and stay with the local people Kayaking and rafting tour: tours with main activity is kayaking or rafting
Charity tours: tour with the main purpose is help the local community or the disadvantaged people
National park tours: Tours with the main destination is the national parks or natural reserves
Trekking tours: tour to the remote area with main activity is trekking or hiking Rock climbing tours: tour to the mountainous area and main activities is climbing Community education tours: tourist and tour guides will conduct a short training for the local people about personal hygiene or language
Camping tours: happened on the beach or in the jungle
The products can be the combination of some or all above activities in package tours
For example: Sapa package tours with biking, trekking, local education activities and stay with the villagers
Some actions below are required:
Take an inspection trip to the remote areas like Ha Giang, Dien Bien, Ca Mau, Con Dao, Phu Quoc, Dac Lac…to see and build up the special eco – friendly tour products
Join some Responsible Travel club like: World Wildlife Fund (WWF), The Netherlands Development Organization (SNV), in all over the world to understand more and make relationship with them to get a certificate and customers from them
Set up many training for the staff to make sure that GAT‘s staff is experts in eco – friendly tours in all Vietnam
Make a new private website which only talks about Vietnam eco tours Build up an eco friendly community online
In the time of information technology, people are very often to get on a network or a search engine site to share what they have and find out what they need
There are more channels than ever to reach travel shoppers The online channels travel shoppers use to research and book travel continues to grow
There are some traditional channels such as direct websites with engaging search engine optimization (SEO) and pay-per-click (PPC) advertising campaigns, emails and mails, tele marketing…which GAT already applied GAT should apply more modern ways as below:
Social networking websites allow individuals to interact with one another and build relationships When products or companies join those sites, people can interact with the product or company That interaction feels personal to users because of their previous experiences with social networking site interactions
Social networking sites like Twitter, Facebook, YouTube, Blog and Google+ allow individual followers to ―retweet‖ or ―repost‖ or ―Plus‖ comments made by the product being promoted By repeating the message, all of the user‘s connections are able to see the message, therefore reaching more people Social networking sites act as word of mouth Because the information about the product is being put out there and is getting repeated, more traffic is brought to the product/company
Through social networking sites, products/companies can have conversations and interactions with individual followers This personal interaction can instill a feeling of loyalty into followers and potential customers Also, by choosing whom to follow on these sites, products can reach a very narrow target audience
Tactics on some social networks Twitter
Twitter allows companies to promote products on an individual level The use of a product can be explained in short messages that followers are more likely to read
These messages appear on followers‘ home pages Messages can link to the product‘s website, Facebook profile, photos, videos, etc This link provides followers the opportunity to spend more time interacting with the product online
This interaction can create a loyal connection between product and individual and can also lead to larger advertising opportunities Twitter promotes a product in real- time and brings customers in
GAT has an account on Twitter (http://twitter.com/#!/goasiatravel), however, it works not well and have many things to promote it
Facebook profiles are more detailed than Twitter They allow a product to provide videos, photos, and longer descriptions Videos can show when a product can be used as well as how to use it It can include testimonials as other followers can comment on the product pages for others to see Facebook can link back to the product‘s Twitter page as well as send out event reminders Facebook promotes a product in real-time and brings customers in
As marketers see more value in social media marketing, advertisers continue to increase sequential ad spend in social by 25% Strategies to extend the reach with Sponsored Stories and acquire new fans with Facebook ads continue to an uptick in spend across the site The study attributes 84% of "engagement" or clicks to Likes that link back to Facebook advertising Today, brands increase fan counts on average of 9% monthly, increasing their fan base by two-times the amount annually