Marketing and Strategy
Paper details:
This is the final paper of a group of other papers. Attached is the final rubric and previous papers
Smart Travel Corporation is seeking to enter into the Nigerian transport industry; the firm’s corporate mission is to provide convenient and affordable means of transportation for its customers. Also, the organization wants to engage in providing affordable services that meet the needs of contemporary consumers in Nigeria’s central cities. Previously, the firm had been involved in providing transport services in road transport. This was majorly through the use of their bus fleets that travel to various parts of Nigeria (Ademiluyi & Dina, 2011). However, the firm seeks to expand its operation to cater for provision of services in both road and rail transport sector. The company wants to make the cost of their services consumer friendly. This will enable customers to use their services as they will be able to afford them.
Smart Travel Corporation has managed to establish itself in the Nigerian industry due to its excellent market strategy (Dolgui and Proth, 2010). In a bid to develop and continue maintaining its current market share and positive customer relations, the firm has continually tried to identify its points of weaknesses and work on them so as to keep them or their effects to a minimum. On the other hand, situations that have presented opportunities for the firm have been effectively exploited to provide more points of development to the company. In this section, we look at the strength, weaknesses, opportunities, and threats that are facing Smart Travel Corporation.
1.0 SWOT ANALYSIS OF SMART TRAVEL CORPORATION.
1.1 Strengths
First, the firm offers lower prices for its products as compared to their competitions. This involves bus and train fares that are required to move from one place to another (Aderamo, 2012). Moreover, the incorporation of online marketing systems has enabled the company to save much on operational costs related to the physical operation and in the end it can provide slightly cheap products. Due to the diversification and extensive operational margins, the firm still fetches profits even when their products are sold at a low price. Secondly, the company offers products customization and also it gives a chance to customers to have train carriages and journey tour vehicles made according to their unique specification. Thirdly, the firm offers a broad range of products and services to customers. This is because of the diversification in operations of the company. Customers can obtain both road, rail, and tour guide services from the firm. Lastly, the company enjoys a larger market share. For instance, it has clients in both sections of the transport industry sector from those dealing with cargo travel to those involved in daily transport between Lagos and Abuja.
1.2 Weaknesses
The firm is not widely known in the Nigerian industry market by clients. This is because of the less advertisement that has been done. Currently, the firm is in a process of developing technological options for facilitating their operation. As a result of the low technological application, the company is only known in a few places such as Abuja and Lagos. This limits their markets’ growth in other areas in Nigeria. There are also delivery issues regarding cargo transport. For instance, the company might incur losses associated with deliveries such as costs, damages, and time factors. Lastly, there is a lack of personalized customer monitoring and tracking procedures. This means that it is hard to understand consumer characters and appropriately respond to their needs. As a result, a generalised view of market analysis and customer response is utilized.
1.3 Opportunities
The firm’s entry into the rail industry presents various opportunities to the businesses. For instance, issues relating to time wastage that characterises use of road transport as a result of congestion will be minimised. Moreover, transportation of bulk products is easier while using rail transport as compared to road transport. Another opportunity is likely to come about as a result of the firm’s decision to go global. This is because the business could increase the number of operations to areas that are not within Lagos and Abuja. This will help increase the market for its products. The adoption of modern technology will simplify processes and operations. Therefore, Smart Travel Corporation’s idea of using online platforms to sell themselves is likely to increase the number of customers for their devices. This is because the online platform will reach many people and since they will be having some information relating to Smart Travel Corporation, it will positively contribute to brand development which could influence consumer’s choice of it as their transport company of choice. Lastly, the firm will stand to benefit from the suggested development of the Nigerian railway line. This is in line with the nation’s strategic development plan in which it seeks to achieve the status of a second world’s country. One of the initiatives contained within the strategy is an improvement in physical transport especially the railway.
