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To what extent the smartbox concept might hit the bull's eye in Tourism Marketing?


1. Tourism Marketing

1.1. Definition and characteristics

Services marketing have four key characteristics:

Intangibility
A service cannot be seen, touched, held or put on a shelf. Difficulty of ownership

Simultaneity

(Inseparability of production + consumption) Mostly, the production and consumption of the service performance occur simultaneously

Heterogeneity

(Variability) It is hard for a service organization to standardize the quality of its service performance

Perishability
Most services cannot be produced or stored before consumption, they exist only at the time of their production

1.2. Stakes and limits

“7P’s of Services Marketing”

- Product- Services : There are offered by companies and retailers so the realisation is not sure and not under the smart box company power.

- Price : find a good price and compromise with the retailers in order to offer a good relation between the good, quality and the price

- Place: There is different possibilities for SME, join a network of similar companies (such as Logis de France or Best Western) or stay independent but the necessity to work with a distributor is more and more present.

- Promotion : “Techniques used to stimulate the short term demand, improving the rhythm or the purchase level of a product or a service by customers or intermediaries”, (Wendy Spinks, University of the sunshine coast, Australia).

The competition is more and more important so the companies need to differentiate themselves. Due to the crisis, the customer is more and more exigent.

Two different ways can be used:

- Psychological: motivate the client by the promise of specific advantages

- Tangibles/ Materials: give information to the clients thanks to visual and physical supports (flyers, brochures, stickers…)

- People: Employees here are from every distribution channel, retailer and the Smartbox company, that is why it is really hard to be sure about their performance.

- Process :

- Physical Evidence : boxes are giving tangibility and evidence to the goods and services proposed, for that the fact that these boxes are available in the different channel is a good point.

1.3. Evolution and development

According to Philippe Callot, in Tourism there is a continual improvement of what is done and offered. It is important to innovate and bring out new applications to make the most of it and be successful. ( “Tourisme et PME” p23, Philippe Callot. Edition Lavoisier, 2006. ESCEM)

Tourism is a sector really important in our society and always moving, however because of the crisis and the fear of people, new tools, goods or services must be developed and bring out in order to push on this market. For instance, the development of the smart box concept is innovative and trying to touch a new market. Moreover, one of the key factor of the success in this market is the loyalty of the customer.

2. Smartbox Concept

2.1. Definition and characteristics

 

Content

Book or/and DVD

Price

Common price for one box in a given thematic

Themes

Vast: Adventures, gastronomy, discovery, entertainment and well-being

Advantages

Security,
Choice but not too vast, delimited
Do not have to look for information, already given

Strategy

BtoC and BtoB

 

Short stay, Time of an experience

Stakes

Quality
Availability
Distribution

Market

Numerous competitors
Smartbox against Wonderbox
Coffret Liberty, Happy Box, Weekend Tour, Rêves à la Carte, Smartweekend, Weekendbreak, Coffret infini…

Smartbox is the leader on the « gift box » market in France. The concept is to create thematic boxes offering different performances. Presented as a box which contains a book or DVD, it offers multiple choices concerning a chosen category of services for one common price. This is a revolution concerning the existents gift-token (cannibalisation?) The beneficiary can choose the destination, the products, the level of services or the activities within a certain number of available propositions. The offer is larger and larger; adventures, gastronomy, discovery, entertainment and well-being (later on, the emphasize will be on this last point).

They offer services and not anymore only products, on the gift market.

People have more and more free time, they are more and more exigent; they want to have the choice but at the same time they don’t want to have to look for information; they want security, the security to know where they are going (they are leaving only for few days, to relax or have a new experience).

Is it really the perfect gift?

- BtoC versus BtoB

At the beginning, the strategy of gift-box was B to C.

However, more and more companies are buying these boxes for their employees or customers. For example, L’Oréal, Peugeot and Danone are buying them to reward their employees; La Société Générale offers boxes to its customers in exchange of points earned during one year.

- Short stay and Experience

Most of these boxes are offering performances for short periods (new trend because of the actual context). For instance, the stays in hotels are only for one or two nights. These boxes are called “Weekend” and there is no possibilities for longer stays, unless you buy additional nights without the intermediary of a box.

2.2. Stakes and limits 

3- Stakes : quality, availability & distribution

Quality:

Smartbox has to make an important and relevant selection with their partners and their performances. People who are buying the boxes do not really know the market and want to have the choice of their destination and performances but with the help of “someone”. Thanks to the concept “Smartbox”, they have the choice within a certain number of possibilities already selected by professionals. Moreover, this quality is really important for the word-of-mouth, because unsatisfied customers do not hesitate to express their dissatisfaction to friends but also in Internet.

Those companies use professionals who are working on the field to select their partners, grade their quality and offers. Moreover, in order to know the level of satisfaction of their clients (buyers and users) and improve it, they organise satisfaction survey (the level of clients satisfaction for the users of Wonderbox is 94% and 98% for the buyers; the satisfaction is around 95% for Smartbox.).

