Contiki Tours : Marketing Strategy Analysis

Contiki Tours is an organisation that uses packaged holidays to a variety of local and international locations. Their targeted market is restricted by age. Clients need to be between 18 and 35 years of ages. The analysis will focus on Contiki * s Australian market for global vacations. Contiki have embraced a concentrated marketing strategy in determining market sections. This suggests that they have actually elected to focus their marketing efforts on gaining a high share of one specific section of the market (i.

e. 18-35 year olds). The advantage of such a strategy is that it enables expertise which might produce economies in production, distribution and promotion. However, it does entail some threats in that market needs can alter or rivals may get in the sector. The risks and benefits of this technique will be taken a look at more carefully in the analysis of the marketing mix. Product In order to evaluate the efficiency of Contiki's marketing strategy it is necessary to comprehend the nature of the product used by the organisation in regards to the benefits that it offers.

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Broadly, it is a service item (eg. flight, bus journey, food preparation) although aspects of the product are physical (eg. food, tee shirts).

It is a specialty product given that it meets a specialised need and consumers are willing to spend quite some time searching for and evaluating. It is also purchased infrequently. It would also be considered a high involvement product due to the relatively high risks of purchase. The notion of purchase risk will be explored in more detail in an analysis of consumer behaviour.

Price The nature of the product, characteristics of the target market, and consumer behaviour each have important implications for pricing. It should be noted that the price paid for the product by the consumer involves more than the nominal price (i.e. the 'price tag'). As well as the money paid for the product, consumers endure time costs and must expend behavioural and cognitive effort. Cognitive effort may involve the customer dealing with some of the risks of purchase (Ross, 1984). There are a number of implications of this analysis for Contiki. Firstly, the organisation can manage the price that consumers pay by minimising the time, behavioural and cognitive effort that is used purchasing the product.

By decreasing the costs to the consumer, Contiki is able to increase the perceived value of their product to consumers. Over-the-phone or internet information and booking services would decrease the time taken in actually purchasing the product, and therefore the cost of the product to the consumer. Also, convenient agent locations would minimise the behavioural effort for consumers. Contiki attempt to coordinate with a wide range of travel agencies who are educated by Contiki sales staff on product attributes (the distribution channel and its implications for pricing with be covered more thoroughly in a later section of this analysis). It should be recognised, however, that many consumers derive utility from extensive cognitive involvement in the purchase process.

For example, some customers may enjoy discussing at length with consultants, their itinerary and travel options. To the extent that this occurs, friendly and knowledgeable travel consultants should be an integral part of Contiki's product offering. In order to achieve this, promotion (i.e. personal selling) to the distribution channel should be emphasised. From this discussion it is evident that the interaction between consultant and customer is a key aspect of the value delivery sequence. Increasing perceived value involves managing the people or participants in the consumption process (Berry, 1980; Booms & Bitner, 1981).