Case No: 2

Thomas Cooks Club 1830

Introduction The Club 1830 brand is owned by Thomas Cook Holdings Limited, London. The Club 1830 unique holiday formula has remained more or less unchanged over the years and provides holidays for this specific age group of customers to the liveliest resorts in the central locations of major holiday regions. The company currently offers holidays to ten destinations across the Mediterranean and the Canaries, and flies from a number of UK airports. The company also offers a full range of accommodation from budget to all-inclusive packages.

History of the development of the Club 1830 brand Club 1830 has been in existence for over thirty years, and was the first holiday company in the UK to specialize in holidays exclusively for young people. Club 1830 was, originally, part of the International Leisure Group (ILG), which collapsed in 1991. The collapse of ILG forced Club 1830 into voluntary liquidation, despite the fact that it had been a profit-making division. Five weeks after the collapse, the existing directors of Club 1830 bought the trade name and reformed the company. This move received enormous support from the travel trade and overseas suppliers. The company was prevented from trading under the Club 1830 name owing to Association of British Agents (ABTA) legislation; hence the re-formed company became known as The Club. The Club witnessed enormous growth during the 1990s from a small tour operator to a top ten UK operator. The ABTA granted the company permission to trade under the original branding, Club 1830, in August 1994, and so The Club reverted back to the original name. Thomas Cook AG is now one of the biggest European holiday companies. Some facts and figures about the company are shown in Exhibit 2.1. The company continues to offer a one-stop holiday planning experience to its customers by using a strong portfolio of brands that it has acquired. The Club 1830 brand is positioned in the UK market to target the young holidaymaker.

The Flying Colours Leisure Group became the owners of the Club 1830 brand in 1995. This group was formed in November 1995 and was backed by a 40 million deal involving a major family tour operator, Sunset Holidays, and Club 1830 were bought. The management team of the Flying Colours Leisure Group has extensive breadth and depth and, until March 1997, was headed by Jeremy Muller who was formerly Managing Director of Club 1830. More recently Thomas Cook took over the company. The final article in the history of the brand was when the German tour company, NUR Touristic, and a new company, Thomas Cook NG, was formed in 2001.

The current business of Club 1830 Thomas Cook aims to drive ambitious growth through successful market segmentation and positioning. The success of the Club 1830 brand shows that well-targeted products using a portfolio of differentiated travel products can provide a successful business strategy in the competitive holiday market. The development of the Club 1830 brand has been recognized as a dynamic response to the conservatism which has typified the UK market for overseas holidays. Club 1830 carried over 100 000 passengers in 1995. Some facts and figures about Club 1830 are shown in Exhibit 2.2.

The Club 1830 holiday concept The Club 1830 holiday formula was the first of its kind in the UK, and has remained unchanged over the years of development. _______________________________________________________________ Exhibit 2.1 Thomas Cook AG: facts and figures * Number two in the European leisure industry * 7.5 billion euros in sales * 24 600 employees * 37 tour operator brands * 75 aircraft * 2400 travel agencies * 75 000 controlled hotel beds * operates in European and international markets * offers the customer one-stop holiday planning

________________________________________________________________ Exhibit 2.2 Club 1830: facts and figures Club 1830 is the market leader in overseas summer-sun based youth holidays. More than 100 000 passengers were carried in 1995. The product is highly respected in the travel trade, and available from over 6000 travel agents. Regional flying from a number of airports ensures high profile

image is maintained throughout the UK. Constant evaluation of resorts ensures that only the most happening of places makes it into the company brochure. Over 5000 applications are received annually for jobs as Clubreps. Less than 100 new Clubreps are required. The company launched the idea of flexible booking in a pick and mix approach with the launch of flexibletrips.com in 2004. ________________________________________________________________

The company concentrates on attracting clients in the eighteen to thirty-year-old age bracket. Club 18 30 contracts hotels and apartments in the liveliest resorts and in central locations. The Club 1830 accommodation is often used exclusively for the companys clients because it was recognized many years ago that it was preferable for the clients to have their own separate facilities and places to stay. The holidays were originally marketed as a fortnight of Saturday nights and entertainment is available twenty-four hours a day, seven days a week. Club 1830 also offered its clients a range of unique excursions and club reps help make up an unrivalled fun holiday experience for their clients.

