International Marketing Plan – Marketing and Promotional Strategies Assignment Help
Club Med, an award winning tour operator, has attained an outstanding upscale move to catch the attention and keep hold of a challenging base of family customers from the entire world.
In recent years, Club Med keeps on developing and spreading out its business into new markets and currently considering China as the center of attention. In 2010 and 2013, Club Med has opened its new resorts named as Yabuli Resort and Guilin Resort respectively (Press Release, 2010). And soon, the group will be opening another resort on Dong’Ao Island. By the year 2015, Club Med focuses on operating 5 resorts in China plus introducing its culture and philosophy to over 200,000 Chinese customer. Besides, in terms of number of clients all over the world, China could turn out to be the second largest market of Club Med. According to the information provided by Fosun International Limited (2014), in 2012, China tourists visiting resorts worldwide grew by 30% and revenue of Club Med in China increased by 33% (Appendix A).
This marketing report elucidates how the existing practices for international marketing in order for the group to continue to follow its successful strategy of upscale transition and internationalization can be enhanced.
- Company Profile
Club Méditerranée, commonly known as Club Med, came into being in 1950. Water polo Olympic medalist Gérard Blitz and French businessman Gilbert Trigano were its founders. Initially an association, increasing number of memberships twisted it into an actual business in 1954 with the support of Gilber Trigano. It went public on the Paris Stock Exchange and Club Med, Inc. turned out to be the United States based subsidiary of Club Mediterranee, led by Serge (son of Trigano).
Club Med owns R and R operations in around 40 countries in North and South America, Europe, and the Asia/Pacific region. It manages more than 65 all-inclusive resorts as well as a cruise ship business (Club Med 2014). Different locations of Club Med offer diverse resort styles that focus on culture, sports, SPA, and families. Overall, it hosts over 1 million visitors yearly.
According to the Club Med Annual Report (2013), the strategic positioning permitted the business to live through the double crisis of 2013 that includes both economic as well as geopolitical. That crisis influenced Club Med markets in the Europe-Africa region. In addition, the strategic positioning also facilitated to maintain their operational prosperity, with operating income village adding up €55 million and earning before interest and taxes (EBIT) constant at €32 million, unaffected in the preceding three years. On the contrary, the net loss of €9 million shows the influence of non-recurring items chiefly associated with the actions taken as a reaction of market decline in the Europe-Africa region.
- Situation Analysis
A situational analysis includes a comprehensive exploration of internal as well as external factors influencing a business (Kotler & Armstrong, 2010). To analyze both internal and external factors which are affecting Club Med, SWOT analysis and marketing environment analysis have been carried out.
- SWOT Analysis
To identify the strengths, weaknesses, opportunities and threats for Club Med, a SWOT matrix is used.
· Strong position in the all-inclusive resort industry worldwide.
· Well-developed website along with mobiles apps.
· Modern free travel mobile app won the 2013 About.com Readers’ Choice Award for Best Hotel App.
· Website generating 20% of sales
· Because of the other financial challenges Club Med has faced in the past, the company has not been able to convert to a more individual pricing method.
· All inclusive formula limits discounting
· Inability to manage a global footprint.
· Growth potential by having resort operations in China.
· Expansion in other international settings
· Huge potential of products/services in China
· Attraction of fitness market.
· Natural disasters
· New taxes imposed by the government
· Economic crisis affects seriously on tourism
· Market share down
- Marketing Environment Analysis
A market environment analysis is an examination of both the external and internal environments associated to a firm (David, 2010). For Club Med, both micro and macro environmental analysis is carried out and discussed below.
- Micro Environmental Analysis
Factors in the microenvironment have an effect on the business directly; however they can be controlled by the firm to a specific level (Kotler & Keller, 2011).
- Competitive Analysis – Porter’s Five Forces Model
As said by David and Cheng (2013), in a given industry, the type of competitiveness can be examined as a combination of the five forces. Considering Club Med, these five forces are elucidated below:
- Rivalry Among Competing Firms
Currently, the key competitors of Club Med are Kerzner International Holdings Limited, Sandals Resort International Limited, and Walt Disney Parks and Resorts. Kerzner International is also entering in the China market and looking forward to develop an advanced Atlantis resort along the Haitang Bay National Coast. Its planning is in progress and construction will be completed by 2016. On the other hand, Shanghai Disney Resort, the first Disney resort in Mainland China, will be opened in spring 2016. In contrast, none of these competitors have plans to open any ski resort like Club Med Yabuli.
