SHA504: The Hospitality Marketing Mix: Place and Promotion

Transcription

1 SHA504: The Hospitality Marketing Mix: Place and Promotion

2 MODULE OVERVIEW Module 1: Tailoring Place to the Target Market After working with product and price, you've now come to the third element of the four Ps: place. The old business saying Location, Location, Location has been considerably expanded in today's competitive landscape. With the advent of package travel, travel agents, the Internet, and considerably intensified tourism marketing, attracting customers has become more complicated than simply boasting an attractive facility. Even if you're already working in a facility that has a well defined physical presence, understanding how place affects a property helps you to maximize the advantages already available to you. After completing this module, you will be able to: Discuss the four basic location strategies Identify the steps involved in choosing a location Choose an appropriate location for a hospitality organization Describe the two dimensions to distribution in the hospitality industry: physical presence and representation Describe the three sources of reservations Discuss the advantages and disadvantages of the principal distribution channels in the hospitality industry Choose a distribution channel appropriate to a specific property or product

3 TOPIC OVERVIEW Topic 1.1: Location and Site Selection There are many methods available to evaluate a potential location. The important thing to remember about location is that it is designed to give you every possible advantage to reach your target market. Choosing a location is an activity that can be as large scale as choosing an economic region that is growing, or as small scale as choosing a particular side of the street that allows traffic to easily access your front parking lot. In general, a hotel site is evaluated on the attractiveness of its location to persons coming to that destination. A restaurant site tends to be evaluated on the ability of the local area to provide business, and the ability of that site to inform the target market of the restaurant's existence. The resources in this topic discuss location from different perspectives. The first resource, Location Strategies, looks at the process of choosing a location within a defined geographic area. Steps in Choosing a Location discusses the location-selection process from the perspective of being able to choose target markets and geographic areas matching your business. After completing this topic, you should be able to: Discuss the four basic location strategies Identify the steps involved in choosing a location

4 Location Strategies There are four approaches in choosing a business location. Click the items below to learn more about these location strategies. Transcript: Location Strategies Clustering Clustering involves locating several units in the same area, saturating the area with one brand of restaurant or hotel. While the cumulative effect may be to attract a large number of potential customers to the area, the danger is that it may result in cannibalization, with one venue taking customers away from one or more of the others. Freestanding or Venue Sites Traffic provided by a host may assist relatively new or unknown concepts. For example, certain types of new food concepts are often best received and reach greater awareness when introduced in an amusement park which draws heavy foot traffic. The presence of many kiosks or food carts offering the new food concept allows for increased consumer awareness of the product and greater trial purchases. Co-location Co-location involves situating two or more noncompetitive properties in one location. This allows the properties to share certain costs, and exposes each to the other's customers. Funnel or Magnet Funnel locations are high-traffic sites that are often very expensive. Magnet locations are low-traffic sites (often in small towns or rural areas) that attract customers because of their ambience, natural scenery, recreational opportunities, and so on. The cost of the site may be low, but usually customers must travel a long way to get there. The success of hospitality businesses placed in magnet locations depends on the businesses' abilities to offer customers a unique experience. Source: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p

5 Steps in Choosing a Location There are four steps to choosing a location for a property. Click on each to learn more. Adapted from: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p Transcript: Steps in Choosing a Location Choosing a target market The first step to choosing an appropriate location for a property is to understand the market strategy and the organization's target market. For example, La Quinta motels cater to the traveling salesperson and other mid-class guests arriving primarily by automobile. Locations are typically along freeways outside major metropolitan areas. They are close enough to the central business district to offer convenient access, yet far enough away to allow economic purchase of the site. Hyatt, on the other hand, caters to groups and businesspeople, who often arrive by plane. Hyatt hotels are often located in the heart of the central business district. Selecting a geographic region Step 2 is regional analysis, which involves selecting the geographic market areas. The selected region must have sufficient and stable demand to support the hospitality business. A growing area with a diverse economic base is best. It is also important to estimate the trading area: the area from which percent of business will be drawn. The trading area for hotels is substantially larger than the trading area for restaurants. Selecting a geographic area Step 3 involves evaluating the demographic and psychographic characteristics of the areas available within the chosen geographic region. Factors to consider include: Estimated demand Number of rooms actually occupied in existing hotels in the area Nature and quality of the neighborhood Choosing an individual site A number of factors contribute to finally choosing the individual site: Look for compatible businesses that will help generate demand, such as office complexes, airports, business complexes for hotels, shopping centers, well-populated residential communities, and/or motels without food and beverage services. Evaluate the competition: Are there already a sufficient number of hotels or restaurants in the area? If so, you may want to look elsewhere, unless you're just trying to establish a presence even though the market is saturated. How accessible is the location? Is the site easily accessible by traffic going in both directions? Can customers get into and exit the site easily? What is the distance from the targeted population? What is the surrounding land use? Will it add to or detract from the location? Adapted from: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p

6 TOPIC OVERVIEW Topic 1.2: Distribution Systems There are two dimensions to distribution in lodging: physical presence and representation. Physical presence refers to being in a location that is easily accessible to guests. When people think of location, what first comes to mind is having a visible facility in a place that is easy to reach. Representation refers to having an agent to represent the hotel in a market. The agent can be any combination of an 800 number, a travel agent, a web site, or a reservation service. The more markets in which a hotel is represented, and the greater variety of representation a hotel employs, the greater a hotel's overall ability to get its message in front of potential customers. This is becoming increasingly important as more reservations are made electronically or through third parties. With the proliferation of ways to be represented in a market, it is also becoming important to hotels to find out if certain avenues of distribution are drawing in more customers than others. After completing this topic, you should be able to: Describe the two dimensions to distribution in the hospitality industry: physical presence and representation Describe the three sources of reservations Discuss the advantages and disadvantages of the principal distribution channels in the hospitality industry Choose a distribution channel appropriate to a specific property or product

7 Global Distribution Systems Global Distribution Systems (GDS) refer to the various methods by which travelers can make reservations for most hospitality businesses. There are three principle methods of reservations: travel agents, central reservation systems (CRS), and the universal switch. Click the links below to view more information. Transcript: Global Distribution Systems Global Distribution Systems (GDS) refer to the various methods by which travelers can make reservations for most hospitality businesses. There are three principle methods of reservations: travel agents, central reservation systems (CRS), and the universal switch. Travel agents Travel agents serve primarily private individuals, corporations, and groups. Central reservation system Airlines and major hotels use a central reservation system (CRS) to book and track reservations. Travel agents can book lodging reservations through the hotel CRS and flight reservations through the airline CRS for travel agents. Airline ticket agents also use the airline CRS. Universal switch The Universal Switch connects the airline CRS and the hotel CRS. Hotels pay a special fee to use the CRS and the Universal Switch. Unfortunately, independent properties may suffer because the airlines have not found it financially feasible to keep independent properties in the CRS.

