Vacations Paradise

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Spring 2011

Paradise Vacations

Statement of the problem

Tour operators are the organizers and providers of package holidays. They make arrangements and contracts with hoteliers, airlines, and other suppliers, and then promote and sell those assembled travel packages, usually through travel agents. Travel agents give advice and sell the bookings for a number of tour operators. Agents can also sell the individual supplier components (e.g. flights, ferry bookings, car hire, etc...) for those who travel independently. Vacations Paradise the leader tour operator in Quebec, is trying to figure out some marketing strategies to counter the competition that brings FunTours with its intention to expand into Québec. Should Paradise Vacations adapt its prices to meet the circumstances of the Quebec market? Should the company lower its prices by a means of price war that would outlast FunTours, and drive them to stay the shortest possible in Quebec market? Should Paradise Vacations lunch a new airline to make the price war viable? Or Paradise Vacations should sell it packages exclusively to internet distributors and bridge the travel agents? Should the company differentiate its products by adding other destinations less developed destinations to its portfolio? Swot Analysis

* Strong relationship with its suppliers, airlines and hotels. * Segmentation of its products into premium, mid and base segments. * Strong relationships with the travel agents in Quebec, their tour operator of choice * Strong leadership in the Quebec market with 39 percent of the market share. * Use of brand identification to constrain competition in Quebec. Weaknesses

* High fixed costs booked upfront, to be sold at a low enough price, so that all the rooms and airline seats are filled. * High storage costs for highly perishable products: the company must sell all its products with no carryover inventory. * Low product differentiation, almost all the tour...
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