Lazy Days Strategic marketing plan
Internal analysis Company analysis
Financial analysis – ratio analysis
0
5
10
15
20
25
1992 1993 1994 1995
%
year
Financial A nalysis
GP M a rg in
N P M a rg in
Tu rn o ve r g ro w th
Vo lu m e g row th
1992 1993 1994 1995
GP Margin % 16 15 13 11
NP Margin % 3 2.9 2.1 1.8
% Growth in Turnover 20 11.11 10
% Growth in Volume 18.8 6.1 9.1
•NP Margin – Declining
•Growth Rate in terms of volume – declining ••
COMPANY ANALYSIS
Financial analysis – customer analysis1992 1993 1994 1995
Volume 69,000 82,000 87,000 95,000
GP per customer
£ 34.80 £ 32.90 £ 29.90 £ 25.50
NP per customer
£ 6.52 £ 6.46 £ 4.83 £ 4.1
Turnover per customer
£ 217.4 £ 219.5 £ 229.9 £ 231.6
•Volume and T/O per customer rise, but NP,GP per customer decline. (as no Operating costs are included in those figures)••GP per customer figures are more accurate than the NP per holiday maker calculations; asNP includes other expenses such as income tax, finance costs and other general admin costs, that are not directly attributable to the holiday makers.
••
COMPANY ANALYSIS
Financial analysis – customer analysis(snap shot)
0
50
100
150
200
250
1992 1993 1994 1995
ye a r
valu
e pe
r cu
stom
er GP per customer
NP per customer
Turnover percustomer
COMPANY ANALYSIS
Value chain analysis for SCA
Infrastructure Web based infrastructure
HR Management• Training aimed at customer satisfaction and service quality• Change management
Technology• ( - )MKIS on line reservation system and customer DB• CRM system
Procurement• Value added services• Cost reduction methods
Inbound logistics
Strategic alliance with, Airlines hotels
and resorts
Operations Customized
products in premium prices
Outbound logistics
Internet and web based to
eliminate intermediary cost
& Sales Marketing Aggressive sales of
, packages and building loyalty programs
Services Creating CLV through
relationship marketing and -continuous follow
ups
Margi
nM
argin
COMPANY ANALYSIS
Customer analysis
Segmentation Grid
Age < 25 - 25 37 - 38 60
– Socio economic Class A B & C1 C2
Benefit Sought VFM Customized Experience
(Frequency per Year) High Medium Low
Lifestyle Part of Life Occasional Once in a lifetime
Number of HolidayMakers
Individual Couple / Family Group
Type of Holiday Adventure Relaxed Tour based
Product Offering Safari Beach Golfing
Skiing Ballooning Eco
The current customer profileCUSTOMER ANALYSIS
Customer Profiling
Target Audience Characteristics of Target Audience
Innovators – , , , , 25 37 A Customized High Frequency Holiday as , / / , Part of Life Individuals and or Family Group
/ Ballooning Safari
Relaxation Seekers - , & , , , 38 60 C1 C2 VFM Low Frequency Holiday as – , , , once in a life time Couple Relaxed Beach
Occasional Travelers - , , , , 25 37 B Experience Medium Frequency , / / Occasional Holiday Individuals and or Family
, Group Tour based , / Ballooning Safari
CUSTOMER ANALYSIS
Factors to consider Segmentation
Factors Segmentation Type
Innovators Relaxation Seekers
Occasional Travelers
Potential Growth High Low Medium
Cash Flow High Low to Medium Medium
ROI Less period toRecover
Slow Recovery Somewhat less period to recover
Brand Equity High Low Medium to High
Communication Budget High Low Medium
CUSTOMER ANALYSIS
Targeting
Age < 25 - 25 37 - 38 60
– Socio economicClass
A B & C1 C2
Benefit Sought VFM Customized Experience
(Frequency per Year) High Medium Low
Lifestyle Part of Life Occasional Once in a life time
Number of HolidayMakers
Individual Couple / Family Group
Type of Holiday Adventure Relaxed Tour based