8 Distribution Channels The two most important distribution channels in the hospitality industry are chains and franchises. In addition to these, there are several others. Click each type of distribution channel below to learn more about it. Adapted from: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p Transcript: Distribution Channels Chains Technically, chains are two or more properties that are affiliated with the chain brand; each hotel or restaurant sells essentially the same services/goods. What appears to be a chain, however, might actually operate under a number of ownership programs. For example, independently owned hotels may be operated by a management company performing under a management contract. Marriott, Four Seasons, and most other major franchise names frequently serve as management companies for hotel owners. Franchises In a franchise system, the franchiser owns the brand and sells the rights to the name, logo, reservations system, and other services to the property owner (the franchisee). These additional services can include: Use of a national brand so travelers can find a hospitality firm name they trust with consistent quality standards, and a marketing program that lets travelers know where the properties are located Ability to access a centralized computer reservation system and 800 number Access to a buying cooperative to help reduce costs through bulk rates or quantity discounts Standardized training programs to maintain consistent service quality The downside of franchising is the expense to the franchisee in the form of royalty payments to the franchiser. Travel and Tour Wholesalers Travel and tour wholesalers buy blocks of rooms and/or airline tickets at discounts and assemble travel packages for the leisure market. The packages may include meals, transportation, and entertainment. The wholesalers then resell these travel packages to retail travel agents, who market them to end-users. One disadvantage is that organizations must offer discounts to the wholesalers, and risk becoming dependent on the wholesalers for a disproportionate amount of their business. Hotel or Airline Sales Representative Companies Hotel or airline sales representative companies sell hotel rooms or airline seats and their corresponding services in a given market area. It is often more effective for hospitality businesses to hire a representative in a given market area, especially when the market is distant and/or when cultural differences may make it difficult for an outsider to penetrate the market. Incentive or Motivational Houses Incentive houses or motivational houses provide incentive travel to employees or distributors as a reward for their efforts. For example, companies often use incentive travel as a prize for employees who achieve or exceed sales goals. National, State, and Local Tourist Agencies National, state, and local tourist agencies are an excellent way to get information to the market and gain room bookings. Some of these groups may be more passive in their promotional efforts, however, and will wait for the consumer to contact them. The Internet The Internet has become a dominant distribution channel. Most hospitality businesses are placing an emphasis on this

9 direct means of reaching the end-user and nearly all have some presence on the Web. Mobile Distribution Mobile products are the newest channel of distribution. Although still in the emerging stage, marketing to consumers via mobile phones and PDAs is considered the next big wave. A few companies have already determined how to maintain the transactional security on these systems, which means that purchases of hospitality products will be able to be made via this channel. In addition, mobile marketing allows firms to confirm reservations, up-sell customers, and remain in contact. Intercept Marketing Restaurants, especially, are interested in achieving multiple points of distribution (PODs). PODs are scaled-down versions of a restaurant concept that take the form of: Towers or modular upright merchandisers (e.g., warmers and refrigerators) Carts for directly intercepting customers Kiosks or self-contained mini-restaurants Essentials of Intercept Marketing Two concepts are important to intercept marketing: hosts and venues. Hosts are high-traffic business locations such as malls, colleges, airports, and zoos. Hosts seek PODs to satisfy customers, increase revenue, and generate additional traffic. The location of the POD is called a venue. Restaurant companies seek venues to increase traffic flow, achieve cost-savings over traditional sites, and decrease competition. A Singaporean-based company called GRANDSTAND produces mobile nightclubs and bars. For example, AQUA is a mobile, three-story, open-air club-lounge that launched in September The entire structure can be folded up, transported and reopened at a new location. The mobility enables AQUA to move from one area of the city to another when trends shift, consumer preferences change, and new locations become popular. This innovation keeps AQUA fresh and gives it tremendous competitive advantage in a cutthroat industry. (Adapted from: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p )

10 Choosing Distribution Channels Consider a case in which a residential property is being converted into a boutique hotel. The owner has conducted a thorough environmental analysis and has selected the target markets to pursue. You will assist the owner by suggesting the distribution channels to use. Below you will see a list of eight distribution channels you may choose to focus on in marketing the boutique hotel. Drag the lettered items on the left into the spaces provided on the right, and put them in order of importance. There is no right or wrong answer to this activity. All of the resources in this and the previous topic should feed into your decisions. Upon completing the choices you are presented with here to your satisfaction, you can print this page to keep your choices for later reference. Then go to the discussion forum to share your results.

11 Module 1 Wrap-Up Congratulations on completing Module One. As you have seen in this module, place has a tremendous impact on the hotel. With the advent of global distribution systems and other methods of advertising your facility, you have seen that "place" is a concept that moves far beyond the physical presence of your facility. Having completed this module, you should be able to: Discuss the five basic location strategies Identify the steps involved in choosing a location Choose an appropriate location for a hospitality organization Describe the two dimensions to distribution in the hospitality industry: physical presence and representation Describe the three sources of reservations Discuss the advantages and disadvantages of the principal distribution channels in the hospitality industry Choose a distribution channel appropriate to a specific property or product

12 MODULE OVERVIEW Module 2: Tailoring Promotion to the Demographic Characteristics of the Target Market The final element of the four Ps is promotion. As the media channels available to promote your service continue to multiply and become more sophisticated, promotion becomes an increasingly complicated challenge. Promotion includes personal and non-personal selling, all advertising from radio to television, direct marketing, the Internet, and many other avenues to get your message across. One of the most important lessons to learn from this module is that promotion is not a "one size fits all" type of item. Precisely because of the wide variety of channels available for promotion, there are many ways to get your message across. Often the process of clearly defining your target market helps traditional and creative avenues of promotion to become clear. This is the time to coordinate the creation of your promotional plan, and bring all the skills you will learn in this module to bear on your business challenge. After completing this module, you will be able to: Define the concept of promotion Discuss three types of promotion Define the concept of communication Define the concept of promotional mix Discuss the factors affecting the promotional mix List the elements typically comprising the promotional mix for hotels Distinguish between personal selling and non-personal selling Describe the Hierarchy of Effects model Define the concept of integrated marketing communications (IMC) Implement the steps involved in creating the promotional plan Define the term advertising and its role in the marketing mix Compare and contrast the characteristics of product advertising and institutional advertising Design an effective, product-specific advertising campaign Define integrated direct marketing and discuss the reasons for its increasing popularity Define the term sales promotion and discuss its objectives Discuss the effectiveness of various sales promotion tools Discuss the possible reasons for undertaking a public relations campaign Implement the steps involved in executing and evaluating a PR campaign Define professional selling and discuss its importance in the overall promotional mix Discuss the advantages and disadvantages of professional selling Describe the steps involved in implementing the professional-selling process Describe strategies for managing the sales effort Discuss various advantages and approaches to Internet marketing in the context of the hospitality industry Apply best practices to Web-site design in order to increase traffic and drive revenue Implement best practices related to search engine optimization Evaluate the extent to which social media can be a component of your organization's online marketing strategy Evaluate the extent to which your organization should take advantage of electronic distribution channel

13 TOPIC OVERVIEW Topic 2.1: Communication and Promotion Promotion is the most visible element of the marketing mix. Promotion consists of all communications, both free and fee-based, between the hospitality organization and the market. Promotion is designed to increase the probability that the customer will buy. Promotional activities are some of the most effective means a company has to communicate directly with potential customers. Promotion is an attempt to influence consumer feelings, beliefs, or behavior. A promotional campaign is designed to get the consumer's attention and secure a place in the consumer's memory--to convince target customers that the organization's goods and services provide a differential advantage over the competition. Effective promotion requires effective communication. Communication is the verbal and/or nonverbal transmission of information between a sender and a receiver. There are two general types of communication Interpersonal (direct, face-to-face) Mass The promotional mix is the combination of personal selling and non-personal selling necessary to satisfy the needs of the firm's target market and achieve organizational objectives. After completing this topic, you should be able to: Define the concept of promotion Discuss three types of promotion Define the concept of communication Define the concept of promotional mix Discuss the factors affecting the promotional mix List the elements that typically comprise the promotional mix for hotels Distinguish between personal selling and non-personal selling Describe the Hierarchy of Effects model

14 Three Types of Promotion There are three general types or categories of promotion. Click on each item below to learn more: Transcript: Three Types of Promotion Informative promotion Informative promotion is generally more prevalent during the early stage of the product life cycle, when it can increase demand for a product category. It explains the purpose and benefits of a good or service and aims to convince consumers to buy the company's product instead of the competition's. Persuasion Persuasion is simply attempting to motivate a consumer to purchase or use more of a product. This is normally used during the growth stage of the product life cycle. Reminder promotion Reminder promotion is used to keep the product and brand name in the public's mind. It is generally used during the mature stage of the product life cycle.

