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STA Travel Island: Marketing First Life Travel Services In Second Life
LB5002 Data Management & Information Technology Lecturer: Presented by: Student Number: Date: Dr. Singwhat Tee Melanie Halpert 12335618 December 5, 2010
enjoy a challenge. provides their vision and mission statements. Switzerland and London. It maintains headquarters in Zurich. mission and strategies: Vision To shape the STA Travel brand into a single. information. Following are the STA Travel vision. STA states. employed part or full time. y The target market of STA are people that travel for fun. taken from their digital brand and style guidelines. in any way they choose. integrated organization able to profitably dominate the world student and young adult travel market and become the leading brand of global travel to this audience. UK. and management of their corporate identity . culturally aware. Describe STA·s business." (STATravel. STA Travel customers are looking to enrich their travel experiences through online access to relevant products.adventureand for the experience. and hate to be categorized. QUESTIONS 1. studying or very well educated. mostly single. All companies must base their strategic µtriangle¶ on the business mission and goals.Assignment 2 STA TRAVEL ISLAND: MARKETING FIRST LIFE TRAVEL SERVICES IN SECOND LIFE Read and analyse the case material and discuss the following questions. Mission Statement STA Travel creates opportunities for students and young adults and enables them to make the most of their time and experience the world face-to-face.STA Travelers are anyone passionate about travel and wanting to travel to learn about the world.com) Business Strategies y STA maintains a µOne Company¶ strategy that alignsthe business operations with their customer needs across the globe. education. (Graphico 2009) Company Background y A full service travel retailer with 400+ travel agency offices in 17 countries and through franchises in 83 others. and organizational strategies. ³they are often aged 18-29. Typically. The focus is on one service standard througha single supplier strategy. y STATravel was established in Australia in the early1970s and was acquired by the Diethelm Keller Group in 1979. from anywhere in the world. services and advice at anytime. * STA Travel. environmentally conscious.
A single sales and booking system. visa information. infrastructure. BLUEe delivers a high volume transactional accounting and enterprise-wide financial information system with highly sophisticated reporting and analysis capabilities that can be accessed by local operations. y STA Travel insists on local control over everything that meets customers¶ needs and only builds global solutions if these will improve the quality with which it meets those needs. y µThe operating structure of the company is simple -.com Informational Strategies STA Travel¶s information strategy is to implement and maintain a single.for every STA Travel point of purchase backed by a single network. and advice. anywhere in the world and be able to access and change their travel itineraries. weather conditions. security.BLUEe. Organizational Strategies y Based on philosophy with the following slogan: ³as local as possible.¶STATravel.´ y The STA Travel business is organized to ensure they remain flexible and are responsive as possible to the needs of each individual customer. y y BLUEe connects 6 million customers from over 80 countries to more than 3000 staff. Our customers also want global coverage. prices and seat availability from dozens of carriers. so we provide global support and solutions when that can improve their experience. finance. and authority as close to the action as possible. and reporting system. It has a standard chart of accounts and finance processes across the group. responsibility. (CODA 2001) The STA Travel¶s centralized technology allows travelers to walk into any store. Through BLUEe. plus the ability to gain a single view of the STA¶s complex finances. dubbed the name µBLUEe´ that supports their vision and business strategies. the staff of STA can access huge amounts of rapidly changing information on flight schedules. accommodation.we delegate as much autonomy. efficient.through one set of operating standards and guidelines. and b) the virtual world . global IT system. Describe STA·s value chain in a) the real world. as well as data on domestic travel. as global as necessary. Sales and marketing are under local management control. y y y 2. travel and insurance.
