NOTTINGHAM TRENT UNIVERSITY

Business Operations & Reliability Management

ISYS40161

Module Leader:

Christopher Mccollin

Module Assignment - 1

SAURABH PARIHAR (N0362556)

Submission Date:

March 2011
Footsteps Historical
Tours
Project: Market analysis and scope of Ecommerce

Inter-net LTD.
 Index

1. Introduction__________________________________________________________2

2. Executive summary____________________________________________________3

3. Market Analysis___________________________________________________4 to 8

4. Market trends_________________________________________________________9
4.a PEST Analysis_____________________________________________________9

5. Strategic Analysis of FHT______________________________________________10

5.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
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!
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.
Market Analysis of Tourism Industry in United Kingdom:

 The UK is the 6th most visited destination by international tourists.

 Travel and tourism is the UK’s fifth largest industry. It employs more than 2.5 million
people throughout the UK and contributes more than £19 billion to the UK economy.
 Built heritage, cultural heritage and contemporary culture are core to Britain’s
attractions, with shopping and watching sport popular activities.

Factors Contributing to Tourism Trends:

a. Weather
b. Transportation
c. Domestic Economy
d. European Economy
e. Global Economy
Market Analysis of Tourism Industry in East midlands:

• 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% are
from overseas
• 800,000 visits from overseas annually
Historical/Heritage tourism industry Analysis:

a. Visitor characteristics(Could be applied in Market segmentation):

VISITOR GENERAL SITUTION

CHARACT- SPECIFIC
ERISTICS

Demographic, geographic and socio-economic Situation specific:

factors:
 place
 Employment  type of transportation
 Education  number of people
 Income  length of stay
OBJECTIVE  Family size  expenditure patterns
MEASURES  Home location  heritage sites visited
 age  type of accommodation
 activity patterns

Characteristic visitor lifestyle: Preferences and attitudes

towards a particular destination,
 motivations Site or product:
 expectations
 preferred heritage experience  likelihood of future
 philosophy and approach to heritage travel to a destination
INFERRED and travel  attitudes towards a
MEASURES  desired personal benefits destination/product/site
 reaction to different kinds of heritage  activity preferences
experiences  location preferences
b. Scales of historical attractions:

World

Local National
Shared Attractions

Personal

c. Types of heritage attractions: (could also add some texts for description of
below)
 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
Key points for consideration to grow Market in terms of Footsteps 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 to
spend 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.
Market trends:

PEST ANALYSIS FOR TOURISM INDUSTRY IN UK in Lieu with FHT:

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 per
capita income of an individual along with nation`s economy.
The downside is that disparities between the wealthier parts of the country and pockets of
deprivation 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, fuel
price 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 attracts
people. 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..
Strategic Analysis of FHT:

Porter`s Five forces analysis of Footsteps Historical Tours based on current 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 Threat of new entrants is The initial cost of setup does not
competitors moderately high 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 view

for tour, the customer has
advantage for specific demands

Threat of substitute products or Alternate or substitute There are plenty of options to gain
services products threat is moderately same information via other
high sources such as internet,
broadcasted videos, magazines
etc.
SWOT ANALYSIS WITH TREATMENTS:

FOOTSTEPS
HISTORICAL
TOURS
INTERNAL FACTORS

STRENGTHS WAYS TO EXPLOIT

 Owners are experienced and passionate
about history
 Have an architectural place in market
 Positive reviews and feedback by
customers
 Personal fame of Roger as radio
broadcaster
 Attracts more people with zeal
to gain background information
on their tour
 Could be beneficial in growing
business
 Could be beneficial in customers
pre-review about company,
which impacts psychological
positivity on customer
 Could be exploited as brand
image and to attract more people

 Could be used to attract

 Have an specific area of tourism business particular segment of customers
i.e. Historical tours

