Thomas Cook Tour Operation UK Ltd :: Business and Management Studies

Thomas Cook Tour Operation UK Ltd Introduction Thomas Cook Tour Operation UK Ltd is the third largest travel group operating in the UK travel industry, owning it’s own travel distribution channels, tour operation and airline. The company believes that they have earned their position through consumer recognition for their quality and expertise in providing package holidays. The instability of the market caused by high sensitivity to economic change and the intangible and perishable nature of the products sold, forces companies competing within the travel industry to constantly seek new and imaginative ways to create demand and maintain or strengthen their position. A combination of economic downturn, a lack of consumer confidence, natural disasters and the effects of terrorism have had a major impact on the performance of Thomas Cook Tour Operations. In this report I will analyze the marketing strategies used by the company and discuss the effectiveness in achieving their objectives. Company The tragic events of September 11th 2001 had a devastating affect on industries throughout the world. The travel and tourism industry however was hit the hardest. Increasing fear amongst consumers afraid to fly and a downturn in the world economy caused a drastic decline in the demand for both business and leisure travel causing passenger numbers to plummet. Thomas Cook tour Operations, like it’s competitors experienced high profit losses as a result of falling passenger numbers, added security costs, falls in their share prices and increased insurance premiums in which occurred I the aftermath. Prior to September 11th the travel industry experienced a dynamic growth between 1995 to 2001. During 2001 20.6 million package holidays were sold to the British Consumer, 1 growth of 2.6%. However the deterioration of the industry’s success came immediately after the terrorism attacks. Thomas Cook Tour Operations were as a result forced to develop a new strategy in order to save their rapidly falling profits. In order to develop their new strategy, the company carried out a SWOT analysis. This is a technique that involves identifying a company’s strengths and weaknesses in the business, the opportunities presented by the trading environment and any threats opposing the company. The below information is adapted from the Thomas Cook Tour Operations’ Chief executive Update. Strengths Existing percentage market share Thomas Cook reputation Existing Thomas Cook image and brand recognition High level of awareness within target market Knowledge and experience of market trends Large number of distribution channels Good product variety Weaknesses Holiday Essential brand not well established and relatively low demand for the product. Confusion and lack of identification of other Thomas Cook brands e.g. JMC and holiday essentials. High volume costs High capital expenditure, i.e. marketing expenses, data processing costs and human resources, e.g. staff turnover Over capacity Excessive fixed assets i.