Impact of ICT on Tourism Marketing

This assignment delves into the significant influence of Information and Communication Technology (ICT) on modern tourism marketing. It examines how ICT tools like social media, mobile applications, and online platforms have revolutionized destination promotion, consumer engagement, and market segmentation strategies. The document also explores the challenges and opportunities presented by ICT adoption in the tourism industry.

ASSIGNMENT NAME: INTERNATIONAL MARKETING PLAN
FOR CLUB MED
STUDENT NAME:
STUDENT ID:
SUBJECT CODE:
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Table of Contents
Introduction......................................................................................................................................3
Analyzing the advantages and disadvantages of overseas growth and the micro/macro
environmental features.....................................................................................................................3
Evaluating the organization’s current international marketing practice..........................................6
Analyzing the rationale for market selection, market entry, and barriers to market entry..............7
Recommending market segmentation, targeting and positioning strategies...................................8
Analysing the application of different methods to evaluate cost effectiveness of sales promotion 8
Identifying issues that affect the overall strategy............................................................................9
Recommending promotional strategy for target audience.............................................................10
Risk assessment of the promotional strategy.................................................................................11
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12
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Introduction
International marketing focuses on the strategies and impediments in the way of disseminating
and selling an organization's goods, ideas, and services across the national borders and seas.
Besides that, it also takes into consideration different challenges regarding culture and
competitiveness in both the domestic and the international markets. There has to be a symbiotic
relationship between the current strategies and the future objectives of an organization. Pricing
promotion and the evaluation of the different international markets at present and in the future
are also crucial for the purpose of international marketing. The thesis statement of the study is to
critically evaluate different angles of international marketing undertaken by Club Med.
Analyzing the advantages and disadvantages of overseas growth and the
micro/macro environmental features
Club Med has recently thought of expanding its business in China and for that purpose,
Gulangyu Beach has been selected. This beach is located in the Gulangyu Island which is an
exotic geographical location near Xiamen, having 600 pianos and well-kept buildings on the
island (Hautz et al. 2014, p.340).
Strengths: Club Med being an international tour operator and a huge reputation in the global
market for especially family tours will be well accepted in china which is a developing country
with the population of one and a half billion. Club Med has already entered into China in 2013
and therefore it would be better for it if it evaluates the experience gathered so far and makes a
package including all the resorts they have.
Weaknesses: Apart from Club Med other companies like Virgin Holidays Limited and Emirates
Holidays Limited are also competing for the same market. The domestic tour operators in China
funded by the government are also there. Club Med has entered rather very late in the Chinese
market and therefore is finding it difficult to cope with the giant American countries
(Rosenbusch et al. 2013, p.650).
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(Figure 1: SWOT analysis)
(Source: Mariani et al. 2015, p.67)
Opportunities: It can improve its packaging part. Besides that, it can also move southwards and
operate in Indonesia and in the other Indian Ocean islands.
Threats: The most pertinent threat is the recent slowdown in the global market. The economic
situations in China have not remained as glittering as it has been in the recent past.
Microenvironmental features: The macro environmental features that need to take into
consideration are as follow:
1. Club Med has to focus on the local packaging managers who actually made the tour
packages and sell them to the potential customers.
2. The competition in the Chinese market is huge and to mitigate that competition Club Med
has to lower its tour costs for a few years so that it can attract a large number of
customers (Luo and Bu, 2016, p.210).
3. The general Chinese people are middle-class people and their purchasing power has to be
in accordance with the expenditure on which Club Med is focusing.
Macro environmental Features: the macro environmental features include:
Political: The demographic forces in China are Negligible and the whole country is run by the
Communist Party. This being the case Club Med has to cooperate with the Local as well as the
central government bodies to get permissions for its operations in different fields. Under the
current leadership of Xi Jinping China has undertaken a lot of political changes like reforms in
the Chinese Army and building railroads across the Middle East to the Western part of Europe,
and the CPEC project via Pakistan. These all will bolster the economy in the eastern part of china
(Wong et al. 2016, p.125).