There are over 400 retail shops. such as working holiday. y Introduction to basic building skills. Online facilities include a trip planner that enables the customer to tailor their travel product to their individual need. commission negotiations and how to assemble. Travel scholarships. Volunteer services (Planeterra).Table 1. cities and international hubs worldwide. call centers. a self-served office that provided avatars with travel and destination information. (Inputs + Operations) STA would focus on Retail Distribution.clothing and how to make later changes in appearance. International Discount Cards (ISIC. Later. Outbound logistics focuses on delivering the finished products to consumers / market. STA offers stand-alone services in flights. franchises. invoice. Employment services (Au Pair. password. They offer packages for individual or group bookings that focuses on deliveringfirst hand knowledge and tailored itineraries for. y Hiring of Electronic Sheep Company to design and build the STA Orientation Island and Travel Island. Travel guides. STA Travel USA also has developed a business-tobusiness line called B2B Solutions with two focuses: Educational Program Solution and the Corporate Travel Solution. tours. Visa services. . Hostels. run. Travel insurance. y Introduction to ways of communication in the virtual world. STA Travel Island was STA¶s main island of destination in Second Life. Flicker. Cooking programs. Mayan ruins and an Asian temple. study and learn. Global phone services. Orientation Island provided an easy entrance or µsoft landing¶ for people new to Second Life. y Access to promotion material for other Second Life destinations. Cattle hand. STA Travel ± Value Chain based on Porter¶s Model 1985 PRIMARY ACTIVITIES Real World Airlines. Orientation Islandprovided the following elements of learning for new users: y Initial design of their online persona± their avatar. volunteer trips. real-time reporting options and support from an assigned account manager. real life travel could be booked at the virtual office. coordinate and integrate their inputs while maintaining flexibility to form profitable and attractive travel product lines. events and festivals. virtual or otherwise. round-the-world trips. The travel island provided the following features for avatars: y Virtual Travel Destinationsofferedexperience of aFrench sidewalk café. People could join Second Life via STA¶s orientation island and learn how to navigate the virtual world with basic tools and introductory lessons. varying from on campus to prestige locations. destinations or experiences. or sport. Language programs. y Learn how to move avatars ± walk. Airport transfers. located in college towns. Outbound Logistics STA Travel maintains a global distribution network through a mix of channels.). including walk-in branches. ITIC. bus and rail. there was no mention of sales of any STA products. discount cards. sit. Car rentals. 365 days/yr in numerous languages. y Interest in STA blogs produced by Electronic Artists. Surf Instructor. insurance. Coach services. Train. IYTC). Tour operators. Online Social communities (Twitter. Operations Takes the inputs given and processes them ready to be assembled into a product ready for sale.. y Virtual Dorms ±New users who came Inbound Logistics Inbound logistics are imputs the business needs to take from its environment and use to its advantage in order for the end product to be completed. STA considers pricing. Each offer unique la carte service options. name. y STA Main Storeprovided avatars with free STA clothing and accessories y STA Travel Main Office. fly. STA Travel Stores are staffed by knowledgeable Travel Experts who can offer advice and help consumers plan the best trip for their needs and budget. Hotels. y Viability and accessibility the of the STA islands. etc. and teleport. in real life and virtual. For STA this would focus on Wholesale & Packaging. Second Life ± A Comparison y Rent of two pieces of virtual µland¶ from Linden Labs to build. Global call centers and online sales facilities are available 24hrs a day. licensee partners and a global internet business. English teacher.For the assignment given. accommodation. Facebook) When developing wholesale and packaging.
