Research consultancy
Question two
Managers become seriously worried about declining customer loyalty as competing companies steal their customers through better offers and purchasing incentives. Furthermore, companies have nowadays to face a totally different situation than in the past: the markets have become liberalized and global and are therefore characterized by high competition (Nguyen & Mutum 2012).
The following are some of the ways how lake Victoria Serena golf course may stop the decline in sales
Motivation of employees to increase sales , this is important and therefore lake Victoria should ensure that it motivates the employees to increase sales by for example setting target for the employees.
The utilization of social media to advertise the company service. With a built-in audience, social media provides amazing potential for boosting brand awareness. Some of the social media platforms like face book and twitter combined have more 1 billion people , therefore this is such a big platform that it is imperative for an organization to miss.
Use of print media like newspaper to advertise the organizations programs for example there more than 100,000 people who read newspaper everyday therefore advertising the company’s services on the newspaper will enable the organization to reach many people and therefore increase sales.
Making use of television advertisements, television adverts increases sales and this is because many people watch the services online and in turn purchase them. This enables in the increase of sales for an industry.
Adopting technology process in advertising the organization, technological progress in advertising this leads to increase in sales and also customer knowledge, which calls for a high interaction between the company and their customers. Moreover, the developments into service-orientation, niche-orientation and information-orientation as well as fast changing customer buying patterns make it necessary that companies try to find ways of increasing their sales performance in a sustainable way. Sustainable means thereby not oriented into short term success but rather in recurring turnovers. A further challenge is the increasingly bad reputation of sales people that leads to a lower identity with this profession and results in a decreasing sales performance.
Use of posters; these are used to advertise a product in an area. It is therefore imperative for lake Victoria Serena to hang posters in different strategic locations across the towns like Kampala, Entebbe as this will increase sales and make the organization more known.
The organization should also adopt radio advertisement of the services of Lake Victoria serena golf resort this is because the radios reach many people and this therefore is essential as it will enable the company to reach clients who are in distant places and hence increasing the sales of lake Victoria serena.
- ii) Product life cycle of lake Victoria serena
A product life cycle is the amount of time a product goes from being introduced into the market until it’s taken off the shelves. There are four stages in a product’s life cycle introduction, growth, maturity, and decline Newer, more successful products push older ones out of the market.
It can also be defined as;
A series of stages that products undergo from introduction to growth to maturity and eventual demise. The lifespan is different for each product. It can take a week or a month for one item, like some trendy necklace, and years or even decades for another.
A fast reaction on changing markets and customer requirements and the involvement of collaboration partners require a sound information basis. In manufacturing, this information basis could be provided by Product Lifecycle.
The life cycle of a product is associated with marketing and management decisions within businesses, and all products go through five primary stages: development, introduction, growth, maturity, and decline.
Development stage
Product development is the first stage of the product life cycle. It begins only when the entrepreneur find and start to develop a new idea. However, if the company is a business that needs some help to regularly develop new ideas, the organization might want to partner with innovators, designers, university researchers or manufacturers to develop new ideas generation processes. At this stage the product or the service has not yet been introduced into the market and the company is just testing the market.
Introduction stage
Introduction stage is the first stage in the product life cycle. The highlighting factor of this stage is that the product is new in the market, sales are slow and to push it higher the company has to incur heavy expenditure on advertisement to make it appealing to customers. During this stage the product has just been introduced to the market, the growth in sales isn’t significant as it takes time for people to test it. The competitors are not so fierce yet. It gives the company many chances to set a monopoly.
Growth stage of a product lifecycle
The growth stage is the period during which the product eventually and increasingly gains acceptance among consumers, the industry, and the wider general public. During this stage, the product or the innovation becomes accepted in the market, and as a result sales and revenues start to increase. In this stage people are accepting the product of services of the product and the sales are increasing at this stage mainly the competitors are still very few in the market.
Maturity stage of product life cycle
The maturity stage of the product life cycle shows that sales will eventually peak and then slow down. During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. The longest of the stages the company pass-through is maturity. The sales rise to the highest point in their life cycle and the pace of progress slows down. The competition is extremely aggressive. The need to keep up with the competitors motivates entrepreneurs to update product characteristics and roll out advancements. It is during this stage that company needs to adopt various approaches otherwise the company will fall and it may be difficult to restart it over again.