15 Personal vs. Non-Personal Selling Personal selling (also called "professional selling") is the planned presentation of a product to a prospective customer by a representative of the selling organization. Personal selling involves one-on-one communication and is very expensivemore money is spent on personal selling activities than on any other promotional method. Personal selling conducted over the phone is called "telemarketing." Non-personal selling includes the following categories. Click the links below to view more information. Transcript: Personal vs. Non-Personal Selling Advertising Advertising is a paid-for type of ongoing, mass communication in which the sponsoring organization is clearly identified. While the total cost of an advertising campaign can be quite high, the cost per contact is very low because advertising can reach such a large number of people. Sales promotion Sales promotions are short-term inducements of value to encourage product trial, and are designed to supplement advertising and coordinate personal selling. Examples include contests, samples, and coupons targeting end-users, trade customers, or company employees. Public relations Public relations refers to a planned effort by an organization to influence the attitudes and opinions of a specific group. Publicity is similar to advertising because it uses mass communication techniques, but it is not paid for and it has the creditability of editorial material.

16 Factors Determining When to Use Personal vs. Non-Personal Selling

17 Ask the Expert: The Hierarchy of Effects Model Transcript: Ask The Expert: The Hierarchy Of Effects Model What is the Hierarchy of Effects model? The Hierarchy of Effects model is a model for reaching promotional objectives and it outlines the stages of consumer involvement with a promotional message. The Hierarchy of Effects model essentially illustrates how marketing promotions move the consumer from awareness of the product, to knowledge about the product's characteristics, to a favorable attitude or liking for the product, to brand preference by explaining why the product has a differential advantage over the competition, to purchase intention or a conviction to buy the brand, and then finally to the actual purchase of the product. What is the relationship between the Hierarchy of Effects and the promotional mix? Each tool in the promotional mix is more effective at certain stages of the Hierarchy of Effects model. For example, advertising is most effective during the awareness and knowledge stages. Professional selling is most effective at developing consumer brand preferences and gaining conviction to buy the brand. Sales promotion is most effective during the awareness and purchase stages, while public relations has the greatest effect in the awareness and brand preference stages. The advertiser's task is to determine which stage a majority of the target market is in and to use the appropriate form of promotion that addresses the needs of that consumer stage, while ensuring that all marketing communications are integrated and conveying the same message to consumers across all stages of the Hierarchy of Effects model.

18 The Marketing Promotion Mix for Hospitality Organizations

19 TOPIC OVERVIEW Topic 2.2: Integrated Marketing Communications: Developing the Promotion Plan Integrated marketing communications (IMC) is the coordination of all promotional activities, media advertising, direct mail, professional selling, sales promotion, and public relations to produce a unified promotional message that is customer-focused. Teamwork is critical to the successful implementation of integrated marketing communications. After completing this topic, you should be able to: Define the concept of integrated marketing communications (IMC) Implement the steps involved in creating the promotional plan

20 Identify the Promotional Mix for the Boutique Hotel This activity asks you to choose a promotional mix for the boutique hotel. You assign percentages to each of the promotional components until you have allocated the full 100% of your promotional efforts. Promotional components for which you do not assign a percentage will default to 0%. When you finish your assignments, click the Assess button to get a summary appraisal of your selections. Then go to the Discussion to compare your results with others taking the course. You can print your summary appraisal from within your browser if you cannot go to the Discussion immediately after finishing the activity. Assign percentages to the following four promotional components:

21 Steps in Developing the Promotion Plan Transcript: Steps in Developing the Promotion Plan Identify the target market Before a marketing strategy can be implemented, the marketer must identify, evaluate, and select a target market. A target market is a fairly homogeneous or similar group of customers to whom a company wishes to appeal. This group of customers has enough characteristics in common to make it viable for the firm to design specific offerings or products for it. A firm may have one or many target markets. Selecting a target market involves analyzing market opportunities that are compatible with the organization's goals and image. Identify the target purchase phase Is the target market simply gathering information about the various alternative products that may satisfy the identified need or is the target market ready to buy? Identify the consumption value In this step, you should identify what benefits customers will acquire when consuming or using your good or service. Then, you want to identify which of these benefits are most salient to your customers. Determine the promotional objectives Promotional plans are designed to accomplish one or more of the following: Increase awareness Change consumer attitudes Change buyer behavior Remind consumers Increase buyers' recall of the product or service Determine the consumer image position What is the image the target market wishes to project? How does this product or service help the target market reach that desired image? Develop the promotional budget Developing the promotional budget involves first choosing the development approach, then applying that approach to developing the budget itself. There are several approaches to developing the promotion budget, including: Marginal analysis: increasing promotional expenditures until each dollar of promotion expense is matched by an additional dollar of profit. Percentage of sales: devoting a fixed percentage of sales revenue to promotion. Fixed sum per unit: Allocating a pre-determined promotional sum to each sales or production unit without reference to other factors. Competitive parity: Matching competitors' promotional outlays. Task-objective: Evaluating the firm's promotional objectives and developing a budget to meet them. Design the message This involves deciding not only what you are going to say, but how you are going to say it-in other words, designing the advertising campaign. To learn more about designing an advertising campaign, see the topic titled "Creating an Advertising Campaign." Determine the promotional mix This involves deciding on the mix of advertising, personal selling, and non-personal selling necessary to satisfy the needs of the firm's target market and to achieve organizational objectives. To learn about the promotional mix, see the topic titled "The Promotional Mix."

22 Measure effectiveness Measuring the effectiveness of the promotional mix is not easy. The various elements of the mix all interact, making it difficult to analyze the effectiveness of any one of them. Complicating the situation is the fact that different elements exercise their effectiveness over different time periods-some elements are effective in the short term, while others take longer to produce an effect. Nonetheless, organizations employ various strategies and techniques to measure the effectiveness of promotional elements, both before their use (pre-testing) and after (post-testing).

23 TOPIC OVERVIEW Topic 2.3: Creating an Advertising Campaign Advertising is a paid, non-personal communication that identifies its sponsor and attempts to inform or persuade members of its target market. Advertising serves several functions, including: Making consumers aware of a product Informing customers about the benefits of a product Influencing customers to buy a product Maintaining product visibility Influencing consumers attitude toward a product or brand The total annual expenditure for advertising in the U.S. exceeds $131 billion or approximately $500 for every man, woman, and child. Most industries, on average, spend only l.5% of their sales dollar on advertising, but the five largest U.S. advertisers Proctor & Gamble, Philip Morris, General Motors, Sears, and Pepsi co. spend over $1 billion annually. After a certain level of advertising is reached, diminishing returns set in. This phenomenon, known as the advertising response function, explains why well-known brands can spend proportionately less on advertising than new brands can. According to estimates, Americans are exposed to an average of nearly 300 advertisements a day from the various types of advertising media. Advertising seldom succeeds in changing an attitude that stems from a person's moral code or culture. But advertising does attempt to change attitudes toward brands and to create an attitude toward the advertisement itself. After completing this topic, you should be able to: Define the term advertising and its role in the marketing mix Compare and contrast the characteristics of product advertising and institutional advertising Design an effective, product-specific advertising campaign

24 Create an Advertising Campaign for the Boutique Hotel The advertising campaign is a series of related advertisements for a particular product focusing on a common theme, slogan, and set of advertising appeals that extends for a defined time period. The objective of a campaign is often a specific communication task accomplished for a specified target audience during a specified period of time. This activity introduces the steps involved in creating an advertising campaign, and gives you the opportunity to apply those steps to the boutique hotel concept. Read about each step, then choose how you might apply it to an ad campaign for the boutique hotel. At the end of the activity, you will see a compiled version of your choices that you can print and save for future reference. If you change your mind, you can retrace your steps at any time to make a different choice.