The range of countries on offer in the Club 1830 range is shown in Exhibit 2.3. The company selected resorts in an attempt to put together a Mediterranean party scene. They chose the best resorts that stayed awake twenty-four hours a day and selected accommodation which was near to the centre of the action. San Antonio, in Ibiza, was selected because it is well known as the dance capital of Europe and the area offers blue zone beaches. The twin fun-spots of Magaluf and Palma Nova on Majorca were selected for their range of bars, lots of pubs, English food and nightclubs. Resorts on Gran Canaria and Tenerife were selected for their bars, disco bars and clubs. Resorts on the Greek Islands of Corfu, Crete and Rhodes were selected for their around-the-clock entertainment. A recent addition to the product range is Cancun in Mexico. The beach and pool are the main focal points of daytime activity, with a suntan the priority for most clients on a Club 1830 holiday. The main action of the holiday, however, starts after dark. The resorts which the company picks have a good variety of local colour and generally have two or three major venues or attractions close at hand.

______________________________________________________________ Exhibit 2.3 The Club 1830 product range * Ibiza * Majorca * Tenerife * Gran Canaria * Cyprus * Corfu * Crete * Rhodes * Kos ______________________________________________________________

The clients prefer to stay in self-catering or bed and breakfast accommodation, and so the company ensures that there is a good selection of well-priced restaurants and cafs close to the accommodation. The Clubrep is an important aspect of the Club 1830 holiday. He or she will be with the clients pretty well around the clock and will act as a party organizer, personally taking the clients to the best bars and nightspots. The ratio of Clubrep to clients is 1:25 because he or she is a social catalyst and the clients best friend. Many of the clients are travelling abroad for the first time, so the Clubrep provides a vital role in making sure the clients have an enjoyable time. The Clubrep concept became the focus for the Club Reps television programme based on Faliraki, Greece, in 2002. The company hoped that this programme would dispel misconceptions about the hedonistic image of the brand. The company subsequently withdrew bar crawls from the product and tried to encourage customers to engage in more upmarket pursuits such as scuba diving and paintballing. The company is now trying to improve the image of the brand with the use of an advertising campaign that communicates the cool nature of the Club 1830 holiday. The campaign includes print advertising, radio advertising and the introduction of exclusive nightclub events across the country (Mintel, 2005). This campaign was developed by the advertising agency Saatchi and Saatchi in February 2005 based on the strapline be on the list, and encourages potential visitors to visit the website beonthelist.com. Since the introduction of the Club 18 30 concept there have been a number of competitors that have entered the market. These are shown in Exhibit 2.4.

The Club 1830 client A summary profile of the Club 1830 client is shown in Exhibit 2.5. The predominant age range for clients is eighteen to twenty-six, withan average age of twenty-one to twenty-two. Lower age limits are enforced fairly stringently, but the upper limits are fairly vague. If a client feels that the holiday would be suited to them, even if they are older, then they are welcome to go on the holidays. The company has a record of customers coming back, year after year, and some female clients even bring their mothers with them. The male to female ratio is generally 50:50, but varies between 40:60 and 60:40. This is partly due to price as female clients tend to go when it is cheaper, and it is also fashionable for them to get an early suntan in May or June. Most of the clients go on a Club 1830 holiday with a friend of the same sex. In low season, the average number of people per booking is two. In high season, this rises to three or four with groups of friends sharing apartments. Many customers go on a Club 1830 holiday for their first holiday experience away from their parents.

___________________________________________________________________ Exhibit 2.5 The Club 1830 client Average age: 21/22 Male: female ratio: 50 : 50 Socioeconomic group C1/C2/D/E Marital status: Single Lifestyle: In full time employment. Resident in parental home. Influenced by fashion, music, dance and entertainment (their spending patterns reflect this) An 1830 holiday is usually their first holiday abroad with friends, but without parents. ___________________________________________________________________ The advertising campaign The Saatchi and Saatchi advertising agency, London, were appointed by Club 1830 in October 1994 to handle the above advertising campaign for the brand, and they have handled the advertising campaign since then. The original campaign objectives set by Club 1830 were to increase bookings for summer 1995, raise the awareness of the Club 1830 brand name and accurately reflect the nature of Club 1830 holidays to the appropriate target market. The campaign which the advertising agency developed, highlighted the fun of a Club 1830 holiday in a tongue in cheek way. It was designed to speak to the target market (seventeen to twenty-five year olds) via their type of media (forty-eight sheet posters) and in their style of language. The advertising agency designed a series of posters which incorporated controversial and suggestive statements which were designed to appeal to the target audience. Examples of the poster copy are shown in Exhibit 2.6

The initial campaign spend was 250 000 which allowed the company to concentrate a month-long, medium-weight campaign around the area where there was potential for growth.