Availability:

According to the customers, most of the time, the discontentment is due to the lack of availability. When they want to book for their hotel or service, they do not find any availability. For instance, most of the time the service providers do not accept the owners of these boxes during weekends because they know they do not need these customers, their hotel or restaurant will be full without them.

In order to prevent this problem, companies such as Weekendesk or Wonderbox try to have and keep a very large number of partners and offers. Moreover, every year they provide and find new partners to develop their offer and follow customers’ needs and wishes.

However, 10 to 15% of clients are not satisfied with the availability of Smartboxes and as we can see in forum or websites, customers do not hesitate to show their discontentment.

Distribution:

Most of the distribution of this product is done through internet. For example, Weekendesk has a website dedicated for the Smartboxes, Wonderbox also, etc… Moreover, big supermarkets such as Carrefour, Auchan or Fnac sell boxes; even travel agencies or specialized shops for Weekendesk in Paris. And now, there are also present in BtoB distribution.

- Market, Competitors

The biggest actors in the market of “gift-box” are Weekendesk (with Smartbox) and Wonderbox. Since 2006, new competitors took place in the French market, such as Coffret Liberty, Happy Box, Weekend Tour, Rêves à la Carte, Smartweekend and Weekendbreak.

Smartbox is leader on the European market with a turnover of 242 millions of euros in 2008. But all these companies are trying to differentiate themselves in choosing different targets or original segments. For instance, some companies propose boxes for companies, others offer weekend only in France or specific regions, some are specialized in entertainment offers or wellbeing boxes, etc…

1.3. Evolution and development

 

Evolution and development

How

Purpose

#Permanent innovation

Propose new boxes with new themes
and new partners (hotels, restaurants, spas…)

Keep being innovating to attract new customers and develop loyalty

Distribution channel in expansion, growing

Be present in every distribution channel: supermarket, travel agencies,
own shops and of course internet

Easy to find, to buy and offer

International development

Develop their product worldwide

They develop their partners and can offer packages abroad for French customers

- Permanent innovation

In order to stay on the leaders, to attract new customers and develop loyalty, companies have to keep being innovating, proposing new boxes with new themes and new partners (hotels, restaurants, spas…) and find a way to differentiate themselves.

- Distribution channel in expansion, growing

A “gift-box” company has to be present in every distribution channel: supermarket, travel agencies, own shops and of course internet (because the purpose of these boxes is to be easy to buy and offer, without spending too much time to choose and let the choice to the person who will receive it; and through internet the box can be directly send to the beneficiary).

- International development

The most important companies on the French market are developing their product worldwide. For example, Smartbox recently opened offices in Canada, USA and already have some in Europe (Spain, Germany, Belgium…). By developing their product internationally, they develop their partners and can offer packages abroad for French customers.

 4. Conclusion

 

Key characteristics

Smartbox concept

Intangibility

This concept is a way to be more tangible than a service and a gift token. There is a book

Simultaneity

First the client has the good, then he uses the service, the consumption is in two times: consumption of the box and the dvd or book, then the services chosen.

Heterogeneity

When finding new service providers, the company such as Smartbox are trying to standardise them and to assure a certain quality for all of there providers.

Perishability

This is a way to keep the service within a certain amount of time, the beneficiary can use it when he wants. It is a way to « store » them before to use them.

 

Recommendations

As seen previously, companies producing boxes like the Smartbox concept have strengths and weaknesses. These is a sum up of advices and ideas in order to improve there sales and part of the market.

The most important idea is the loyalty of the customers but also of the services providers. The services providers do not really like these agreements,because of the commissions often high, however these companies are making them big advertisements. This is why they should use this opportunity. Smartbox companies should be really clear among them about the concept, the commissions and their advantages too. Retailers should catch the opportunity to have more and new customers. Smartbox are an other channel to sell their services or goods, they have a new advertisement everywhere in France and in different channels.

Then, if the customers are satisfied there is an « effet boule de neige » because when one person receive a smart box as a gift, if they like it they might buy one for a present to someone else, thinking it was a good idea and experience. And if the first buyer knows that the consumer likes it and was satisfied with it, they will continue to buy this kind of present for other friends. Moreover, because of the variety and the quality of the services available, Smartbox companies have to use this strength to have the opportunity to make loyal their customers. For that, they have to focalise on the evolutions and developments cited before: more precisely on their permanent innovation and their distribution channels.

The smartbox concept well realised is a win-win situation for the 3 parts:

- Good advertisement for the services providers

- Security for the customers

- Good sales for the company

Finally, the Smartbox concept could hit a success even bigger than it already did. The important thing is to develop the points mentioned before and thanks to their experience and long time relation with the retailers and customers. They have to innovate and they will be able to hit the bull’s eye.

Céline Collot,
Master of Marketing Management and Communication,
Toulouse Business School

Proposed by: CĂ©line Collot On 09/11/2009 - 12h52 Last update: 12/11/2009 - 15h43  Write your TUTORIAL
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