Marketing Recommendation Ryanair

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Marketing Recommendation Ryanair Powered By Docstoc
					TOURISM DEMAND
Current and Future Markets


Mr Sören Hartmann
Board Member
TUI Deutschland GmbH

Porto, 20th April 2005




TUI | Der TUI Konzern |   | Folie 1
                      Agenda

                       Change in product offering
                       Change in demand
                       What will happen next?
                       T.U.I.
                       What has happened in Portugal?




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 2
Change in
product
offering




            e2
New destinations and
low-cost carriers result in excess capacity

Allocations in the overall tourist market have increased above average



            New
                                                Outstanding value for money in new hotels
         destination
                                                 such as in Turkey, Egypt, Bulgaria
              s


                                                Low-cost carriers and local airlines have extended
           Low-cost                              their portfolio of routes, eg Ryanair, Easyjet etc.
            carriers                            They have also modified customers’ booking
                                                 behaviour through price incentives (19 euros, for
                                                 example) and aggressive marketing campaigns


                                     Both developments result in excess capacity:
                                              stiff competition and falling prices .


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005    Page 4
Previous approach to the product mainly via the
operator and travel agencies

                         Old                                                        New
                      Demand                                                       Demand



                        Sales
                                                                                    Sales

                     Operators
                                                                                  Operators
                       Carrier

                    Dest. services
                                                                       Carrier      Dest.      Hotels
                                                                                   services
                        Hotels

                    In the past:                                                 In future:
                   Growth drivers                                   Growth drivers along the entire tourist
                Sales and operator                                                 value
                                                                               chain are possible.
Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005     Page 5
The offering is characterised by excess
capacity

Strong changes in the offering have an effect on the market


      New destinations with an
      excellent hotel portfolio



        Low-cost carriers with
           additional offer                                          Enormous variety of offers
                                                                     Constant price decline

        Many additional market
               players



    Enormous duplication of the
     product over the Internet




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005         Page 6
Change in
demand




            e2
   Customers have a clear idea of their holiday

Customers attach great importance to service and individual offers



                                      Changed customer booking behaviour

                                       More travel experience
                                       More flexible
                                       They exhaust all available distribution
                                        channels before deciding on a holiday
                                       More price-sensitive
                                       Destination has become an exchangeable
                                        currency
                                       “Self-oriented” and want to be addressed
                                        individually.




    Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 8
What will
happen next?
Internet as the most important information tool
The consumer discovers and uses all distribution channels available to
him


                                Brochures of tour operators
                                Travel agencies
                                Travel TV
                                Last minute offers (flyers, mailings)
                                Internet




         Internet as the most important information medium and an
         excellent communication and organisation tool




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 10
Standard products no longer in line with market
requirements
The domain of mediocrity in respect of price, quality and service leads to a
dead end

       Addressing the product to specific target-groups (budget +
        premium are growing steadily)

       Target-group-oriented approach to the customer

       Rethinking traditional price strategies (increased price
        sensitivity of customers)

       Defining new strategic options (budget and premium
        markets will in future have to be more finely structured)




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 11
Two approaches for marketing

The marketing of products will in future be the decisive element


      Marketing via a multitude of providers                        Cooperation with a strong partner

           Several sales channels                                     Strong brand in all distribution
                                                                        channels
           Controlling the allocations and price
            is very difficult                                          Product in association with a
                                                                        strong brand is consciously
                                                                        perceived by the consumer
                                                                       Price clarity via all distribution
                                                                        channels is guaranteed
                                                                       Cost of marketing much lower




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005       Page 12
   The customer would like to get all services from one
   source
Market changes have an effect on customer booking behaviour


                                      Changed customer booking behaviour


                                     Good value for money
                                     Simple payment handling (handling of
                                      all services by one provider)
                                     Recommendation and advice for certain
                                      products (quality products)
                                     Time saving in booking and
                                     Dependability and presence of the tour
                                      operator in the destination (chance of
                                      amendment, guarantee of the booked
                                      service)



   Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 13
A strong partner should cover all sales
channels

In a cooperation with a strong partner, this should:


    have a strong brand familiarity,

    be represented with his strong brands in all sales channels (brochure,
     travel magazine, TV, Internet, etc.),

    have the necessary systems and resources,

    have the appropriate know-how,

    be able to control allocations and

    guarantee standardised pricing of products


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 14
T.U.I.