____________________________________________________________________ Exhibit 2.6 The 1995 Club 1830 poster campaign poster copy Its not all sex, sex, sex Girls. Can we interest you in a package holiday? Its advisable not to drink the local water. As if . . . Beaver Espa?a You get two weeks for being drunk and disorderly Discover your erogenous zone The summer of 69 ____________________________________________________________________

The campaign was nationwide, other than Scotland and London, and was particularly concentrated in catchment areas of regional airports, such as Newcastle, Manchester, Birmingham, East Midlands, Cardiff, Belfast and Bristol. The posters were placed in major town centres where the largest population of young people in the 1830 age range live and work. Research showed that the target group found the poster campaign humorous and appealing. The campaign also portrayed the products in a true light and consciously discouraged families, and other groups of people who would not enjoy this type of holiday, from booking a Club 1830 holiday. The campaign commenced in January 1995 and for the 1995 season Club 1830 enjoyed record bookings, 30 per cent higher than the previous year. The company decided to run an amended version of the campaign in 1996. There had been criticism of the campaign and the Advertising Standards Authority (ASA) insisted that the Club 1830 campaign should be vetted by themselves before it was run. The company decided to run a forty-eight sheet billboard campaign along the lines of the previous Jolly Japes campaign, but the posters urged the reader to look for the real advertisements in magazines such as Sky, Loaded and Company. These magazines were chosen because they are read by the target audience. It also allowed the company to design press advertisements which were much more explicit, but similar to the first campaign.

The awareness and public relations gained from this campaign made an essentially small budget work very hard. The advertising campaign continued to make sure that the product remained at the forefront of youth culture. The brochure, which is produced on an annual basis, is a major part of this. The brochures are designed with this in mind, and there is a strong emphasis on style and fun. Early brochure design caused comment in the trade. The brochure used Flo and her pensioner pals to introduce the products and it was designed to be humorous, but informative. The brochure also incorporated advertisements for other companies that sell products targeted at the same market segment. The company were criticized for their product range and their controversial advertising campaigns by some pressure groups, in the light of HIV and AIDS. The company decided to take positive action about

this and although they did not consider themselves as moral guardians, they thought it would be sensible to reiterate the safe sex message wherever possible. Young people in the 1990s had been the first group to benefit from the government Health Education Authoritys advice on sex education. Club 1830 recognized that young people may have sex on holiday, and for that reason, the company reacted positively to the government Health Education Authoritys initiative of 1991, which asked travel companies help educate young travellers in the dangers of casual sex overseas. Club 1830 included information on safe sex and protection within every ticket wallet. The company also provided confidential supplies of condoms to clients for their Club 1830 holiday The government Health Education Authority sought to address the problem of drug abuse among young people in 1997. Club 1830 responded accordingly and offered realistic advice on drugs and the laws governing their use overseas to clients before they travel. Astatement by the Club 1830 Managing Director, Stuart Howard, in February 1996 emphasized the point. We believe it is important to be proactive on these issues. Everybody knows that holidays are a time of romance and excitement, and we have 30 years of experience in dealing with this. Condoms are not as reliably available in many Mediterranean resorts, as they are here. Drugs, unfortunately are widely available everywhere. Although we have no wish to set ourselves up as moral guardians, we believe that it is only responsible to take up these initiatives on our clients behalf. Club 1830 was one of the first tour operators to respond positively to the government Health Education Authoritys initiative on drugs. More recent advertising campaigns have also been devised by Saatchi and Saatchi advertising agency.

The Future It is predicted that the market for holidays aimed at the youth market will grow as disposable income continues to rise among the group. It is likely that the customer will start to demand more independently designed holiday packages with an increasing emphasis on adventure based activities. The customer will also start to travel further afield as they become more experienced holidaymakers. An increase of bookings via the Internet is also predicted to be a feature of the market (Mintel, 2005).

Conclusions Club 1830 is one of the best examples of a UK brand which has aggressively targeted a particular market segment and positioned their products to suit the behaviour patterns of their clients. The company has repeatedly targeted the clients with effective and eye-catching advertising, which has been controversial enough to attract substantial media attention. The company also reacted positively to the government Health Education Authoritys campaigns on safe sex and drug abuse. This has meant that the company are seen to be acting positively for their clients in the face of major health concerns. The company is now having to react to increased competition and changing consumer behaviour.

Discussion Points 1. Discuss the ways in which club 18- 30 has been very effective in designing holidays which suit the lifestyle of their target clients. 2. Explore the dilemma which a company, such as club 18-30 can have when it is trying to design effective and appealing advertising campaigns without offending society at large. Discuss the ways in which club 18-30 has overcome this potential problem.