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Thomas Cook to be or not to be

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ORC Cvty

on 2 April 2014

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Transcript of Thomas Cook to be or not to be

Thomas Cook
Case Study

Arka Chakraborty
Lohit C P
Divya Choudhary
D. Vikranth Lokeshwar

Environment Analysis
Objectives and Marketing Mix
Key Trends and Strategic Choice
Industry Overview
Thomas Cook Introduction
Environment Analysis
Porter’s Five Forces
Key Trends
Strategic Choice
BCG Matrix
Ansoff's Matrix
Marketing Objectives
Marketing Mix
Projects & Budget
Implementation & Control
Industry Overview
Industry Overview
Thomas Cook Introduction
Thomas Cook Introduction
Package Travel
Pre-packaged holidays and dynamical packages

Independent Travel
Individual components or dynamically created travel
Travel and Financial Services
Travel money, travel assurance, travel finance
Tourism Sector
Macro Environment Analysis
Macro Environment Analysis
Framework adapted from Porter, 1985; Porter, 2008; Datamonitor, 2012; TCG Annual Report 2012
Micro Environment Analysis

Environment Analysis
Resource Audit
TCGAnnual Report, 2012; IBTimes, 2012
Intangible Resources NEUTRAL/STRENGTH
Leading leisure travel service company
Goodwill (£ 80.5million)
23 million customers
Strong brand and customer loyalty. However, this has been recently damaged due to financial difficulties.
Physical Resources NEUTRAL/STRENGTH
Aircrafts – 91
Retail outlets – 3,637
Employees- 31,000
Financial Resources THREAT
November 2011 saw a fall in shares by 70%; September 2012 saw a rise in shares of 9.38%
Net debt reduced by £103m (from £891m to £788m)
May 2012 TCG agreed on a financial package worth £1.4bn
Human resources STRENGTH
Established relationships with UK & German Universities
Offering Degrees and on the job training
Formal development programmes
Rivalry among existing competitors
Threat of new Entrants
Supplier Bargaining Power
Buyers Bargaining Power
Threat of Substitutes
Numerous competitors
Price wars
Heavy discounting
Rivalry among suppliers
Suppliers forward integration
Relatively Low
High fixed costs
High exit barriers
High entry barriers initial investment
Relatively High
Convenient transport
Rise of low-cost carriers
Direct sales from suppliers
Low switching costs
Standardized products available everywhere
large volumes (group purchase)
Information transparency
Key Trends
Tailor-made tours
More individual holiday experiences, more flexible itineraries but still with all the security and benefits of a package and more affordable options.
Package travel
The trend for an increase in package holiday bookings is expected to continue into 2013.
Key Trends
Customer behavior
Growth of online booking
The rise of low-cost carriers
Age group trends
Aged 15-34 take more holidays abroad than any other age group
Strategic Choice
BCG Matrix
Corporate travel
Financial service
Tailor made Package
Market Growth
Market Share
Strategic Choice
Ansoff's Matrix

Source: ABTA, Travel Trends Report 2013; TCG Annual Report 2012
Package travel
The number of travellers aged 55+ has increased to 23%, while 35% are in the 15-34 age category and 42% are aged between 35 and 54. Holidays remain the dominant reason for taking an international trip (71%), ahead of business travel 16% and other reasons such as visiting friends and relatives (13%). More people are flying on holiday than using their car or another means of transport.
ITB Berlin 2013
Marketing Objectives
Marketing Objectives
STP- Positioning
Low Brand Quality
High Brand Quality
Low Priced
High Priced
Marketing Objectives
STP- Repositioning
Increase brand quality by rebuilding trust among consumers, yet at an affordable price
Low Brand Quality
High Brand Quality
Low Priced
High Priced
Marketing Objectives
Marketing Mix
High-quality service and diverse travel routines
Customized product for each segment
New Product development.
Competitive Pricing
User-friendly website surface
Traditional & Digital methods.
Supply chain management
Employee training
Physical Evidence
Blogs for sharing experience
Projects & Budget
86% of overseas and 91% of domestic travel transactions in India are now “digitally influenced”. Digital channels: websites, social media, peer reviews and smartphone or tablet apps.
According to Google 80% of travel products in the India are researched or purchased online.
Projects & Budget
Trend in Using Digital Services
Projects & Budget
Mobile Apps
Mobile apps often do better than the more established online presence for some travel companies.
Consumers who plan travel on their mobile device
29% booked or researched accommodation
27% researched destinations
26% read traveller reviews
23% researched restaurants
18% booked or researched flights
With hundreds of downloads daily the Thomas Cook brochures app, developed by VSI-thinking, is hugely successful.
Thomas Cook application have been fantastic with over 15,000 app downloads in just a couple of weeks.
The Brochure Store app has had tens of thousands of downloads from iTunes in the first five months and Thomas Cook predicts there will be a quarter of a million downloads within the first 12 months.
Projects & Budget
Site-map Navigation
Currency trend and exchange
Reserve services
Projects & Budget
Marketing Budgets on Digital
Three-quarters (74%) of companies invested more in digital marketing technology in 2012.
Companies are spending 35% total marketing budgets on digital.
Projects & Budget
Marketing budget
Projects & Budget
Traditional Advertising
Projects & Budget
Traditional Marketing Programmes
Implementation & Control
In order for the Thomas Cook Group to successfully implement its marketing strategy it is essential to identify, evaluate and take appropriate action in order to achieve its objectives on the three business levels.
Internal control
* The achievement of operational or strategic goals
* The improvement of financial conditions
* Operating efficiency and effectiveness maximization
* Profitability of marketing management activity
* Individual project and products performance

External control
* The utilization of laws and regulations.
* The future trend of tourism market
* Seasonal market situation analysis (market share and market increasing rate)
* Supervise the market condition and inhabitant's purchasable ability
Thank for Listening!

