Innovation and Marketing in Tourism Industry: A Case Study of XYZ Cafe

This report discusses the role of innovation and marketing in the tourism industry, with a case study of XYZ Cafe. It covers product development, PEST analysis, industry trends, Porter's five forces analysis, and strategic marketing plan for future growth.

Innovation and marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Innovation and its application for tourism industry....................................................................4
Product development in order to gain market growth.................................................................5
PEST analysis in order to understand impact of macro social, political and economic factors..6
Industry trends to understand characteristics of marketplace.....................................................7
Porter's five forces( Competition analysis).................................................................................8
Strategic and competition marketing plan for future growth....................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The innovation plays a crucial role in development of the tourism industry by practising
different new techniques (Barbu, 2019). Innovation refers to bringing positive new changes in
the existing products and services to comply with the market trends. It is essential for a business
entity to support art of innovation in order to maintain and achieve systematic goals in business
functioning. Companies should also maintain all operations in a systematic manner for
sustainable growth of the business. This project includes choosing of appropriate marketing and
development strategy for sustainable development of the business. In this project there is also a
competitive strategy and analysis is performed in order to lead the marketplace. This project also
includes PEST analysis in order to determine and know condition of the external and micro
environment. In this report example of XYZ Cafe is taken into consideration, which is present
and located in the heart of London City. The Cafe is a newly started business with new
operations and functions and sells premium coffee varieties.

MAIN BODY
Innovation and its application for tourism industry
Innovation is essential for a business to develop effective business practices that are fair
in current competitive environment (Bigné, 2019). It is also a major role of a business to
facilitate innovation in its function for increasing market share and turnover. Innovation is
considered as a major practical approach in the tourism industry to develop distinct business
practices. It is also major responsibility of a company to develop innovation in its functions to
systematically lead the competition. The XYZ Cafe will sell Mango and strawberry lassi in the
marketplace of United Kingdom. XYZ Cafe will try to also bring innovation in its marketing
operations for systematic development of company.

Product development in order to gain market growth
The development of product is the most essential part of a business which should be done
in a precise manner (Mohanty, 2017). Business should continuously focus on developing a new
product in order to gain competitive advantage and also market growth. In the recent times,
importance of product development as increased and this is brings a major change in policy of
the company. In the corporate world, advertisement and promotion are the two major techniques
of marketing related to a product. XYZ Cafe should focus on operations management in order to
develop systematic goals and operations. Also the Cafe will take essential feedback from the
customers in order to bring desired changes and modifications in products. Product development
will also help the company to easily meet the desired market growth rate in a specified period of
time. In order to systematically develop a product a company should take into consideration
various market needs and demands. The product development is also essential in order to bring
desired changes in product by taking into account marketing functions and tasks.

PEST analysis in order to understand impact of macro social, political and economic factors
The PEST analysis is an effective tool which provides insight to a company related to the
macro environment. PEST analysis is also a major tool which states the role played by external
forces in effecting a business. The PEST analysis of XYZ cafe is mentioned below:
 Political factors- The political factors are the major factors related to rules and
regulations developed by the government of UK. It is compulsory for the company to
develop and follow political factors in order to conduct ethical business. Stability of
current government in United Kingdom also impact on major functions and operations of
XYZ in a sustainable manner.
 Economic factors- The economic factors are considered as factors related to monetary
policy of United Kingdom. Many economic factors like GDP and national income, also
significantly impact on major economic operations. The factors like situation of recession
and inflation in a country also helps in development of different economic factors.
 Social factors- In the functioning of a business at the marketplace, social factors like
traditions and culture of the society impacts on business operations (Niazi, 2017). The
XYZ Cafe is also developed and affected with the major social factors as they contribute
to develop effective internal environment.
 Technology factors- The information and technology play a very crucial role in
developing the core competency edge in a candidate. It is also key responsibility of a
business to develop and include application of IT for conducting safe and quick
operations (Nijssen, 2020). Technology is the major aspect which helps and supports a
business to develop ethical and sustainable practices. XYZ company should also use the
application of technology in order to develop different functions and operations for
customer database management.

Industry trends to understand characteristics of marketplace
It is essential for a business entity to take into consideration analysis of industry trends
and marketing characteristics for developing a sustainable business. The industry trends should
be analysed by the marketing management in order to successfully identify target customers.
Marketing management of the company should perform a brief analysis of the industry by
conducting marketing survey in a systematic manner (Opute, 2020). The market survey will help
the company to understand contemporary management issues in a well defined manner. Also the
company will take into account, focus on current market needs in order to develop and perform
effective utilisation of the current resources. Also the XYZ Cafe will take assistance of
information and technology in order to perform sustainable operations management practices. In
the recent times, major companies develop focus on strategic action plan which is effective in
developing industry trends (Pacauskas, 2018). The understanding of key industry trends should
be developed in a systematic manner for long term and short term business growth. Also it is key
role of the strategic and marketing management of a business to develop a systematic strategy to
deal with current competency.