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Economic: Economic factors also play a key role in the case of China as it is the largest
producer of commodities the country has a huge number of middle-class people with an immense
purchasing power. The economic fundamentals are also very robust as the IMF has predicted a
growth rate of around 6% for the country. The Gross Domestic Product (GDP), Net National
Product (NNP), Gross National Product (GNP) figures of China have improved significantly in
last two decades. Per Capita Income in China has also gone up leading to the formation of a large
middle class that has a lot of aspirations. The Chinese Yuan Renminbi has been devalued in the
last year following a low market season. The US investment has also shrunk a bit after the low
growth rate of the USA and the global slowdown (Al Ariss et al. 2014, p.175), though its
investment in the ASIAN region has significantly gone up.
Technological: Different Technological factors also play a crucial role as packaging and
managing the whole industry is based on the technological factors for being transparent. It also
gives the tourists different kinds of information relating to different packages. Producing the
largest number of electronic goods in the world China has mastered in low price software and
hardware products. Apart from that it also has a robust manufacturing sector funded by the
private as well as the government companies.
Legal: The legal system in China has always been very strict and thus all the possible efforts
have to be made by Club Med to meet the necessary requirements of the local as well as National
political forces. Licensing is also an important tool for that. The Chinese government has also
provisions to safeguard its foreign investments in the country. The PLA and the Chinese Navy
are also the best in the region and thus the sea shores are always very safe to roam (Child, 2015,
p.142). The French government also have certain agreements with the Chinese government,
through which they can afford the visa and passport facilities available.
Social: with a population of around one and a half billion China has the largest number of human
resource. In spite of the One Child Policy, the human capacity is huge in China. The country has
faced problems with the aging population in the recent past. The Chinese are followers of
Taoism and are not violently religious. The society is stable more or less.
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Evaluating the organization’s current international marketing practice
For Club Med, the most distinctive marketing practice are the following:
The experience of Happiness: Club Med has undertaken a few innovative programs for the
tourists and all of them are around the theme of happiness. They have designed “Vacations à la
carte” range by using which the tourists can select their desired vacations and experience the
views they want. By using this range the tourists can also experience live sports and feel
rejuvenated (Khodakarami and Chan, 2014, p.40). Club Med has also included “Comfort à la
carte” for better management of the accommodation process. The tourists can choose among five
room categories and two comfort levels such as a club room with a view and so on.
Excellent transportation Facilities: Clients always want to have hassle free and smooth
transportation facilities like flight time, preferred airlines, security and the visa facilities. Club
Med has also signed some agreements with different carriers of different countries in Europe.
Some of the examples are the Air France in France, TNT in Belgium, Euro Fly in Italy and so
on .it also gives special visa and transport facilities to the Taiwanese people to travel to Japan. It
also has arranged more flights from New York to Guadeloupe and Martinique, and to other parts
of North America.
Variety and customer relationship: Club Med also gives a lot of choice in its products so that
the customer can be satisfied with the offers. There are also different mix packages that can be
essential for attracting the tourists (Laufs and Schwens, 2014, p.1120).
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Analyzing the rationale for market selection, market entry and barriers to
market entry
Selection
The different parts of market selection are:
Ethnocentric: Any business strategy has to be based on the domestic market and the domestic
market in China was not properly open to any kind of business until the late 1960s. The domestic
demand is the prime mover in the direction of regenerating growth in any sector. The travel and
tourism industry can utilize that according to its needs. China being a young country in terms of
its population it is a bright spot for investment (Pallais, 2014, p.3570).
Polycentric: this is related to the existence of different related foreign markets in a country. In
the case of China, the American investment in China is a huge factor and the two countries
cannot do without each other. The Stock market at Hong Kong is another spire where the foreign
investment is huge in amount.
Geocentric: The global factors are also very important in terms of meeting the business
requirements of an organization in the long run. The global markets such as the USA and China
are large shareholders in that. China being the Second largest market in the world has invested a
lot in the neighboring countries and is directly linked to the global market system (Terpstra et al.
2012, p.134).
Market Entry
There are three principles which are followed in the process of market entry:
1. Manufacturing in the home country is safer than manufacturing in the overseas base.
Manufacturing in the foreign country is only possible when the organization feels safe
from every perspective to invest in the target country.
