Lonely Planet Case Study
Prepare a report in which you analyze the marketing channel conflicts and cannibalization issues that Lonely Planet faces as it is currently operating. Suggest solutions that might reduce the revenue losses or operational frictions that result from these issues.
I feel that Lonely Planet is one big channel conflict. When they first started the company it wasn’t really an issue. The fact that they have grown so much and integrated themselves into many different markets makes it harder to reduce the channel conflict or cannibalization. There is a certain point, during your expansion processes, which you reach when you dive into as many markets that Lonely Planet has. I feel if they wish to reduce revenue losses due to channel conflict and cannibalization they should slim down certain aspects of their company.
As Lonely Planet is currently operating they are selling hard copy books through their website and retail resellers. Along with this they have also started selling their guides as e-books for the Kindle. This poses the threat of both channel conflict and cannibalization. In order to stay competitive with other guide book company’s they will have to reduce the price of their products. If they don’t do this across the board, they will be undercutting their retail resellers.
In order to reduce revenue losses or operational frictions that result from said issues, I feel Lonely Planet could update their revenue model to incorporate all of their products into one. The best option for this is the Advertising-Subscription mixed revenue model. This model would allow Lonely Planet to increase revenue while decreasing channel conflict and cannibalization.
By using the subscription based part of the mixed revenue model, they would be charging a subscription fee for both their website services but also their traveler magazine. The subscribers pay the fee and accept a certain level of advertising in the process.
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