1.4 Threats
The biggest threat to the firm is competition. It is at a risk of succumbing to competition from its fierce rivals. Therefore, it needs to improve its strategies to ensure that it remains in operation and establishes higher customer competitiveness. The competition is likely to be increased by new entries into the transport industry. Primarily, this is because of the advancement in technology. Furthermore, new firms are encouraged by the development of proper road and rail networks. The rapidly changing technology is worrying to the company. This is a threat in the sense that the firm has to observe technological changes carefully and make sure that it adopts the best ones. Failure to do so may reduce the competitive edge of the enterprise. On the other hand, poor technological observation may make a firm to operate using obsolete technologies that are not very efficient. Lastly, being a service offering company, Smart Travel Cooperation faces a challenge of ensuring that all their employees relate with customers in a good way. This is crucial particularly because of the difficulty in employee monitoring and the widespread use of informal language in the transport industry.
2.0 SMART TRAVEL CORPORATION’S CORE COMPETENCIES
Smart Travel Corporation has managed to enter into Nigerian telecommunication industry successfully. This is because it has become recognized and it has various clients who are expected to increase upon completion of the railway transport initiative. The future indeed seems bright for the company. However, the SWOT analysis revealed some threats and weaknesses that need to be addressed. One of the main threats to the company was competition. For Smart Travel Co-operation to beat off competition, it has incorporated various processes and strategies that help in it in remaining successful by having an edge over its competitors. Some of these core strategies include; organizational learning which is a process of acquiring new knowledge, product development which refers to improving the state of their products, training and development which is a practise of imparting skills in employees through further learning and training and lastly, cooperate social responsibility.
2.1.0 Organizational Learning
Organizational learning involves learning from the past experiences of the organization and other players in the industry and then developing new strategies based on the lesson derived from these particular past occurrences (du Toit, 2016). Organizational learning was incorporated into the company in the early 2000s. This was after clients began complaining of reoccurring problems with comfort and some perceived non-maintenance of some of the Smart Travel Co-operation busses.
2.1.1 Importance of the Processes
Organization learning is essential in providing new and previously existing knowledge. The method used allows Smart Travel Corporation staff and employees to refer to previous experiences in dealing with current issues. Moreover, emerging trends and new techniques in the industry are able to be incorporated into the company by a proper understanding of them through appropriate learning. Organizational learning has been vital in ensuring that the firm provides quality products that are designed to cater for the unique interest of their clients. Moreover, it limits repetition of negative bearing incidences that have once occurred on the company in the past.
2.1.2 Competition
Organizational learning results in better products for the customers while competitors may find it hard to compete against Smart Travel Corporation. This is because the strategies that will be developed through learning will be aimed at elevating the levels of customer satisfaction and experience with the company. Therefore, they will be able to derive maximum benefits from the enterprise. On the other hand, organizational learning involves consideration of information that is available within the company and that which is external. The external environment may include competitors, suppliers, as well as legal conformity requirements. Proper use of this information enables Smart Travel Corporation to come up with strategies that cannot be replicated by competitors. Moreover, the strategies will be able to counter the effects of competitor’s techniques as the information used will have considered competitors strategies first.
2.1.3 Strategy
Organisational learning is carried out by Smart Travel Corporation through the firm’s human resource planning. It depends on the employee’s ability to learn from early experience and use it. The organization involves the creation of knowledge from already done activities and sharing of that knowledge.
2.2.0 Product Development
This refers to practises carried out by the company with an aim of improving the current state of the firm’s product (Odeleye, 2012). Smart travel cooperation being a service company is tasked with improving the level of comfort and satisfaction that their clients derive from using their transport means. Smart travel cooperation adopted product development techniques immediately after it entered the Nigerian transportation industry to counter stiff competition that exists in the market.
2.2.1 Benefits of Product Development
Product development enables the company to promote the use of its transport systems. This leads to increased sales which constitute to high returns. Moreover, product development is vital in countering competition through the use of Taguchi methods.
Also, product development is crucial for smart travel cooperation in that it enables it to respond to competition without incurring losses. Companies adopt various techniques and solutions in response to competition. However, some of the solutions might be detrimental to the profitability of an organization.
