Marketing Mix Program
Vienna International, whose head office is in Vienna, operates and manages about 41 first class hotels and resorts, which are spread in about ten countries in Europe. It has the Vienna Tour Operator, which selects potential destinations, draws up appropriate routes and fashions different Vienna International travel packages. It has also has the Vienna Travel agency which is charged with the selling and promotion of Vienna International travel packages, reservation and ticketing, provision of transport services and MICE service. In China, Vienna International’s target market was city tourists, business travelers, sport tourists, health and wellness tourists and families mainly from Europe and Australia to China. Vienna International Travel proposed a number of tailor-made European tour packages to a Chinese group. However, the Chinese Group declined the offer opting for another offer from a small Chinese Agency in Vienna. A number of reasons led to the failure of the proposal offered by Vienna International to the Chinese Group.
The first major reason for the failure was the price level that Vienna International offered for its products. Vienna International targeted high-end travelers whose main concern was the quality of the product and not the price. It therefore offered high quality and high price products and services. However, the customers that the Chinese group had were ordinary Chinese group travelers to whom price was a big issue (Kotler, Armstrong, Wong & Saunders, 2008). The products that Vienna International offered such as the first class hotels were expensive and not favorable to the ordinary group of Chinese travelers. This led to the Chinese group opting for another company in Vienna, which offered a lower price for its products. The uncompetitive prices offered by the company led to the failure of the company in the Chinese market.
The second reason was the place and promotion techniques used by Vienna international. Although Vienna International has its own website which it uses to promote its products and services, the website is only in the English, German and Russian language. The company’s website lacks a Chinese option making it hard for the Chinese Group of travelers to learn of the services and products the company has to offer. The lack of a Chinese language option in its website limited the number of people the firm could reach leading to the failure.
Another reason for the failure was a communication barrier and failure in process. Communication between Vienna International and the Chinese group and partners failed because of the presence of a cultural gap. The Chinese have a preference for face-to-face communication or through phones, which was not possible in this case because of the distance and time gap between Vienna and China (Kotler et al., 2008). The only suitable alternative was the use of email which the Chinese did not support leading to the failure. The time and cultural gap led to the failure.
Another reason for the failure was competition from other smaller firms operating in the same market. The smaller firms offer products and services at a very low price, but of lower quality than what Vienna International had to offer. The low prices offered by the smaller firms were favorable to the ordinary Chinese travelers and led to the small firms eating away the market targeted by Vienna International. Competition from the smaller firms also led to the failure of the company in the Chinese market.
Conclusion and recommendation
A number of reasons led to failure of Vienna international in the Chinese Market. The main reason for the failure was the high prices offered by the firm for its products and services. Although the products and services were of high quality, the target market was made up of ordinary Chinese travelers whose main concern was price and not quality. Another reason for the failure was the communication barrier, cultural and time gap that existed between the Company and its target market. This hindered the exchange of information between the two (Zikmund & D’Amico, 1993). The other reasons for the failure was the presence of smaller firms targeting the same market offering low price products and the failure in the promotional technique used by Vienna International
Vienna International has to do a number of things to allow it capture the Chinese market. The first and most critical is to diversify its products and services to allow for competitive prices. The company should introduce new products and services of lower and competitive prices to capture the target market. The company should also broaden its website to have the Chinese language as one of the options. This will help in the promotion of its products and services. It will also enable the exchange of information between the company and its clients. The company should also set up travel agents in China to help bridge the existing time, cultural and communication gaps. This will help the company capture its targets in the Chinese market.
Kotler, P., Armstrong, G., Wong, V., & Saunders, J. Principles of marketing Upper Saddle River, NJ: Financial Times Prentice Hall, 2008
Zikmund, W. G., & D’Amico, M. Marketing. Santa Fe, NM: West Publishing Company, 1993