Research on the Competitive Dimension of Travel Agencies Based on

the Marketing Dynamic Capabilities Theory

Na Han1,Jian Li2,Jian-mei Liu3

1School of Management and Economics, Beijing Institute of Technology, Beijing, China;

2School of Social Science, Beijing Institute of Technology, Beijing, China;

3College of Business Administration, Capital University of Economics and Business, Beijing, China

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Abstract -Complex, dynamic and competitive environment has posed many challenges to travel agencies regarding maintaining competitive advantages and it is imperative that the Travel agencies must have the marketing dynamic capabilities to quickly respond the changes taking place in the market. Based on the theory of marketing dynamic capabilities and the problems being faced by the travel agencies, this paper appliesfactor analysis to analyze the various dimensions of travel agencies’competitiveness. The results shows that thedimensionsincluded five categories: market information management; socialnetwork resources; travel agencies human resources; brand management and travel agency innovation, and the roles of different dimensions to enhance the competitiveness were different.

Key words-dynamic capabilities, marketing dynamic capabilities, travel agencies, factor analysis

I.INTRODUCTION

Proposals of State Council on Accelerating Development of the Tourism inter-alia focus on making this industry as a pillar industry with strategicsignificance in national economy. However, due to the changing customer demands and fierce market competition, the uncertainty and complexity grows increasingly which cause frustrations to many travel agencieswhile some more factors such as sharp increase in the number of firms; similarity of the products; price competition; damage to corporate reputation etc also add to it.So, because of such high uncertainty, companies must have the dynamic capabilities to quickly adapt to changes in the industry. However, travel agenciesusually focus on price competition. Therefore,obtaining a competitive advantage becomesthe disadvantage of manytravel agencies.

During last a few years, the theory of dynamic capabilities has becomesa hot topic among the scholars in the field of marketing.The concept of this theory wasfirst time put forward by Fang & Zou (2009), which reflected the ability of facing the rapidly changing market demand, the speed and efficiency of inter-departmental business processes for the creation and delivery of customer value. Although scholars have proposed the concept of marketing dynamic capabilities, without in-depth research, there are considerable different opinionson the dimensions of marketing dynamic capabilities[1]. Even, the theory of marketing dynamic capabilities for travel agency has not yet been evolved, and this is undoubtedly the most critical capacity for travel agency to respond to dynamic environment. Based on this, Qinhuangdao travel agencies were taken as samplefor this research. This paper appliesstatistics methods to analyze the dimensions of travel agencies and to solve the problem that how to build the marketing dynamic capabilities for travel agencies in dynamic environmentwhich will be helpful for travel agencies to enhance the competitivenessfrom the perspective of marketing strategy.

II. REVIEWOFTHE THEORY

Although the literatureabout dynamic capabilities is available in abundance，however, the current researchof marketing dynamic capabilities is still at its infancy stage[2,3]and the study focused on travel agency marketing dynamic capabilities is almost nil. This paper aims to enhance travel agencies competitiveness, therefore, review of the theory will include the dynamic capabilities, marketing dynamic capabilities and travel agencies competitiveness.

A.Applicationofdynamic capabilitiesin the marketing field

Resourcebased view(RBV) explains the source of corporate competitiveness, it points out that theheterogeneity of resource is critical to the corporation to obtain sustained competitive advantage. As, this theory focuses on the internal resources,ignoring impact of external environment on business, therefore, RBV can’t explain how to gaincompetitiveness in highly competitive environment[4,5].

Dynamic capability focuses on exploring how to create competitive advantages in highly competitive environment. If an enterprise could learn from customers, better thancompetitors, to change its core business processes and practices, ongoing reconstruction, upgrading and allocation of resources [6,7], it will create customer value better than competitors, finally gaining excellent performance in the market (the Stan Maklan et al, 2009).By means of dynamic capabilities, enterprise could respond rapidly to market change.

