Marketing and Management Report: Strategies of Contiki Tours and TTC

This report provides a comprehensive analysis of Contiki Tours' marketing and management strategies, focusing on the application of the marketing concept, situational influences on consumer behavior, and the components of their service products. It begins with an organizational background of Contiki Tours, tracing its evolution and acquisition by The Travel Corporation (TTC). The report then delves into the three core concepts of marketing: production, selling, and marketing, arguing for the importance of the marketing concept in satisfying customer needs and achieving business goals. It explores how TTC leverages various strategies, including packaging, branding, pricing, and advertising, to influence customer purchase decisions, with specific examples from Contiki and Trafalgar. Furthermore, the report examines the product components of Contiki Tours, highlighting its service-based offerings, market segmentation, and pricing strategies. The analysis considers how consumers evaluate product quality and value, including situational factors influencing their purchasing behavior. Overall, the report offers valuable insights into the marketing practices of a successful tour company in a competitive market.

Running head: MARKETING AND MANAGEMENT
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Marketing and Management
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Institution:

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Organizational background
Contiki Tours started its operations in 1962 as Tiki Tours. John Anderson, a New
Zealander, founded the company after having arrived in London and had a desire to see Europe
improve economically. Without much money, Anderson formulated a plan which would enable
him to see Europe without incurring charges, and in the company of other people. He started off
by putting a deposit on a minibus, identified a group of people he would travel with, and
embarked on a 12 weeks trip to explore Europe. In the process, Anderson was able to interact
with his fellow travelers, reduce the cost of sightseeing, deal with some challenges, and more
importantly start a tour company which later grew and became one of the world’s most reputable
company. Anderson’s initial idea was to develop Contiki Tours in a manner would be appealing
to travelers ranging from 19-29 years of age. After sometime, however, he revisited the idea and
extended the age limit to include travelers between the ages of 18-35 years. According to
Anderson’s autobiography, the company experienced some marketing challenges of enhancing
revenue, building the business value, and reducing costs. At the moment, the admiration of
products offered by Contiki tours was growing, and for this reason, The Travel Corporation
(TTC) developed an interest in the company and subsequently purchased it.
Introduction
Currently, the family-owned company (TTC) is celebrating 90 years of offering
sustainable and long-term multi-cultural tourism. And, the company is free from debts and other
challenges that hinder the smooth running and growth of public organizations. Their multi-

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cultural brand offers a platform for the customers to choose from approximately 30 distinct
brands in different market segments. The brands offered by the company include holiday
packages, guided tours, river cruises, and luxury hotels. The company stretches its services to 70
nations across five continents, has 10,000 employees, and serves 2 million customers
annually.According to their website, TTC’s philosophy aims to enhance travelers’ experiences
by offering exceptional services that are tailored to meet the expectations of customers. Also, the
company has set clear values that aim to establish long-lasting relationships with the customers,
through the delivery of quality and consistent service, value, and experience.
Question 1
When an organization decides to market its products or services, it has to follow three
distinct concepts which include production concept, selling concept, and marketing concept. The
consumers select the products or services they need based on the product quality and ability to
satisfy their needs. The Travel Corporation, therefore, should strive to communicate the best-
perceived values which will make the customers consider and select the services offered by the
company. Making sales requires TTC to approach the market using three concepts as stated
above. First, a service that may not satisfy the customers well but the price is attractive. In this
case, the customer will make the purchase decision based on price. This is the production
concept. Second, the company may approach the market with a service that may not give the
required satisfaction. However, the company will repeatedly overstate the benefits of the service,
and the customers will respond appropriately (Cantallops, & Salvi, 2014). This is the selling
concept. Third, TTC may approach the market with a service that is will best satisfy the needs of

