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NOTTINGHAMTRENTUNIVERSITY
Business Operations& Reliability Management
ISYS40161
Module Leader:
ChristopherMccollin
Module Assignment - 1
SAURABH PARIHAR (N0362556)
Submission Date:
March 2011
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Footsteps Historical
ToursProject: Market analysis and scope of Ecommerce
Inter-net LTD.
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Index
1. Introduction__________________________________________________________22. Executive summary____________________________________________________3
3. Market Analysis___________________________________________________4 to 8
4. Market trends_________________________________________________________94.a PEST Analysis_____________________________________________________9
5. Strategic Analysis of FHT______________________________________________105.a Porter`s Five forces Analysis________________________________________ 11
5.b SWOT Analysis with treatment__________________________________12 to 13
6. Marketing plan_______________________________________________________13
6.a Marketing Mix 4 P`s___________________________________________13 to 14
6.b Current Market & Ecommerce________________________________________15
7. Investment Appraisal and Timescale_________________________________16 to 17
8. Recommendations____________________________________________________18
9.
Conclusion__________________________________________________________19
10.References__________________________________________________________20
11.Bibliography________________________________________________________20
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Introduction:
Footsteps historical tours is small medium size enterprise, which is organising historical tours
and exploring history to communicate it in people for about 30 years. It is family business
organization run by Roger and his wife Judith, both are passionate about history. Judith is
managing the administrative side of the business, whereas Roger is indulge in researching
history to write articles and broadcasting the telecast about history.
Footsteps tours had achieved architectural place in its long and quite successful journey by
providing dedicated, quality and consistent service to its customers. They are more or less
planning about growth of business and to make it run more smoothly by using latest
technologies. Although the administration & management of business is going smoothly, but
they both are unable to do any other stuff of their own interest!
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Executive Summary:
The report is an Market Analysis for Footsteps Historical Tours which is done by various
tools such as Porter`s five forces, PEST Analysis, SWOT Analysis. The report is preceded
with Analysis of UK tourism industry, Heritage tourism and some statistics continued by Key
considerations for market growth in terms of Footsteps Historical Tours. Investment appraisal
for i-trading initiation for Footsteps Historical Tours is presented with repayment or recovery
of investment. Some recommendations with timescale are also been suggested to implement
for better opportunities in market growing followed by conclusion. And at last list of
references and bibliography.
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Market AnalysisofTourism Industryin United Kingdom:
y The UK is the 6th most visited destination by international tourists.y Travel and tourism is the UKs fifth largest industry. It employs more than 2.5 million
people throughout the UK and contributes more than 19 billion to the UK economy.
y Built heritage, cultural heritage and contemporary culture are core to Britainsattractions, with shopping and watching sport popular activities.
Factors Contributingto Tourism Trends:
a. Weatherb. Transportationc. Domestic Economyd. European Economye. Global Economy
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Market AnalysisofTourism Industryin Eastmidlands:
Contributes 5 billion to the economy
About 3.5% of GDP
30,000 businesses
200,000 people employed
90% of trips are day trips, 9% are staying trips from other parts of the region, and 1% arefrom overseas
800,000 visits from overseas annually
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Historical/Heritagetourismindustry Analysis:
a. Visitorcharacteristics(CouldbeappliedinMarketsegmentation):
VISITOR
CHARACT-ERISTICS
GENERAL SITUTION
SPECIFIC
OBJECTIVE
MEASURES
Demographic, geographic and socio-economic
factors:
y Employmenty Educationy Incomey Family sizey Home locationy age
Situation specific:
y placey type of transportationy number of peopley length of stayy expenditure patternsy heritage sites visitedy type of accommodationy activity patterns
INFERREDMEASURES
Characteristic visitor lifestyle:
y motivationsy expectationsy preferred heritage experiencey philosophy and approach to heritage
and travel
y desired personal benefitsy reaction to different kinds of heritage
experiences
Preferences and attitudes
towards a particular destination,
Site or product:
y likelihood of futuretravel to a destination
y attitudes towards adestination/product/site
y activity preferencesy location preferences
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b. Scalesofhistoricalattractions:
c. Typesofheritageattractions:(couldalsoaddsometextsfordescriptionofbelow)
National History attractions Scientific attractions Primary production attractions Craft centres and workshops Manufacturing centres Transportation attractions Sociocultural attractions Attractions associated with historic people Performing arts attractions Theme parks Galleries Stately and ancestor homes Pleasure gardens Religious attractions Military attractions Genocide monuments Towns and townscapes Villages and hamlets
Shared AttractionsLocal National
Personal
World
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Key pointsforconsiderationtogrow MarketintermsofFootsteps Historical Tours:
There are more households without children. There are more single person households.
