The Internet Impacts on the Travel Industry

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Table of Contents

Introduction
The Role of the Internet in the Lives of Consumers
Role of the Internet to Business Units
The Impact of the Internet on the Marketing Mix in the Travel Industry
The Product
Place Factor
Pricing Factor
Promotion
Conclusion
List of References

Introduction

The world has been massively influenced by emerging technologies. One of the aspects of technology that has affected human activities is the invention and advancements of the internet. Internet is increasingly becoming a basic need for most individuals and to business units.

The role of the internet in the society is becoming more pronounced as it has been realized that it helps in running of the business and running various errands that would have previously demanded one to move from one place to another. According to Lerbinger (2006, p. 89), the internet plays a very important role in the lives of consumers and business units in various ways. The e-marketplace is becoming increasingly relevant in the current society.

Many business units are finding it important to embrace the internet in their operations. According to White (2012, p. 59), the internet is becoming a key factor of operation in most business units. These business units are finding it easier managing their operations using the internet. Consumers are also finding the internet to be relevant in their quest to buy various products they need.

The internet is bringing these two entities together in a virtual environment where stores are no longer a necessity. As Safko (2010, p. 98) puts it, the internet has become a basic tool that enables customers and business units to meet in a unique environment where the need to have a physical location has been eliminated.

This research paper focuses on the impact that the internet has had in the lives of consumers and business units in the current society in the travel industry.

The Role of the Internet in the Lives of Consumers

The current society has transformed from what it used to be in the past. Women are now active in the corporate world just as men. According to Hendrix (2004, p. 37), both men and women are actively engaged in formal employment in the current society. This means that they do not have enough time to go shopping in the traditional brick and mortar markets.

They heavily rely on the e-marketplace whenever they want to make a purchase. This has seen the need for consumers to have an internet enabled personal computers and phones that can enable them to make their transaction online. The internet has therefore replaced the need to make travels to the physical store.

Lerbinger (2006, p. 70) says that the internet saves time for the consumers. Instead of travelling to brick and mortar stores, consumers can easily make their purchases using their computers in the comfort of their sitting room or even in their offices. The payment can be made online using their credit cards. The consumer will then receive their purchases right in their doorsteps or at the office.

This means that they are able to balance their tight schedule and meet their domestic needs without much struggle. The time that would have been spent traveling to shops can be used in conducting other duties. The internet has also enabled consumers to shop around for the best products within a very short time right on their desktop. Consumers can visit various websites that offer the desired product within a very short time.

Within this time, they can determine the store that offers the most competitive price. They will also be in a position to select the desired brand with the right specification they need. This makes it possible to minimize their expenditure. They shall have not only spared the cost of transport to these stores, but would have also been able to go for the lowest price for the commodity they need.

Role of the Internet to Business Units

The role of internet to business units is very visible in the current competitive market. According to Lerbinger (2006, p. 78), the need for a virtual market has been on the rise. Business units are under pressure to use their limited resources to meet the increasing needs of the customers in the market. The emergence of internet has been of great importance to business units in the current society.

E-marketplace has been of great help to business units as it has helped in solving the problem of limited facilities. Business units have been struggling to create numerous stores to serve the needs of the market. The internet has created an environment where business units do not need stores. Customers can now shop in their websites, and the goods can be directly delivered to them.

In most of the cases, retailers do not have to stock the products, especially the highly involving and expensive products. They only need to put a display on their website and when the customer makes the purchase they would go to the manufacture and order the product. The product would then be delivered directly to the customer.

This reduces the cost of storing these products in the retailer’s warehouse. It also reduces the cost of labor as only a limited number of employees would be needed. Moreover, there will be reduced handling of the product, increasing chances of delivering it to the customer in good shape.

According to Jobber (2010, p. 45), firms are always concerned about how best they can manage their relationship with customers. This is because of a number of factors. Managing an online customer may not be as easy as managing a customer in brick-and-mortar markets (customers physically coming to the stores). This is because it is not easy to determine the exact taste of a customer through online means (Anthoniessen 2008, p. 56).

However, this is a challenge that many international travel firms must always be ready to face given the growing popularity of the online market. Customer relationship management always involves several activities. One such activity includes keeping a connection with customers before and after the purchase of a product. This will involve tracking online activities of such a customer from time to time (Wilcox, Cameron, Ault & Agee 2003, p. 38).

The ultimate aim of this strategy is to ensure that such a customer is constantly engaged by the firm in order to increase chances of him or her making repeat purchase. This will require special software that will make this possible. Many travel firms have found it a lot more beneficial for tracking their customers online because it enables them to monitor their online activities.

Given the fact that a firm would need to keep in touch with the customer after the visit, there are some pieces of information that will be very important to the company (Jobber 2010, p. 82). The most important information that a company may need is direct contact with the customer. The internet has provided business units with ways of getting this information.

