Contiki’s Marketing strategy

The purpose of this report is to understand the role of marketing, the basis of the consumer
behaviour and influences on tourist decision making and to examine the role of segmentation
for the travel agent Contiki. Contiki is a tour company founded in New Zealand that offers
tours to different destinations such as Europe, Australia, New Zealand, North America, South
America, Africa, Middle East and Asia, with a target market of young people between the age
of 18-35 years old. The tours are made up of sightseeing, free time, social events, culture and
adventure, but one of the most important factors is the social element, by being able to
experience the travelling with a group of people with similar interests. The company was
founded in 1962 and it is one of the most popular youth travel companies in the world, that is
also committed to sustainable tourism (Contiki, 2020).

The marketing segmentation is defined as dividing the customers of a company into

different types of shared characteristics with the aim of identifying the most profitable
segments and the potential for growth (Madhavaram and Hunt, 2007). The main strategic
approach of the segmentation is based on the number of segments, such as for zero segments
the strategy used is an undifferentiated strategy with no segmentation, for one segment the
strategy used is a focused strategy based on niche marketing with a small target market, for
two or more segments the strategy used is a differentiated strategy with multiple niches more
defined target markets and for thousands of segments, the strategy used is hyper-
segmentation with customised offers for each customer. Contiki uses a differentiated strategy
with the main target markets chosen represented by young people with age between 18 to 35
interested in cultural adventures and authentic experiences, also following a sustainable path
for travelling. Another step in segmenting the market for a company is choosing a base and
some of the most used ones are demographic, geographic, psychographic, behavioural and
situational. The demographic target is made by using characteristics such as age, gender,
income, family size, economic situation, etc., such as the target used for Contiki for young
people between 18 to 35 years old, with a medium economic situation because the packages
have affordable prices but are not categorised as low prices and without children. The
geographic target is represented by the physical location and Contiki offers holidays all
around the world in areas such as Europe, Australia, New Zealand, North America, South
America, Africa, Middle East and Asia. The psychographic target is chosen related to the
lifestyle, the personality and the social life of a person and the company focuses on people
interested in adventure, culture, that like to travel in groups, are social and open to new
adventures. The behavioural target analysis the purchasing, consumption and behaviour of a
person, Contiki focusing more on the authentic experiences rather than having a luxurious
experience, the customers are seeking enthusiast and travellers interested in discovering the
country. The contextual and situational target is based on context and situation, for example,
shopping, life changes or other special situations that can happen on day by day basis
(McDonald, 2012). Segmentation is an important step for all the companies in order to
choose where they redirect their marketing resources, to identify the appropriate target
market and their unique selling point, to grow and have success in the business.

Positioning in marketing is defined as the place that a business occupies in the eyes of the
customers and what differentiates it from other brands and companies. In order to position
itself, a company uses the marketing mix usually composed from the people, the processes,
the physical evidence, the product, the price, the place and the promotion (Ries and Trout,
2001). Contiki is a company that offers packaged holidays as a product to different locations
such as Europe, Australia, New Zealand, North America, South America, Africa, Middle East
and Asia as a place, having a low price because everything is done online and there is no
need for the spending of a physical location and hiring people, using social media and
influencer marketing for promotion, based on the people interested in the company and
adapting to the wants and needs of their target market, the millennials. According to an article
published by Eye For Travel (2016), the successful marketing strategy used by Contiki is
based on user-generated content and transforming the customer into the marketer and creates
a unique, real and relevant experience for the readers and potential customers. According to
the article, 92% of customers trust earned media more than classic pieces of advertising.
Another strategy of the company is to create competitions offering big discounts for people
sharing photos from their trips, using the company’s hashtag and engaging in different ways
with the company through social media. Although the company was founded in 1962 and it is
58 years old, it kept the same target market over the years and adapted to the conditions of
the moment in order to be up to date. Another important aspect of the company through the
interface of the website is that it lets the customer customise their holidays and fit it to their
own needs and wants because the company recognise that people are not the same and they
do not want the same things (Web in Travel, 2016). Some alternative strategies used to sell
more tours and activities are partnering with local businesses such as accommodation and
activity providers, working with the local destination marketing organisations in order to
promote the products offered, giving out discount codes to customers and building email lists,
focusing on the content on the website and the SEO, using paid ads on social media and
Google in order for the customers to access the booking system.

In conclusion, the marketing of a company is the most important factor in the success of
the business and using all the marketing tools it is the best way to ensure a successful future,
to gain more customers and to grow as a business. Contiki is a modern company that has been
growing with the market for the past 50 years, using modern approaches of marketing such as
digital technology, social media and influencer marketing in order to promote other people’s
experiences for a real and authentic connection to the reader. Using segmentation, target
marketing and positioning efficiently, the company has the best framework for success. Using
the main target, the 18 to 35, the millennials, the company has a good strategy and is adapting
fast to the wants and needs of the generation, this way keeping itself as one of the market
leaders in tour operators and differentiating itself from its competitors.
References:

Contiki (2020) Home, available at: https://www.contiki.com/uk/en (Accessed at: 4 Feb 2020)

Eye For Travel (2016) User-generated content and why customer is Contiki’s new best
friend, available at: https://www.eyefortravel.com/social-media-and-marketing/user-
generated-content-and-why-customer-contikis-new-best-friend (Accessed at: 4 Feb 2020)

Madhavaram, S. and Hunt, S. (2007). The service-dominant logic and a hierarchy of operant
resources: developing masterful operant resources and implications for marketing
strategy. Journal of the Academy of Marketing Science, 36(1), pp.67-82.

McDonald, M. (2012). Market Segmentation. Wiley.

Ries, A. and Trout, J. (2001). Positioning: the battle for your mind. McGraw Hill
Professional.

Web in Travel (2016) How Contiki keeps itself fresh for today’s millennials, available at:
https://www.webintravel.com/how-contiki-keeps-itself-fresh-for-todays-millennials/
(Accessed at: 4 Feb 2020)