Marketed under the slogan µWe make money. such as show-and-tell. The International Student Travel Confederation. cost controls and Second Life STA employed a manager and an assistant manager for theSecond Life sim and was overseen by Craig Hepburn. regulates all cards and questions or issues can be brought to STA via customer service. Rio Carnival. As each division uses different marketing tools the following are just examples of what is in use: y Social Media ± Facebook. an STA hosted seminar discussing various aspects of travel. Managing Director Asia Pacific.via STA coulduse their free dorm rooms. compliance issues. stated that STA Travel Second Life was based on a sales-led strategic approach. eBrochures. planning. Organization/ Infrastructure Business structure including support systems and functions such as finance. y Many of STA customers hold International discount cards. y Sandbox . twice weekly for a minimum of 16 consecutive weeks. in 80 countries. STA Travel blogs. discussions and tours in Second Life. Africa and Asia Pacific.) y Customer Service & Sales via: In store appointments. The global IT system enables executive management to make informed decisions on growth and management. Managing Director International. you make money. as global as necessary¶. Chief Information Officer. SUPPORT ACTIVITIES Real World STA Travel has a board of directors and an executive management committee that includes: Chief Executive Officer. S.(Shuftan 2009) Marketing & Sales STA Travel¶s sales and marketing decisions are delegated to each individual operational division to keep the company µAs local as possible. Chief Financial Officer. online Travel µChat¶. STA¶s current focus is on branding. investment in its people and streamlining operational performance. the Global Webmaster for STA Travel. STA focus would be on Customer Service. Lonely Planet. it is surmised that success in virtual world is based and measured against financial metrics. y The STA Second Life weblog kept avatars informed of all upcoming STA Travel events. y STA had a partnership with Landmark Island and offered tours through them around Second Life. The organizer. quality control and general senior management. scavenger hunts and trivia y Live music and global dance parties y Meet-and-greet socials y Seminars such as the µSunday Travel Series¶. and posted notices about the tours. Mile High Club and free local events y Sale Promotions ± Last Minute. Customizations could be made and used for private meetings and get-togethers. World Travel Internships y Gift vouchers. It ensures the business. Group Managing Director of Northern Europe. Voss of the Second Life Tour Group had a link to the STA. (Campbell 2007) Based the approach and as the decision to close down STA Second Life presence was based on lack of increase in sales. Gap Year y Affiliate Marketing (US only) ± Earn commission online by aligning a (your) website with STA. organizational and IT strategies are in alignment with its goals. It monitors trends and changes in the market. making adjustments where necessary. and Managing Director Central Europe. The STA executive management committee decides the aim. These marketing events included: y Contests. World events calendar.users could practice building skills in their own virtual environment. Skype. STA¶s virtual marketing strategy was based on live weekly events and toursthat were produced by STA Travel and partners. iGoogle tools. 24-hour call center y STA provides customer support and security through a worldwide network of travel help branches. which provide value offers and discount opportunities within and out STA direct services. of which STA Travel is a leading member. Flicker y Online Tools ± RSS product feeds. Spring Break. Global Webmaster for STA Travel. Hepburn. vision and culture of the company. that delivers on-the-spot support to STA Travel Blue Ticketholders. STA Travel organizational strategy is µto give local control over everything that meets customers¶ needs and only builds global solutions if these will improve the quality with . Pod Casts y Competitions ± Round-the-world. Service All activities related with the maintenance of product performance after the product has been sold. Twitter. Managing Director USA and Japan.
although some partners have voluntary taken part in STA Second Life. as in the example of weekly DJ service for use of a dorm.Euranna Rossini. Human Resource Management Recruitment. development. as well as information on domestic travel. STA Travel is confident in the culture of their business and first looks to recruit people that share their core philosophy. infrastructure.358 people in 375 offices throughout 17 countries. It also provides powerful tools to residents for developing enhancements.The official manager was.¶ *** In 2005. motivating and rewarding the workforce. weekly. prices and seat availability from multitudes of carriers. (Example. and while not µpaid¶. anywhere in the world and be able to access and change their travel itineraries. Their strategy also enables travelers to walk into any STA store. The management team is promoted from within and given authority to develop local markets and run the business like their own. visa information. STA¶s core philosophy is stated as µIt is of paramount importance to young people to travel and expand their horizons. Using the global STA network. and reporting system. accommodation. Second Life is a 3-D virtual world entirely created by its residents. rather than focusing skill levels.) (DKH 2009) Two people staffed the STA Second Life sim. In-house business training is provided and for promising employees there are opportunities for leadership roles. As STA is one of the largest travel retailers it leverages it immense buying power to obtain exclusive discount card issuing authority and ticketing agreements worldwide. (Percival 2008. finance. (People1st2008) The human resource strategy is based on financial metrics that keep the individual employee focused on service and the core competencies. (Dey 2007) Procurement How STA¶s resources are acquired. Pg. signed for exclusive rights to sell student rail passes with Eurail and also signed the first student ticket agreement with low-cost carrier. used trade for service.142) A small number of volunteers helped. Currently there are over 3000 employed in 400+ branches. This system allows management access to high-volume transactional accounting and enterprise-wide financial information with real-time reporting and analysis capabilities. Jetstar Australia.a single sales and booking system for every STA Travel point of purchase backed by a single network. Travel is an agent for positive social change. (CODA 2001) to identify opportunities. their staff can access large amounts of rapidly changing data on flight schedules. The staff was available for only a few hours daily. (Shuftan 2009) Technology The STA Travel has a centralized technology strategy that delivers a consistent brand and image on any STA Travel web site. such as sliders or 3D modeling tools. Bob Lane in conjunction with assistant manager. while maintaining local content. Most resources have been leased or hired. global trekker. Buying power from real life has not translated over. which result in discounts as high as 40% off published pricing. monthly. STA publishes figures on a daily. STA¶s development of their human resources works to motivate and build a strong company team. annual basis with clear expectations at the per-person level to keep the business focused. In 2009.which it meets those needs¶. (Wurzinger 2005) BLUEe . travel and insurance. weather conditions. through 75 countries. a virtual world infrastructure. STA employed 2.Linden Labs created the technology that provides the platform for the creation and technical support of Second Life. .