2.2.2 Competition
This strategy has a direct bearing to competition. This is because it is linked to affecting market situations involving smart cooperation products. This is achieved through the provision of further developed products which have superior’s qualities as previous products. This means that the quality is likely to surpass that possessed by those of other competitors. As a result, consumers are influenced to choose smart travel cooperation products as opposed to those products which are provided by the company’s competitors.
2.2.3 Strategy
Incorporation of product developed at smart travel company is first achieved through market analysis, research, and development. A market analysis helps in identifying the points to improve regarding the current products. The improvement should be relevant to the market. On the other hand, research and development provide means through which actual product modification is carried out.
2.3.0 Training and development.
This involves the development of skills of employees through further learning. Training and development is used to empower the labour force for the company (Tolley and Turton, 2014). Employees are imparted new skills to enable them to work more efficiently. It involves activities that are related to staffing by ensuring that new workers receive the necessary skills before they become employees of the company.
2.3.1 The Importance of Training and Development
Training and development is important for the company in ensuring that it acquires the best available labour force. This was first done during the firm’s entry into the Nigerian transport industry.
Training and development is crucial in that it provides the company with the competitive labour force. This is essential because, in Nigeria, there are integration issues whereas the transport industry has some weaknesses. Therefore, a company’s ability to handle these factors can influence success.
2.3.2 Competition
Training and development ensure that the company has able and competent labour force. As a result, smart travel cooperation can offer quality services that cannot be matched with those of their competitors. This gives the firm an edge over their competitors.
2.3.3 Strategy
Training and development at Smart Travel Cooperation is a function of the human resource management department. The committee is tasked with identifying the necessary skills that require to be imparted in employees. Moreover, the HR department finds the appropriate times for carrying out educational training on individuals regarding these skills. Furthermore, the human resource department evaluates the level of these skills in individuals periodically.
2.4.0 Cooperate Social Responsibility
This refers to the firm’s voluntary responsiveness to the society, environment, and the legal requirements that guide the context in which it is operating (Akwara, Udaw, and Ezirim, 2014). It involves factors relating to how the firm caters to the surrounding community’s needs, how it achieves customer’s satisfaction, and how it refers to the environment. This technique has been carried out by smart travel cooperation for almost five years now, and its continued application is linked to the benefits that the method brings to the company.
2.4.1 Importance of Cooperate Social Responsibility
Cooperate social responsibility is credited for its role in enhancing public relations with smart travel cooperation. The perception of people regarding the company is improved as they feel that the firm minds them and has taken them as a core part of the organization. This is because its principal function is to aid an organization in maintaining a good relationship with the external environment. Moreover, it fosters the development of a good public image by the firm.
2.4.2 Competition
Corporate social responsibility helps in fighting competition by influencing the consumer’s choice. It makes customers prefer smart travel cooperation because of the way the company relates to the clients and how it participates in community enhancement programmes. Moreover, it is a simple competition technique through which a firm does not focus on the competitors directly but rather on the consumers of their products.
2.4.3 Strategy
Smart travel cooperation carries out cooperate social responsibility as part of its customer satisfaction technique. It is regarded as an organisational practice that is planned for concerning the reigning consumer needs. Moreover, all the individuals or stakeholders that are associated with the company are encouraged to be socially responsible while carrying out any organizational activity.
References
Ademiluyi, I. A., & Dina, O. A. (2011). The Millennium Development Goals and the Sustainable Future for Nigeria’s Urban Environment: A Railway Strategy. Journal of Human Ecology, 33(3), 203-209.
Aderamo, A. J. (2012). Urban transportation problems and challenges in Nigeria: A planner’s view. Prime Research on Education, 2(3), 198-203.
Akwara, A. F., Udaw, J. E., & Ezirim, G. E. (2014). Adapting Colonial Legacy to Modernism: A Focus on Rail Transport Development in Nigeria. Mediterranean Journal of Social Sciences, 5(6), 465.