B. The Concept and Dimensions of Marketing Dynamic Capability

Research on dynamic capability has formed a relatively complete system in academics, however, study of marketing dynamic capability has not attained enough attention[3]. Before concept of marketing dynamic capability officially proposed, marketing scholars have discussed marketing specific capacity [8,9] or market-based dynamic capabilities[10,11] instead of marketing dynamic capability. Bruni et al. definedmarketing dynamic capability from the perspective of resources and knowledge[12], they thoughtthat marketing dynamic capability was the basis of long-term building, integrating and reconstructing enterprisescapabilities for managers. Marketing dynamiccapability reflect the ability of, creating, using and integrating human resources, socialcapital and managers’ cognitive on market knowledgein order to adopt the change in market and technology. Eisenhardt and Martin analyzedmarketing dynamic capability from the aspect of business process and they consider that dynamic capability is reflected in a series of business process to respond to the market changes and managers could integrate and useresourcesto form a strategy of value creationthrough this process [4]. On basis of earlier achievements.

Scholars have put forward different views on dimensions of marketing dynamic capability. Maklandivided marketing dynamic capability into four following dimensions from the aspect of customer relationship management [13]: (1) demand management; (2) creation of marketing knowledge; (3) establishing brand; (4) customer relationship management. Bruni divided marketing dynamic capabilities into following three dimensions [12]: (1) management belief; (2) human resource; (3) social capital.

C. Travel Agencies Competitiveness

Two major research schools of thoughts on enterprises competitiveness are related to Resource Based View and theory of industrial organization. These two theories studies corporate competitiveness and influencing factors from different angles. RBV proposes that heterogeneous resources are the source of enterprises capabilities. Theory of industrial organization considers that external environment has an important impact on competitive advantage. These theories have different emphases, in addition to risk in the market competition, which includes many opportunities, so, the authors believe that enterprises should combine resources with externalenvironment, to creatively enhance the enterprises competitiveness.

Scholars choose price competitionas the starting point to solve the problems of travel agencies , involving price-making, industry division, market structure,product innovation and so on. Chang Dejun (2004) established the core competitiveness of travel agency from five aspects[14] i.e: strategic policy, brand operation, application of modern information technology, human resources management and corporate culture. Fang Dongcheng (2004) thought that we should build core competitiveness from six aspects[15], such as industry management system, corporate credit rating, brand management, corporate culture, customer loyalty and product innovation.

D. Literature Review and Research Framework

Presently academic circles have diversified views on the concept and dimensions of the marketing dynamic capability and there are many problems in the development process for travel agency, therefore, it is necessary to apply marketing dynamic capability for travel agenciesto explore the key factors.Based on this logic combined with the marketing dynamic capability, this paper explores the following questions: Firstly, what are the dimensions of marketing dynamic capabilities for travel agencies? Secondly, whether the different dimensions play the same function or not?

III. STUDY DESIGN

A. Defining of Marketing Dynamic Capability for Travel Agencies

Based on the problems of travel agencies and views of scholars in the past, this paper planned to analyze marketing dynamic capability for travel agencies from five aspects i,e: (1) market information management; (2) human resource; (3)product development management; (4) brand development; (5) social relations resources.

B. Marketing Research and Analysis

Qinhuangdao travel agencies have been chosen for research for this paper. Out of total 116 Qinhuangdao travel agencies, 88 agencies are chosen randomly for our study, however, 75 questionnaires were delivered successfully i.e 85.2% and 64 received back from, i.e 85.3%. We have determined 15 variables namely: level of attention to market research(X1), collection and collation of market information(X2), market research(X3), information technology application(X4), keeping abreast of market and adjusting business(X5), innovation(X6), establishing advanced products Group(X7), cooperation with other travel agencies(X8), relationship with hotels and scenic spots(X9), relationship with the authorities and important customer(X10), training of employees (X11),employees development(X12), corporate team-building(X13), developing brand(X14), customer loyalty (X15). The score is assigned from 1 to 7, higher the score the moreattention and application.