25 Types of Advertising There are two major types of advertising: Institutional advertising builds the image of the company or the industry. Product advertising touts the benefits of a specific good or service. Institutional Advertising Institutional advertising is concerned with promoting a concept, an idea, a philosophy, or the goodwill of an industry, company, organization, person, or government agency. It is closely related to public relations' functions. Institutional advertising has four important audiences: the public, the investment community, consumers, and employees. Advocacy Advertising Advocacy advertising is a form of persuasive institutional advertising that enables corporations to present information or express their views on a publicly recognized, often controversial issue. Product Advertising There are several types of product advertising, including pioneering advertising, competitive advertising, comparative advertising, and reminder advertising. Pioneering Advertising Also called informative advertising, pioneering advertising seeks to develop initial demand for a good, service, organization, person, idea, or cause. It is most often used during the introductory phase of the product life cycle. Its goal is to develop primary demand for a product category rather than demand for a specific brand. Competitive Advertising Also called persuasive advertising, competitive advertising seeks to develop demand for a specific brand rather than a product category. It is used most often in the growth and early part of the maturity stages of the PLC (product life cycle). It is especially useful in a highly competitive environment, where marketers want consumers to choose their brand over that of their competitors. By emphasizing a brands differential advantages or benefits, competitive advertising promotes selective demand or demand for the specific brand. Comparative Advertising Comparative advertising is advertising that references actual product names to make specific brand comparisons. Typically, market leaders do not use this type of advertising because they do not want to draw attention to their competitors. Comparative advertising is most beneficial for the challenger in a product category. As one ad agency executive said, "When you challenge the leader, you have little to lose." Reminder Advertising Reminder advertising seeks to reinforce previous promotional activity by keeping the name of the good, service, organization, person, idea, or cause in front of the public. It is used in the latter part of the maturity stage, as well as throughout the decline stage of the PLC.

26 Types of Media

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28 Ask the Industry Expert: Creating an Advertising Campaign: Best Practices About our Industry Expert: Peter Yesawich Peter C. Yesawich is Chairman and Chief Executive Officer of Ypartnership, Americas leading marketing, advertising, and public relations agency serving travel, leisure, hospitality and entertainment clients. Ypartnership is an integrated marketing communications company that is known for its strategic thinking, breakthrough creativity, and innovation in marketing practice. Yesawich received B.S., M.S. and Ph.D. degrees from Cornell University, and is a graduate of the Advanced Management Program at Yale University. Yesawich is a frequent commentator on travel trends in such publications as The New York Times, Los Angeles Times, The Wall Street Journal, USA Today, and International Herald Tribune, on the CNN, CNBC and MSNBC cable television networks, and on National Public Radio. He also serves as a visiting associate professor of marketing at Cornell University and is a member of its Center for Professional Development faculty. He is listed in Who's Who in America and has authored numerous articles on marketing and advertising strategy in both trade and professional journals. He is a member of the International Society of Hospitality Consultants and serves as a member of the board of directors for the Travel Industry Association of America. Yesawich has received the World Travel Award from the American Association of Travel Editors, the Albert E. Koehl Award from the Hospitality Sales and Marketing Association International (HSMAI), and the Silver Medal from the American Advertising Federation. He is also a member of the HSMAI Hall of Fame. Transcript: Ask The Industry Expert About Creating An Advertising Campaign: Best Practices In developing an advertising campaign, how do you manage the creative process? Delicately. The question of how to manage the creative process is one that I think people in the business have been challenged to address successfully for years. There is a famous expression in advertising: "It's not creative unless it sells." So fundamentally, the first step is to craft messages that people really will find to be motivational. The balance that has to be achieved is the balance between managing the discipline without, in any way, suppressing the creativity. And that's a remarkably delicate balance that has to be achieved in the process of development. The way we recommend that be done is through the preparation of a document we call the "Creative Work Plan." And a creative work plan is really nothing more than an expression of the basic elements of the communication. They would include, for example, the primary purpose of the advertising, or the message. What outcomes are desired once people have been exposed to that message? The next would be, obviously, defining the target market or markets, and to the extent possible, that goes well beyond understanding who the markets are demographically, to include their lifestyles, and more importantly, their travel behavior when it comes to hotel advertising. From there, the work plan would stipulate precisely what action the advertising is designed to motivate those who are exposed to it to pursue. And then there is also a final element of the plan which we call the "mandatories," and those are the things that have to be scripted into each communication-such things as "how people who are exposed to the message will respond"-if it's a telephone number or a Web site address or some other response vehicle that will be mandatory to all communications. In the hotel business today, in my view, there is far too much advertising that is created in the absence of that discipline, and I'm sure you can appreciate if there is no discipline at the front end, then it's very difficult for people to agree on whether or not the advertising has performed satisfactorily at the back end. How do you create an effective and appropriate story and how do you present that story in an effective manner that is appropriate to your target audience? The creation of the message is probably the single most difficult challenge that I think general management or marketing management has today in promoting lodging or broadly, in travel. And the reason for that is that there is a numbing sameness to much of the product that is out there today. So, from a consumer's point of view, to them many of the types of lodging accommodations that are popular today essentially look the same as their competitors, and, as a result, it's very difficult many times for hoteliers to discern the differences between their product, or their brand, and competitive brands, and then to roll that up into a fashion that the message really comes through the communication. The concept today is you must differentiate clearly and effectively to implement what are truly effective communications programs.

29 How does brand loyalty affect advertising effectiveness? Loyalty is a very perishable commodity in today's environment for one primary reason, and that is the transparency of pricing. And that is, now, it's very easy to log on to any of a number of Web sites and to get a presentation of comparative prices in a given market for a particular type of hotel or resort. That transparency has, in turn, essentially led consumers to take a more aggressive posture in the negotiation of what they think is rightfully theirs. And there is a quid pro quo today for their business, and that is their feeling is that if they are going to provide a brand or a property with their business, there should be something given in exchange beyond the normal expectation of clean, comfortable, safe lodging. And one of the things we know in lodging marketing is if you want to move market share very quickly, there is a very easy way to do that, and that is you "up the ante" with the goodies you provide those customers. You offer triple or quadruple airline miles for a well-defined period of time, or you offer a complementary breakfast or free access to the Internet. And we noticed that when we do those things, you can see shifts, marked shifts, in the patronage that you receive, obviously at a higher cost, but I think that's symptomatic of the challenge of, frankly, maintaining loyalty as most would define it today. How do you make decisions regarding the media in which the message would be communicated, and what criteria and considerations form your decisions? The process of selecting media, I think for most hoteliers today, is akin to the misery of choice. And that is, there has been a proliferation of media options-whether in the printed form in terms of special interest magazines, the broadcast form in terms of the sheer number of low-band and cable stations that are now on the air. And then when we add to that the options that exist online, the options kind of grow exponentially. So, determining where to place the message has become a highly complex assignment for most hoteliers, and the best advice I can give hoteliers, either at the property or at the brand level, is to begin by establishing a very clear definition of the target audience. And that goes well beyond the demography of the target audience, which is looking at it by age and income and marital status, to include life style, media habits, and consumption habits. And if we develop that rich a picture of the customer, then what happens is we filter all of those media options through those screens, so to speak, so that we only look at media options that deliver efficiently against that target. The second then, becomes determining the efficiency of those media, and that really boils down to the cost, theoretically, of using a particular medium to reach a theoretical thousand members of the audience delivered by the medium. The last dimension, however, really is more judgmental, and that's whether or not the environment in which the advertising will appear is conducive to the sale of what's being advertised. And then the last judgmental issue is whether or not the budget will support the effective use of the medium. Particularly true online. One of the things that we have learned in the world of Internet advertising is that it's very quick to burn through a lot of money very, very quickly, even more so than on television, and for that reason, to use that medium effectively, as an advertising medium, tends to get very, very expensive. So, those are the considerations that again I would encourage hoteliers to evaluate, and that is always begin with a comprehensive profile of the target, screen the media options through that to determine if they're appropriate, look at their efficiency, and then exercise good judgment in terms of looking at the content, the editorial or the program environment, and ask yourself the hard question: Are you in a position to provide the financial resources to maintain an effective level of frequency? How do you measure the impact of an advertising campaign? Any campaign should be measured against the objectives that preceded its development. That sounds obvious, but in practice, many times it's very difficult. Those objectives generally do fall in one of two areas: either an objective that is defined in terms of communication impact-things like changes in awareness of a property or a brand, or changes in the intentions of those that see the message to patronize the brand-and those are things we can measure very easily, where we take a pre-campaign measure, we run the advertising, and then we replicate the measure after the advertising has run to see if we have influenced awareness, intention, or image. The other general category of measurement is tied generally to inquires: whether it's telephone calls to a toll-free number, unique visitors to a Web site, coupon redemption-something that is highly measurable that comes directly as a result of people having been exposed to the advertising. And generally, the best method of measurement is one that incorporates some element of both, some element of communication impact and some element of measurable inquiry and/or response.