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the customers and the seller. This is the marketing concept. The thinkers of the business world
argue that the marketing concept is a truism of business. It acts as the foundation of the
marketing concept. Organizations that offer the best satisfaction to their customers are also in a
position to fulfill their own needs. The marketing concept aims to deal with the needs of the
customers rather than the needs of the services or products (Perreault Jr, Cannon, & McCarthy,
2013). This increases the acceptability of the products offered by TTC. When TTC can offer
services that meet the expectations of the customers, the expenses incurred in the process of
promotion are reduced. Also, the chances that TTC will become a sick unit are significantly
reduced due to the consistent patronage of clients.
Evidently, the marketing concept demands a coordinated and integrated approach to
marketing. Harmonizing the business activities ensures that there is efficiency in the marketing
operations and economy. TTC can compare and evaluate the impacts of different sales territories
and products. By checking on the flows of exchange, interacting activities, and institutions, the
system approach enables a logical analysis of possible marketing challenges along with
appropriate solutions (Godey, Pederzoli, Aiello, Donvito, Chan &Weitz, 2012). The marketing
concept offers both a philosophical and strategic value. The marketing concept helps the TTC
management to direct the company’s efforts towards the wider and long-term goals which may
include the growth and stability of the company. A sustained and positive interaction with the
clients becomes possible. TTC can respond appropriately to environmental changes if it is ready
to pursue the marketing concept. A good understanding of the different variables and the
complex interplay associated with the variables makes it possible for the organization to identify

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the impending changes and make the necessary preparations. TTC, therefore, can deal with the
prevailing pressures of environmental changes and competition.
It is worth noting, however, that the marketing concept faces some limitations. First, it
does not consider the greater social scope of marketing. The concept solely focuses on fulfilling
the needs of the customers and disregards other stakeholders such as investors, employees,
suppliers, the public, and the state. Consequently,the marketing concept may hinder the proper
operations of managers. For instance, the manager may engage in activities that are likely to a
pose danger to the general population such as polluting the air and environment (Guo, & He,
2012). To interact positively and improve the image of the company, TTC management should
be willing to put into consideration the well-being of various groups, not the customers, in the
decision-making of marketing (Tadajewski & Jones, 2012).For tour companies, in this case,
TTC, taking part in sustainability makes great sense; both in getting more bookings and
regarding ethics. If TTC is ready to promote environmental conservation, the travelers will be
willing make more bookings with the company since they are ensured that their destinations will
not harm them.
Question 2
Nowadays, selling a product or service has become difficult due to the high competition
in the market. Every business is trying hard to attract the customers using different strategies. To
sell a product or service, businesses need to come up with strategies which relate to packaging,
brand, price, and advertising (Gordon, 2013). After taking analyzing the Contiki and Trafalgar
websites keenly, it was evident that TTC developed its products to cater for the different market

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needs. TTC has adopted the key approaches that make the process of marketing easy and
effective. This section will look at these approaches and revisit the situational factors employed
by TTC to influence the purchase behaviors of the customers. Situational influences are
impermanent factors that impact the behaviors of customers.
Trafalgar has come up with a new slogan, “rediscovering the romance of travel.” This
slogan is likely to capture the emotion and essence of traveling. Indeed, some scholars argue that
the emotions state of customers might have an impact on the purchase decision-making process.
Trafalgar also offers customers audio headsets to keep them entertained on smaller guided tours.
This also has an impact on the emotional situation of the customers and eventually affects their
decision making process. Another product offered by Trafalgar is the “Be My Guest Product”.
This product suits the clients who are more interested in an intimate travel experience. This
product offers the experience where customers are given a family treatment. In other words, the
customers are welcomed into the houses of the local people, offered home-cooked meals. This
type of informal encounter impacts the decision-making process of the customers who love
meeting new people, tasting meals prepared by the locals, and sharing meals. In addition to this,
Trafalgar has come up with family-focused itineraries. This product will target the student
customers since the tours are timed to happen during the school summer vacations. This product
is designed to satisfy the needs of the family clients so that they can travel together.
Taking a look at Contiki, the company has perfected the travel experiences for 18-35
years old’s. This means that the young, wild and free can enjoy trips spanning six
continents.Contiki communicates to its customers in many different ways, and the products