STA Travel s Core Competencies & Identifying Criteria Criteria New Products and Services. STA has been building its multichannel distribution capabilities for 40 years. Through a massive standardized global distribution network STA Travel can provide product service and support 24 hrs a day. STA Travel Core Competencies be easily imitated by competitors. C. Competitively Unique Excellence in personalized customer service is the foundation of STA culture. Business. below. What are STA·s core competencies? The travel agency STA Travel. and cannot Figure 1. STA is able to personalize and tailor products and offerings. IT strategies have enabled global mass customization ± µplug & play¶ of service offeringsfor varied experiences. (Prahalad 1990)Table 2. . Unique Air & Land Product Line Immense Multichannel Distribution Capabilities In the 1990¶s. New products are consistently being offered and through global expansion. distinguishes itself as a travel retailer unparalleled through the development of their core competencies. STA leverages its enormous buying power to obtain worldwide exclusive product offerings and discounts. with the last 10 years focused on excellence through innovation and standardization. significantly contributes to the perceived end product benefits. Multichannel Distribution New markets are accessed through acquisitions and distribution partners. operational and IT strategies have enabled STA to offer a level of customer service unparalleled in the travel industry.3. Prahalad and G. new markets are identified and accessed. or New Markets Provide Crucial Customer Value & Benefits Air & Land Lines STA maintains an expectation of growth. Service Culture CRM enables STA to identify and offer new products and services that are valued by customers. STA core competencies are their unique air and land product lines combined with their strong customer service culture and their immense multichannel distribution capabilities. They used the following three criteria in identifying a core competence: provides access to a wide variety of markets. 365 days of the year for any STA customer. a market leader. Hamel Strong Customer Service Culture defined the term core competence.K. Table 2. anywhere in the world. New products can be quickly rolled out global through STA¶s immense multichannel distribution network. needs and destinations that ensure standardized quality and low pricing. It also identifies markets where service is lacking. Through customer relationship management (CRM) and individualized customer service. highlights a few examples of STA Travel¶s core competencies achievements.(CODA 2001) Competitors are trying to play catch-up while STA refines its distribution strategies.