2. The currency stability and the security issues are also very important when an
organization like Club Med is trying to invest in China. The Chinese Yuan is monitored
by the state bank of China and thus it needs certainty (Snider and Williams, 2015,
p.1020).
3. Club Med may tie up with certain other companies to gain experience and then think of
entering into the market independently.
4. The countries which have definite plans, strategic objectives and business portfolio for a
certain period of time can certainly invest in a foreign country. In the case of travel and
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tourism, the organization has to have a clear-cut plan and a definite study of the target
country so that no untoward risk can be there.
Recommending market segmentation, targeting and positioning strategies
There can be six strategies that can be followed in this case:
Segmentation
Market segmentation can be achieved by means of three things. First is the selection of the key
areas of growth and movement. As far as Club Med is concerned, the beach resorts need to be
well connected to the different other important areas of activity. If a company is doing business
in more than one area then it has to have different branch managers of each of the sections so
that transparency can be achieved. The segmentation of the different sections under one branch is
also very important and needs to be implemented accordingly (Suzuki, 2013, p.510).
Targeting
The organization has to be very clear as to what are the targeted customers and the groups that it
would focus in the next ten or fifteen years. The consumers are always more influenced by the
suggestions of other travelers and not by any company recommendations. The business parks and
special zones created for business can be more prioritized. As Club Med has always targeted the
family packages, it should also target the youth for that matter by giving the students special
packages and proposals in the new areas (Kotler et al. 2015, p.120). This will actually spread the
information in a better way.
Positioning
A sea beach resort cannot be at a place that is not well connected either by rail or by airlines.
This has to be the first criteria for any kind of progress in the way of making a location globally
popular. The organization also needs to take into consideration the local hubs of business so that
the packages can be better marketed (Hassan and Craft, 2012, p.350).
Analysing the application of different methods to evaluate cost effectiveness of
sales promotion
Sales promotion offers the customers additional benefits with their purchases. The strategy is to
make customers buy more during the promotional offers, thereby increasing sales. Companies
compare the potential sales and profits with a baseline to evaluate the profit margin if no
promotional offers had been made. Sales promotion also increase brand awareness and involve
more customers in the product sales. Club Med, being a major player in the tourism business,
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held various sales promotion strategies in order to increase sales. But along with profitable sales
promotion strategies, Club Med also should be concerned that the promotional events do not go
over budget. They need to maintain the cost-effectiveness of the strategies.
Companies need to evaluate the effectiveness of their sales promotion to draw maximum profit.
It can do so by outlining the sales made during the promotional period and profit generated
(Morrison, 2013 p.73). Comparing this profits with the sales and profits from nonpromotional
sales can help them analyze the situational needs and buying a pattern of the customers. What
organizations need to focus on is their promotional events should draw as more revenue than
money spent. This determines the potential of drawing customers and satisfying individual
needs. This may help them determine the extent of success of the promotional sales (Law et al.
2014, p.747). As Club Med offers holidays for all sections of tourists, its targeting methods must
be able to reach far sections of societies, thus attaining more customer attention.
Another method is brand awareness. Sales promotion not only contributes in increasing sales but
also add to the consumer’s brand awareness at a lower cost. Sales promotion is the most efficient
customer relations method. Companies can analyze that though promotional strategy may not
generate additional profits but should continue additional sales, in the long run, increasing brand
awareness. As more customers are getting familiar with the brand and its advantages,
consequently more is the sales (Rubio et al. 2014, p.292). The main objective of brand
promotion should be increasing sales. The effectiveness can be determined by accounting the
sales before and after the promotional events.
Identifying issues that affect the overall strategy
The promotional strategy followed by the management team of Club Med has some issues
related to it. The failing world economy can put the marketing team at a back foot in the context
of implementing the promotional offerings. Declining market can reduce the people’s interest in
taking holiday breaks (Ditta-Apichai et al, 2013, p.154). In situations as such, any kind of
promotional discounts and deals may not be able to convince customers and visitors in buying
their packages (Djeri et al. 2014, p.231). Moreover, the proposed strategy comprising
promotional discount offers is seen as a deceptive technique to influence customer interests. It
tends to target only specific sections of the potential market, and thus may not gain support from
other sections, which may affect their business objectives. Also, a brand value may take a hit due
to such strategies if not clicked. Club Med’s idea to expanding their business operations may find
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few takers who prefer other major players who are best in their respective services. It should
focus mainly on services which it offers best and enjoys popularity in. Identifying issues that
already or may affect the business promotions is a half task done in maintaining the stability and
effectiveness of business operations (McDonald, 2013, p.138).