This can be the e-mail address, Facebook account, phone number or any other information that will enable the firm to reach out to the customers (White 2012, p. 47). The firm will also be interested in understanding the demographic information of the customer such as gender, age, and social status. This way, it will be easy to formulate the right information about appropriate products.

For new visitors, it will be important for the firm to determine such factors as how long the potential client was on the website, the areas that were visited, and whether or not a product was ordered. The duration of the visit will help determine the interest of the customer for the products. Areas visited will help the firm to know the specific products that the customer desires.

The Impact of the Internet on the Marketing Mix in the Travel Industry

Noor Al – Deen and Hendricks (2011, p. 94) say that technology has completely changed the face of the earth. Firms have been forced to change their operational activities to reflect these environmental changes. Various multi-national firms have gone online. One of the industries that have found online transaction very important is the travel industry.

Various travel firms around the world have realized the importance of allowing their customers to make most of their bookings online. It also creates a borderless market where a customer can complete transactions while several miles away from the facility. As White (2012, p. 84) says, the internet has had a huge impact on the marketing mix elements of the travel industry in several ways.

The Product

One of the marketing mix elements that have been impacted by the emergence of the internet is the product offered in this industry. This industry offers accommodation and tour services to tourists around the world. The emergence of the internet has redefined this product in the current world. Traditionally, tourists would come and the management would organize their accommodation.

The tourists would then be taken to the field where they would watch various sceneries and nature. However, this has changed. Customers are asking for more in the current market. They demand to get a product of higher value, a product that offers more than just the simple basics.

With the emergence of the internet, customers are exposed to a variety of products to choose from, making them feel that they deserve more whenever they visit. Because of these changes brought about by the internet, managements of travel agencies have redefined the product to offer more than just the basics. For instance, firms are currently struggling to offer customers an extra service besides the basics.

Customers would be given a disk of a recorded documentary of all the places that they plan to visit. They would take a day or two watching the recorded documentary in order to have an idea of what to expect when they get to the touring stage. This would allow them to make a decision of the places they would want to visit first based on the documentary they watched.

Jobber (2010, p. 97) says that the internet has heavily changed the product as an element of the marketing mix in the travel industry. This scholar says that when a tourist purchases accommodation, there is more than accommodation that a customer would need. When a customer is looking for an appropriate hotel to book, the customer would look for a hotel that has more than the basics that a hotel can offer.

The customer would look for a firm with such services as a casino, spa, among other facilities that can generate pleasure. This is because most of the travelers are holiday makers. As such, they would want as many facilities that can generate pleasure as may be possible. These facilities form part of the product. Initially, when the internet was not a factor in this industry, these extra services were not very important.

However, the current market has made them become the basic needs in this industry. When a customer is deciding on the product to purchase, these factors will guide the decision. Managements of various firms in this industry are, therefore, forced to adjust the product to reflect this new need.

Place Factor

The place factor in the marketing mix has also been redefined. According to Grunig (2002, p. 90), online business has gained a lot of popularity within the past decade. Firms have come to realize that the best way to reach out to the customers is through online means. With the changes taking place in the social structure in most societies around the world, women are also becoming breadwinners in their families.

This means that most families do not have time to go around shopping for items they need. They prefer searching for the desired products online while at work or at home (Andrzej & Buchaman 2007, p. 31). They do not mind the distance because a firm fails to go online, it will be losing its customers who have considered going online (Doorley & Garcia 2011, p. 78). Going online is, therefore, a move that any firm cannot ignore.

With the geographical barrier having been eliminated, business units can now operate in an international market. Travel agencies in Los Angeles can attract customers in Beijing because of the internet. This customer would be able to make the bookings and pay for the product online, without the need to have a face-to-face interaction with the firm.

The internet has improved the performance of the travel industry, and as Safko (2010, p. 112) says, this industry has expanded massively in the recent past. According to this scholar, tourists depended on referrals when they wanted to travel abroad. For instance, a tourist who wanted to visit Miami Beach would travel to Miami and then start looking for accommodation while there.

The tour agencies would wait for these tourists at the airports or other strategic places where they were expected to be after landing. This was a tedious process as the tour agents would spend a lot of money without the assurance that they would manage to get a customer. This changed with the emergence of the internet. Tour agencies no longer send their agents to wait for customers at the airport.

The place factor which had been a problem before has been solved. Customers can now order these services while still in their country. With the internet, they do not need to travel to the place in order to make payments and book for the facilities. They would complete all the transactions and even tour the room that they have booked all with the help of the internet.

With a webcam, a customer would see the entire hotel facilities that he or she has booked online. On arrival, such a customer would move directly to the hotel, having known some of the important features while miles away. This has improved business operations for firms in this industry. To the customers, it has eliminated the hustle of looking for accommodation and tour agents physically. The cost is also reduced because of this.

Pricing Factor

Pricing factor has also been influenced in this new approach of managing markets. According to Hendrix (2004, p. 93), the current market is very competitive. The internet has helped create a competition that never existed before. Travel agencies are coming up at a rate that the existing firms had never predicted. This is because starting a firm in this industry has been made easier. Initially, starting a firm in this industry was a big challenge.