(Ives 2007) Creating virtual brand awareness may have been achieved but. by two people.An article in the Database for Advances in Information Systems definedthe business benefits in virtual worlds are products and services that have been co-created with customers. According to Gartner (2010).This technology couldalso providebusinesses the opportunity for valuable co-creation and co-production with their customers. Pg. In the reviewed case. product and service offerings. (Goel 2007) STA Travel has established itself as a world-leading travel company for its defined market. no air or land product lines are offered for purchase in the virtual world. 4. This has not been reflected in Second Life. Nixon hoped that the launch would increase brand awareness and develop a new way to access the STA target market. brand visibility and the ability to market to a new consumer base. they should not launch STA Travel in Second Life. such as STA Travel an opportunity for a distinct and strategic competitive advantage over their competitors. (Percival 2008. which left the STA¶s Travel Island unmanned a majority of the time. Producing revenue was not in the initial launch plans but M. it detracted from the real-life brand image of STA. building a strong global brand through its continual focus on the needs of students and young people. Their main business strategy is already focused onconsumer perceived value and integrates customer relationship management. detailed information and personalized customer service. STA Travel Island: Marketing First Life Travel Services In Second Life. data and feedback to perfect operations.As per the reviewed article. Not only is customer service a core competence but alsois integral to the culture and business strategy of STA Travel. Customer service was provided for a few hours at best. STA Travel¶s multichannel distribution capabilities are not used to an advantage. as Second life clients must leave their virtual avatars to access the main functions of STA distribution. Furthermore. Also STA¶s virtual focus remained on their target . there is no obvious valuein adding virtual customer relationship management to improve business performance or enhance co-creation. by looking as the core competencies that have filtered through to Second Life the STA brand was not being represented in a true positive image. in 2007 Second Life was an emerging technology that offered early adopters.142)Not only might this have been perceived in a negative manner by avatars. as we have seen. with the information and plan provided for introduction of STA Travel in Second Life. Should STA spear ahead to launch the virtual STA in Second Life? What does it stand to gain and lose? In my judgment. marketing was sited as the reason for launch.How would these change with the introduction of STA presence in Second Life? I would argue that all the core competencies are µlost¶ in Second life. such as access to products.
y STA does not have a Second Life business plan that clearly defines goals or metrics to measure success. y Training in virtual world interaction and virtual customer relationship management is necessary but unknown to STA. STA failedto create a strong virtual presence. y STA¶s virtual world markets to real person not the anonyms µavatars¶. This could have been effectively used for other marketing projects and represents an opportunity loss. y STA Travel has many resources and partners that could be utilized for the development of Second Life. severely limits the projects or ways STA can develop and market. y Limited budget and staff are committed to the Second Life project. STA Travel had an exciting opportunity to become a leading pioneer in virtual business but unfortunately through narrow focus. I would have suggested more research is necessary into Second life users before justifying the expenditure. although may have succeeded in fosteringa negative brand image for the virtual users of Second Life. y Need to hire full-time employees in their virtual store in order to attract and engage customers. it misses out on the opportunity for . either Linden Dollars or µreal¶ world currency. y As the STA virtual travel office is self-served.market of student and young people. y Islands can only accommodate an estimated 40-50 avatars at a time before lag occurs and the virtual experience becomes inefficient and frustrating for users. Instead they invested a sizable amount of their marketing budget into a project that was discontinued a mere 9 months after.(Day 2007) y Limited island accommodation. Through substandard planning that resulted in scarce human resources. y STA has no clear plan to profitability within Second Life. which may make it difficult to identify and provide avatar µvalue¶. vision and a lack of planning missed their chance. 5. 40-50 avatars. little focus on personal service and absolutely no direction or long-term goals. What are the threats to STA·s virtual world? What does a SWOT analysis show for STA virtual world in Second Life? A SWOT analysis for STA virtual world in Second Life shows the following: Strengthens y STA has strong global brand awareness. y Virtual travel agents are only available for a few hours online daily. Weaknesses y STA has no experience with consumer interaction in virtual life. There was no mentioned data to validate a six-figure investment into marketing through virtual worlds or whether it could access an untapped market of students and young people.