The average age of the population is increased and the seniors market is growing,which is more important in view of these type of tours.
Discretionary income will increase and, therefore, people will have more money tospend on leisure.
People now are better educated and want a broader range of experiences. Out of the ordinary experiences; is what people may be attracted towards.
People are also attracted to live in rural areas with any historical attachment.These key points show that there is a wide market to grow business.
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Markettrends:
PEST ANALYSIS FOR TOURISM INDUSTRY IN UKin LieuwithFHT:
POLITICAL:The political environment of U.K. is quite stable. The government of UK promotes the
tourism organizers because UK tourism industry is worth 114b and contributes more than
8% of the total gross domestic product. There are several independent agencies such as
Tourism Alliance seeks to establish and maintain a favourable operating environment for all
businesses involved in Tourism sector. FHT could gain more trust by applying and joining
any federation or agency working independently for the representation of quality of products
and services.
ECONOMICAL:UK economy is benefiting individuals by gradual low inflation rate. One of the most
influential factors on the economy is high unemployment levels, which decreases the aspect
of expenditure on leisure and holiday packages. Tourism industry is also affected by the percapita income of an individual along with nation`s economy.
The downside is that disparities between the wealthier parts of the country and pockets ofdeprivation will get wider, with implications for travel demand. There are certain issues
which could influence market for both buyers and sellers in this industry, such as VAT, fuelprice hike, inflation etc. To overcome the economical up and downs FHT could maintain an
premium and a base levels for their services.
SOCIOLOGICAL:
Ageing, increasing number of singles, day-bound visit trends are social factors which could
influence the business of FHT. `Senior` people are more interested in holiday packages and
tours with bias of historical attachment. Also eagerness to know about ancestors attractspeople. Women are more attracted towards leisure spending in gaining experience about past
and historical events. Food also finds an important place in tourism industry. FHT could
provide distinguish features in the packages to maintain competitive environment for the
same service which its competitors are providing.
TECHNOLOGICAL:
The rapid development of technology is affecting the businesses in UK and all over the
world. A trend of getting internet access at home and buying online is developing in the UK.
Trend of fast and efficient service provision is at height in any business. Internet, tele- booking, tele- marketing, customer service management are the basic necessities for any
business to run smoothly in todays technological environment. By using ecommerce FHT
could be able to attain new height for the business, attract more people and expand their
business by 24*7 run..
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Strategic AnalysisofFHT:
Porter`sFiveforcesanalysisofFootsteps Historical Toursbasedoncurrent position:
Intensity of competitive rivalry Rivalry is high Services and products are alike,
Differentiated by the location &
experience of provider, customer
switching is quite low.
Presently there are more than four
competitors in market
Threat of the entry of new
competitors
Threat of new entrants is
moderately high
The initial cost of setup does not
requires high investment, but wide
experience and research on history
Supplier Power Supplier power is low There are plenty of options
available for transportation &catering; but less options with
accommodation/hotels
Buyer Power Buyer power is high Depending on the individual viewfor tour, the customer has
advantage for specific demands
Threat of substitute products orservices
Alternate or substitute products threat is moderately
high
There are plenty of options to gainsame information via other
sources such as internet,
broadcasted videos, magazines
etc.
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SWOT ANALYSIS WITH TREATMENTS:
FOOTSTEPSHISTORICAL
TOURS
INTERNAL FACTORS
STRENGTHS
y Owners are experienced and passionateabout history
y Have an architectural place in markety Positive reviews and feedback by
customers
y Personal fame of Roger as radiobroadcaster
y Have an specific area of tourism businessi.e. Historical tours
WAYS TOEXPLOIT
y Attracts more people with zealto gain background information
on their tour
y Could be beneficial in growingbusiness
y Could be beneficial in customers pre-review about company,which impacts psychological
positivity on customer
y Could be exploited as brandimage and to attract more people
y Could be used to attractparticular segment of customers
WEAKNESS
y Low marketing profiley Outdate and time consuming operation of
business
y Limited or no use of current technologiesy Low management and organization in day
to day business running
y Unawareness of market trends and futureplanning for business growth
WAYS TOREDUCE
y Internet marketing &tele-marketingy Going ecommerce, i.e. having
an website with all the facilities
y Could appoint an technicaladviser
y Organization by using propertechnical support/facilities usedin business currently and also
by appointing person for
managerial tasks
y By giving proper time formarket study and future
possibilities
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EXTERNAL FACTORS
OPPORTUNITIES
y Attract more people by some offers
y Pointing out the needs of the customer andprovide them to possible extent
y Market segmentation
WAYS TOEXPLOIT
y Provide attractive offers withcomplementary products and
exciting packages
y By asking customers for anyadditional facility, any particular
type of tour etc.