IV.TESTINGFORDIMENSIONSOFTRAVEL AGENCYMARKETINGDYNAMICCAPABILITY

Among these 15 variables, there might be some interaction effects on each other, so, in order to analyze more scientifically, the authors applied factor analysis to this problem. This paper adopted factor analysistoturn 15 variables into fewer common factors F=(f1, f2,…,fp), (the number of common factor<15), and then got comprehensive factor value Z=b1f1+b2f2+…+bpfp, bi=λi/Σλi, i=1,2,3,4,5, bi is the weight for the i th common factor. Common factors extracted were the dimensions of travel agencies marketing dynamic capabilities, bidetermined the roles of the dimensions on travel agencies competitiveness.

A. ExtractingCommon Factors

Extractingcommon factors by SPSS 16.0 (Table1). As can be seen from the table 1, the contribution rate of five former characteristic roots was 87.11%.

TABLE I Total Variance Explained

Initial Eigenvalues
Total / % Variance / Cumulative %
X1 / 4.553 / 30.352 / 30.352
X2 / 3.172 / 21.145 / 51.497
X3 / 2.127 / 14.182 / 65.679
X4 / 1.708 / 11.388 / 77.067
X5 / 1.506 / 10.043 / 87.110
X6 / 0.783 / 5.217 / 92.327
X7 / 0.464 / 3.096 / 95.423
X8 / 0.309 / 2.060 / 97.483
X9 / 0.144 / 0.959 / 98.442
X10 / 0.080 / 0.530 / 98.972
X11 / 0.059 / 0.395 / 99.367
X12 / 0.036 / 0.241 / 99.608
X13 / 0.026 / 0.175 / 99.783
X14 / 0.020 / 0.136 / 99.919
X15 / 0.012 / 0.081 / 100.000

B. Naming for principal component

However, the meaning of five common factors is not clear, so it is difficult to name for common factor extracted. The factor loading matrix is ​​not unique, therefore, rotating them by the method of varimax, it is feasible to name for the rotated principal component factor(Table 2).

As can be seen from Table 2, X1, X2, X3, X4, X5 had higher load on the first principal component, these five variablesdescribed market research attitude and its implementation, which reflected external market information management, therefore, first principal component F1 is named as “Market information management”; Similarly，the second principal component F2 is named“Social network resources”; The third principal component F3 is named as “Travel Agency Human Resources”; The fourth principal component F4 named as “Travel Agency Brand Management”; The fifth principal component F5is named as “Travel Agency innovation”.

TABLE II. Rotated Component Matrix

Component
F1 / F2 / F3 / F4 / F5
X1 / 0.910
X2 / 0.881
X3 / 0.858
X4 / 0.870
X5 / 0.896
X6 / 0.976
X7 / 0.970
X8 / 0.925
X9 / 0.871
X10 / 0.877
X11 / 0.786
X12 / 0.887
X13 / 0.859
X14 / 0.984
X15 / 0.985

C. The Dimensions of Travel Agencies Marketing Dynamic Capabilities

According to the table 2, we could get the function which comprised of principal components and original index variables. We could obtain bi from variance contribution in table 1, and then get evaluation model of travel marketing dynamic capability: Z = 0.348F1+0.243F2+0.163F3+0.131 F4+0.115F5.

As can be seen from the evaluation model, b1 is the biggest weight in the five common factors, so F1 (market information management) plays the most vital role, and this dimension has an impact of 0.348 on travel agency competitiveness; Social network resources has an impact of 0.243 on travel agency competitiveness, ranking second in the five dimensions, which suggests that travel agencies pays more attention to external market environment; However, band management has a little impact on travel agency competitiveness, the weight is 0.131; The weight of product invention is only 0.115, which is the least one, so travel agencies hasn’t pay much attention to product invention.

Fig.1 Model of Travel Agencies Marketing Dynamic Capabilities

V. CONCLUSIONS AND PROSPECT

A. Conclusions

Based on marketing dynamic capability, this paper used factor analysis to study Qinhuangdao travel agencies, obtaining the dimensions of marketing dynamic capability for travel agencies, and finding that different dimensions had different impact on travel competitiveness.

B. Study limitations and future research directions

This study only selected Qinhuangdao travel agency as research sample. In future, scholars should select different areasand different types of travel agencies to analyze and to ascertain whether there are differences in travel agencies marketing dynamic capabilities.

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