Decline stage
The decline stage of the product life cycle is the terminal stage where sales drop and production is ultimately halted. Profitability will fall, eventually to the point where it is no longer profitable to produce, and production will stop. During this stage the competition gets too high, the sales go down because of the latest technological inventions, changes in consumer needs, and the upcoming trends. The sales rate falls until it stops being cost-effective for us to run the project. Nevertheless, there is still money to be made if the company can handle this stage correctly.
The demand falls off as the competing products oversaturate the market. The competition increases, becomes unbearable and customers find more attractive competitors. At earlier stages, spending money on advertising yields benefits and is cost-effective. Financing tons of ad campaigns in the decline period leads to lower profits and even losses. The product the company produces seems to become unprofitable anymore.
The company’s favorable position on the market depends on the product itself. The sales go up if the thing the company produce meets the needs of consumers and has a fair price. If the cost is not reasonable, or people simply don’t need this item or service the company moves into the decline phase.
Influence of marketing environment on the effective performance of the business
Marketing can enhance effective performance of the business if there is an effective Environmental Scanning; Environmental scanning entails the collection of information relating to the various forces within the marketing environment. This involves the observation and examination of primary and secondary sources of information, including online content from business, trade, media and the government, among others. Through analysis, marketing managers can attempt to identify extant environmental patterns and could even predict future trends. By evaluating trends and tendencies, the marketing managers should be able to determine possible threats and opportunities that are associated with environmental fluctuations.
There are mainly two types of environment the Micro Environment and the macro-environment; for industry like Golf course hotel which is in a tourism industry must constantly assess the marketing environment. It is crucial for their survival and achievement of their long-term economic goals. Therefore, marketing managers must engage in environmental scanning and analysis. Most firms are comfortable assessing the political climates in their home countries. Political risks are any changes in the political environment that may adversely affect the value of any firm’s business activities. Most political risks may result from governmental actions, such as; the passage of laws that expropriate private property, an increase in operating costs, the devaluation of the currency or constraints in the repatriation of funds, among others all these affect the operations of the business.
Political, Legal and Regulatory Issues; The political environment encompasses laws, government agencies and pressure groups which could have an effect on tourism organizations and entrepreneurs. Such factors include; national politics on financial matters, including; foreign debt, and the rates of inflation (i.e. increase in prices), recession; policies and regulatory legislation on reciprocal trade and foreign investment; travel restrictions, the governments’ tourism policies; as well as ecological considerations, among other issues.
Political, legal and regulatory issues can affect the viability of tourism firms. Therefore, any prospective changes in the governments’ priorities (for example; public spending) or a change in government can lead to the opening-up or the closing of markets. The business activity tends to grow and thrive when a nation is politically stable. National governments and their legal systems could could facilitate or hinder businesses, in many areas. Therefore, any political changes are closely related with the legal and economic matters (for example: employment laws, minimum wage laws, health and safety laws, zoning regulations, environmental protection laws, consumer protection laws, tax laws, et cetera).
The Economic Issues; The economic analysis involves an examination of the foreign countries’ monetary, fiscal and economic policies. The factors affecting consumer purchasing and spending patterns, include; wealth per capita; discretionary income; industrial development; currency restrictions; balance of payments; leave of imports / exports; fluctuations in interest and foreign exchange rates, among other issues. The exchange rate of a country’s currency represents its value in relation to that of another country’s currency. Currency rates fluctuate on a daily basis, thus creating high risks for many industries, including the travel and hospitality sectors. Tourism businesses will be more encouraged to expand and to take calculated risks when economic conditions are right. For example, when there are low interest rates, and when they are experiencing rising demand. Rising incomes and higher standards of living have often translated to more disposable money on luxuries like; long-haul travel and other hedonic behaviours.
Social Issues; A social analysis delves into societal behaviours, customs, values, norms, lifestyles and preferences. Demographic factors, including the age structure of the population may also change, over time (for example, there are many developed countries that are already having an ageing population). Moreover, social issues could also comprise the cultural environment, which is influenced by the individual populations’ size, race, religious beliefs, gender, family, education, occupation, and the individuals’ position in the social stata, among other variables. Institutions could influence society’s basic values, perceptions and preferences. For instance, there may be changes in consumer behaviours which could be attributed to trending fashions and styles. Climate and seasonal variations could also affect consumer behaviours, and their travelling propensity. Of course, there may be other factors that could affect the consumers’ inclination to travel, including; credit facilities and attitudes, competition from other spending behaviours, et cetera. In addition, social issues may also relate to distances to be travelled; urban versus rural lifestyles and attitudes to travel; emigration, school vacation periods, perceptions on international commuting, et cetera.
