Transcript PPT Chapter 9

Chapter Nine
Understanding Organizational
Customers
Overview

The organizational customer purchases
hospitality products and services for a
group or organization that has a
common purpose for the purchase
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
2
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Generic Organizational Market



The planner or manager seeks to
satisfy the different needs of all
members of a group which makes the
task difficult
Corporate downsizing has complicated
this market relationship
The planner must understand and
predict the groups’ needs
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
3
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Generic Organizational Market
Influential factors:




Site visits
Correspondence with sales staff
Word of mouth
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
4
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
Rely heavily on hotel staff rather than
the individual customers




Salespeople, conference service
managers, chefs
More experience translates into less
dependence on salespeople
The importance of “buy time”
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
5
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
“Buy time”






Also called purchase cycles or lead times
How far in advance the decision is made to
purchase the hospitality product and book the
reservation
Determines scheduling of sales, advertising and
related marketing activities
With purchase group variety, managing
inventory is critical
Depends of the use of the property at different
periods of time – days of the week or seasons
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
6
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
Assessing needs



Each collection of a group with a
common purpose has different needs
Major complaints of salespeople are
regarding not taking enough time to
know the needs of their business
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
7
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
Resolving conflict

Planners have to work within the
organization and with the hotel to
anticipate and resolve conflict
Numerous issues




Types of guest rooms, meeting rooms,
special meal requests
Schedule a pre-conference meeting
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
8
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
Executing the meeting




Can be simple if planned well, or difficult if
not
Sometimes end user needs are not met as
last minutes changes take place
In the end, it is the responsibility of the
hotel to provide that service
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
9
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Meeting Planners
Evaluating the results

Post-conference meeting



Hotel can take immediate steps to correct
malfunctions and reinforce positive aspects
Planner needs to assess results and
communicate with hotel before planning the
next meeting
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
10
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Corporate Travel Market




Plans travel and entertainment for a
company’s employees
Plan individual schedules
Different trips may have different
missions within the same organization
This market is very large, pays good
rates, and is consistent business
throughout the year
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
11
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Corporate Travel Market
Planner needs to know the service
needs of the organization and negotiate
contracts on their behalf



Can be important as travel can represent up
to 25% of an organization’s cost
Can significantly affect hospitality industry
revenues
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
12
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Corporate Travel Market
Knowing the volume




Important on both sides
Room rates are negotiated from the
published rack rates
Large travel consortia can provide
purchasing power for combined corporate
customers
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
13
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Corporate Meetings Market
Covers a wide range of organizational
customers

The management meeting


Small meetings with upper management
The sales meeting


Discuss company sales goals and strategies; usually once a
year
Training meetings or seminars


Exchange of information and improving performance
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
14
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Corporate Meetings Market
Corporate planner needs







Ensure they will be successful in the eyes of their
organization
Need honesty about the capabilities of the hotel
and personnel
May need the professional conference service
manager more than the salesperson
Quiet meeting rooms and adjoining rooms
An efficient front desk for assigning rooms
appropriately
Expected and unexpected needs should be met
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
15
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Conference Centers



Carefully designed lodging facilities that
target and meet the specific needs of the
small-to-medium size meetings market
Dedicated conference centers with
specialized services that are market specific
Governed by the International Association
of Conference Centers (IACC)
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
16
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Conference Centers
IACC Criteria that must be met for
designation as a conference center:






60% of available meeting space be
dedicated, single-purpose conference space
Rooms separate from living an leisure areas
Available 24 hours for material storage
60% of total revenue must be conference
related
Average group size must be 75 or smaller
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
17
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Incentive Market





Trips that are taken by dealers, distributors,
customers or employees of an organization
as a reward for superior performance
Meeting and recreational needs
Increases teamwork and morale
Incentive houses are companies that
provide professional planning services for
this market segment
Incentive planners plan every detail of both
business and pleasure
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
18
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Incentive Market
Three forms:

Pure incentive


No business related activities
Incentive plus



Pleasure trip with some sort of informational meeting
70% of all incentive trips
Incentive weekends


Three day weekend is more business productive
because less of the workweek is effected
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
19
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Association, Convention and
Trade Show Markets

Groups that need guest rooms, food
service, and function space to
accommodate their meeting needs
and convene at the local, regional,
national, and international levels in
which membership is usually voluntary
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
20
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Association, Convention and
Trade Show Markets
Association



Convention planners

Elect officers, have
social functions and
organize activities for
the organization
Usually meets in
smaller groups and
social contacts are the
main reason for
attendance

Trade shows



Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
21
Usually meet annually
for setting policy and
distribution of
information
Goals are to showcase
and sell products
Hotel can sell rooms
and meals to the
exhibitors who attend
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Association, Convention and
Trade Show Markets




Hotels must be flexible to the needs of
the attendees to be successful
Food and beverage can be lucrative,
but not always guaranteed attendance
Need good convention service
managers over salespeople
Can be price sensitive
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
22
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Convention Centers




A freestanding large exhibit hall
where trade shows are typically
housed
Do not have lodging accommodations
Publicly owned and privately
operated
Booths or space are sold to
purveyors
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
23
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Convention and Visitors
Bureaus (CVBs)
Publicly and privately supported by those they
serve:









Convention centers
Hotels
Restaurants
Merchants
Theaters
Airlines
Are nonprofit, serving their major constituents
who pay fees
Mission is to promote the city as a destination
area and as liaison to coordinating all visiting
entities
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
24
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
SMERF



Price sensitive, not-for-profit
organizations including social, military,
education, religious and fraternal
Also is a catch-all for organizations that
do not fit into other groups
Can fill guest rooms and meeting space
during slow periods
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
25
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Government Markets



Can also be booked during slow
periods
Reliable source of revenue for budget
and midlevel properties
Per diem rates are usually set by
local or national law
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
26
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Group Tour and Travel Markets




Leisure travelers who travel in groups
with or without an escort
Wide ranging market including
travelers with different motivations
Motivations include: convenience,
companionship, lover cost, planned
itineraries
Motor coach tours
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
27
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Discussion

The various organizational customers
discussed in the chapter have a variety
of different needs. Do any of them
have similar needs? What do they all
have in common, if anything?
Marketing Essentials in Hospitality and Tourism:
Foundations and Practices by Shoemaker & Shaw
28
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.