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 15
The strong brand TUI as orientation tool and
possibility of entering all distribution channels


                                                          Customer




 Brochures                        Travel                            Hotel             TV channel
                                  agencies                          Portal/Internet


    with a brand familiarity of over 90 percent, TUI has the best chances of
  firing the customer with enthusiasm for itself and for the service provider
                                      (hotel)


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005        Page 16
The TUI brand is present in all distribution
channels

                 TUI offers the customer:
                         good value for money,
                         all products from one source,
                         a simple handling system (payment handling),
                         professionalism and expertise,
                         trust and service
                         and quality along the entire value creation
                         chain



          A well-known visual aid to orientation


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 17
What has happened in Portugal?




                                 e2
  Booking situation Summer 2005
  Portugal records a strong increase with TUI
   Percentage development of S 05 compared to S 04 as of 01.04.2005
                                                 Turnover                                          Quantity

               Balearics                                8,7%                                                            29,1%

        Canary Islands                           0,0%                                                  4,4%

       Spain Mainland                -1,8%                                                                     16,1%

                Portugal                                            22,9%                                         19,9%

                  Greece                               6,9%                                            4,3%

                  Turkey                                  10,5%                                             11,1%

                    Egypt            -2,0%                                      -12,1%

                  Tunisia                                      17,5%                                                22,7%

             Dom. Rep. -10,3%                                                         -6,9%

Country destinations * -11,1%                                                       -9,5%

                Others**                                 9,4%                         -5,9%
   * Germany, Austria, Switzerland, France, BeNeLux, Scandinavia, UK, Ireland, Iceland, Croatia/Slov./Montenegro, Eastern Europe res excl. Bulg./Rumania
   **Cyprus, Malta, Morocco, Orient, Bulgaria, Rumania, other long-haul destinations
   Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005              Page 19
Does Portugal approach the right target
groups? (1)

                          Booking behaviour 1999/2000 to 2003/2004
                                (Source: Tourist/Travel Scope)

             Type of holiday
               Decline of seaside holidays from 55 % to 42 %
               Increase in study trips from 4% to 7%

             Booking periods
               Decline in bookings made more than 4 months in advance from
                 28% to 15%
               Increase in bookings made 1-4 months in advance from 39% to
                 53%

             Internet
                Increase in its use to obtain information from 13% to 25%
                Increase in bookings made via Internet from 4% to 22%


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 20
Does Portugal approach the right target
groups? (2)

                          Booking behaviour 1999/2000 to 2003/2004
                                (Source: Tourist/Travel Scope)

             Family bookings
               Decline of the family bookings from 18% to 13%
               Decline of bookings with 2 children from 31% to 29%
               Decline of bookings with more than 2 children from 7% to 0%
             Age groups
               Decline of 20 – 34 year-olds from 23% to 18%
               Decline of 35 – 49 year-olds from 25% to 20%
               Increase in the 50 – 64 year-olds from 28% to 34%
               Increase in the group over 64 years from 14% to 18%
             Catering
               Constant all-inclusive offer of 2%
               Increase in the all-inclusive offer in the overall market of 26% per
                 annum


Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 21
Emphasize clearly the added value and
advantages
Modified booking behaviour demands target group oriented approach



                                            Through optimal communication and marketing activities,
       Communicatio                          Portugal should emphasise the added value and advantages
       n + Marketing                         of the country
                                            A low price is no longer the main argument for the holiday
                                             decision compared with other destinations
                                            Offer target-group specific products
         Target group                       Emphasize the added value and advantanges of the
          approach                           hotel
                                            Offer the right customer through the right channel with a
                                             suitable product to a reasonable price

                                            Hotelier should decide on the right partner
       Strong partner
                                            Standardised use of all distribution channels if possible




Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005   Page 22
Let‘s manage the new challenges together

      Let„s take on the tasks – as strong partners – and progress together!




                                                          Portugal



                                                                       TUI
                                                 Hotels             Deutschland




                                           Strong partners

Mr. Hartmann, Board Member TUI Deutschland, Porto 20st April 2005        Page 23
Thank you very much!

				
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