MARKETING MANAGEMENT IN TURBULENT TIMES
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MARKETINGMANAGEMENT IN
TURBULENT TIMES
HOSPITALITY FORUM06.10.16 - 07.10.16
Anna PopkoFounder & DirectorTravel Image LLC
Marketing challenges in turbulent times
Economic crisis and disturbances when occur, they shift rapidly from one market to others
Marketing activities are in need for a strategic overview of fluctuations in the Supply and
Demand Successful implementation of marketing activities cannot result from random approachIt is an effect of careful planning and implementation
Rather than striving to maximize return on investment, market decision makers are preoccupied with risk minimization
Market decision making in turbulent times is neither
easy nor simpleWe need answers to the following
questions:How should one adapt the productAt what prices should one sell it Which sales managers should be hired and How should one present one to the target audience?
Marketing challenges during
periods of prosperityCompanies aim to achieve rapid growth and development They combine offensive and defensive marketing strategies Recognize new market opportunities and Take profit growth as an indicator of marketing effectiveness
Marketing challenges in Turbulent Times
Companies face the decline in demand They are affected by recession They rapidly take measures to cut costs and investments in order to ensure their market survivalAn early warning system is required to ensure reduction of growing risk
It is possible to meet marketing targets in falling markets
Business liquidationInvestments in current business activities with a goal of growthAchievement of profitable survival based on market dominationDisinvesting focused on rapid return on investment
Strategic marketing responses in turbulent times
• Conducting of extensive buyer research, based on their changed needs, requirements and expectations
• Maintaining of the existing market share with key buyer segments
• Aggressive taking over of a larger market share from competitors that matches key buyer segments
• Focus on increasing or at least maintaining of the existing level of marketing budget
Strategic marketing responses in turbulent times
Raising of strategic planning efficiencyFacilitation of decision making on different levels and functions Changes in organizational structure
The Hotel Marketing Management System and Niche Strategy development
a.The Marketing Planb.Brand Marketingc.Forms of Marketingd.E-marketinge.Yield Management
Hospitality Marketing aims at:
Finding out what guest wants and needs are
Provide the guest with solutions
“Create guests and keep them coming back” which means they become “Guests” from “Clients”
Hospitality is UniqueProducts are:
Perishable
Intangible
Interrelated
Production and consumption takes place at the same time
Guests can become “brand loyal”
Strategic Planning
Objectives
Strategies
Organization
Strategic PlanningResearch and analysis
Analyzing environment, business mix and market size.
PEST analysis (Political, Economic, Social, Technological) environment
In house operating reports on sources of business
Room night production and revenue by business mix segment
Market research on published information (Government, surveys, etc.)
Competitive analysis
Positioning StatementDecide how you want to be
“Better than the competition”
“Different than the competition”
“Opposite of the competition”
Brand Marketing
Brand Identity
Easy to remember, Associated with value, Easily recognized, Positive connotation, Looks good in color, Catch the customer’s eye, Pleasant, Easy to pronounce and spell
Competitor analysis and SWOT
Marketing Segmentation ProcessDivide market (customers)into segments - categories
F.I.T (Frequent Individual traveler)
Corporate
Company meeting/Incentive
Association/Convention
TOUR / I.T. (travel Agencies)
Packages
When a segment is more than 5% occupancy you view and study as a separate segment
Create Profile for each segments
Analyze segments
Formulate strategy for each segment
The marketing Plan DevelopmentThe Marketing Plan SummaryThe Hotel profileHotel three year trendCompetition analysis – who is the competitionMarket share analysisGeographical origin of businessA Summary statement
Structuring of Rates The Rate Spread
• Horizontal spread• Vertical spread
Standard room Superior DeluxeX 100 (Horizontal spread 10 euro) 110 120
XX 120 140 160Vertical spread 20 euro from100 to 120 – single to double
The Pyramid approach• The Three rate pyramid• The five rate pyramid
The Pyramid Approach Smaller hotels
Smaller hotels – up to 300 rooms where the five rate pyramid is not applicable nearly the same results can be achieved with a three rate pyramid Most available level B 60% Level A Level C 20% 20%
(Minimum) (Maximum)
The Pyramid Approach (for hotels larger than 300 rooms –
5 levels) It should be based on differences in room size, location and equipment. It provides flexibility for the maximization of revenue through front office administration.
Most available level C 40% (of rooms)
Level B Level D 20% 20%
Level A Level E
10% 10% (Least expensive) (Most expensive)
Different Kinds of Rates The minimum single is always the base control rate, which we use to develop the rest of the Hotel rates
Group ratesConvention ratesCommercial rates – minimum rack rate applicable throughout the yearRate restrictions – over 70% occupancy allows for rate restrictionRate review – once a yearRate monitoring and control
The marketing plan summary
The marketing plan summary • Is the forecasted business mix• Is the actual rooms revenue forecast• The rooms department budget• Is the cornerstone of the hotel’s marketing plan• Serves as the basis for formulating strategic
programs• Is an action calendar relative to each element of
the business mix
Administrative summary
• Co-ordinated activity calendar• Who is doing what (department Head)
• Marketing costs for each action or activity• In order to evaluate whether the program was financially
successful
Hotel Packaging
Stimulate sales through packaging – variety of packages
Tours
F.T.T. packages
The special interest package
The business and group market package
Tour package composition
Includes
Accommodation, Transfers, Sightseeing, Meals
Packaging as motivational devise (incentive etc)
• Escape /mini-vacation Package• Room, Dining, Entertainment, Sightseeing,
Shopping, Sports• Pricing and Brochure components
• Pricing very important • Brochure layout and presentation or Promoted
electronically
E-commerce & e-marketing
Website DesignSearch engine Optimization (SEO)Online Advertising & PPCEmail MarketingSocial Media MarketingArticle marketingViral marketingVideo marketingAffiliate marketing
YIELD MANAGEMENT Yield management is the application of Information
Systems and Pricing Strategies to allocate the right capacity to the right customer at the right place at the right time
The application has been most effective when applied to operations with the following Characteristics
Demand prognoses
Service is perishable
Markets and niches segmenting
Product is sold in advance
Demand is floating
CREATE VALUE
Let YOUR clients become your GUESTS
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