PESTLE Analysis - Language Travel Magazine Research

A brief PESTLE analysis reveals the following about the macro-environment for this project:

- Political: Spain and the Russian Federation have strong existing political ties and a history of political cooperation. There are no political barriers to cooperation between the two countries, and economic and civil society cooperation between Russia and Spain could make learning Spanish potentially advantageous for Russian children.

- Economic: Unlike many regions of the world, the Russian economy is growing (though slowly). This bucks the trend of other high-income OECD countries. GDP growth is expected to be 3.9% in 2013, with attendant growth in personal income.

- Sociocultural: Gradually increasing personal income and freedom of movement have led to an increasing importance of travel in Russian culture, and Russians are now enthusiastic international travelers. This suggests a strong importance of second-language learning s well as travel.

- Technological: There are a growing number of online language training courses that could provide a substitute or compete with the program, such as the Ectacto program (designed for Android phones and tablets).

- Legal: Russian citizens do need a visa to visit the Schengen area, including Spain. These visas are good for up to six months. However, there have been suggestions that this policy could be relaxed and visa-free travel between the Russian Federation and the Schengen area could be eliminated by 2014. Thus, this may be a short-term issue.

- Environmental: The main environmental influence on the program may be the cost of travel, related to carbon offsets and the cost of airline tickets. However, this is a non-specific concern.

Market Analysis and Trends

Market analysis and trends have been considered across two views, including the Russian market for international language schools and the Spanish language school market generally. There are no official market reports regarding either of these markets (as this is a niche or specialty area of education), and as such secondary sources including news reports have been used.

According to a report in Language Travel Magazine the Spanish language school market plunged in 2009 due to lack of demand from sources around the world and economic struggle. However, 2010 represented a period of recovery and growth that increased enrollment, and 2011 was expected to be even stronger in this market. International markets including Brazil, the United States, and other European Union countries were strong, although markets like China were relatively weak because of the demand for visas. Russia was not mentioned as a major source of students to these schools, although of course this could potentially change over time.

As with Spain, outbound travel from Russia fell sharply in 2009 due to the economic crisis. Language Travel Magazine's (2010) survey indicated that the year involved a 12% loss in the number of students placed in outbound programs. This report also indicated that Spain was the chosen destination for 3% of Russian students placed through travel agencies. Summer vacation courses are the second-most popular choice. These programs are mostly chosen by secondary students. Overall indications suggest that language programs are closely connected with economic prosperity, and that Spanish language is a minor, but still noticeable, choice for Russian students.

Customer Analysis

The product being offered by the language school is a one or two-week language training and tourism course aimed at late-primary and secondary students (aged 9-17). The program will cost €725 for one week or €1,450 for two weeks, and further rates can be arranged for longer stays. The program fee includes accommodation, meals, language training, and outside activities, but does not include airfare or visa fees. Assistance will be provided in securing visas and group airfare rates will be negotiated from Moscow.

The program is intended first to appeal to families with at least one child, as the program is intended for children to travel unaccompanied. The academic and career-oriented nature of the language learning program is also clear, as 36% of Russian language travelers traveled for future work purposes and 24% for facilitating overseas studies (Language Travel Magazine, 2010). This indicates that the families interested in academic and job-oriented outcomes will be most interested in the program. A final concern is the socioeconomic status of the family. The average Russian monthly salary of 23,600 rubles (€588) means that the price of the program is very expensive for average earners. Thus, the target customer for this program will have above average earnings. It is estimated that this program will be most affordable for the highest 20% of earning families, which have an average of 47.13% of the earnings as of 2009 (which corresponds to a monthly income of €1390).

Market Segmentation

The target customer for this program (as determined above) is an academic or career-oriented family with one or more late-primary or secondary age children, and with an above-average income. In this section, market segmentation is performed in order to determine how large this market is likely to be.

The overall number of families with children is relatively low, owing to a sudden demographic shift in the 1990s that left Russia with a current total fertility rate (the average number of children that a woman gives birth to) at 1.54. This suggests that approximately 15% of the population is under age 15. Furthermore, approximately 20% of women do not have children. Because the program will also be limited to Moscow (due to the relatively small size of the program), only around 8% of these families will actually be reached.

In terms of educational focus, families with strong tertiary participation are likely to respond most to the program. This is quite high, with tertiary enrollment at 75.89% in Russia as of 2010. This suggests that interest in the program is likely to be strong, particularly for parents seeking an academic or international business oriented career path for their children. Overall, this suggests that many parents are likely to be interested in the program. The limiting factor is likely to be income. As previously indicated, monthly income in Russia is slightly less than a week of the language program.

Promotional Tools

The marketing and promotional budget for the program is fixed at no more than €5,000 for the initial program. Language Travel Magazine's survey of outbound Russian language travelers indicates that word of mouth (47%) and web sites (27%) are the most common recruiting methods used by agencies to generate business. This suggests that these two approaches are likely to be most effective in promoting the program itself. Word of mouth, a Web site, and distribution of brochures to secondary schools will be the main promotional tools used.

The selected promotional tools, including electronic word of mouth and a Web site, are primarily based in social media marketing, or using social media (such as Facebook and other interactive forms of marketing in an online environment) to distribute information and build excitement about a given program. Facebook will be a major outlet, both for providing information and enabling customers to distribute information easily. Approximately 5% of the Russian population uses Facebook, with the largest age group being in the 25-34 age range and the third-highest group in the 35-44 age range. This figure has grown by approximately 15% in the last six months. This suggests that Facebook will be a strong approach to providing information to parents of secondary students, particularly in the higher income levels that will be required to sustain a program over time. Facebook has an advantage in that using Facebook to provide information to users is free (requiring only time from an employee to maintain the site), though using pay-per-click advertising will cost. A Web site will provide supplementary information for the program, enable contact and signup, and provide all forms and other requirements needed for administration of the program. Brochures distributed to secondary schools will provide awareness of the program to teachers and headmasters helping students plan their educational paths. This three-pronged promotional plan will offer students, parents, and schools awareness of the program and encourage participation while still retaining low costs.

References

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Evans, D. Social media marketing: The next generation of business engagement. Hoboken, NJ: John Wiley and Sons.

Gusev, A. The relations between Russian Federation and Spain.

Hancox, N. Demanding Spain. Retrieved from Language Travel Magazine.

Hua, E. How to identify a Russian traveller.

Language Travel Magazine. Russia Challenged.

Polish Language Translations - Academic Research Resources. Web. polish-translations.com/articles/

RIA Novosti. Putin laments Russia's income gap.

Schengen Visa Services. Schengen Visas.

Social Bakers. Russia Facebook Statistics.

Vasilenkov, S. EU to abolish Schengen visas for Russia in 1.5 years?

World Bank. Data - Russian Federation.

World Bank Development Research Group. Russia - income distribution.