Dolgui, A., & Proth, J. M. (2010). Pricing strategies and models. Annual Reviews in Control, 34(1), 101-110.
du Toit, A. S. A. (2016). Using environmental scanning to collect strategic information: A South African survey. International Journal of Information Management, 36(1), 16-24.
Odeleye, J. A. (2012). Politics of Rail Transport Development in Developing Countries: Case of Nigeria. Journal of Civil Engineering and Architecture, 6(12), 1695.
Tolley, R., & Turton, B. J. (2014). Transport systems, policy, and planning: a geographical approach. Routledge.
Marketing and Strategy
Marketing strategies are those techniques that can be deployed by a business organization in any sector to increase its sales and achieve a sustainable competitive advantage over its competitors. In this regard, according to du Toit (2016), the strategies deployed can include the basics, as well as the short and long-term activities that will be conducted with the aim of achieving the marketing objectives of an organization. The formulation of marketing strategies entails the understanding of the various strategic constraints that are likely toe affect the business from within (internal) and from outside (external). Specifically, in the view of du Toit (2016), the marketing strategies include the specific actions and steps that an organization will take to ensure that objectives are met. These actions can be either economic, technological, political or legal.
Smart Travel Corporation seeks to venture into the transportation market in Nigeria. In order to succeed in this field, the company will have to formulate several marketing strategies and indeed, engage in marketing activities that will help the company maintain a competitive advantage. As a result, this paper will seek to state the corporate mission of Smart Travel Corporation and how that mission aligns with the provision of railway transport services to the residents and business people of Lagos and Abuja. Specifically, the various ways that will be used to market the railway line services internally and externally will be explored. The methods that the organization will deploy in order to wage off competition will also form part of this paper. Moreover, the brand effectiveness of the product will be assessed. The behaviors and demographics of the targeted consumers will be evaluated as well as the unsatisfied need that the railway transport services will seek to fulfill. Finally, the fixed and variable costs, as well as how they fit into the organization’s short and long term goals will be explained. Indeed, the pricing strategy that is most appropriate for smart travel corporation will be discussed.
Branding and Idea Concept
The corporate mission of Smart Travel Corporation is to provide affordable and convenient means of transport to its customers. Additionally, the organization also engages in providing affordable services that meet the needs of contemporary consumers in Nigeria’s main cities. In this regard, the organization has been involved in the provision of those services in the road transport via its buses that move to different parts of Nigeria. In this regard, the present service of providing cheap and convenient railway transportation for the tourists and business people of Abuja and Lagos will help the company further its corporate mission. Specifically, the railway transport sector has been ignored for some time with the key players in the sector dealing with obsolete and outdated trains that do not offer contemporary services to the current needs of the residents and tourists (Tolley & Turton, 2014). In this regard, the aim of providing this transportation service will be in line with the organizations corporate mission of the provision of affordable, quality, and convenient means of transport.
The marketing of the company’s services locally and internationally will be critical to the success of the venture that Smart Company Corporation wished to engage in. In this regard, the affordable and contemporary railway services nationally and internationally will be marketed via the means of advertisement. This will be through the traditional as well as social media (Tolley & Turton, 2014). In this regard, the organization will contact the major international media such as BBC and Aljazeera so that they collaborate for the sake of advertising their products. Additionally, the company would contact the national television channels who will advertise the services to the Nigerian citizens. The organization will have to share their service provision through the social media by advertising what they offer as well as the costs that they charge. Additionally, The Company would consider using celebrity endorsement by contacting major celebrities who will endorse the railway transport services that the company will offer. According to Tolley & Turton (2014), this will ensure that people around the world are aware and indeed, assured of the quality and affordability of those services.
