Lonely Planet Case Study Ch 3 E-Commerce
Lonely Planet Case Study 1. Prepare a report in which you analyze the marketing channel conflicts and cannibalization issues that Lonely Planet faces as it is currently operating. Suggest solutions that might reduce the revenue losses or operational frictions that result from these issues. I feel that Lonely Planet is one big channel conflict. When they first started the company it wasn’t really an issue. The fact that they have grown so much and integrated themselves into many different markets makes it harder to reduce the channel conflict or cannibalization.
There is a certain point, during your expansion processes, which you reach when you dive into as many markets that Lonely Planet has. I feel if they wish to reduce revenue losses due to channel conflict and cannibalization they should slim down certain aspects of their company. As Lonely Planet is currently operating they are selling hard copy books through their website and retail resellers. Along with this they have also started selling their guides as e-books for the Kindle.
This poses the threat of both channel conflict and cannibalization. In order to stay competitive with other guide book company’s they will have to reduce the price of their products. If they don’t do this across the board, they will be undercutting their retail resellers. In order to reduce revenue losses or operational frictions that result from said issues, I feel Lonely Planet could update their revenue model to incorporate all of their products into one. The best option for this is the Advertising-Subscription mixed revenue model.
This model would allow Lonely Planet to increase revenue while decreasing channel conflict and cannibalization. By using the subscription based part of the mixed revenue model, they would be charging a subscription fee for both their website services but also their traveler magazine. The subscribers pay the fee and accept a certain level of advertising in the process. By using the advertising based part of the mixed revenue model they can increase revenue by selling advertising space in their magazines and on their website.
This revenue model makes the most sense for their products. 2. Prepare a list of new products that Lonely Planet might 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. There are several different features that Lonely Planet could pursue with their business to take advantage of new technologies. . Lonely Planet could expand the information sections of their website to incorporate events happening around the world that could entice people to travel to. b. After looking into Lonely Planet’s App on their website and the reviews incorporated with it, I feel they should increase funding to their App development to increase functionality, usefulness, and ability to download the App, which tended to be the most griped about issues. c.
Lonely planet could expand their e-book aspect to be compatible with all the tablets on the market thus increasing sales. d. Reduce the guides focus from countries to cities in order to make use of limited memory handheld devices Some of the main issues that may arise during the creation of these features include: 1. They will have to increase funding to their App department as stated above 2. They will have to increase their global awareness in order to be in the know about world events 3.
They would have to increase the compatibility of their electronic versions of their guides. 4. Converting their current guide layout from country to city would be a cumbersome task as well. 3. Many loyal Lonely Planet customers carry their travel guides (which can be several hundred pages thick) with them as they travel around the world. 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(s) 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 As aforementioned, Lonely Planet could expand their electronic versions of their guides to increase the portability and ease of use of them.
They could also create slimmer more portable and functional printed guides with just the most important portions present. Both of these would be viable replacements for the thick cumbersome guides. This would also address the limited Internet access of their traveling customers, because they would already have the guides downloaded to their device for ease of use. Another avenue I feel that they could pursue is a partnership with all the different airlines to carry their traveler magazine on board for reading.
It would help them increase revenue by selling in bulk to the airlines, and at the same time increase the product awareness to their primary customer base. One final avenue I feel they could pursue is partnerships with many different App companies to integrate their Apps together to increase the functionality of the Lonely Planet App. Some of the apps that would be relevant to include in conjunction with their own would be an airline ticket, currency converters, destination reviews, and some sort of Voip calling service.