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Travel Agencies Are Losing Business to online Bookings offered to Passengers by Airline Websites. Identify Some Possible Focus Options to Travel Agencies Wishing to Develop New Lines of Business That Would Compensate for This Loss of Airline Ticket Sales.

Essay by   •  July 28, 2012  •  Essay  •  1,085 Words (5 Pages)  •  3,109 Views

Essay Preview: Travel Agencies Are Losing Business to online Bookings offered to Passengers by Airline Websites. Identify Some Possible Focus Options to Travel Agencies Wishing to Develop New Lines of Business That Would Compensate for This Loss of Airline Ticket Sales.

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Introduction

When consumers are forced to book online at airline websites - an option that carriers prefer due to it being a cheaper and automated channel, agents would tend to lose their facility of pursuing the better deals for their customers. (Newman)

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Travel agents are known to be dependable associates whom assist in safeguarding our comfort when overseas. When a travel reservation is made via an alternative channel, there is a tendency that consumers have forgotten or are neglecting a travel agent's 'had been there done that' expertise. In summary, travel agents are still in the business because of their customer relations. They would always work along the line of ensuring customer satisfaction. A list of services that agents would provide includes:

1. Searching for cheaper hotel; airfare rates.

2. Ensuring customer comfort - consumers would never be placed in shabby hotels.

3. Arranging the necessary documentation for a clients' travel

4. Double checking and following up on air-travel dates

To put it briefly, the emergence and advancement of e-commerce services had caused travel agencies to lose numerous businesses to airline websites that offer the benefits of online bookings. Haller (2006) had confirmed this: "Consumers lured by convenience and promises of the best deal are booking more trips online."

Tackling the Problem

Generally, companies would deem selecting options like training staff to further enhance customer service level; expanding the range of offerings and services they can provide as the rightful solution. However to effectively counter their market loss, travel agencies need to return to the very beginning and select the market they wish to penetrate once again. When a strategic implementation action plan is utilized after the segmentation process, they would be able to make a comeback in due time.

Market Segmentation

During the course of market segmentation, travel agents need to mark out their objectives and goals - ideals which would eventually assist them in selecting the rightful market - would serve them the most advantages. All organizations differ in ability when serving the different variations of consumers. It is essential for firm's to identify the market they would be able to serve best. Market segments compose of consumers sharing similar needs; characteristics; consumption patterns and purchasing behaviour.

Utilizing a Focus Strategy Model

Strategic management would become overwhelming without the use of a strong organizational theory or framework. When utilizing experience, theory needs to be comprehended and relied on. Without theory, confusion of perception might take place. Thus, the usage of a theoretical model would assist individuals in further understanding the concept. (Ginter, Swayne and Duncan)

Focus Strategies for Services Model

The 3 strategy options available for agents to counter the problem of loss business - against online ticketing prices would include:

Fully Focused (Service & Market Focused) Strategy

Markets served in the following are few with a narrow base of service offerings. When utilizing a fully focused strategy, right implementation would lead the organizations towards a series of benefits. Upon acquiring the ability to develop recognized proficiency for their niche market segment, firms are given the prospect of patenting their products/services. This action would protect them against potential competitors in the market. Also, due to the exclusivity of their services, they are able to charge premium prices.

On the contrary, a high level of risk is involved when using the fully focused strategy - substitute offerings by the general competition might cause the demand for goods/services to be eliminated. Due to only serving a tiny market segment, an economic downturn might case vulnerability to the business.

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