WEAKNESS WAYS TO REDUCE

 Low marketing profile
 Outdate and time consuming operation of
business
 Limited or no use of current technologies
 Low management and organization in day
to day business running
 Unawareness of market trends and future
planning for business growth
 Internet marketing & tele-
marketing
 Going ecommerce, i.e. having
an website with all the facilities
 Could appoint an technical
adviser
 Organization by using proper
technical support/facilities used
in business currently and also
by appointing person for
managerial tasks
 By giving proper time for
market study and future
possibilities
EXTERNAL FACTORS
OPPORTUNITIES
 Attract more people by some offers
 Pointing out the needs of the customer and
provide them to possible extent
 Market segmentation
THREATS
 Competitors with alike profile
 Conflict on business issues because of
roles of family and business overlap
WAYS TO EXPLOIT
 Provide attractive offers with
complementary products and
exciting packages
 By asking customers for any
additional facility, any particular
type of tour etc.
 By determining the segment of
the customers, provide tours and
holiday packages attractive for
particular group of people
WAYS TO REDUCE
 Setting Unique Selling Point for
their business
 Introducing formal business
managerial positions, procedures
and timing
Marketing Plan:

Market Mix:

7 P`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 visiting
nearby locations for a day
2. Night stay Tours : These tours are for individuals or groups interested in couple of
days 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.
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.

Physical evidence:

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.

Current market & 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:

 It will be more easier for broadcasting videos over internet.

 It will be more easier to carry out accounting as e-payment manages the money
directly with bank accounts.
 Ecommerce could enable to carry out businesses without the barriers of time or
distance. 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.
 The direct cost-of-sale for an order taken from a web site is lower than through
traditional 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.
 The day-to-day pressures of the marketplace have played their part in reducing the
opportunities for companies to invest in improving their competitive position. A
mature market, increased competitions have all reduced the amount of money
available to invest. If the selling price cannot be increased and the manufactured cost
cannot 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.
 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 preparation
2. Error detection and correction
3. Reconciliation
4. Mail preparation
5. Telephone calling
6. Data entry
7. Overtime
8. Supervision expenses
 Operational benefits of ecommerce include reducing both the time and personnel
required to complete business processes, and reducing strain on other resources.
 It will make it easier, for people to trace their ancestors and will, therefore, stimulate
genealogical tourism.

Investment Appraisal for Ecommerce(EC):

 1. Introduction: Investment appraisal can be done by two methods:
a. Payback Method
b. 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.

All components and services required:

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 £1200 per month once for approving

involvement finance

Cost related to dependency on new £150 yearly

technologies

Consultancy cost £500 yearly

Personnel training cost £200 yearly

Website Design & development £1000 once

Website Maintenance and up gradation £500 yearly

 Final plot:

Project Initial Cost Expected

TOTAL Earnings
(Years) 1st 2nd 3rd 4th
Implementing £6200 £8,000 £9500 £10,000 £11,000
Ecommerce (Assuming the
i.e. i-trading failure once a
year, initial
setup for one
time only, all
type of
maintenance
and personal
training for
yearly

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.

Recommendations:
 1. The urgent need to grow business in today`s business scenario is website of
the enterprise, so website design and development should be approved.
2. To use latest technologies in the tours such as GPS, satellite positioning, so as
to provide more accurate the position of any place with historical importance.
3. To implement some promotional activities such as advertisement on TV, radio
etc.
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 packages
for 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 of
customers with a economic range of services which attract more customers.
7. Implement time management of business, which could reduce family issues
overlaps 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.

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 currently
in market.
 There is a wide market to grow business along with threat of competitors, which
could 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.

References:
  "Marketing Management: Strategies and Programs", Guiltinan et al., McGraw
Hill/Irwin, 1996
 David JOBBER, Principle and Practice of Marketing, 5th Edition, McGraw-Hill
Education,2006
 Investment Appraisal : Graham Mott, Pearson Education Limited in 1997 , 3rd
Revised 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/Irwin Market
space U, c2001
 Tourism statistics : international perspectives and current issues: edited by J. John
Lennon, Continuum, 2001
 Heritage tourism : themes in tourism : Dallen J. Timothy and Stephen W. Boyd
Prentice 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