Any Questions?
Source: the eDigital Research, 2012;TravelDailyNews, 2011
Source: Econsultancy, 2013
Over two-thirds (70%) of companies surveyed derive up to 50% of their total revenues from digital marketing spend.
VSI-thinking eBusiness systems have helped save Thomas Cook millions of pounds.
Projects & Budget
Advantages of Digital Marketing
Source: Econsultancy, 2013
Projects & Budget
Digital Marketing Programmes
Source: Deloitte, 2012
Mobile applications (57%) QR codes (48%)
Mobile commerce (34%) Mobile advertising (31%)
Mobile-optimised emails (31%) Mobile search marketing (28%)
Ansoff Matrix
Thomas Cook (India) Ltd. (TCIL) is the Indian subsidiary of Thomas Cook International Markets (TCIM) The company was started in the year 1841. In 2006 Dubai Financial (LLC) has taken a controlling interest of 60 percent of shares in TCIL by purchasing 100 percent of controlling stock in TCIM.
It operates in over 90 countries, and has over 2000 branches all over the world. In India, the company was started in the year 1885. The company has around 54 branches in 20 cities and four airport counters in the major metros

 Dealing room and ability
to hedge

 Note consolidation more

Forex Scale Benefits

 Leverage footfall
 Leverage online platform


• Other Travel
Related Services

• Visas & Passport

• Insurance

• Travel-related



• Corporate

• MICE / Domestic

• Inbound

• Outbound


• Wholesale Forex



 Customer access

 Operating and
infrastructure costs

 Marketing & brand
 Distribution network

Intra-Group Synergies

increase in salary level, which has resulted in increased disposable income, the double income family, and the changing mindset from the frugalistic society to a consumeristic society
Economic slowdown:from 13% in 2011-12 to 5% in 2012-13
Devaluation of money
availability of hotel rooms in the country has improved from around 47,000 in 1993 to around 2,00,000 in 2013. Further, the hotel industry is expected to see a 65% increase in rooms in the next five years
Price cutting by operators
Incentive travel by industry
government is likely to approve 51% foreign equity in the Hotel Industry
Increased budgetary allowance for tourism sector.
Improved approach to International marketing (establishment of incredibleindia.org)
Removal/reduction in taxes on tourism and travel
Flexible policy on charters
Introduction of open skies for peak tourist seasons.
Private sector participation in airports like Mumbai and Delhi.
Disinvestment in Government hotels
the GATT agreement, the Indian industry has been forced to compete with the world for market share in all exports
Increase in the allotment of foreign exchange from $500 per person per annum to $2000 per person per annum.
increased number of private airline operators leading to price undercutting, featuring of India in many of the television channels with high TRP like BBC, Travel and Tourism, Animal Planet, etc.,

Fast growing global middle class
Increase in young corporates
Mobile Channels
Ease of booking via internet
The subsidiaries of the company in India are

1. Thomas Cook Tours Ltd.
2. Indian Alive Tours Ltd.
3. Hindustan Cargo Ltd.

Thomas Cook Introduction
Industry Overview
What are the features of leisure travel business?
How is it different from business travel?
Foreign Exchange Earning
Segment & Strategy
Corporate - Direct Sales
Leisure - Digital Marketing, Social Media Marketing
Direct Sales and Advertising
Segment & Strategy
Inbound Corporates-Advertise & promote rich indian heritage and culture
Leisure Travel
Special packages for :
Students studing abroad
Medical tourism
Pilgrim Tours

Loyalty cards
fusion holidays
48hrs holidays
Club Holidays
-Travel Insurance
-Hotel Business
3. How can Thomas Cook exploit the opportunities in the growing leisure travel business in India? Are the advertisements in the print media, the right approach?

Advertising through regional print media
Social media advertising
Offering customized tours
Early booking discount

3. How can Thomas Cook exploit the opportunities in the growing leisure travel business in India? Are the advertisements in the print media, the right approach?

Target Segment to be concentrated-Indian middle class
Threat from unorganized sector
Low cost carriers


• Complete range of travel related services available
• International operations and wide network
• Total customer care
• Employee empowerment, giving a competitive edge
• Close contact with the corporate world
• Strong shareholder support and favourable image


• Higher costs compared to competitors
• No marketing skills with the organization
• At present no contact with the individual traveler
• Small network within India


• Higher growth rate of leisure travel
• Rising affluence of Indian middle class
• Holiday abroad as a status symbol
• Overlap between corporate and leisure travel in India
• More money and leisure time available with youngsters


• Entry of other multinational travel agencies
• Indirect competition from Timeshare Resorts
• Low cost operators, unorganized sector
• Generic competition with other status symbols

Submitted to:Prof R.Srinivasan
Full transcript