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 …show more content…
* 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.
* 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 operators offer the same package destinations. * Inefficiencies in the supply chain: travel agents that charge 8 percent could be eliminated for a saving.
* Expected growth of 4.6 percent in the leisure travel expenditure in Canada as a whole and in Quebec. * The advent of the internet would allow Paradise Vacations to sell packages to internet distributors and directly to customers through their website. * Offer from Air India to lease aircrafts for the winter season. …show more content…
We can do this by adopting another product differentiation strategy by carefully positioning the package holidays to optimize the company performance. Instead of the typical destinations where all the tour operators compete, add other places with little offering, like the Bahamas, Hawaii, Tahiti, Costa Rica and Belize.
The only issue with this solution is that it could necessitate an important amount of funds for introduction and awareness marketing.
The second alternative is the opposite of the first, but they are not incompatible. Many tour operators, or all of them in Canada tend to specialize in north-south travels, I would suggest to take advantage of the pretty much untapped market south-north and get tourists come to Canada. In this case, Paradise Vacations would have to design travel packages including, skiing, campgrounds, hunting and fishing