Smart Travel Corporation is differentiating from competition so that its services can be a step ahead of the competitors. The company is doing this through offering exceptionally quality services on its existing market of road transport. The reputation and strong brand that has been built over the years nationally and internationally ensures that the company has its own consumers (Odeleye, 2012). Additionally, the other competitors charge a relatively higher price that will enable the company have a competitive edge. The speed of the new and improved railways services will be a factor that will make the organization competitive as the consumers will able able to transport their goods for a shorter time than they did before (Odeleye, 2012). Indeed, those travelling will not have to complain about traffic jams, as the railway line will not be subject to that. All these advantages will ensure that there is differentiation of competition between the company and its business rivals.
The company has aligned its mission of affordable and convenient transportation services by charging cheap prices for their services. Specifically, the current railway transport system is obsolete and, therefore, not convenient as it can break down easily. As such, the major competitors will be the road transporters. However, they charge much more for their services due to the traffic jams and the amount of time wasted on the roads (Ademiluyi & Dina, 2011). However, Smart Travel Corporation will be cheaper as it will not spend any much time on the roads. This issue of affordable provision of transport services is in line with the mission of the company of providing affordable, quality, and convenient transportation for its consumers. In this regard, those business people will pay for much lesser for using the railway lie to transport their goods from Lagos to Abuja than when they use road transport or even the air. Indeed, the pricing of the company’s product greatly aligns with the market position and corporate mission of the organization.
Since the early 90s, Smart Travel Corporation has been operating a fleet of buses, running from Lagos to Abuja. With its ability to offer quality road services and a solid work ethics, the company has been rated as one of the leading road transport players across the country (Ademiluyi & Dina, 2011). Therefore, the customers have identified with the company’s brand through the road transport industry. Due to the quality and affordable services that the organization has provided in the road transport industry, it has built a very strong brand that will be a boost for the railway transport industry (Ademiluyi & Dina, 2011). Indeed, despite the railway transport services being a new venture for the company, the consumers have already identified themselves with the Smart Travel brand. As a result, the brand of the company is very effective.
Defining Product or Service Need
The targeted consumers of the railway transport services are the traders who sell their products in the cities of Lagos and Abuja. In this case, they have goods that needs to go to the market in the shortest time possible as some of them can expire within a very short period. Additionally, the tourists who visit the two cities require the railway as they are bored by staying on the traffic jams when using the road transport system. Therefore, this service offers all that as it will enable the farmers and traders to move their goods between the two cities within a very short time and at a very an affordable cost. Additionally, the tourists have the behavior of exploring new areas. As such, the railway line would offer them an opportunity to do that because it will pass through various areas.
The railway transport service offers cheap, quality, and convenient railway transport that does not exists in the transport industry. In this regard, the existing railway lines and trains are obsolete; therefore, these new and improved trains would offer quality and convenient transport to the consumers (Akwara, Udaw & Ezirim, 2014). Additionally, there is a need for a means of transport for the traders that is convenient for them and that which is not costly at the same time. Due to the nature of their products and the small profits that the get, they need a transportation means that will offer them convenience and save on the costs of transport. This need will be fulfilled by the services that will be offered by Smart Travel Corporation.
The traders and residents of Lagos and Abuja seek information about transportation from their friends who are in the same business. Tourists use the internet to search for various means of travelling between the two cities. Additionally, they use the social media to communicate on the various companies that offer the services. In this regard, they discuss on which company offers the best services and which is the most convenient. Additionally, traders have various discussions and face-to-face meetings. As a result, they have to transport their products to the markets every day. However, there are issues with the obsolete trains breaking down. Therefore, according to Akwara, Udaw & Ezirim (2014), some of their products are spoilt as the train might delay for several hours and even a day. Therefore, the services of railway transport by the farmers and traders are frequently used on a daily basis.
The choice of the farmers, traders, and tourists as the target is the best choice for a variety of reasons. First, they will provide market for the railway transport services, as they will be using them on a daily basis. As a result, there will be some form of guarantee that the organization will be having customers for their services on every single day. Secondly, the farmers will enjoy the use of these services, as they will be cheaper and convenient for them. In this regard, they will be assured that their products will reach the market fresh and without any undue delays. More importantly, the tourists that are also chosen as target markets will enjoy the railway transport services, as they will offer them an opportunity to explore the various forests and areas of Nigeria without any fear of attack.