- Potential Entry of New Competitors
Entry barriers are not too low. Large capital costs are required and there are some international firms which could be considered as potential competitors of Club Med. Furthermore, according to China Tourism Research Institute, China had 61.90 million outbound visitors in the first half of 2015, an increase of 12.1% compared with the same period in 2014. Thus, such increase in the number of visitors could attract many other international firms.
- Potential Development of Substitute Products
The resort industry of China is quite high. And there are many which are doing good business. However, considering different innovative aspects of Club Med, it can be analyzed that potential development of substitutes is low to medium.
- Bargaining Power of Suppliers
There are several price-competitive airlines. There are lots of companies which provide economical food. Plus, because of its entertaining ambiance, there is strong demand to work for Club Med at low wages. There is minimal threat of forward integration by suppliers.
- Bargaining Power of Consumers
If a consumer goes for self-package, price of similar vacation is 50 to 100 percent higher. And high perceived risk of wrong vacation choice.
- Macro Environmental Analysis
- PEST Analysis
Political climate strongly affects hotel and resort industry. In particular, as Club Med operates in China and plans to make China as its 2nd largest market, China’s government regulations will be highly put into consideration. Besides, tax regulations and laws influencing competition are also imperative determinants for its success, thus, marketing strategies also have to consider governments to keep good collaboration relations with them.
For Club Med, economy’s health is vital as demand relies chiefly on disposable income of consumers. Business cycles can affect the amount of accessible free-time/leisure time people have and hence influence the audience rates. In addition, rate of inflation and savings are important determinants for resort operators.
The tourism business is strongly influenced by changes in the lifestyles of consumers. And, the increase of the social media affects this business. Club Med considers social media as a powerful tool as it gives opportunity to directly link with customers and to develop stronger associations with them. Demographic factors are also an imperative determinant seeing that there is a demographic shift in most urbanized countries.
Club Med is fully aware of new technologies and incorporates them so as to stay modern and be striking to its consumers. 20% of the sales of Club Med come from its website. Besides, for smart-phone users, Club Med has its well-developed mobile apps too. Through the growing acceptance and usage of digital technology, customers are targeted more directly via customizing marketing messages.
- Market and Competitor Analysis
In China, the continual growth of the hotel and resort industry is foreseeable (IBISWorld, 2015). Enhanced infrastructure, Chinese economy’s considerable escalation, rising prosperity amongst the native inhabitants and the expected propagation of economical carriers will stimulate the development of national travel and definitely the expansion of the hotel and resort business. In addition, an increase of the international tourism and consequently demand for hotels and resorts are also expected to keep on given China’s aim to become one of the chief international tourist destinations of the world.
Following are the key competitors of Club Med (Hoovers Inc.):
- Kerzner International Holdings Limited
- Sandals Resort International Limited
- Walt Disney Parks and Resorts
With Kerzner International, Fosun International the chief non-state owned enterprise in China has come into a contract for a novel and advanced Atlantis resort alongside the Haitang Bay National Coast. In China, it will be the first Atlantis resort and the third Atlantis internationally. Its construction will be completed in 2016 (Breaking Travel News, October 16, 2013)
Sandals Resorts operates nearly twelve resorts in the Caribbean. The all-inclusive resorts focus couples and offer upscale amenities like gourmet dining, spa services, etc. For visitors who plan their honeymoon at the resort, it also offers free wedding packages. Also, the Sandals resort owns four Beaches resorts for families.
The first Disney Theme Park in Mainland China, Shanghai Disneyland, comprises two hotels, dining and amusement area. Shanghai Disney Resort, the first Disney resort in Mainland China, will commence magical Disney storytelling and experiences planned particularly for Chinese visitors. The resort will be opened in Spring 2016.