Opportunities y Provides a new platform for co-creation of product lines with customers. STA may fail to identify µvirtual¶ consumer value. There was only an intention to µbe¶ in Second Life. which can used to fine-tuning marketing methods. Threats y As virtual marketing is completely unfamiliar. y Brand image cannot mirror real life and may beperceived negatively. y STA island is only accessible by µteleportation¶ which provides the difficult challenge of getting avatars to willing go to island and then stay long enough for brand immersion y Other sites offer a better variety of activities providing more things for avatars to do. objectives. he questioned. Matt Nixon. (Kzer 2006) y STA may attract positive branding as µinnovators¶ for trying new technological platforms. y To become a leading pioneer in virtual business. Sibley Verbeck. how could visitors be lured back again?(Ives 2007)To be successful in Second Life. ³Would Second Life continue to grow? Would it attract collage students? Could STA design events on the Island that would attract young people? How would they market those events. They also may crash STAsims or use scripts to damage in-world objects. y Enables new data gathering techniques through observation of consumers¶ avatars. In the reviewed assignment. founder and CEO of the Electric Sheep Company. the main threat to STA Travel in Second Life was not an actual threat but a weakness.positiveinteraction. was quoted replying ³They don't know« Mostly it's 'We've been reading about virtual worlds ² is there anything there for us?'"(Rose 2007) It appears as though STA Travel didn¶t know either. users may see the STA brand as cold or impersonal as STA Travel¶s office is self-served. This includes visitor numbers interaction metrics and referral sources. even identified the areas of weakness himself. they did not have a marketing or business plan to define goals. The main weakness of STA was the lack of planning. When reviewing the SWOT analysis. ³in-world´? Could they effectively execute them on the limited budget they had available? Once on the Island.When asked what do most marketers want when they call Electric Sheep. Director of E-Commerce. or success. y µGriefers¶ or avatars that harass others are threats to highly visible STA events. STA should have addressed the weakness and threats by development of a viable marketing and business . The underlying weakness is that STA Travel failed to realize that Second Life was not only a marketing medium but also a new business platform. y Activity in STA¶s virtual island can betracked and measured. y As virtual worlds have been created for a shared real-time experience.
Therefore this question will be answered outside the assignment. STA did not have a business plan or strategy for long-term growth in Second Life and most importantly presence in the virtual world did not increase overall profits. Most brand extensions. Reduction of volume in real-world ticket sales occurred for the following reasons: y Same or very similar market targeted. STA Travel had pulled the plug on the future development of STA virtual World in Second Life in January 2008. as STA Travel Island did not offer real-world products for purchase. there was no benefit for STA in maintaining a presence in Second Life.plan that addressed the issues before investment. Carefully analyse why STA management may have undertaken this action? Second Life is most effective where the virtual world provides real working opportunities and usages to businesses that are not available through other channels. Craig Hepburn. STA could have developed and sold µvirtual¶ products. strengthen brands and create new revenue streams. it would appear that the virtual platform did not increase total market share but only detracted from in-world sales resulting in cannibalization. whether via the virtual world of Second Life or alternate means. for the period when STA Travel Island did offer real-world bookings. 6. when introducing their Second Life Island. The virtual brand of STA did not reflect the image that STA had developed worldwide and was in danger of reflecting a negative image. The following information supports the supposition that cannibalization did occur.can expect a certain amount of cannibalization. the answer would be no. Global Webmaster for STA Travel. When reviewing the information available. the STA virtual world presence did cannibalize real-world ticket sales. This is normally countered by differentiation strategies to reduce the impact. No virtual marketing plan that targeted new market or expanded into unexploited current market. Such examples can be seen in businesses whose main focus is design. Companies that are successful in Second Life use this tool to co-create product lines. y Sold same product. STA Travel announced ³We . 7. In a 2007 session at Ad:Tech London. nor created differentiation. In April 2007. told the audience that the investment into Second Life had already paid for itself. Cocreation of product lines was already integral to STA business strategies and the virtual world did not improve that process. (Shuftan 2009) Therefore. engineering and architecture. Will STA virtual world presence cannibalizing its real world presence. STA did not have a strategy. it would seem that yes. As reviewed. (Campbell 2007) But STA Island was closed because the sim was not resulting in an increase in sales. why and why not? If the answer is based on the reviewed assignment.
they may become inspired to travel in the real world. was the only good one STA made in regards to Second Life. activities and online STA µavatars¶. is hardly a valid reason to continue an expensive investment. . where they can become part of this fast growing social community and as they are exploring our Island. Furthermore.´ (Travolution 2007) Unfortunately. fun and excitement. It is my conclusion that the decision to µpull the plug¶.want to give our customers access to a unique new social space. other Islands clearly offered more interaction. the STA Travel Island could hardly be seen as a unique place to be in Second Life. µmay become inspired to travel¶. and with limited funding.
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