Product Offering Safari Beach Golfing
Skiing Ballooning Eco
Innovators Innovators + Occasional Travelers
Occasional Travelers Relaxation Seekers
Lazy Days - Positioning
Generic
- Semicustomize
d
Customized
Servicecustomization
Local Regional Global
Serviceoffering
CurrentPosition
DesiredPosition
CUSTOMER ANALYSIS
External analysisMarket analysis
Porter’s Five Forces Analysis
MARKET ANALYSIS
Porter’s Five Forces Analysis Bargaining Power of Customers – HIGHü Several options available to customers within the leisure industryü Easy access to information - Internetü Tightening discretionary spendü Customers are asking for more for less priceü Low switching costü•
Bargaining Power of Suppliers – MEDIUM to HIGHü Suppliers – hotel resorts, airlines, travel agents, caterers etc.ü Reduced dependence on intermediaries – shift to direct
distributionü Destinations are demandingü Airlines packagingü Price competition among the suppliers•
• •
•
•
MARKET ANALYSIS
Porter’s Five Forces Analysis Threat of New Entrants – HIGH ü Commoditization ü Low entry costü Availability of New Markets ( N. America, Asia etc.) ü•
Threat of Substitutes – MEDIUMü Substitutes constitute anything that competes for consumers’ “share
of wallet” E.g. – Purchasing a TV, going on a local holiday within Europe etc
ü Switching to other house way goodsü Customer goes directly to the hotelü
Inter Industry Rivalry – HIGHü All the above factors contribute to strong rivalry within the leisure
industry as firms compete to maintain market share•
MARKET ANALYSIS
Competitor profiling
MARKET ANALYSIS
Customer focus
Ran
ge o
f hol
iday
pac
kag e
s
High Low
Lim
ited
W
ide
Lazy Days Holidays
Travel Leisure's (pvt) ltd
Global Holidays
Competitor analysis
MARKET ANALYSIS
Strategic options and objectives
Objectives for sca
Corporate objectiveTurn over increase by 50% by next 3 years
Marketing objectiveMarket share increase by 45% by next 3 years
Customer life time value increase by 45% (CRM)
Marketing functions IMC – to increase awareness level internally and adapt to change to
strategyAggressive sales strategy to market new packages.
STRATEGIC OPTIONS AND OBJECTIVES
Price Differentiation Focus Differentiation
Product Differentiation Customer Service Differentiation
Differentiation strategy
Product Offering Differentiation ü
Lazy days will focus on Product Differentiation as its business strategy to establish the competitive over their competitors.
ü
Lazy Days to achieve its Product Differentiation by ;ü
üQuality Packages– creating a package and service that is exceptional in one or more ways. Examples: Safer Ballooning and Safari Packages, Additional Costal guards at beach packages.
ü
üFirst Mover advantage being the first one to offer Ballooning package for newly married couples in Africa.
ü
üFeatures/Options offer lots of choices, unusual combinations ( Example Safari + Ballooning, Safari + Golfing , Ticket only, Hotel +Ticket etc. )
ü
üCustomization – Tailormade packages
Differentiation strategy
Multiple Niching
•“[A] firm should `stick to its niching’ but not necessarily to its niche. That is why multiple niching is preferable to single niching. By developing strength in two or more niches the company increases its chances for survival.”
• Philip Kotler
üLazy days to adopt MarketNicher Strategy to compete against it’s competitions establish the competitive over their competitors.
üAs Lazy Days will be attacked by larger firms once they notice the niches are successful, Lazy Days to focus on MULTIPLE NICHING STRATEGY.