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offered by the company are super clear. By doing so, the company can influence the purchase
decisions of its customers. Travel marketing requires strategy and time, and this is what Contiki
has been able to achieve over the years. Contiki’s website is one of the major marketing tools
that have attracted customers. The site is content-rich, user-friendly and appealing to the users
who are comprised of individuals between the ages of 18-35 years. Moreover, the site isregularly
updated to keep it relevant and updated. The company also capitalizes on the micro-moments.
These are the moments when a person decides to do something. For instance, the company has
introduced summer tours to cater for the school going students.
The marketing strategy used by Contiki is concentrated on a particular section of the
market (i.e., 18-35 years old). This type of strategy allows the company to specialize which may
lead to economies in distribution, promotion, and production (Lin & Huang, 2012). It is also
important to note that the company offers service products such as flight, bus trip, food
preparation and much more. The prices offered by Contiki have been designed to cater for the
different market segments. By offering affordable costs for their products, Contiki can achieve
increased value for its products. Internet information, booking, and over-the-phone services are
some of the strategies used to reduce the time taken to buy a product and eventually reach a
particular market segment. Contiki also recognizes that some customers enjoy having discussions
with consultants, travel options, and their itinerary (Mauri&Minazzi, 2013). Knowledgeable and
friendly travel consultants are an integral part of the company’s product offering. The interaction
between the travel agents and the customers is the major component of the value delivery
sequence.

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Question 3
Product components entail all those units that help make up a product. The components
include goods, services, ideas, experience, people, and place. A study of Contiki Tours shows
that it is a firm that offers packaged vacations to dozens of both local and international
destinations whereby their market is bound by age whereby clients are between 18-35 years old.
Largely, the firm is a service product, offering services such as flight, meal preparation, and bus
trip. The firm is a specialty product with the fact that customers are willing to spend a wide range
of looking for and evaluating their offers. Contiki is a high involvement product firm given the
high risks of purchase.
Consumers use variousvariables in determining the quality of a given product. Quality
varies depending on the user in question (Maity, &Dass, 2014). General, what itdeemed to be of
value to one product may appear to be of little quality to another consumer. Customers have
different ways of evaluating product quality and value. Some view a product’s price as a
powerful indicator of a product quality. The various ways that customers use to evaluate the
quality of a product include physical cues such as taste, smell or even size, place of origin of the
product, the distribution channel, price of the goods and services and even the mode of
packaging.
First time-zone is a zone that involves consumer’s purchase behavior. In the first zone,
customers are searching, estimating and selecting products that would meet their needs. There is
recognition of unmet need; they look for information, valuing the available alternatives,
ascertaining product qualities, valuing the risks associated as well as selecting the product.

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Before selecting the product, consumers always look for quality and value in a product,
and also the satisfactory outcome of the product. They undertake an analysis of cost, risks, and
benefits associated with the product. The costs may involve money, time and effort.
Reviewing the products offered by Contiki Tours, many customers may value the value
and quality of the services and products depending on how comfortable they would feel during
the tour. The services offered involve traveling (John, & Susan, 2015). The comfort of traveling
using trains and even planes would make it more comfortable, making the consumer cross
evaluate and reflect back (third time-zone).
In valuing the quality of food provided, taste, aroma and even how regular the food is
presented in a day may be deemed as a means of measuring its value. Contiki Tours offers milk
at room temperature, coffee, and tea, cereals as well as toast with a possibility of having sausages
and eggs. Dinner is taken at the pleasure of the customers as most of the time they would be
traveling. Dinner is cooked in campsites where the customers may get involved. By involving the
clients in preparation of meals and having them prepared in a different environment may be
deemed by many as good and may reflect in evaluating it once again.
ContikiTours offers accommodation, and its quality and value may be measured
regarding price, security as well as the hospitality. With the housing price being included in the
total price of the tour, there is an assurance of getting accommodation which includes budget
hotels, hostels, and Contiki Owned Campsites depending on the trip. All this information is
provided onContiki’s website, and the customer would likely measure its quality even before
planning for the trip. This would, later on, influence their post-purchase behavior.