Technological Issues; A technological analysis is required as marketers need to keep themselves up-to-date with the latest innovations in the tourism industry. Like any other business, the tourism firms, including airlines are effected by new technologies, which could create new products and market opportunities (Tussyadiah, & Inversini, 2015). For example, larger and faster aircraft which are more pleasing to the customer, as well as airport developments and their facilities, including; efficient check-in desks; lounges, shuttles and online travel booking sites, among other things, have surely improved the customer experience. Moreover, recently there have been a number of interesting developments in the field of airport security.
(c) Challenges of building customer relations
Customer Relationship is a widely-implemented strategy, generally refers to the activities that helps businesses to build and sustain relationships with customer by means of technology to integrate and synchronizes business processes such as sales and marketing, customer service and support. In other words it is the way of better analysis of customer requirement to deliver relevant products or services to the customers. CR evolved over the period from operation such as relationship marketing and then moved towards customer retention through the effective management of customer relationships.
The knowledge about the customer behavior seems to be the most important attribute in CR to gauge the dynamics of clicks-and-bricks business environment. The improvement in customer delightfulness, which is considered as one of the key performance measure for competitive advantage, is supported by individualized relationships with customers.
Communication challenges; managing customer relation needs constant communication with customers. Some customers are located in remote areas and therefore it is a challenge to build customer relations. Communication channels like social media require internet to be available so as the market can have a constant communication with customers.
Poor media coverage in some areas; companies maintain consumer relation by having a constant interaction with customers. This is normally through television adverts and giving customers information on the new changes in the product design or new activities that company is engaging into.
Government laws on building business brands; when the organization sets strict laws on managing relations between the customers and and the business it makes it difficult for business to have succefful customer relation since its against the laws.
The critical factor in successful implementation of a CR strategy is the aligning of CR initiatives with employee and customer objectives (Bowman and Narayandas, 2014). Several commercial CR software packages are available off the shelf, varying in their approach. CR is not just a technology, it is rather a comprehensive approach to an organization’s philosophy in dealing with its clients. Most times companies face a challenge on the way of managing customers’ objectives due to the inability to manage customer expectations it becomes unsustainable to manage customer relationships.
The vision of the company and its goals for its vision are some of the challenges in developing customer relations some companies have a specific strategy in ensuring that the destination that they are developing is in line with the CR strategy. While CR strategies are developed, leadership and governance must be agreed upon them, as it will help lower stress when managing the impact of change upon employees.
Value Equity: emphasizes the rational and objective aspects of a firm’s offering. The value is strengthened if the actual goods and service consumption experience meets or exceeds the expected experience. Hence, each time the customer is disappointed he/she will become disconnected. The main drivers of Value Equity are the physical or service product and the service environment (Rust et al., 1999).
Brand Equity: substantially contributes to the Customer Equity approach. It is mostly important in industries that sell products that are low involved goods: consumers do not want to think too much about them. Substantial insights have been made into the process that encourages customers to develop relationships with firms (Keller, 1998). The main drivers are brand awareness, brand ethics and attitude towards the brand (Keller, 1998; Aaker 1991).
Relationship Equity: the tendency of consumers to be loyal to a brand, above and beyond the customer’s objective and subjective assessment of the brand (Rust et al.,1999). Its prime focus is to maximise the relationship for the retention of customers, and to decrease the likelihood that the customer will purchase from competitors. The main drivers are aspects such as loyalty, special recognition, community, knowledge building and affinity (Rust et al., 1999).
As social media has transformed the web into an interactive information and communication channel, social media plays a significant role in influencing the Decisions customers make when selecting products and services, based on feedback in blogs, websites and forums. This online feedback is vital for a marketer (Severi, Nasermoadeli and Kwek, 2014). A survey conducted by The Neilson Company showed that 90 per cent of internet consumers worldwide trust recommendations from people they know, while 70 per cent trust consumer opinions posted online (Neilson, 2009).
Competition in the market; when the competition in the market is very stiff the organization faces of managing customer relations because the organization devotes its time in managing the competitions and some companies are even dragged into price wars which may not be sustainable in the long run.
