A travel agency decides about the services it would make available to the customers. Therefore product mix is a step ahead of product design. In product mix, services designed individually are clubbed together. A travel agency has to decide the length and breadth of the product mix. An example would make this clear. Suppose a travel agency is offering ticketing, travel documents and airport transfer service. This would be termed the length of its product mix. All these product lines have their breadth too. For instance the airport transfer could be provided only in luxury cars. An agency could add more product lines such as tour packages and hotel accommodation.
While extending services of a supplier, a travel agency should be cautious. It must not offer the services of those suppliers who provide bad services. This would bring bad name to them too. A travel agency must be flexible regarding its product mix. It has to take care of quality, brand etc. An agency has to change its policies according to government regulations and tax structure, political environment etc. Policies of principal suppliers also affect products/services of travel agencies. They also have to take decision on adding or dropping products. An agency has to be cautious regarding human resource development as quality services product cannot exist without good customer care.
The first step of a business is to decide on its market segment. The prospective market has to be carefully segmented. The segmentation could be done the basis of the purpose of travel or their budget. Timing of the travel decisions or services by the customers could also be the base of segmentation. For instance, lets us take the case of Penang in Malaysia. A customer could need services like travel consultancy, ticket booking, handle travel documents (visa, passports etc), airport transfers, tour packages, hotel bookings etc. Once an agency has decided on the market segment to target, it could focus on other issues.