30 TOPIC OVERVIEW Topic 2.4: Direct Marketing and Sales Promotion Direct marketing (also called "database marketing") involves direct communication with qualified prospective buyers to generate interest in a product. Direct marketing uses one or more advertising media to make a sale and learn about a customer whose name and profile is included in a customer database. For example, telemarketing is a type of direct marketing that combines advertising, marketing research, and personal sales. Integrated direct marketing uses a marketing database system to create multiple-vehicle, multiple-stage marketing campaigns for a more powerful approach. There are a number of reasons for direct marketing's increasing popularity: Organizations are better able to define their target markets Computers make personalization easy Competitive privacy: Direct marketing enables organizations to better shield their marketing efforts from their competitors Direct marketing produces immediate results Ability to track responses and effectiveness Direct marketing develops relationships with customers, a must in today's competitive environment. Winning a new customer is four to seven times as costly as retaining an old one. Sales Promotion Sales promotion is an activity in which a short-term incentive is offered to the customer to induce the purchase of a particular good or service. Sales promotions are still a vital part of the promotional mix, and are becoming increasingly popular, especially for products for which it is difficult to create brand loyalty. Sales promotions have a number of objectives: Increase product trial Serve as a bridge between advertising and personal selling Boost consumer inventoryin other words, get consumers to buy more than they normally would (for example, a two-for-one sale) Encourage repurchase Support and increase the effectiveness of advertising Encourage brand switching through the use of coupons Encourage brand loyalty through the use of frequent-buyer clubs After completing this topic, you should be able to: Define integrated direct marketing (IDM) and discuss the reasons for its increasing popularity Define the term sales promotion and discuss its objectives Discuss the effectiveness of various sales promotion tools

31 Sales Promotion Tools Consumer promotions make up almost one quarter of the promotion mix. The most popular and effective types of promotions are listed below. Click the links to view more information. Transcript: Sales Promotion Tools Coupons Coupons are price incentives designed to encourage trial or brand switching. Frequent-buyer programs Frequent-buyer programs (or patronage awards) reward loyal consumers for making multiple purchases of a particular good or service. Rebates Rebates are another form of short-term price inducement and are often used by the auto industry and, increasingly, by the liquor industry. Free samples Free samples are another effective consumer promotion, particularly in promoting new products or existing products to new consumers. An example of the latter is restaurants in high traffic areas that offer free samples of their menu offerings to passersby. Contests and sweepstakes Contests and sweepstakes are promotions that give away prizes and awards. A contest is based on some skill or ability, but sweepstakes rely on chance and luck. Point-of-purchase advertising Point-of-purchase advertising refers to displays and other promotions located near the site of the actual purchase decision. Specialty advertising Specialty advertising is a sales promotion medium that employs useful articles carrying the advertiser's name, address, and advertising message to reach the target consumers.

32 TOPIC OVERVIEW Topic 2.5: Public Relations A public relations campaign is a series of activities aimed at cultivating a positive overall image and influencing the way customers, stockholders, government agencies, or special-interest groups feel about a brand or company. Examples of such activities include press conferences, corporate communication, newsletters, annual reports, and lobbying. The basic rule of a public relations campaign is: Do something good, then talk about it. The objective is to generate publicity in the form of unpaid media coverage. Public relations specialists work to ensure that the flow of information about a firms employees, activities, and products is consistent with its objectives and that the organizations image is presented in as positive a light as possible. Public relations strategies can be used to: Introduce new products to middlemen and consumers Influence government legislation Ease public acceptance of corporate changes Enhance the image of a city, region, or country Encourage recruitment and patronage Enhance the image of a company by linking it to certain activities Help reposition a product After completing this topic, you should be able to: Discuss the possible reasons for undertaking a public relations campaign Implement the steps involved in executing and evaluating a PR campaign

33 Planning a Public Relations Campaign In 1988 the Public Relations Society of America described the mission of public relations in this way: "Public relations helps an organization and its publics adapt mutually to each other." This description cuts to the heart of the purpose of public relations: Its main function is to anticipate and guide the two-way dialog that exists between a company and its customers. How a company packages every facet of its outreach has an impact on how it is perceived by its target market(s); that perception, in turn, drives the next action a company takes. A manager trained in best public relations practices will be forward looking in planning, will clearly analyze results, and will keep upper management informed on how the company is perceived by its customers.

34 TOPIC OVERVIEW Topic 2.6: Professional Selling Professional selling is personal communication of information to influence and persuade a prospective customer. Professional selling allows the seller to interact one-on-one with the customer to determine the needs of the customer and to effectively demonstrate that the seller's product meets the customer's needs. Under the following circumstances, professional selling can be the most important component of the promotional mix: In business-to-business marketing, because business customers often require products that must meet unique specifications When the sale of such products requires negotiation over price, delivery, and installation When consumers are geographically concentrated and relatively small in numbers When the product is expensive, technically complex, custom-made, requires special handling, or involves trade-ins When the price is relatively high When the channels are relatively short, meaning there are no or few channel middlemen or intermediaries There are several advantages to professional selling: It's flexible in that the message can be altered to fit the prospective customer. It minimizes wasted effort because the prospect is qualified as a valid part of the target market beforehand. It often results in an actual sale. It provides immediate verbal and non-verbal feedback based upon the prospects reaction. Even though professional selling is the most expensive form of promotion, and on average, only one sales call in five is successful, it can be a very effective method for selling high-priced, continuing services. After completing this topic, you should be able to: Define professional selling and discuss its importance in the overall promotional mix Discuss the advantages and disadvantages of professional selling Describe the steps involved in implementing the professional-selling process Describe strategies for managing the sales effort

35 The Professional Selling Process Successful professional selling involves several steps: Prospecting Qualifying Sales approach Sales presentation Handling objections Closing the sale Evaluating the results Look through the presentation below to get more information and see examples of these steps in action. Transcript: The Professional Selling Process Successful professional selling involves a seven-step process, outlined below. Step 1: Prospecting or Lead Generation Prospecting or lead generation involves following all the "leads" in the target market to identify potential customers. Primary sources for identifying prospects by are Dun & Bradstreet's Market Identifiers and computerized prospect identification systems. Step 2: Qualifying Qualifying involves determining whether or not prospects are really potential customers. Are they willing and able to buy? Do they have the authority to make a purchase decision? Are they receptive and accessible? Step 3: Determining a Sales Approach It's important to find out as much as possible about the customer's needs before the actual sales call. Often this is accomplished through pre-sales telephone interviews. Step 4: Selecting a Sales Presentation Method The goal of the sales presentation is to emphasize to customers how the product will meet and satisfy their needs. The best sales people adapt their approach to the specific situation and to the needs of the particular customer ( adaptive selling). Consultative selling (an outgrowth of adaptive selling plus relationship marketing) is the practice of providing information that will help customers achieve their short- and long-term goals. For example: Salesperson: How do you do, Mr. Green, I'm Jane Kinney with Grand Mountain Lodge. Thank you for taking the time to meet with me today. As I told you over the phone, I've been researching your company and I believe I have some ideas for you. But before I get started, could you answer a few questions? Prospective Buyer: Absolutely, but as I told you over the phone, I only have a few minutes. Salesperson: I promise to keep it short. First, I understand you are the regional sales manager for the Southeast region. How many salespeople work under you? Prospective Buyer: I have a total of 27 sales reps scattered throughout the Carolinas, Virginia, Georgia, and Florida. Salesperson: Are you satisfied with their performance? Prospective Buyer: Well, the downturn in the economy has affected us, as it has everyone else in this segment. My