y By determining the segment ofthe customers, provide tours and
holiday packages attractive for
particular group of people
THREATS
y Competitors with alike profile
y Conflict on business issues because ofroles of family and business overlap
WAYS TOREDUCE
y Setting Unique Selling Point fortheir business
y Introducing formal businessmanagerial positions, proceduresand timing
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Marketing Plan:
Market Mix:
7P`s:
Product:
The FHT is a service product and involves tours in exotic locations of England. There are
different kind of tour products:
1. Day-bound Tours: These tours are for individuals or groups interested in visitingnearby locations for a day
2. Night stay Tours : These tours are for individuals or groups interested in couple ofdays visit to a place for holiday
FHT provides these services with background research and guide throughout the tour.
Promotion:
The USP of FHT is its 30 years long and quite successful journey. The FHT is not so much
concern about promotion and advertisement. Its customers are loyal, genuine and appreciated
with its services. Although `Roger` being a RADIO broadcaster could promote FHT more
effectively, as he is famous personality.
Price:
The main motto of FHT is to provide quality and dedicated service, so the price segment does
not matters for them. Although for the services they provide, they can set an
premium/executive price range for its loyal customers. To grow the business FHT also
provides services at economy price, which attracts more customers. Also to compete with
competitors they are also keeping flexibility to sustain in market.
Place:
The FHT conducts tours and packages in several parts of England. Such as Lincoln, York,
Edinburgh, Nottingham, Scott, London. FHT also conducts theme based tours such as `In
Queen Mary`s footsteps`, Historical events etc.
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People:
The people in FHT consists of Tourist guides as well as the main operations staff, Staff of
transport operators i.e. coaches, hotels and accommodation staff.
Physicalevidence:
FHT has tie up with some of hotels nearby the historical attractions, coach operators and at
the top Nottingham from where it started and situated has many historical attractions.
Process:
Currently the on-going business is run in traditional way i.e. tele-booking, documents are
maintained for accounts, regular paperwork for day to day business. The tours are conducted
by coach/buses and for night stay tours hotels and camps are booked.
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Currentmarket & Ecommerce:
Electronic commerce (EC) is the use of electronic methods, means and procedures to conduct
various forms of business activity in world of internet. The Internet is changing the World.
Before our eyes, the World Wide Web is systematically transforming almost every industry.
To an increasing extent, a company does not exist if it is not present on the internet. The
tourism industry is in the early stages of being transformed by the internet. By creating
websites for clients, one could establish them on the Web at a key moment in the
transformation of the tourism industry.
There are number of reasons why to go for i(internet)-business/Ecommerce for
Footsteps historical tour:
y It will be more easier for broadcasting videos over internet.y It will be more easier to carry out accounting as e-payment manages the money
directly with bank accounts.
y Ecommerce could enable to carry out businesses without the barriers of time ordistance. One can log on to the Internet at any point of time, be it day or night and
purchase or sell anything one desires at a single click of the mouse.
y The direct cost-of-sale for an order taken from a web site is lower than throughtraditional means (retail, paper based), as there is no human interaction during the
online electronic purchase order process. Also, electronic selling virtually eliminates
processing errors, as well as being faster and more convenient for the visitor.
y The day-to-day pressures of the marketplace have played their part in reducing theopportunities for companies to invest in improving their competitive position. Amature market, increased competitions have all reduced the amount of money
available to invest. If the selling price cannot be increased and the manufactured costcannot be decreased then the difference can be in the way the business is carried out.
Ecommerce has provided the solution by decimating the costs, which are incurred.y The strategic benefit of making a business ecommerce enabled, is that it helps
reduce the delivery time, labour cost and the cost incurred in the following areas:
1. Document preparation2. Error detection and correction3. Reconciliation4. Mail preparation5. Telephone calling6. Data entry7. Overtime8. Supervision expenses
y Operational benefits of ecommerce include reducing both the time and personnelrequired to complete business processes, and reducing strain on other resources.
y It will make it easier, for people to trace their ancestors and will, therefore, stimulategenealogical tourism.
