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Contiki Tours : Marketing Strategy Analysis

702 words - 3 pages

Contiki Tours is an organisation that offers packaged holidays to a variety of local and internationaldestinations. Their targeted market is limited by age. Clients must be between 18 and 35 years old.The analysis will focus on Contiki *s Australian market for international holidays.Contiki have adopted a concentrated marketing strategy in identifying market segments. This meansthat they have elected to focus their marketing efforts on gaining a high share of one particularsegment of the market (i.e. 18-35 year olds). The advantage of such a strategy is that it allowsspecialisation which may produce economies in production, distribution and promotion. However, itdoes entail some risks in that market needs can change or competitors may enter the segment. The risksand benefits of this strategy will be examined more closely in the analysis of the marketing mix.ProductIn order to assess the effectiveness of ...view middle of the document...

The notion of purchase risk will be explored in more detail in an analysis of consumerbehaviour.PriceThe nature of the product, characteristics of the target market, and consumer behaviour each haveimportant implications for pricing. It should be noted that the price paid for the product by theconsumer involves more than the nominal price (i.e. the 'price tag'). As well as the money paid forthe product, consumers endure time costs and must expend behavioural and cognitive effort.Cognitive effort may involve the customer dealing with some of the risks of purchase (Ross, 1984).There are a number of implications of this analysis for Contiki. Firstly, the organisation can managethe price that consumers pay by minimising the time, behavioural and cognitive effort that is usedpurchasing the product. By decreasing the costs to the consumer, Contiki is able to increase theperceived value of their product to consumers.Over-the-phone or internet information and booking services would decrease the time taken inactually purchasing the product, and therefore the cost of the product to the consumer. Also,convenient agent locations would minimise the behavioural effort for consumers. Contiki attempt tocoordinate with a wide range of travel agencies who are educated by Contiki sales staff on productattributes (the distribution channel and its implications for pricing with be covered more thoroughlyin a later section of this analysis). It should be recognised, however, that many consumers deriveutility from extensive cognitive involvement in the purchase process. For example, some customersmay enjoy discussing at length with consultants, their itinerary and travel options. To the extent thatthis occurs, friendly and knowledgeable travel consultants should be an integral part of Contiki'sproduct offering. In order to achieve this, promotion (i.e. personal selling) to the distribution channelshould be emphasised.From this discussion it is evident that the interaction between consultant and customer is a key aspectof the value delivery sequence. Increasing perceived value involves managing the people orparticipants in the consumption process (Berry, 1980; Booms & Bitner, 1981).

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