36 people are really having to hustle and they're hearing "no" a lot more than they used to. Salesperson: How is that affecting morale? Prospective Buyer: Morale is down. It's hard to handle that kind of rejection day after day after day. That's one of the reasons I'm so busy right now. I am almost constantly on the road, working with and encouraging my people to keep going. Salesperson: If I could show you a way to increase your sales force morale and motivation, would you be interested? Prospective Buyer: What do you have in mind? Step 5: Handling Objections This involves effectively answering customers' questions and addressing their concerns. For example: Salesperson: At the Grand Mountain Lodge, we specialize in creating meetings that generate excitement and increase morale. Prospective Buyer: Wait a minute! Are you asking me to spend tons of money to send my people to a resort? Because if you are, I have to tell you right now that times are tough and I just can't do that! Salesperson: Mr. Green, how much are you going to spend over the next few weeks traveling all over your territory to work individually with each salesperson? Prospective Buyer: Okay, I see what you're driving at. I could spend the same amount or less and group all of my people together in one place. Salesperson: Exactly. And would treating them to a special weekend bolster their morale? Prospective Buyer: It might just do that. Salesperson: Excellent. Now, what else would you like this meeting to achieve? Prospective Buyer: Well, it would give me a chance to introduce a new product to my entire sales force, rather than trying to present it individually to each salesperson. But, I'm still concerned about pulling my salespeople out of the field-i need them to be as productive as possible right now, and this meeting reduces their selling time. Salesperson: I understand. What if we plan the meeting for a weekend and invite spouses to attend as well? No charge for the second person in the room, and your sales people could mix business and pleasure-turn the meeting into a weekend getaway. While your sales force is attending meetings, their spouses could take advantage of the many activities our resort offers. How does that sound? Prospective Buyer: I have to admit, that's a great idea. But I'm still concerned about the price of the meeting, and even more how management will perceive it. I just don't think it'll look good to my superiors if I'm spending money on a retreat when we're tightening our belts. Salesperson: I'll tell you what: if I can show you how you can hold this retreat without spending more than you've spent on hotels, car rentals, and airfare in recent months, can we move forward with our plans? Prospective Buyer: Sure. Salesperson: Would you mind sharing your travel expenses with me? Prospective Buyer: I have my expense report here. I'm averaging $1700 a week on travel alone. Over the last three months, I've spent almost $22,000. Salesperson: Mr. Green, if you can be flexible on dates, I am certain we can create a great weekend retreat for less than you've spent on travel in the past three months. I'll also provide you with a complimentary cocktail reception on the first evening of your party's arrival. How does that sound?

37 Prospective Buyer: It sounds pretty great, actually. Step 6: Closing the Sale There are lots of ways to close a sale, but the most effective is probably enumerating all the benefits the buyer has agreed the product provides, then asking for the order. For example: Salesperson: OK, Mr. Green, let me make sure we're on the same page here. We're talking about a weekend retreat at Grand Mountain Lodge, dates to be determined. Spouses are invited at no extra charge. We're also offering a complimentary cocktail reception on the first evening of your party's arrival. And we promise to come in with a price beneath what you've spent on travel over the past three months. Have I missed anything? Prospective Buyer: No, if you can do all that, the trip will be worth it. Salesperson: I'm sure we can come up with something. Now, I know you're busy. Shall I meet with your assistant to explore dates and get all the other details ironed out? Prospective Buyer: Sure, Mary can help you with whatever you need. Salesperson: Good. I'll make an appointment to meet with her right away. Thank you so much for your time. I'll put together a contract in the next few days and get it back here for your signature. Can we meet again on Thursday afternoon? Prospective Buyer: I am out Thursday afternoon, but I think I have some time free on Friday afternoon, if that works for you. Salesperson: Sounds great! I will see you then. Thanks again. Prospective Buyer: My pleasure. Step 7: Evaluating the Results Whether or not you've successfully closed the sale, it's important to evaluate the effectiveness of the sales approach and follow-up any post-sales contact with the customer.

38 Managing the Sales Effort Sales management refers to planning, organizing, staffing, motivating, evaluating, and controlling an effective field sales force. Sales managers link the sales force to other elements of the internal and external environments, and determine sales objectives. Volume-selling objectives set total revenue and/or room nights as sales objectives. Up-selling objectives encourage salespeople to increase profits by upgrading the level of service or product the guest buys. Market share or market penetration objectives require the sales force to reach a certain percentage of total sales in a particular market. Product-specific objectives increase responsibility for improved sales volume for specific product lines. Recruiting an Effective Sales Force Recruitment and selection is the initial step in building an effective sales force. Attributes that are commonly acknowledged as important to salespeople include: High energy level Self-confidence Competitiveness Personal sensitivity Ability to elicit customer needs Customer orientation Training the Sales Force All sales people - both new and experienced - need regular training to enhance and refine their selling skills, learn about new products, and improve their time and territory management practices. Effective salespeople must be able to:

39 Assess customer needs Describe how the product can satisfy those needs Practice effective selling techniques by focusing on customer benefits In addition, salespeople must be persuasive and have good communication and listening skills. Training focuses on developing technical and customer knowledge, and acquiring the ability to design solutions to customer problems. If the product is complex, an engineering degree may be required. Organizing the Sales Department Sales is just one branch of the marketing department in a hospitality organization. For example, in a large hotel, the marketing department may include sales and marketing, guest services, guest relations, the concierge desk, advertising, and public relations. Determining the Size of the Sales Force Sales managers rarely rely on a single method to determine the ideal size of the sales force, but often combine a formal approach with their own opinions about economic factors, industry trends, growth of the market, and the needs of customers. Nonetheless, there are two primary approaches: The workload approach is based on the total time required to cover the territory divided by the selling time available to one salesperson. Managers who use the incremental productivity approach increase the number of salespeople as long as the additional sales increases are greater than the additional selling costs. Compensating and Motivating Salespeople Most sales managers use a combination of salaries and commissions to compensate their salespeople. Straight salary is simple to administer, but does not stimulate performance. Straight commission stimulates performance, but does not reward salespeople for non-sale activities. In addition, downturns in the economy can demoralize a sales force operating only on straight commission. The salary-plus-commission method of compensation stimulates performance, rewards non-sale activities, and provides stability to the salespersons' livelihood during economic downturns. Sales quotas and sales incentives can help build satisfaction and motivation within the sales force. Sales quotas must be challenging but attainable. Sales incentives can take the form of recognition at ceremonies, premiums, awards, merchandise, vacations, and cash bonuses. Evaluating and Controlling the Sales Effort Sales managers can use several strategies to evaluate and control the sales effort, including: Call-record reports to track the number and quality of calls Performance ranking to evaluate salespeople according to sales or profits Evaluation of past performance to measure progress Qualitative or subjective methods such as product and customer knowledge, presentation skills, appearance, and temperament

40 TOPIC OVERVIEW Topic 2.7: Internet Marketing for the Hospitality Industry Hospitality is among the many industries that have found the Internet to be one of the most effective and cost-efficient marketing channels. Among its many advantages, the Internet enables organizations to reach a great number of potential customers at an insignificant marginal marketing cost; and it can facilitate an ongoing dialogue with them. Various studies have shown that the Internet is the first source of information for both business and leisure travelers. This topic discusses the particular advantages of the online marketing channel, examines various approaches to Internet marketing, and then describes how these approaches can be applied to the hospitality industry. After completing this topic, you should be able to: Discuss various advantages and approaches to Internet marketing in the context of the hospitality industry Apply best practices to Web-site design in order to increase traffic and drive revenue Implement best practices related to search engine optimization Evaluate the extent to which social media can be a component of your organization's online marketing strategy Evaluate the extent to which your organization should take advantage of electronic distribution channels

