SHA504: The Hospitality Marketing Mix: Place and Promotion

Transcription

1 SHA504: The Hospitality Marketing Mix: Place and Promotion Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 1

2 This course includes Two self-check quizzes Two discussions Two Ask the Expert interactives One final action plan assignment One video transcript file Completing all of the coursework should take about five to seven hours. What You'll Learn Choose an appropriate location for a hospitality organization Choose a distribution channel appropriate to a specific property or product Create a promotional plan for a hospitality product or service Design an effective, product-specific advertising campaign Execute and evaluate the effectiveness of a public-relations campaign This course, produced in partnership with the Cornell School of Hotel Administration, consists of activities and resources that introduce you to various approaches to tailoring the location and distribution channels of your hospitality products or services to your target market; and tailoring promotion to the demographic characteristics of your target market. The material includes both theoretical frameworks and practical advice. In marketing, the concept of "place" refers not only to the physical location of your business, but also to distribution channels through which target markets are reached. The old business adage "location, location, location" still rings true as Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 2

3 a reliable determinant of success, especially in hospitality. But with the emergence of online travel agencies, package travel, and intensified, highly targeted tourism marketing attracting customers has become far more complicated than just a few years ago. By developing a more modern concept of "place", you gain new advantages in reaching target markets. Technology and the "information overload" environment present difficult challenges and new opportunities to promote to potential customers. This course covers advertising, professional selling, sales promotion, direct marketing, and public relations. As you discover through coursework, the process of defining your target market is inextricably linked to your decisions about promotional methods and channels. Judy Siguaw Dean, College of Human Ecology, East Carolina University Click Play to Listen Judy A. Siguaw is Dean of the College of Human Ecology at East Carolina University. Previously, she was a Professor of Marketing in the School of Hotel Administration at Cornell University and was the founding Dean of Cornell-Nanyang Institute of Hospitality Management. She also held the J. Thomas Clark Chair in Entrepreneurship and Personal Enterprise. Dr. Siguaw earned her doctorate in 1991 from Louisiana Tech University. She has published over 50 journal articles including those appearing in the Journal of Marketing Research, Journal of Marketing, Journal of International Business Studies, Journal of Strategic Marketing, Industrial Management, Journal of Business Ethics, Journal of Travel Research and the Cornell Hotel and Restaurant Administration Quarterly. She is co-author of Hospitality Sales: Selling Smarter, American Lodging Excellence: The Key To Best Practices in The U.S. Lodging Industry, Exploring Best Practices in the Hospitality Industry in Asia, and Introducing LISREL. Start Your Course Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 3

4 Module Introduction: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 4

5 Read: 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 the following pages 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 5

6 Read: Location Strategies There are four approaches in choosing a business location. Click the items below to learn more about these location strategies. Source: Cathy H. C. Hsu and Tom Powers (2002), Marketing Hospitality, 3rd ed. New York: John Wiley & Sons, Inc., p Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 6

7 Read: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 7

8 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 8

9 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 9

10 Read: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 10

11 Activity: 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 the following, and previous, pages 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 next page to share your results on the discussion forum. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 11

12 Module Introduction: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 12

13 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 13

14 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 14

15 Read: Three Types of Promotion There are three general types or categories of promotion. Click on each item below to learn more: Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 15

16 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 16

17 Read: Factors Determining When to Use Personal vs. Non-Personal Selling Factor Professional Selling Advertising Nature of the Market: Number of buyers Limited Large Geographic concentration Concentrated Dispersed Type of customer Business purchaser Ultimate consumer Nature of the Product: Complexity Custom-made, complex Standardized (routine) Service requirements Considerable Minimal Type of good Business product Consumer product Use of trade-ins Common Uncommon Stage in product life cycle Introductory, early growth Latter growth stage, maturity, early decline stage Price High unit value Low unit value Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 17

18 Ask The Expert: The Hierarchy of Effects Model Judy Siguaw, DBA Dean, College of Human Ecology East Carolina University What is the Hierarchy of Effects model? The Hierarchy of Effects model: Click play to listen - Outlines the stages of consumer involvement with a promotional message - Involves six steps: Awareness: get the target market to notice the product Knowledge: inform the target market of the product's characteristics Generate a liking for the product Create brand preference Create a conviction to buy Get the consumer to purchase the product What is the relationship between the Hierarchy of Effects and the promotional mix? Relationship between Hierarchy of Effects and elements of the promotional mix: Click play to listen Advertising: most effective during awareness and knowledge stages Professional selling: most effective for developing customer preferences and gaining conviction Sales promotion: most effective during awareness and purchase intent stages Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 18

19 Read: The Marketing Promotion Mix for Hospitality Organizations Personal Communications Advertising Sales Promotion Publicity/ Public Relations Corporate Design Selling Broadcast Sampling Press Release Signage Customer Service Print Coupons Press Interior Training Internet Discounts Conferences Vehicles Word-of-Mouth Outdoor Sign-up Rebates Special Events Equipment (Other Customers) Retail Displays Gifts Sponsorship Stationary Cinema/Theater Prize Promotions Uniforms Telemarketing Direct Mail Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 20

20 Activity: Identify the Promotional Mix for the Boutique Hotel 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. 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. You can print your summary appraisal by right-clicking the presentation and select "print." Assign percentages to the following four promotional components: Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 21

21 Read: Steps in Developing the Promotion Plan Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 22

22 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 23

23 Activity: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 24

24 Read: 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 advertising, and reminder advertising. product advertising, including pioneering advertising, competitive advertising, comparative 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 25

25 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 26

26 Read: Types of Media Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 27

27 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 28

28 Ask The Expert: Creating an Advertising Campaign: Best Practices Peter Yesawich Chairman and Chief Executive Officer Ypartnership In developing an advertising campaign, how do you manage the creative process? Click play to listen 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? Click play to listen How does brand loyalty affect advertising effectiveness? Click play to listen How do you make decisions regarding the media in which the message would be communicated, and what criteria and considerations form your decisions? Click play to listen How do you measure the impact of an advertising campaign? Click play to listen About the Expert 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 29

29 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 30

30 Read: Direct Marketing and Sales Promotion Direct Marketing 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 31

31 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 32

32 Read: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 33

33 Activity: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 34

34 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 35

35 Watch: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 36

36 Read: 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 37

37 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: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 38

38 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 39

39 Read: Marketing on the Internet 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. In the following pages we will discuss 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. 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 40

40 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 41

41 Read: 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. In the following pages, 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 42

42 Watch: Web Site Design An illustrated presentation with audio appears below. Use this resource to learn about Web site and design. Source: Buchanan, Ryan (2009), 11 Design Best Practices, Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 43

43 Read: 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 Google AdWords. Sites such as Google 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. 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 Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 44

44 (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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 45

45 Read: Search Engine Optimization Audit 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 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. 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 46

46 Read: 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. Copyright 2012 ecornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 47