Case
Ct.
Lonely Planet
In 1992, Tony and Maureen Wheeler were
newlyweds who decided to have one last adventurous travel experience before
settling down. Their trip was an overland trek from London to
Australia through Asia. So many other travelers asked them about their
experiences that they sat down at their kitchen table and wrote a book titled
Accross Asia on the Cheap. They published the book themselves and were
surprised by how many copies they sold. More than three decades and 60 million
books later, their publishing enterprise has turned out to be one of the most
successful in history.
The
Wheelers’ publishing company, Lonely Planet, has grown rapidly with typical
annual sales increase of 20 percent or more. In 2007, BBC Worldwide purchased a
75 percent ownership interest in the company. Lonely Planet TV now produces a
variety of travel and documentary programs that appear on cable networks
throughout the world. The company is privately held and does not release sales
figure, but industry analysts estimate current annual revenues to be about $85
million. Lonely Planet publishes more than 600 titles and holds a 16 percent
share of the travel guide market. The company has more than 400 employees in
its UK, U.S., French, and Australian offices performing editorial, production,
graphic design, and marketing tasks. Travel guide content is written by a
network of more than 300 contract authors in 22 countries. These authors are
knowledgeable about everything from visa regulations to hotel prices to the names
of the hootest new entertainment spots. The combined expertise of the in-house
staff and the in-country authors has kept Lonely Planet ahead of its
competitors for many years.
Lonely
Planet also offers travel services that include a phone card, hotel and hostel
room-booking, airplane tickets, European rail travel reservations and tickets,
package tours, and travel insurance. These services are sold by telephone and
on the Lonely Planet Web site.
The
web site has won numerous awards, including the society of American. Travel
writers Silver Award and a spot on Time magazine “Fitty Best Web Sites” tist,
it has also won the best travel site Webby multiple times. The site was
launched in 1994 and includes an online store in which lonely Planet
publication are sold However, the site’s main draws are its comprehensive
collection of information about travel destinations and its online discussion
area, the Thorm Tree, which has nearly a half million registered users.
Lonely
Planet is always looking for ways to expand its market and brand image through
new technologies. For example, it offers audio phrasebooks and city guides that
can be download to several brands of smart phones.
Despite
its excellent Web site and its use of new technologies, most of Lonely Planet’s
revenues are still generated by book sales. The typical production cycle of a
travel guide is about eight months long. This is the time it takes to
commission authors, conduct research, work through several drafts of writing
and editing, select photos, create the physical book, and print it. This
production cycle cause new books to be almost a year out of date by the time
they are published only the most popular titles are revised annually. Other
titles are on two-,three-, or four – year revision cycles. The time delay in
publication means that many details in the guides are outdated or wrong,
restaurants and hotels close (or move), exchange rates and visa regulation
change, and once – hot night spots are abandoned by fickle clientele.
Lonely
Planet publication are well researched and of nigh of high quality, but the
writers do not work continually because the books are not published
continually, the Web site often has information that is more current than the
published travel guides. The site’s online shop does offer some custom guides,
which are parts of its existing travel guides packaged in different ways, and
it does let customers buy specific chapters from its books, but it still is
largely focused on selling books. Lonely Planet has adopted new technologies,
but has not used them to change its revenue model in major way or to make basic
change in the production of its main product, the travel guides.
Required
1. Prepare
a report in which you analyze the marketing channel conficts and
canniballzation issues that lonely Planet faces as it is currently operating.
Suggest solutions that night reduce the revenue losses or operational frictions
that result from these issues.
2. Prepare
a list of new products or services that lonely planet night introduce to take
advantage of internet technologies (including wireless technologies for mobile
devices ) and address customers’ concerns about the timeliness and currency of
information in the printed travel guides. Briefly describe any problems that
Lonely Planet will face as it introduces these new products.
3. Many
loyal lonely planet customers carry their travel guides (which can be several
hundred pages thick ) with them as they travel around wold, in many cases,
these customers do not use large portions of the travel guides, Also, Internet
access can be a problem for many of these customers while they are traveling.
Describe a product ( or products ) that might address this customer
concern and also yield additional
revenue for lonely Planet, your answer here could build on ideas that you
developed in your solution to part 2.
Note : your instructor might assign you
to a group to complete this case and might ask you to prepare a formal
presentation of your results to your class.