COMPETITIVE STRATEGY
Strategic option analysis – Ansoff’s matrix
STRATEGIC OPTIONS AND OBJECTIVES
Market Penetration1. Increase usership for golfing in African destinations by 20% through
••Specialized safari packages for selected travelers in Social groups C1 & C2•Golfing loyalty club membership•Golfing fiesta package for women
2Increase usage for skiing in Eastern European destinations by 30% through
•Market skimming pricing for mass crowd•Promote skiing packages for both peak & off peak seasons
Market Development 1. Exploring new market segments in most profitable African destinations
• Targeting only Social groups A & B for specialized product offerings ( Innovators, Relaxation seekers, Occasional travelers)• Favorable money making destinations will be carefully selected for these packaged holidays , E.g :Congo, Cape town•This would be our key target segment which gives us the maximum amount of revenue & returns•Priority would be given to continuously develop key markets in Africa which in turn brings us this purpose, this would be done through our research team which is responsible for selecting profitable market & segments•The selected target Audience or key customers are likely to be under scrutiny for next three years based on their returns to our business goals, thus this makes easy for evaluation of the new segment
Strategic option analysis – Ansoff’s matrix
STRATEGIC OPTIONS AND OBJECTIVES
New Product Development
New product packages are carefully made which suits to the selected social groups A & B, this would include Wild safari Package in African jungles Hot ballooning package in blue sky These two special product offerings would be coupled with many other supportive value added services such as : Hotel stay , Air fare, Concierge services, Boutique night out The above packages are rolled out to innovators, relaxation seekers & Occasional travelers for whole year Based on the incremental value of each individual in these segments, they would be entitled to a further new product package which exclusively available after 1 year of operation That would be the exclusive VVIP Afro package given out to high value makers This includes the benefits of: Hot chocolate ladies club in Africa, Meet my princess offer & many more
Diversification
Right now we are not considering any sort of interest for diversification, but based on the business performance in the next three years the following options are available :
consulting company in tourism & leisure Destination marketing organization
Swot analysis•Strengths
• Hall of experience & familiarity in current market
• Company has pricing advantages & can survive in the tag of price war. (Pricing policy is below 5-8% industry rates)
••Opportunities
• High spending power amongst socio eco A&B
• Attractiveness of African mkt and potential for earning capacity
• Comparatively less competition within Africa for leisure and tourism industry
• Admin cost is relatively low compared to European destinations
• Absence of rigid government policies , political red tapes & high taxation for mkt entry
• Super profit making destination with first mover advantage for particular product offerings
•
•
•
•
We akne sse s•Lack o f customer DB. Competitor
intelligence & customer loyalty •Poor communication methods in the
absence of appealing mkting campaigns
•Complicated product o fferings & packaging not suiting the TG
•High overheads•No technology advancement•Adaptation of conventional thinking
amongst Lazy Days instead of customer driven culture.
•
Thre ats•Unpredictable recessionary environment
can completely shadow off the incomers.
•Rising numbers of pressure groups for environmental protection and independence.
•The degree o f duplication might be very high in Europe destinations with similar types o f product o fferings.
Building sustainable competitive advantage
Way you compete•
• Product Strategy• Generic product offering (mass packages) and customization to suit
personal requirements.• - Wild life safaris ( generic and customized safaris ) • - Honeymoon Packages (Customized & generic – safari/ Ballooning
/Golfing) • - Tailor made tours for individuals and group • - Ballooning in Africa• - Family holidays • - Adventure holidays ( Skiing / Ballooning/ Safari )•
• Pricing Strategy• - Competitive pricing for the generic offering (mass packages)• - A comparatively higher price for the customized packages depending
on the customer requirements• • Re-positioning Strategy • - integrated marketing communications (IMC) • Message : “plan and design holiday packages to those who wish to