41 Marketing on the Internet Channels of distribution are the means by which hospitality organizations and their customers can interact and undertake transactions. The performance of a market channel is determined by three characteristics: customer reach, operating efficiency, and service quality. For a marketing strategy to be cost-efficient and effective with customers, all three characteristics must be optimized. If a business cannot reach potential customers, sales will not take place. If operations are inefficient, the cost to serve customers will be too high to be profitable. If service quality is poor, customer retention will suffer, even if customers can be reached effectively and served cost-efficiently. The marketing channel with perhaps the most potential to expand customer reach is the online marketing channel. Online marketing allows the company to reach a world of potential new customers at an insignificant marginal marketing cost. Airlines, for instance, have totally eliminated commissions for travel agents by selling tickets directly on the Web; they have increased operating efficiency while expanding customer reach. Hotels and chains have used electronic distribution to reduce costs by shifting transactions from intermediaries to themselves through direct connections and branded Web sites. Online marketing can also facilitate an ongoing dialogue with customers as to how the company can improve service quality. Various studies show that the Internet is the first source of information for business and leisure travelers; the types of online travel information accessed most often are destination, airline, and lodging information. Companies do not have to be large or have a huge budget to have a meaningful online marketing campaign. It just takes imagination, dedication, time, and some knowledge. Moreover, the impact of the Internet on hospitality, travel, and tourism is undisputed. The Internet has become a dominant distribution and promotion channel for the hospitality industry; it is the fastest-growing channel in the world. Some of the largest travel distributors today are Internet-based retailers. It is virtually impossible to compete in today's marketplace without a solid Internet strategy.

42 Online Marketing Techniques The Internet does not offer just one type of media channel to build brand awareness or increase customer traffic to its own Web site. Instead, companies can choose among several options for where to spend their Internet marketing dollars, including: Rand Fishkin, with SEOmozBlog (July 1, 2009), states that the choice of an Internet media outlet must be based on the company goals and strengths. However, he also notes that conversion rate optimization, search engine optimization, and marketing provide the highest return on investment for organizations. Throughout this topic, we will explore these mechanisms in greater detail. You should also be aware of the following channels: Display advertising - placing ads on third-party Web sites Pay-per-click advertising - bidding for placement on search engines Online public relations - generating additional media attention through online outlets Affiliate marketing - offering financial incentives for other Web sites to promote your product Viral content campaigns - generating content that consumers will forward to others Transcript: Online Marketing Techniques Conversion Rate Optimization (CRO) Conversion rate optimization occurs when a firm alters its Web site to improve the path from the landing page to the desired action. Hospitality Web sites are battling for a prominent online position. These sites are increasingly user-intimate, screen-oriented, and content-rich. This form of distribution makes the booking of hotel services more efficient and responsive. Search Engine Optimization (SEO) Firms engaged in search engine optimization (SEO) find ways to increase the ranking of a Web site in searches with major search engines such as Google, Baidu, or Yahoo. campaigns campaigns are direct messages to prospective customers. Companies often target these campaigns to specific customers, making them very effective and cost-efficient. Before sending messages to customers, though, hospitality organizations need to make sure that the customers are willing to receive from the organization. Obtain customer permission. Ensure that the customer wants to receive the type of message and information that is being sent. Moreover, given the growth in using mobile devices for , the marketing message must be easily read over such devices. Finally, organizations need to avoid sending too much . Social media marketing Hospitality organizations of all kinds, from tourism boards to hotels to airlines, are using social media to promote their products and services, and to gather, test, and market ideas. Social media, such as MySpace, Facebook, and Twitter, can be used to create an ongoing dialogue with customers and to generate viral marketing.

43 Web Site Design An illustrated presentation with audio appears below, along with a text transcript. Use these resources to learn about Web site and design. Source: Buchanan, Ryan (2009), 11 Design Best Practices, Transcript: Web Site Design Online Marketing Techniques Depending on an organization's strengths and goals, its leaders might choose to invest in any of a number of online marketing techniques. Generally, conversion rate optimization, search engine optimization, and targeted marketing offer the greatest return on investment for organizations. These techniques use different methods to increase traffic and revenue, but all three rely on an effectively designed campaign. Imagine you are on the mailing list for a hospitality company offering a special discount for hotel rooms during an off-peak travel season. When you open the , you discover that it contains blocks of text with no formatting to highlight the important points, it lacks images of the discounted rooms and the area surrounding the hotel, and the message is excessively long. How long would you spend reading this before you closed it and moved on to the next item in your inbox? Clearly, the design of this message is as important to you as the content. So how do you design Web pages and s that allow you to effectively deploy these three online marketing techniques? Before You Design The first rule as you begin designing your Web site is to be sure that the design follows from your branding and marketing strategy. Your site must focus on creating and reinforcing a particular identity, ability, characteristic, feature, benefit, or service-a position in the minds of current and potential guests and patrons. You will want to be sure to include your positioning statement on the landing page of your site. Define the objective of the site. Do you want your site to provide information, educate, strengthen the brand connection, process reservations, communicate with guests, handle special requests, or all of these? Your objectives will define the necessary sections of the site, as well as its intended audience. When developing a Web site, answer the following questions: What is your core objective for designing the site? To generate interest and trials? To increase online reservations? To increase the loyalty of each guest? To provide information on rates and services to save staff time? Also ask yourself: Why would someone want to surf the site? What is interesting about the Web page? and Why would someone want to return to the Web page? Asking yourself these questions will help you to make strategic decisions about how to design your site and to what pages you will want to drive traffic. Tips for Conversion Rate Optimization When you know which pages are strategically important, you can begin implementing elements important for conversation rate optimization. In this technique, you design your site to reduce the time it takes for the user to move from your Web site landing page to important, revenue-generating actions. A more effectively designed landing page is one way to optimize conversion rate. Some tips for optimizing the landing page are offered by Tim Ash in "The Art of the Landing Page-Seven Tips for Increasing Conversion," in the June 30, 2009, edition of American Express Open Forum. These conversion rate optimization techniques include:

44 Remove choices. Eliminate clickable links that take the viewer to another Web site. Keep your promises. Align the page content with the marketing expectations you have established elsewhere. Don't be loud. Reduce visual distractions by minimizing the range of font styles, colors, and sizes used. Reduce anxiety. Use indications of security seals and other indicators of trustworthiness, including trade association logos and money-back guarantees. Enhance affinity. Use logos of well-known clients and highlight news articles that have mentioned your brand. Display testimonials from current clients. Have a clear call to action. Make sure you clearly ask for action on the part of the Web site visitor and clarify what will happen if the visitor clicks on the desired link or fills out a form. Keep clutter away from the call for action so that it stands out. Reduce text. Internet users do not read much text, so less content leads to higher conversion rates. Relentlessly pare down your text to simple headlines and short bullet lists on your landing page. More detailed information can be placed on supporting pages. In addition to improving your landing page, you may want to change the structure of your site to improve your branding and reduce the time customers spend navigating for important business information before making decisions about your product and services. Always design your site with the user in mind. The first element of any Web site is its domain name. The simplest approach for hospitality companies is to use the company, brand, or destination as the domain name. You can check the availability of domain names at register.com or godaddy.com. The look and feel of the site must be in sync with your branding. It should use the same colors, typefaces, graphic elements, and overall tonality. All pages should follow a consistent layout and overall design. Carefully choose the sections of the Web site. Too many sections will make it seem cluttered, and too few will require visitors to search extensively. Also, if a lot of your business is generated through travel agents, providing an agent referral section on your site can encourage loyalty. You may also want to provide links to individual properties or branches. Web visitors expect to find some basic information about a hospitality product, including its general characteristics, address, size, pricing, style, valued features, and the quality and range of service offered. Include information about the people who own, operate, and work for the business-people still want to deal with people. Search Engine Optimization An alternative to conversion rate optimization, search engine optimization improves the volume or quality of visitors to a Web site from searches on search engines such as Google, Baidu, or Yahoo. One of the most important design elements is proper use of metatags. Search engines use metatags to identify and index Web sites. Metatags include the title, keywords, and site description tags that represent the page or site content. Many search engines use metatag information to determine the ranking of a site in displayed search results, a key element in search engine optimization. Other key design tips for search engine optimization: Provide a descriptive paragraph at the top of the home page. Pay attention to keywords and perform regular search engine audits. Develop unique keywords for each page title that target the primary keywords or key phrase for that page. Keep graphics and text in balance. Use large, prominent paragraph headings. Add a one-line company description to the page footer. Additional Design Suggestions Regardless of which online marketing technique you choose, you should consider some universal design techniques. Putting customer testimonials on your page helps to build credibility. You might also consider creating an "About Us" page to provide the history of the business. These additions will increase customer identification with your business, improving

