chapter nine understanding organizational customers
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Chapter Nine
Understanding Organizational Customers
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Overview
The organizational customer purchases hospitality products and services for a group or organization that has a common purpose for the purchase
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.3
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Generic Organizational Market
Influential factors: Site visits Correspondence with sales staff Word of mouth
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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”
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.6
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.9
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.10
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.12
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.13
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.15
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.16
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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)
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.18
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.19
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.20
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.21
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
Association, Convention and Trade Show Markets
Association 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
Convention planners Usually meet annually
for setting policy and distribution of information
Trade shows 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.22
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.23
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.24
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.25
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.26
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.27
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.28
Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw
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?
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