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Investment Appraisalfor Ecommerce(EC):
1. Introduction: Investment appraisal can be done by two methods:a. Payback Methodb. The average rate of return
Considering a new start of ecommerce for FHT, Payback method is more favourable because
ecommerce includes techniques which are changes periodically.
Allcomponentsandservicesrequired:
Initial software cost 750 yearly
Planning and development costs 500 yearly
Possible failure cost 200 per failure
Maintenance and upgrading cost 500 yearly
Initial hardware cost 500 for two Computers
Cost of top management
involvement
1200 per month once for approving
finance
Cost related to dependency on newtechnologies
150 yearly
Consultancy cost 500 yearly
Personnel training cost 200 yearly
Website Design & development 1000 once
Website Maintenance and up gradation 500 yearly
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Final plot:
Project Initial CostTOTAL ExpectedEarnings(Years) 1st 2nd 3rd 4th
Implementing
Ecommerce
i.e. i-trading
6200
(Assuming the
failure once ayear, initial
setup for one
time only, all
type of
maintenance
and personal
training foryearly
8,000 9500 10,000 11,000
Expected time of repayment or covering up the investment 9 months.
Timescale:
The complete implementation of IT project would take:
Two months for website development and design. Period of a month for personal IT training. Period of a month for setting up resources (Hardware/Computer Systems, Software
and networking)
The benefits of going ecommerce are not immediate, but on long term i.e. increase the
business which could be analysed annually.
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Recommendations:
1. The urgent need to grow business in today`s business scenario is website ofthe enterprise, so website design and development should be approved.
2. To use latest technologies in the tours such as GPS, satellite positioning, so asto provide more accurate the position of any place with historical importance.
3. To implement some promotional activities such as advertisement on TV, radioetc.
4. To have proper managerial structure of organization, such as CEO Roger,Managing Director Isabella, Manager of Human resources Judith and with a
a Position of Technical Operations Manager for Max.
5. Market segmentation: By conducting and organizing holidays and packagesfor particular age group such as for seniors(old age), school students tours,
adult students tours. Tours attracting singles, family tours etc.
6. To set an premium range of services for loyal and executive segments ofcustomers with a economic range of services which attract more customers.
7. Implement time management of business, which could reduce family issuesoverlaps with business issues: ecommerce will save plenty of time of owners
of FHT.
The above recommendation includes some short term and some long term achievable
objectives.
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Conclusion:
Overall analysis of market for Footsteps Historical Tours shows that there are many areas to
look forward for market growth and proper management of their business. The key findings
of report consists of:
There is an requirement of website for FHT to go for i-trading with facility of e-payment.
FHT management also lack behind in use of modern technology and trends currentlyin market.
There is a wide market to grow business along with threat of competitors, whichcould be reduced by proper Marketing planning.
The FHT also lacks in proper structure of management and human resources.And at the end report suggests the recommendations to the above outcomes. Thus the report
is an complete Analysis for Footsteps Historical Tours with current position, key findings to
grow market, ecommerce and its advantage in tourism in contrast for FHT, investment
appraisal for set up of e-business and recommendations.
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References:
"Marketing Management: Strategies and Programs", Guiltinan et al., McGrawHill/Irwin, 1996
David JOBBER, Principle and Practice of Marketing, 5th Edition,McGraw-HillEducation,2006
Investment Appraisal : Graham Mott, Pearson Education Limited in 1997 , 3rdRevised edition
Marketing strategy : a decision-focused approach :Orville C. Walker, Jr. and John W.Mullins,McGraw-Hill Higher Education, 2008
E-commerce : Jeffrey F. Rayport, Bernard J. Jaworski, McGraw-Hill/IrwinMarketspaceU, c2001
Tourism statistics : international perspectives and current issues: edited by J. JohnLennon,Continuum, 2001
Heritage tourism : themes in tourism :Dallen J. Timothy and Stephen W.BoydPrentice Hall, 2003
Bibliography:
http://www.ecommerceeducation.com/benefits-of-ecommerce.asp
http://www.visitbritain.org/insightsandstatistics/resourcesearch/index.aspx
http://www.visitbritain.org/insightsandstatistics/trendsandforecasts/trendsupdate/tu147.aspx
http://www.visitbritain.org/insightsandstatistics/index.aspx
http://www.statistics.gov.uk/CCI/nscl.asp?ID=8131
http://www.eastmidlandstourism.com/?page_id=85