Planning an Advertising and Sales Strategy

Advertising and Sales Strategy for Travel Agent Franchise

Before embarking on any business opportunity it is necessary to consider the viability of the business, including the way that the new venture may be marketed and the products sold. If a new business is a franchise, then it may be argued some aspects of the have already been developed and proof of concept exists. If a franchise has been chosen, for example Cruise Planners; An American Express Representative, the potential franchise will still need to consider the way in which the business will be advertised and sales made. This franchise opportunity has been chosen as it requires a low initial investment.

Advertising Plan

The first consideration is the advertising plan, looking to assess what types of media may be used, and the best way of optimizing the budget available.

Budget

The budget for advertising is typically between 3% and 5% of the firms' sales (Visa, 2007). In the case of a travel company, where the revenue is generated by commissions that are earned in the travel products sold, the advertising budget should be based on commission that will come into the firm, which will be the firms' revenues, rather than the total value of the travel services sold. It may be estimated that in the first year this business will earn a modest $70,000 in the first year, based of the average of 14% commission of sales worth $500,000 in the first year. If the advertising budget is 5%, this gives an annual advertising budget of $3,500. This modest budget can be used effectively is the right strategies are used.

2.2

Media Used by Industry & Competitors

Media used by travel agents and the cruise industry varies greatly. Large cruise companies will utilize the mainstream mass media, including television, radio, and national magazines, as well as the internet. Cruise companies use very visible media to attract a mass market, which supports their own sales as well as their brand for the sales to be made by agents.

Travel agents have web sites, and depending on their size they may also use television, radio, national or local press, specialist magazines, and the internet, including advertising through key word searches and banner advertisements.

2.3

Media which Reaches Target Market

The target market is those who have an interest in taking a cruise holiday. The target market is broad; in 2011 alone, it is estimated 11.2 million North Americans took a cruise holiday, in an industry worth $37.85 billion, and demand is increasing (Florida-Caribbean Cruise Association, 2012). With this large target market, it is likely that the traditional mass media reaches the target market. Many travelers will also access the internet, including travel forums where banners may be seen, or use search engines. There are also specialist cruise ands travel magazines, and national newspapers may have travel supplements at the weekend. Local newspapers may also reach the target market.

As social networking media is now well established, and with a penetration rate of 43%, it is highly likely than the average segment of the target market, who are also more likely to be using the internet than the average U.S. citizen, will be using this medium (Internet World Statistics, 2014).

3.4

Where Information Gathering Takes Place

Information gathering is undertaken through a smaller range of media. The cruise magazines are one source, but the main sources of information gathering are the internet, including travel review sites and forums, such as CruiseCritic.com, and other interactive sites, such as Facebook, as well as information gathered directly from travel agents who sell the cruises.

3.5

Affordable Media

The mass media is not viable with such a limited budget. However, when looking at information gathering by the potential customers there is an indication of more cost effective mediums. The use of the internet, with the development of a web site that is search engine optimized may be beneficial, especially if it is set up to allow past passengers to post reviews. However, a cost effective approach will also include the setting up of social networking media, and the use of advertising though the media sites, which can be undertaken in a highly targeted manner for as little as $1 a day (Facebook, 2014), but more may be advisable. The use of the local newspaper or radio can also be cost effective.

3.6

Aim of Advertising

The aim of the advertising will be to generate leads or enquiries. Most potential cruisers want to talk to an agent before they book a holiday; this is a common trait with any potentially high cost purchase (Dickinson & Vladimir, 2007). Therefore it is enquires that are the most important stage, as without these the travel agent will not make sales. With a closing rate that a good, (but not excellent) agent may have of 40% (Dickinson & Vladimir, 2007), and a desire to sell 100 cruises in a year, the marketing should generate 250 serous leads in a year, or 5 a week.

4.

Sales Plan

4.1

Distribution Channel

The sales plan will start with the decision to make sales direct to the customer. Dickinson & Vladimir, (2007) note that most cruisers want to talk to a sales agent or travel agent before booking, so a direct channel may be the best approach. This will allow the travel agent to get top know the customers and find out what they want to make sure they are being sold the right cruise. It is also a distribution medium that may help to create longer term relationship so cruisers will once again return to the same agent for subsequent cruise bookings.

4.2

Sales Forecast

A forecast can be made for the expected level of sales in the new franchise, it is estimated that there will be 100 sales in the first year, with an average cruise value of $5,000, and from this the agency will earn an average of 14% commission, giving revenue for the firm of $70,000. It may also be estimated that the following year there will be a 20% increase as past customers return and more new customers are obtained.