The Marketing and Sales Division Chapter 11

Chapter 11 Objectives Define Marketing Terms in Hospitality. Explain the function of a feasibility study and situation analysis. Understand the components of a Marketing Plan and its purpose. Describe the organization of the department. Understand the business of sales. Explain the need of advertising in hospitality.

Marketing Terms Objective 1

Marketing & Sales Terms Markets Identified groups of current or potential guests Market Segments Groups with similar buying characteristics Market Mix Various segments that the hotel tends to attract Marketing Strategy Tools used to attract the correct market mix

Modern Marketing Emphasis Marketing was once just the selling of products Marketing became more consumer-oriented during the Great Depression Now, marketing is not only the selling of goods and services but also the advertising of what is available.

The Sale of Hospitality Hospitality Industry sells products and services Services are intangible and harder to market Good marketing will promote the image and position well above the competition

Planning for Guest Needs Objective 2

Planning for Guest Needs Feasibility Study analysis of the proposed hospitality facility to determine the best chance for success. Components of the Feasibility Study Location Most important element in the success of property Population living or working in the surrounding area Ease to get in/out of establishment

Planning for Guest Needs (cont.) Components of the Feasibility Study (cont.) Demographics Age, Marital Status, Income, Number of Children Marketers identify preferences of these guests Competition Financial Success of Competition SWOT Analysis of competition Financial Analysis Estimation of expected revenues and profits

Planning for Guest Needs (cont.) Situation Analysis Collection of data to determine the likes and dislikes of a property after it is opened. Situation Analysis Components The Product The goods and services that the property sells Looks at physical and psychological factors The Market Analysis of the make-up of the guests you have

Planning for Guest Needs (cont.) Situation Analysis Components (cont.) The Competition SWOT Analysis of each Competitor Commonalities and differences between you and them Segmentation Determining segments to fulfill the property’s needs and marketing to those segments Evaluation On-going analysis to improve property

Marketing Planning Process Objective 3

The Marketing Plan The Marketing Plan uses the Situation Analysis to determine who to sell to and how. Marketing Plans keep sales accountable and focused on the correct business. Elements of the Marketing Plan Mission Statement Clearly states what the property is and which markets it intends to serve

The Marketing Plan (cont.) Elements of the Marketing Plan (cont.) Situation Analysis Comparison to competition in rates, occupancy, etc. Comparative Statistics Use of actual business volumes to create projections for the future and determine the focus to meet those projections in terms of booking goals and pace.

The Marketing Plan (cont.) Elements of the Marketing Plan (cont.) Action Plans Determination of monthly plans to meet goals while assigning responsibility of those sales activities Promotional Calendar Timeline in which advertising and promotions will be offered during the upcoming year Catering Plan Action plans for the catering aspect of the business

Organization of Marketing Objective 4

Organization of Marketing Director of Sales & Marketing Director of Convention Services Convention Service Manager PR Manager Revenue Manager Reservations Staff Director of Sales Sales Managers

Organization of Marketing (cont.) Depends on property size and needs DOSM typically reports to the General Mgr. May oversee following positions Director of Sales or ADOS Revenue Manager PR Manager Convention Services Manager

Interdepartmental Relationships Sales team will sell the various products within the property Must relay all information to each department Food & Beverage Front Office and Reservations Banquets

Bringing in Business Besides internal communication, sales team must find the business from the outside Methods of Sales Personal Contact Guest reaches out to the property directly Property initiates contact to the guest or customer Advertising, Internet Marketing

Bringing in Business Methods of Sales (cont.) Companies and Associations Sales efforts to companies who travel or host groups Sales efforts to Associations who have seminars, annual conventions and trade shows Travel Agents Agreements to earn reservations through an agent 3rd Parties Wholesale parties via agency or website

Hotels & Airlines Similarities between Hotels & Airlines Product is perishable. An unsold room or seat can never be used again. Frequent Traveler Rewards target business travelers to earn loyalty Both have advance purchase and discounts Both use Yield Management to maximize profits

The Business of Selling Objective 5

The Business of Selling Operation depends on a successful sales team Rooms Business is most profitable for hotel Considers two types – group and transient Transient can be corporate or leisure business Hotel should have a good mix of business

The Business of Selling (cont.) Types of Rooms Business Conventions Events ranging from 100 to 100,000 people Put on by companies, associations, or organizations Contract Rooms Contract in which a company guarantees a certain number of rooms everyday at the hotel Heavily Discounted due to volume

The Business of Selling (cont.) Types of Rooms Business (cont.) Business Meetings Local companies which use hotel for various meetings Training, Meetings, Incentive Trips Tour Groups Leisure and Business Travelers using packages Transient Business Business Travelers coming in to conduct business

The Business of Selling (cont.) Public Space Meeting space and Ballrooms F&B Business Catering, Restaurants and Lounges Internal Selling Employees selling higher priced items for profit Personal Selling Sales Team selling to the outside

Rating Systems Classifications of hotels based on amenities, product and services AAA Diamond Rating Mobil Star Rating Ratings are a form of advertising and if rating improves or decreases it can affect business levels

Advertising, Promotions, Public Relations Objective 6

Advertising Newspapers Magazine Radio Targeted Audience, consistent circulation Short Life Magazine High quality production, color, prestige Longer life and still a targeted audience Radio Local saturation, targeted, short life

Advertising (cont.) Television Internet Sites Social Media Appeals to sight and sound, targeted, repeats Expensive to produce Internet Sites Photo, Video, Virtual Tours Easy to Update Social Media Ways to connect with guests but monitor often

Advertising (cont.) Outdoor Ads Direct Mail Billboards along state highways Exterior Signage Direct Mail Mailing of brochures, coupons, ads Targeted Audience and can be personalized Uses frequent guest memberships

Special Promotions Coupons Product Sampling Contests Discounted or Free Stays Can be used in multiple advertising options Product Sampling Trying of a new menu item to entice guests Contests A way to increase sales for time of contest Prizes should be cost effective

Special Promotions (cont.) Packages Increased room rates which include amenities that are minimum cost to hotel Weekend Package including Champagne, Meals Business Package including technology Premiums Giving something free for those paying premium Gift Certificates

Special Promotions (cont.) Discounting A way to entice new guests to increase sales Must track the ROI Bonus Offers Buy something and get a bonus Free Dessert, 4th entrée free

Public Relations Fostering a good relationship with the Public Creates a public image for the property Media Editorial Coverage about property Community Charity work in the local area Employees Assists in selling efforts