explore and discover the natural bounties”
•
• Distribution Strategy• - No intermediaries , web based & direct marketing • - Priority focus on reaching the customer – online and offline
•
•
•
•
•
•
•
•
People Strategy• -Train staff on service quality, relationship marketing, ,
competitor profiling, collecting market information, etc…• - self resourced team to develop the website ( this avoids
outsourcing expenses) •
Process Strategy• - MKIS & CRM systems, knowledge management, intranet
systems• - Development of e-distribution systems•
Physical Evidence• - Consistent branding in staff dress, market oriented office
environment, brochures, tickets , travel guides, travel insurance and other tangibles
•
BUILDING SUSTAINABLE COMPETITIVE ADVANTAGE
On-line Off-line
Official web site Alliance web site web ad’s (Airlines, hotels/resorts and banks)
- In-flight magazines - 24*7 customer service •Customer friendly office – providing personalized services to meet customer requirements.E.g: coffee for all customers.•Bank offers : corporate packages , card holder offers (platinum and gold card holders)
Basis of competition
Providing competitive service by streamlining & synchronizing the upstream & downstream value chains
Use of a balanced portfolio to offer a balanced product range
BUILDING SUSTAINABLE COMPETITIVE ADVANTAGE
Leisure and travel industry
Global Holiday Travels –UK Whole World Golf Travel Safaris Direct (http://www.safaris-direct.net) Golfing in Africa – (www.golfingafrica.com) Balloon Safaris – (www.balloonsafaris.com) www.lastminute.com
WHERE WE COMPETE
BUILDING SUSTAINABLE COMPETITIVE ADVANTAGE
WHO WE COMPETE AGAINST
STRATEGY
Market Development
Branding
Differentiation SKILLS
Knowledge management
communication
IT
STAFF
T&D
Employee satisfaction
Motivation
Rewards
SYSTEM
Customer database
MKIS
Intranet/Extranet
STYLE
Supportive style leadership
Action centered leadership
STRUCTURE
Virtual Organization
Flexible
Bottomup approach SHARED VALUES
Innovation
Integrity
Quality
Openness
ACHIEVING SUSTAINABLE COMPETITIVE ADVANTAGE
IMPLEMENTATION & CONTROL
IMPLEMENTATION & CONTROL
BALANCE SCORE CARD
VISION
Financial
-% profitability for SBU-Economic value added-Market share (as a web dealer)
Internal process
-# of customer complaints-Time taken to upload the site and errors-% time site down ( during peak holiday seasons )-
Innovation & Learning
-# of new additions to the site-# of site links-# of language translations-# of training hours per employee -
ExternalInternal
Past
Present
Future
Customer perspective
-# of customers -Customer satisfaction (VFM, Range of offers, service of the employee) -Customer retention ( Loyalty cards, blue tooth) -Average value per customer -Customer acquisition -
BALANCE SCORE CARD – MEASUREMENTS Perspective Objective Measurement Targets
96 97 98
Financial Revenue Growth Increased mkt shareEconomic value added
% change in revenue % increase in mkt share
50%45%
50%45%
50%45%
Customer Customer retentionCustomer satisfactionCustomer acquisition Per customer value
Retention %Survey Rating% of new customers % of turnover per customer
75%60%60% 50%
75%74%70%50%
75%85%75%50%
Internal process Customer complaintsWeb site down timeWeb site upload time
% of complaints% time site down – peak % of errors
35% 12%20%
30% 10% 12%
25%10%7%
Learning & Development
New additionsNew linksLanguage translationsEmployee training rate
# of new additions to the site# of site links# of language translations# of training hours per employee
50%35%25%75%
50%40%25%75%
50%40%25%75%
Budget 1996 1997 1998
Receipts £ £ £ £ £ £
Balance b/f 390000 -11260000 3902500
Turnover:
A,B customers £300*20000 6000000 £350*35000 12250000 £400*50000 20000000
C1,C2 customers £180*95000 17100000 £150*85000 12750000 £150*87750 13162500
23490000 13740000 37065000
Payments
Web Development 25000000
Web Maintenance 4000000 4200000 4410000
Marketing expenses(offline) 3000000 2750000 2500000
IMC 2000000 2100000 2205000
Administrative expenses 750000 -34750000 787500 -9837500 826875 -9941875
Balance c/f -11260000 3902500 27123125
* Assumption : Inflation rate is 5%.
Customer price assumptions will vary (+ / 30%)
After 3 years;
•In 1998 Corporate objective is in-line with the targets.•(Increasing Turnover by 50%)• £33162500 – £22000000 *100 =
50.07%• £ 22000000•
Marketing objective is in-line with the targets•(Increasing Market share by 45%)• 137750 – 95000 *100 = 45%• 95000
END
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