Porter's five forces( Competition analysis)
In order to develop effective internal environment and strategy related to the competition,
it is very much crucial to develop and understand Porter's five forces analysis. The Porter's five
forces model is a major and universally adopted tool, which helps in developing competitive
edge for the company. It is major duty of top level management of a business firm to develop
and formulate Porter's five forces analysis in order to develop effective business approach
(Schiavone, 2019). Also the Porter's five forces analysis is a major approach which helps the
company to develop effective and systematic operations. Company like XYZ Cafe should
include this analysis to enter in marketplace with major strategy. The Porter's five forces analysis
of XYZ Cafe is mentioned below:
 Bargaining power of buyers- In the marketplace, bargaining power of buyers refer to
the capacity or extent to which a business needs to negotiate with customers. In case of
XYZ cafe, it is compulsory for a business firm to develop and include bargaining power
of buyers in order to gain advancement in features. The company should perform total
quality management in its operations for gaining systematic growth rate. Also it is the
major responsibility of marketing management of a company to analyse briefly
bargaining power of buyers. Bargaining power of buyers also include, role and
development performed by buyers of a company to impact on its profitability.
 Bargaining power of supplier- Bargaining power of suppliers is an essential function of
business to develop operations in a systematic manner. The number of suppliers of
Coffee in international market and domestic market is very high. Number of suppliers has
decreased after COVID-19 and Brexit which will impact on raw material availability of
the business firm. Also the bargaining power of suppliers should be developed according
to the presence of different suppliers in marketplace (Tollin, 2017). The bargaining power
is low which can directly impact on the financial aspects of business.
 Threat of new entries- In the corporate world, there is always threat of new companies
which can enter the marketplace. Companies in international and national marketplace
develops and expand their operations which can impact on the other companies. For XYZ
Cafe, there is a major threat of new companies like FTU cafe, D and D Cafe which are
about to enter marketplace of London. In order to deal with the marketplace
consequences and challenges, it is effective for a business entity to face new entries in a

major sense. The top level management and board of directors should plan strategically in
order to gain growth in marketplace.
 Threat of substitutes- There is always a threat of substitutes in the marketplace for a
company. It is also key role of management of a company to develop organisational
policy in order to eliminate threat of substitutes. There are many famous tea and coffee
shops which can impact directly or indirectly on company's operations. The threat of
substitutes also creates a major impact on business performance and its growth. It is also
a major task of the management of business to develop products according to market
forces.
 Competitive rivalry- This includes, various companies which are giving tough and stiff
competition to XYZ Cafe. In order to face the competition in a major sense, company
should include a brief policy and plan to deal with competitive rivalry. Product
development is also a good strategy which can be chosen by a business entity to lead the
marketplace. Also in the corporate world, it is major role of marketing management to
focus on developing systematic operations with the help strategic management.

Strategic and competition marketing plan for future growth
The market planning helps a company to develop ethical and sustainable business
practices for the future. In order to eliminate risk associated with the operations, it is very much
crucial for a company to develop strategic planning. Risk management models will also help the
company to overcome different issues and challenges related to marketing growth (Varadarajan,
2018). In order to expand operations in a precise manner, the strategic plan of the company
should be developed and implemented with the help of effective supervision and control. Also
the strategic management plan for XYZ Cafe is mentioned below:
 Plan- The plan formulation and development is the initial stage in different company
operations. It is also major responsibility of marketing management to develop risk free
planning for the company. Also the plan should be formulated by taking into
consideration major factors like, promotion, advertisement and publicity. In order to
develop a perfect business plan, marketing department play a very crucial role.
 Implementation and action- It is also a key responsibility of marketing management to
focus on implementation of the business plan. The implementation is a major point which
needs to be covered by marketing management in an ethical manner. Also the key
responsibility of management is to take necessary actions related to market trends.
 Feedback- The feedback is a major business approach which helps a company to deliver
systematic business practices. Many successful international and national companies take
feedback from customers and employees to develop essential change in product
development.
 Evaluation- This is the last stage in strategic plan which includes assessment and
evaluation of the business plan. The strategic plan must be evaluated with professional
approach to develop survival at the marketplace.

CONCLUSION
In the functioning of a business, it is major role of information and technology to support
different operations and functions in a systematic manner. The above discussion concludes the
role of top level and strategic management to develop systematic operations. It is also the key
role of management to analyse all the major factors which impacts on internal and external
environment for development of business goals. This project also concludes the role played by
ethics and honesty in developing major business practices related to firm development.

REFERENCES
Books and Journals
Barbu, C.M., Păunescu, A.F. and Buşu, O.V., 2019. PROMOTING SOCIAL INNOVATION
USING MARKETING AND COMMUNICATION TOOLS. Annals of the University of
Craiova, Economic Sciences Series, 2(48).
Bigné, E. and Decrop, A., 2019. Paradoxes of postmodern tourists and innovation in tourism
marketing. In The Future of Tourism (pp. 131-154). Springer, Cham.
Mohanty, S.K., 2017. Globalization, Innovation, and Marketing Philosophy: A Critical
Assessment of Role of Technology in Defining New Dimensions. In Business Analytics and
Cyber Security Management in Organizations (pp. 48-63). IGI Global.
Niazi, A., 2017. The Role of Entrepreneurship, Innovation and Marketing Capability in Small
and Medium-Sized Enterprises (SMEs). International Journal of Economic Perspectives, 11(3).
Nijssen, E.J. and Ordanini, A., 2020. How important is alignment of social media use and R&D–
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Opute, A.P., 2020. Small and medium enterprises marketing: Innovation and sustainable
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Pacauskas, D., Rajala, R., . and Mäntymäki, M., 2018. Harnessing user innovation for social
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Schiavone, F. and Simoni, M., 2019. Strategic marketing approaches for the diffusion of
innovation in highly regulated industrial markets: the value of market access. Journal of Business
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Tollin, K. and Erz, A., 2017. The strategic viewpoints of innovation and marketing teams on the
development of novel functional foods. In Developing new functional food and nutraceutical
products (pp. 63-83). Academic Press.
Varadarajan, R., 2018. Innovation, innovation strategy, and strategic innovation. In Innovation
and Strategy. Emerald Publishing Limited.