45 willingness to pay, brand loyalty, and overall financial performance. The best-designed Web sites ensure that visitors return to the site and spend some time there. For example, recipes from your on-site restaurant may engage visitors and keep them coming back, as may online gift shop catalogs. Keep sticky content on your own site rather than linking to other sites, which encourages visitors to leave and perhaps never return. If you must provide links, code each outside link so that a new browser window opens each time a visitor clicks to go to a page outside your site. Include various easy-to-understand ways for Web visitors to purchase online and offline. If an important objective is to increase online lodging or dining reservations, the visitor should be able to guarantee or pay for the reservation online and then receive an instant confirmation, either on-screen for printing or via . Finally, use breadcrumb navigation, which is important for both usability and online marketing techniques. This text-based navigation shows where in the site hierarchy the currently viewed Web page is located, while providing shortcuts to instantly jump higher up the site hierarchy. Including text links with relevant keywords in the anchor text of the breadcrumb provides a significant search engine optimization benefit. Design design follows principles similar to those for the design of Web page content. When designing an , ensure it is clear and concise. Remember that readers tend to follow an F-shaped pattern when scanning a Web page or , so strategically locate important information within that F-shape (that is, in the top and left areas of the screen). Maintain consistency between the message and the company Web site. Create attention-grabbing subject lines running either less than 60 characters or greater than 72 characters. Use pre-headers to help move the reader to the body of text. Use images, but also utilize alt tags that describe the images in case the images are blocked or can't be opened. Encourage recipients to open the by limiting the message to a width of 550 to700 pixels and preparing a message that can be effective in the preview panel used by systems such as Outlook. Lastly, use a sample of the targeted customer segment to test different subject lines and versions of the to see which is the most effective.

46 Understanding Search Engine Optimization Search engine optimization relies on your ability to make your site one of the first viewed when someone enters the relevant search terms. That means a critical component of this technique is knowing the terms people enter into search engines such as Yahoo and Google. To find out what keywords people use when they look for information about your establishment or services, search the word suggestion tool at Overture.com. Sites such as Overture also allow you to purchase top positions for keywords. The higher up you want your site's presence to appear, the more it will cost you. Each time a user clicks on a "sponsored" link on a keyword-bid search engine, the owner of the site pays the amount bid for that link. Keeping rankings high in Overture.com pay off because Overture is partnered with dozens of other major portal and search engine sites. A site in first or second place on Overture receives three to five times as many clicks and appears on the other search engines and portals. You might gain some insight into the terms that people use to search the Internet by "live viewing" the keywords that people are using. You will notice that most people do not use very specific keywords for searches. Go to the engine and enter the keywords that you hope will bring up your site. Are you on the first page? If not, consider the following tips for your title page: Look at your titles closely. Do they captivate? Are they search-engine friendly? What can you do to improve upon what you have? If you have a page that is doing well (top ten), then don't touch it. Do not change anything until your site slips to page two. Even then, be careful about the changes you make. Usually a slight title tweak is all that is needed to push it back into place. Go for singular and plural versions in the title. Use separators to break the title into sections by using hyphens, for example. Also use proper upper and lower case. Don't stuff a bunch of keywords in your title separated by commas. This is one of the most unprofessional search engine optimization practices, and it is not friendly for visitors who will be scanning your content. DON'T USE ALL CAPS FOR YOUR TITLES. This makes it very difficult for some people to read. Don't put the company name at the beginning of every title. Your primary keywords should come first, then your company name (unless, of course, the company name happens to be the primary keyword phrase). Don't repeat keywords back to back. Make sure there is balance and separation. Get at least one word between repeats, and possibly even a separator (hyphen). If it doesn't read well to you, then you haven't crafted it effectively. Break it apart and do it again until you have something that reads well and is enticing to both users and search engines. Know how the engines work. Search engines consider how many links point to your site, as well as how important those sites are in terms of size and how many links point to them. Adding your URL to industry sites and to large and small directories and lists that allow free and purchased text links or ads will give you a competitive edge over other sites.

47 Search Engine Optimization Audit To make sure your search engine optimization technique works effectively, you should perform regular audits. To begin the audit, you first must make sure you are checking for the correct keywords. A good tool to help you with this is the word suggestion tool at Overture.com. Enter your keywords and the tool will show you how many times that term was searched for during the preceding month, along with associated searches that made use of the core words of that term. Then, visit a popular search tool such as Google or Yahoo to begin your audit. An in-depth search engine optimization auditing process can provide interesting results, depending on which metric you use. Key areas to examine include: Keyword search volume and competition analysis: Determine the five to ten most popular keywords for your Web site and identify the number of competing pages optimizing those keywords. Current site rankings: How does your site fare in regard to those keywords? Compare yourself to competitors. Helpful Tip: Keep up-to-date on submission requirements and changes in the subscription procedures. Here are some Web sites that can assist in this process: searchtools.com searchenginewatch.com searchengineworld.com Search engine saturation: To what degree is your Web site indexed on Google, Yahoo and MSN? Examine your internal linking structure to ensure that your pages are easily accessible to Web crawlers. Search engine simulator report: To what degree are all the URLs of your Web pages indexed by search engines? Link popularity comparison: Have as many other entities linking to your Web site as possible. How does your page rank compared to those of your competitors? Link reputation report: Ensure that the anchor text used to link back to your Web site contains both the domain name and targeted search terms.

48 Social Media Marketing Hospitality organizations of all kinds, from tourism boards to hotels to airlines, are using social media to promote their products and services, and to gather, test, and market ideas. In using social media, it is important to understand that people want to connect with other people, not with companies. Accordingly, the goal should be to facilitate connections by offering creative content that people will want to share with others. 1 Effective social media campaigns make their claims believable, focus on good content, and create a compelling reason for people to share the information. One of the most effective social media campaigns in recent history was designed to promote Hamilton Island in Queensland, Australia. The campaign advertised for applicants for the "best job in the world": Hamilton Island caretaker. Job "applicants" were encouraged to submit their applications through videos, and then site visitors voted on the best candidate. The applicants urged their own networks to vote for them. The winner won a six-month stint touring Queensland and posted an account of his journey through blogs, Twitter, and Flickr. The campaign attracted 34,000 video applications from 200 countries and more than 7 million site visitors. 2 In addition, social media, such as MySpace, Facebook, and Twitter, can be used to create an ongoing dialogue with customers and to generate viral marketing. Companies have used Twitter to solve customer problems in real time, while Facebook delivers company news to your target market on a regular basis. Marriott, a top user of Twitter, noted that this social media channel allowed it to create greater brand awareness and guest loyalty. Nonetheless, hospitality organizations should understand their goals and target markets before jumping into social media marketing. For example, 5 percent of Twitter users account for 75 percent of the content, and teenagers view Twitter as being something old people use. Second Lifetype platforms are also critical for connecting to customers, but the content must: Be interactive Provide a reason to return Create the ability to share content with friends Encourage word-of-mouth marketing Second Life is being used in the lodging industry in creative ways, including testing innovative hospitality concepts. 1.Godin, Seth (2008), Tribes: We Need You to Lead Us, New York: Portfolio. 2. Ibid.