- Club Med Current International Marketing Practice
In 2013, Club Med initiates a new worldwide campaign surrounding “happiness” (Club Med’s Annual Report, 2014). The campaign was introduced in 47 countries worldwide and in 22 languages. This breakthrough campaign emphasizes the exclusivity of Club Med vacations via a contemporary, amazing and participative tactic that distinguishes the brand from the market. The new tagline was – “And What’s Your Idea of Happiness?”
In the United States, this new campaign was launched via multiphase 360 degree disruptive approach by means of advertising outlets comprising digital displays in airports, travel agencies, magazine advertisements, events in affiliation with Shape, Self and Family Fun magazines. Considering its new tagline, Club Med invited guests and admirers to disclose their ideas of happiness. Besides, the guests also shared their ideas on the happiness’ walls www.IdeaOfHappiness.com. Moreover, such activities should be kept on to engage more and more customers.
The campaign also spreads on social media. With the launch of a pricing calendar, Club Med adds another new marketing and digital innovation to their ever-expanding portfolio.
After the launching of its campaign, Club Med swiftly expedited actions to maintain its industry-pioneering connected marketing strategy which boosted the mobile platform traffic by 300% percent and tablet-generated returns above 37% as compared to its previous year.
- Recommended Marketing Segmentation
Segmentation refers to the process of dividing the market of consumers into groups based on one or more shared internal or external characteristics (Kotler et al., 1998). Club Med market can be segmented on the basis of: demographics, psychographics, behavior, and geographical location. Like segmentation can be done on the basis of destination (among 5 geographical areas for beach resort and 2 areas for Ski Resorts), desired comfort level (corresponding to the number of tridents), children, teenagers, couple, or family holidays, and also on the basis of product experience the customers wish to share during upscale holidays like nature, culture discovery, spa & well-being, sports, high-level skiing, and so forth.
- Targeting Strategy
After the segmentation process is complete, the next step is targeting, which involves the tourism marketer’s choosing a segment or segments to which to communicate the promotional message. The chosen segments are ‘children (aged between 4-12 years)’ as well as ‘teenagers (aged between 13-19 years)’. And the focused geographical location is ‘China’, since Club Med already has 2 resorts in China and focuses to open 3 more resorts in China by 2016. Besides, we are indirectly targeting families because according to a research study (Beder, 1998), almost all children are able to convince their parents.
There are different targeting strategies that a tourism marketer can implement. Our targeting strategy is differentiated targeting strategy i.e. designing more than one promotional message, with each communicating different benefits. We will design two different promotional messages for children and teenagers.
- Positioning Strategy
As said by the Kauffmann Foundation, how one distinguishes himself from the competition comes under the scope of positioning strategy. Our positioning strategy will be to develop the image of Club Med in the minds of target segments as a place where they will find lots of happiness, fun, entertainment, and discover new cultures and many interesting aspects under one umbrella. Besides, according to the National Survey conducted by Common Sense Media (2012), these chief elements, most prominently fun and entertainment, attract the targeted segment a lot.
- Positioning Statement
“Club Med – A Symbol of Happiness, Fun, Entertainment & Discovery!”
- Recommended Promotional Strategy with Supporting Marketing Mix
Promotional strategies are used in marketing to determine the best ways to get the product or service to a particular market (Kotler & Armstrong, 2010). There are diverse promotional tools which can be used and to reach the target market of Club Med, the promotional tool which will be exploiting is advertising via television commercial (TVC). Television is a powerful advertising medium because it creates impact through sight, sound and movement.
Children aged between 4-12 years like cartoons. So, ad for this target market will be shown on the following TV channels:
- Cartoon Network (Worldwide)
- Nickelodeon (Worldwide)
- CCTV-14 (China)
Teenagers aged between 13-19 years like music, animated movies, and sports. So, ad for this target market will be shown on a music channel like:
- Star Sports
In addition, teenagers also like going to cinemas (Australian Bureau of Statistics, 2010), so it is intended that the ad will also be shown on cinemas while movie break.
- Supporting Marketing Mix Outlined for Proposed Market
Club Med owns R and R operations and manages all-inclusive resorts as well as a cruise ship business (Club Med 2014). Different locations of Club Med offer diverse resort styles that focus on culture, sports, SPA, and families. The group manages everything in a way that wooed social interaction between guests.