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Among other services offered include partying. The Contiki Tours have the reputation for
having the best parties. Customers may have a different taste in the way the measure if these
parties do suite them. Depending on customers, they may try to consider the extra activities
involved such as dancing, karaoke, as well some games being available. Others may deem loud
music not being favorable to them thus offsetting party. The atmosphere in which the party is set
may also be of significance to customers. All this ways of evaluating the value may lead to some
evaluating and reflecting back on the events while others may not be satisfied with it.
Question 4
Satisfaction is the measure of the way products and services supplied by a firm meet the
needs of customers. A satisfied customer will always refer a particular company’s product or the
firm itself to their family and friends, creating a positive word of mouth, attracting new
customers and lowering the cost of advertising (Vazifehdoost, Rahnama, &Mousavian, 2014).
When a customer is highly satisfied, they are unlikely to switch to other products.
Transactional Satisfaction and its Impact on Future Decision Making of Customers
Transactional satisfaction refers to when a customer has only one encounter with an
organization (Ganiyu, Uche, &Adeoti, 2012). Once the product has been delivered, the
customers then reflects on their pre-purchase expectation and examine what has been delivered
to them. If they receive as per their expectations, then they belong to a neutral zone of the firm
offering the service. If what the customer has received is much more than what they anticipated,
they are considered satisfied and maybe would keep using the products of the firm. If the

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consumers receive less of what they anticipated, they are dissatisfied and for that reason would
try out alternatives from other firms to meet their satisfaction. This degree of satisfaction or
dissatisfaction and if the customer would prefer to use the products or services of the company
varies with customers, depending on their pre-purchase anticipation. Satisfied customers would
form a relationship with TTC hence influencing their future decision-making.
Cumulative Satisfaction and its Impact on Future Decision Making of Customers
The overall experience is based on a chain of positive encounters that brings about a
cumulative sense of satisfaction. The value that is considered at the pre-purchase is short-lived
but can transform to a fulfillment in the post-purchase level leading to repurchases enhancing
customer loyalty. Cumulative satisfaction is viewed as a mental state that leads to a deep sense of
confidence towards a product or service (Jahanshani, Hajizadeh, Mirdhamadi, Nawaser,
&Khaksar, 2014). The expectation of the customer is embedded in their mind, hence, do not
have a second thought about purchasing a product or service. For example, a customer who has
been using TTC in their expeditions in the past two years and has gained its confidence through
experience, he will pick out the company, among other tour companies even in the future.
Customers who gain trust with TTC mean that they are comfortable that the firm will deliver to
their expectations. Mostly, cumulative satisfaction is a one client’s evaluationhence TTC would
not much rely on a single customer. The trust on the firm leads the customer to become loyal and
hence would influence their future involvement with the firm.
Collective Satisfaction and its Impact on Future Decision Making of Customers

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Collective satisfaction refers to the cumulative satisfaction of all customers. It is based on
a large number of customers who find the products of a company satisfying, have gained trust in
the products as well as becoming loyal to the company such that they would and will be willing
to use the company’s products for a long time in the future. Collective satisfaction is considered
as the basis of how a company manufactures and maintain their brand (Paiola, Saccani,
Perona,&Gebauer, 2013). Once a firm maintains a collective satisfaction with its customers, it is
bound to be successful, and developing other products would insinuate its customers to try them
out hence building their reputation. A large number of customers’ shares information with their
friends thus attracts a large number of users. The future consumer decision is influenced by that
other customers would be easily swayed on choosing a particular product as first-time users due
to recommendations from many other users of the same product.
Managing Customer Reviews
Customer reviews refer to a review made by a customer regarding the purchase of a
product or service. They form part of a customer’s feedback on online shopping sites. TTC can
manage customers effectively by tracking the reviews in that they know when and where the
reviews appear. In case of a collective satisfaction, the firm may consider creating their business
page so that they claim whatever the site contains (Wirtz, Den Ambtman, Bloemer, Horváth,
Ramaseshan, Van De Klundert, &Kandampully, 2013). This improves the listing of The Tour
Corporation in search rankings, allowing you to have individual access to tools of tracking and
analyzing the reviews sent, and that opportunity of communicating with those who have
reviewed your firm. To control the quality of the responses to the reviews to maintain their

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clients, TTC may choose one management to be responding to the reviews, suggesting to answer
to positive compliments rather than the negative ones (Sashi, 2012). This shows appreciation to
the customers. Having a large number of customers in the long-run, the firm would do all their
best to maintain them. Managing negative reviews would be one of the options of retaining your
customers. The reviews can be turned to the advantage of the firm in some instances.
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