Recommending promotional strategy for target audience
Club Med enjoys a wide market in the tourism industry. It boasts of its friendly, upscale
international holiday package service provided to tourists. A proper marketing strategy is crucial
for any tourist business organization for the success of its marketing efforts. Marketing mix
indicates several marketing variables charted out by the marketing team in order to target
specific customers or dedicated market segments (Huang and Sarigöllü, 2014, p.120).
Club Med can consider restructuring its pricing strategy. It should provide the holiday and
vacation packages at affordable rates. The market survey revealed that moderate sections of its
customer base belong to the higher middle class, who prefer its trident resorts and luxury villas
to move away from their work activities for sometimes. This form the perfect destination for
them to de-stress themselves and enjoys a vacation. Club Med can lay more stress on providing a
wide range of excellent services that they enjoy relaxing. So pricing rates of luxury villas and
suites can be somewhat relaxed to attract more customers from this segment. Customers can be
offered destination packages inclusive of spa facilities at a beachside resort so that they feel
lively and enjoy seas (Hanssens et al. 2014, p.536). Package offering various services, such as
travel, transportation, and accommodation, water sports activities, combined with family
discounts can also generate more customers. During the peak season, where most of the resorts
raise their service rates, it can use this opportunity to induct more customers in its business
strategy. Club Med can lower the room rates and that of the other services, compared to the rest.
Tourists and guests shall easily connect with this strategy where customers’ needs have been
taken into consideration. It is a universal truth that customers like to accept services of those who
offer same of higher quality services but at a lower rate (Barrett, and Weinstein, 2015, p.151).
Also providing a wholesome deal at affordable rates reduces the tourist’s burden in making all
arrangements. But with providing the services at affordable rates, Club Med should ensure that it
does not cut down on quality. Quality is the first element in a bouquet of services that concerns a
customer. Customers are mostly attracted to one those who offer high-quality services. As the
targeted segment of potential customers of Club Med is the higher middle-class sections of
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society, who enjoy quality lives themselves, they would prefer the same class and quality of
service that they enjoy at home. They shall feel that management are concerned about them and
their needs and make necessary arrangements so that they are fully satisfied.
Risk assessment of the promotional strategy
Along with providing benefits, the promotional strategy similarly has some inherent
consequences. The above-devised strategy also involves some risk in implementation. Though it
may prove fruitful, if worked, there are some potential risks to it. The strategy to reduce price
rates of the resort services can put the resort business at a potential loss if it is unsuccessful in
drawing customers. If customers do not connect with the objectives of the promotional plan, they
would not prefer to avail such services (Karamustafa et al. 2013, p.258). There is also a
possibility of raising concern among the tourists about the reducing pricing rates. They may
imagine that the management has compromised on the service quality in order to revise price rate
and increase customer intake and thus can draw flak within the potential market (Morritt and
Weinstein, 2012, p. 83). Its competitors can play down on this strategy and try to convince the
economic sections of the market that Club Med is unable to continue with its current business
prospect and unwillingly had to cut costs to sustain itself. Competitors can take advantage of this
by placing themselves about the Club Med in terms of quality and quantity of service. The
proposed strategy also involves the risk of gaining the attention of a small part of the large
potential market.
Conclusion
This report highlights the major complications faced by the organizations in the tourism industry
and how resorts should develop a marketing plan to internationalize themselves. They serve to
international tourists and thus need to take considerations according to geographical propositions
in order to please them. In this Club Med, which is one of the major players in global resort
organizations, also face some issues in expanding their business operations. This report suggests
the ramifications and implications of the promotional offers run by Club Med and suggest
improvements measures that can help to attract more potential customers. The resorts run by
Club Med can learn about customer preferences and restructure its marketing to meet customer
satisfaction.
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