Price is the value that a company receives in return of the value it creates for the customers. Club Med targets elite class people that is the why the prices are high. Furthermore, due to the other financial challenges, Club Med faced in the past, it has not been able to adapt to a more individual pricing method.
A smartly crafted promotion mix will be used to position the brand and build its image as of premium quality. The promotional tool which will be exploiting is advertising via television commercial (TVC). Besides, the following tagline shall be used and displayed on the TV advertisements to reinforce the theme of Club Med:
- Club Med – A Symbol of Happiness, Fun, Entertainment & Discovery!
Club Med owns operations in around 40 countries in North and South America, Europe, and the Asia/Pacific region, and manages more than 65 all-inclusive resorts as well as a cruise ship business. Our target geographical location is China where Yabuli Resort and Guilin Resort are operating.
- Risk Assessment of the Implementation of Promotional Strategy
During different levels of campaign development, risk assessment is an area that is significant to be considered. Consideration of risks requires Club Med to ponder what could be the unfavorable and unpleasant outcome as a result of the TV advertising, or what could be the aspects that could restrict the success of Club Med’s promotional strategy. Besides, an example of advertising risks might be innovative and inventive materials possibly will not be comprehended by the children. Thus, in order to carry out a risk assessment, SWOT analysis will play a great role.
Club Med, recognized for its wide-reaching resorts, sumptuousness villas & chalets, and all-inclusive holidays. Club Med keeps on developing and spreading out its business into new markets and currently considering China as the center of attention. This marketing report explains how the presented practices for international marketing in order for the group to continue to follow its successful strategy of upscale transition and internationalization can be enhanced. Situational analysis have been carried out in which SWOT, macro and micro environmental analysis, market and competitor analysis give significant information. Considering the target market, children and teenagers, the promotional tool which will be exploiting is advertising via television commercial (TVC).
- Australian Bureau of Statistics 2009, Attendance at Selected Cultural Venues and Events, Australia.
- Beder, S 1998, ‘A Community View’, Caring for Children in the Media Age, Papers from a national conference, edited by John Squires and Tracy Newlands, New College Institute for Values Research, pp. 101-111.
- Breaking Travel News 2013, Kerzner to launch new Atlantis resort in China.
- Common Sense Media 2012, A National Survey of Teachers About the Role of Entertainment Media in Students’ Academic and Social Develop, viewed 30 October 2015, <http://static1.1.sqspcdn.com/static/f/1083077/20832535/1351788309210/CSM_TeacherSurveyReport2012_FINAL.pdf?token=LDYfHKpuwflf5lkuQJVJ%2B7EeAqU%3D>
- Club Med 2013, Corporate Annual Report, viewed 23 October 2015, <http://www.clubmed-corporate.com/wp-content/uploads/2014/02/VCONSO-ENG-VDEF1.pdf>
- Club Med 2014, Official Website, Club Med, viewed 30 October 2015, < http://www.clubmed.ca/cm/all-inclusive-vacations-in_p-61-l-US-pa-RECHERCH6-ac-vz.html>.
- David, FR 2010, Strategic Marketing, 13th edition, Prentice Hall.
- David, SY & Cheng 2013, ‘Analyze the Hotel Industry in Porter Five Competitive Forces’, The Journal of Global Business Management, vol. 9, no. 3, pp. 52-57.
- Hoovers Inc., Club Med Company Information, viewed 22 October 2015, <http://www.hoovers.com/company-information/cs/company-profile.CLUB_MEDITERRANEE.61aa020b5a00bbf1.html>
- IBISWorld, 2015, Hotels in China: Market Research Report, viewed 29 October 2015, <http://www.ibisworld.com/industry/china/hotels.html>
- Kotler, P & Armstrong, G 2010, Principles of Marketing, 13th Edition, Pearson Education Inc.
- Kotler, P, Armstrong, G, Brown, L, & Adam, S 1998, Marketing, 4th edition, Prentice Hall, Sydney.
- Kotler, PT & Keller, KL 2011, Marketing Management, 14th edition, Prentice Hall.