Marketing Trends
- Submitted by: jessmama
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- Category: Other
- Date Submitted: 05/19/2012 02:09 PM
- Pages: 6
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Introduction
Understanding the process of transition from a traditional business, brick and mortar, to an e-commerce business is not as simple as it may seem. This paper will follow a small business that successfully transitioned from brick and mortar to e-commerce. This is the story of the transition of Borgsmiller Travel (1962-1996).
History/Travel industry background
The World Wide Web (www) was a mystery to most small businesses in the 1970’s. Most did not understand what the advantages were or how to use it. The traditional role of a travel agent in the 1970-1990’s was to mediate between the airlines, hotels, and the consumer. At that time it was difficult for a travel agency to differentiate themselves for their competition. Basically most provided destination expertise or quality service.
So, the impact of the internet gave travel agencies the ability to reach worldwide markets, but it also gave the airlines the ability to deal with customers directly. This cut substantially into the earnings of travel agencies and reduced their commissions from 20-25% to a mere 5% per ticket. Some airlines even imposed a cap on commissions. This gave the airlines substantial savings and a better knowledge of consumer behavior. In light of these dramatic environmental changes, major changes were needed by travel agencies to remain in business.
Frederick Borgsmiller opened Borgsmiller Travel in 1982. It was a full service agency serving Southern Illinois. This area was mostly rural but it also included a large state university and a community college. St. Louis’s Lambert Field, an international airport was about one hundred miles away and there were two regional airports in the area. Borgsmiller Travel started with one office and one agent in Murphysboro. In 1983 an office was opened in the Southern Illinois Airport with one agent. By 1985, Borgsmiller Travel had three offices and a satellite office and over six employees.
By now technology...
Understanding the process of transition from a traditional business, brick and mortar, to an e-commerce business is not as simple as it may seem. This paper will follow a small business that successfully transitioned from brick and mortar to e-commerce. This is the story of the transition of Borgsmiller Travel (1962-1996).
History/Travel industry background
The World Wide Web (www) was a mystery to most small businesses in the 1970’s. Most did not understand what the advantages were or how to use it. The traditional role of a travel agent in the 1970-1990’s was to mediate between the airlines, hotels, and the consumer. At that time it was difficult for a travel agency to differentiate themselves for their competition. Basically most provided destination expertise or quality service.
So, the impact of the internet gave travel agencies the ability to reach worldwide markets, but it also gave the airlines the ability to deal with customers directly. This cut substantially into the earnings of travel agencies and reduced their commissions from 20-25% to a mere 5% per ticket. Some airlines even imposed a cap on commissions. This gave the airlines substantial savings and a better knowledge of consumer behavior. In light of these dramatic environmental changes, major changes were needed by travel agencies to remain in business.
Frederick Borgsmiller opened Borgsmiller Travel in 1982. It was a full service agency serving Southern Illinois. This area was mostly rural but it also included a large state university and a community college. St. Louis’s Lambert Field, an international airport was about one hundred miles away and there were two regional airports in the area. Borgsmiller Travel started with one office and one agent in Murphysboro. In 1983 an office was opened in the Southern Illinois Airport with one agent. By 1985, Borgsmiller Travel had three offices and a satellite office and over six employees.
By now technology...