It would require an investor to have a fleet of cars that the tourists would need, and a good rapport with the local hotels to run smoothly. However, this has changed with the emergence of the internet. It is now possible for one to enter this industry without all these resources. With a well-maintained website, and a proper promotion done using social media and other advertising channels, a firm will be able to get customers from all over the world.

Given this fact, there have been price wars as firms in this industry struggle to outsmart one another. When customers make decisions on the firm that best meets their needs, part of their decision would be based on the price that these firms charge. Because the firms are available online, these customers can skim around looking for the best prices. This means that the firm with the fairest price will always get considered in the process.

As a result of this, travel firms have been forced to lower their prices to match market demand. This has hurt some of the firms in this industry because of such price wars always lower the productivity of a firm. This inhibits growth as the profit margin is constantly reduced.

Promotion

The promotion element of the marketing mix has received the greatest impact of all the elements of the marketing mix. Online advertising is a strategy that has been used to inform the target audience of the availability of the products in this industry. Such tools as Google AdWords can be useful in reaching out to the target audience directly. This strategy is always very useful when the firm targets a large target audience.

The marketing department would conduct research and determine blogs which are most widely read in this particular industry (Brooke, Lucinda & Yan 2011, p. 348). Firms in this industry benefit from online advertisement because it will not only be developing a relationship with the customers, but also help the firm develop a close relationship with the bloggers.

The social network is another attractive online marketing strategy through which firms in this industry have been using to reach out for the target audience. The world is changing very fast due to the changes brought about by advanced technology. Many of the youths visit various social sites on a daily basis. Boyd and Ellison (2008, p. 220) say that Facebook has a fan base of more than one billion people.

This cuts across various demographic spaces, with the majority being youths from various social statuses. YouTube has almost a similar number of users, with over eight hundred others on Tweeter. Customers will also be able to reach this information with a lot of ease (Andreas 2012, p. 23). They can get the message from friends who are also on Facebook.

Another good approach to promotion using the internet is by using e-mail marketing. This strategy is appropriate when dealing with customers that have a close relationship with the firm. In this strategy, the firm will develop an appropriate message in regard to the changes made on the product.

The firm will then select customers and other specific individuals who should be receiving the message. The firm will then send messages to these individuals via their e-mails over the changes made on the website. Hendrix (2004, p. 26) explains that this strategy is very beneficial both to the firm and the customers.

Conclusion

It is clear that the internet has had a massive impact on firms in the travel industry. For a long time, this industry was operating using the brick and mortar strategy. However, this has changed with the invention of the internet. Firms find their customers through the internet, and customers find the product they need through the same internet. To the customers, making bookings have been made easier and cheaper with the invention of the internet.

To the business units in this industry, the internet has simplified marketing strategies. The internet has also redefined the marketing mix elements of firms in this industry. The place and promotion elements have had the greatest of the impact due to the use of the internet in this industry.

List of References

Andreas, S 2012, ‘How publics use social media to respond to blame games in crisis communication: The Love Parade tragedy in Duisburg 2010’, Public Relations Review, vol. 1, no.1, pp. 1-31.

Andrzej, A & Buchaman, A 2007, Organizational Behavior, Prentice Hall, London.

Anthoniessen, P 2008, Crisis Communication: Practical PR strategies for reputation management and company survival, Kogan Page, London.

Boyd, D & Ellison, N 2008, “Social Network Sites: Definition, History, and Scholarship”, Journal of Computer – Mediated Communications, vol. 13, pp. 210- 230.

Brooke, F., Lucinda, A & Yan, J 2011, ‘How publics respond to crisis communication strategies: The interplay of information form and source’, Public Relations Review, vol. 37, no. 4, pp. 345-353

Doorley, J & Garcia, F 2011, Reputation Management: The Key to Successful Public Relations and Corporate Communication, Routledge, New York.

Grunig, L 2002, Excellent public relations and effective organizations: a study of communication management in three countries, Lawrance Erlbaum, New Jersey.

Hendrix, J 2004, Public Relations Cases, Thomson Learning, Toronto.

Jobber, D 2010, Principles and Practice of Marketing, McGraw-Hill Companies, London.

Lerbinger, O 2006, Corporate Public Affairs: Interacting with Interest Groups, Media and, Government, Lawrence Erlbaum, New Jersey.

Noor Al – Deen, S & Hendricks, J 2011, Social Media Usage and Impact, Lexington Books, Plymouth.

Safko, L 2010, The Social Media Bible: Tactics, Tools & Strategies for Business Success, John Wiley & Sons, New Jersey.

White, C 2012, Social Media, Crisis Communication, and Emergency Management: Leveraging Web 2.0 Technologies, CRC Press, New York.

Wilcox, D., Cameron, T., Ault, P & Agee, W 2003, Public Relations: Strategies and Tactics, Pearson Education, Boston.

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