Pricing
Several costs will be involved in the venture. Specifically, the offering of the railway transportation services by Smart Ventures Corporation would involve various costs, which are mandatory for every business organization undergoing such a venture. These costs are fixed and variable costs. Fixed costs are those, which do not vary with the amount of goods and services that the organization would produce (Dolgui & Proth, 2010). In the current situation, the costs would not depend with the number of consumers that the railway transportation would transport. Under this category are the leasing of the trains and wagons. Additionally, the monthly salaries of the train crew would fit into this category. The other category would be that of variable costs. In this regard, according to Dolgui & Proth (2010), these costs vary with the variations in the output of the organization. In this regard, they would be depended on the number of consumers that would use the railway transport system for the company. In this category are the costs of fueling the train. The variable costs involved are far much smaller than the expected return in a period of one year. These costs fit into the company’s short and long-term goals, as they are feasible. The following table gives estimates of the costs that will be incurred.
Cost category Estimated costs per year
labor $41,000
Lease of wagons $1,300
fuel $11,200
Train operators $65,000
Station expenditure $8,500
maintenance $25,000
overheads $3,000
administration $4,000
insurance $1,500
security $1,200
management $8,000
Totals $169,700
The costs that are charged by the competitors are almost the same as these with a difference of below 2%. The competitors pricing is very high compared with the time that the consumers and their goods take from the time they board the train to the time that they arrive at their destinations. Additionally, there is much inconvenience as the competitors trains can break down easily as they are obsolete and outdated. As a result, the customers are likely to undergo various losses at the time that the services are discontinued because of the breakage. According to Dolgui & Proth (2010), due to this charging similar process but offering quality services than the competitors would be beneficial to the company.
The target market who are the farmers, traders, as well as the tourists are able to pay for the services of the train at the set prices from Lagos to Abuja. This is because of the desperation that they have since railway transport was introduced in Nigeria. Additionally, they would consider it an ethical behavior to pay for prices commensurate with the quality and convenience of the services offered. Specifically, they have never enjoyed good services offered in the railway transport as the companies that have been involved have always used obsolete trains, which are not reliable. As a result, the target market are willing to pay any amount as long as they are able to get quality and convenient services from the organization.
The most appropriate pricing strategy that is applicable to this market is the cost plus pricing. In this regard, the organization management would calculate the labor costs, direct material costs, and the overheads costs that are incurred in the provision of the railway transport services and add them up with the aim of creating a profit margin, which would eventually dictate the prices of the services (Dolgui & Proth, 2010). In this strategy, the customers will be able to get the rationale of the pricing while the company would avoid the probability of underpricing or over pricing. Indeed, this strategy would ensure that the organization does not operate under losses.
References
Ademiluyi, I. A., & Dina, O. A. (2011). The Millennium Development Goals and the Sustainable Future for Nigeria’s Urban Environment: A Railway Strategy. Journal of Human Ecology, 33(3), 203-209.
Aderamo, A. J. (2012). Urban transportation problems and challenges in Nigeria: A planner’s view. Prime Research on Education, 2(3), 198-203.
Akwara, A. F., Udaw, J. E., & Ezirim, G. E. (2014). Adapting Colonial Legacy to Modernism: A Focus on Rail Transport Development in Nigeria. Mediterranean Journal of Social Sciences, 5(6), 465.
Dolgui, A., & Proth, J. M. (2010). Pricing strategies and models. Annual Reviews in Control, 34(1), 101-110.
du Toit, A. S. A. (2016). Using environmental scanning to collect strategic information: A South African survey. International Journal of Information Management, 36(1), 16-24.
Odeleye, J. A. (2012). Politics of Rail Transport Development in Developing Countries: Case of Nigeria. Journal of Civil Engineering and Architecture, 6(12), 1695.
Tolley, R., & Turton, B. J. (2014). Transport systems, policy and planning: a geographical approach. Routledge.
