Marriott - Case Presentation for Printing

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MKTG208: Sales Management – Case Analysis

MARRIOTT - SALES FORCE ONE

The spirit to serve

Agenda

Background Information

Sales Force One: Introduction & Problem Analysis

Solutions

Potential Risks

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Background Information

Industry Analysis

Threat of new competition

Threat of substitute products or services

Bargaining power of customers (buyers)Bargaining power of suppliers

Intensity of competitive rivalry

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About Marriott

3000 properties Worldwide presence: 65 countries Brand division

Tiered to cater for different customer needs

Marriott Brands

Exquisite Luxury Hotels

Contemporary Quality Hotels

Quality Destination

Hotels

Extended Stay Value Hotels

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Opening of the restaurant « A&W Root Beer », Washington DC1927

1957First Hotel « Twin Bridges Motor HotelNew ventures and franchised open quickly

Marriott Corporation1967

1969First international Hotel: Acapulco, Mexico

Division in 3 areas: food and services/ airlines in-flight services/ hotels and restaurant1970

1987Starting luxury services: Marriott suites

Marriott corporation splis into Marriott International Inc and Host Marriott Corporation1993

1997SFO project

Key Dates

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Spirit to Serve

Associates

Guests

Com

mun

ities

Marriott Core Values

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Sales Force One: Introduction

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Property A

Property B

Property C

Property D

CUSTOMERS

Traditional Model

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Problems with Traditional Model

Uncoordinated sales effort Unclear allocation of tasks• Individualized Sales Team• One customer, multiple contacts

• Require more defined role to serve diverse customers

Chicago

Sales Force One Model

New York

Regional SFOCustomer

Regional SFOCustomer

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• Differentiating Strategy– Becoming customer-oriented

• One primary point of contact to solve all inquiries

• Bottomline– Increasing revenue

• “Adds US$1 billion in the long run”

– Solving the problems of the traditional model

Sales Force One

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Sales Force One: Problem Analysis

SFO: Problems AnalysisMarriot Brand Property Owners

Sales Team Customers

SFO: Problems AnalysisMarriott Brand

• Advantages– Streamlining of sales force for

easier management– Reduced overheads

• Disadvantages- Encounter resistance from

various stakeholders

SFO: Problems AnalysisProperty Owners

• Advantages– Exposure to a larger market

potential (Cross-selling)

• Disadvantages– Loss of autonomy in sales

function– Dilution of customer base

SFO: Problems AnalysisSales Team

• Advantages– Clearly defined roles– Establish better relationship

with customers

• Disadvantages– Shared commission– Require Migration– Loss of efficiencies

SFO: Problems AnalysisCustomers

• Advantages– Reduced disturbance– One primary point of contact

• Disadvantages– Loss of efficiencies– May damage brand perception

and hence loyalty

SFO: Problem AnalysisSummary

Sales Team

Loss Motivation

Lack of Knowledge

Customers

Loss of Efficiencies

Loss of Brand LoyaltiesProperty Owners

Loss of Autonomy

Dilution of Customer Base

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Recommended Solutions

Reco

mm

ende

d So

lutio

ns Scrapping SFO

Existing SFO

Revising SFO

Individual sales teams but integrated data

system

Bidding system for individual hotels

Co-ordination between SFO

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Individual properties retain control

Hotels have to work efficiently to win the bid

Allow more information exchange and co-

ordination

How: Rationale:

Recommended Solutions

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Property A

Property B

Property C

Property D

CUSTOMERS

Recommended Solutions:Scrapping SFO

Recommended Solutions:Scrapping SFO• Establishing Database

Last ContactedCustomer Rank

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Recommended Solutions:Scrapping SFO

Advantages• Retaining properties’ autonomy•Sharing of customer database•Reduced multiple calls to customers

Disadvantages

• Loss of efficiencies• Constant updates are

required• Intensified competition• Costly

Chicago

Recommended Solutions:Existing SFONew York

Regional SFOCustomer

Regional SFOCustomer

Bidding System

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Recommended Solutions:Existing SFO

Advantages• Retaining properties’

autonomy• Improved efficiencies• One primary contact

point

Disadvantages

• Intensified competition• Cutting cost to drive

competitive advantage• Leads to sub-standard

level of service

Recommended Solutions:Revising SFO

Sales Organizations Sales Force Motivation

Sales Force Training

Tier 3SpenderTop 15%

Tier 2Middle Men

50th to 85th Percentile

Tier 1ConservativesBottom 50%

Customer Segmentation

Country’s SFO

Sales Structure:At Country Level

Tier 3Spender

Tier 2Middle Men

Tier 1Conservatives

Tier 3SFO

Tier 2SFO

Tier 1SFO

Regional Sales Director

Country Manager A

SFOTier 3

SFOTier 2

SFO Tier 1

Country Manager B

SFOTier 3

SFOTier 2

SFO Tier 1

Country Manager C

SFOTier 3

SFOTier 2

SFO Tier 1

Sales Structure:At Regional Level

Region ASFO

Region BSFO

Region CSFO

Region ACustomer

Region BCustomer

Region CCustomer

Global SFO Office

Sales Structure:At Global Level

England

Sales Structure:Process

Singapore

Singapore SFO

Customer

England SFO

Customer

Database System

Sales Functions

Sales Force

Country Sales

Manager

Regional Sales

Director

Global SFO

Office

SummaryPlanning

SMART GoalsSales Objectives

Sales Organization

StaffingSources of

Employment

TrainingNeed Analysis

Organizing TrainingCollecting feedback

Leading & Motivating

Controlling

Sales Planning:Setting SMART Goals• Leveraging on excellent customer service

provided by highly-motivated sales representatives, SFO is to increase total global sales revenue by US$ 1 billion in the next five years – US$100 million in the first year of implementation, US$ 200 million in the 2nd year, US$250 million in the 3rd and 4th year and US$200 million in the fifth year.

• Four Indicators– Sales Quota– Customer Satisfaction Index (CSI)– Employee Satisfaction Index– Hotel Feedback

Sales Planning:Setting Objectives

Booking rates = no. of successful bookings/total number of inquiries

Sales Planning:Setting Quota

Sales Volume Booking RateNo. of calls made

to other SFOs

• Sources:– Internal Hiring• Serves as a career progression path• Candidates possess knowledge about the

company• Major sources

– External Hiring• Internal sources may not be sufficient

Staffing

• Sources:

Staffing:External Hiring

Job advertisement Headhunting Management Trainee

• Organizational Needs:

Training:Need Analysis

Sales Skills Customer Satisfaction Employee Satisfaction• Closing the deal• Basic knowledge

• Exceed customers expectation• Service Recovery

•Socialization•Leading & motivating

Sales Skills• Closing the deal• Basic knowledge

Customer Satisfaction• Exceed customers expectation• Service Recovery

• Personnel Needs:Training Internal Hires External Hires Management

Trainee

Phase 1

Orientation √ √

Basic Sales Skills √ √ √

Persuasive Skills √ √ √

On The Job Training √ √ √ *

Phase 2 Rotational Stay √ √

Phase 3

Personal Service √ √

Service Recovery √ √

Service Excellence √ √

Living-the-Culture √ √

Training:Need Analysis

Training:Evaluation

Training questionnaires• Training effectiveness• Trainer’s effectiveness

Post-training performance• Before-and-after variance in

Sales• Before-and-after variance in

CSI• 360 degree feedback

Leading & MotivatingMonthly Meeting Associates Night

Heart of the House Bonus & Incentives

Controlling

KPIs 360o Feedback Customer Appreciation Night

Global SFO Meeting

Regional Meeting

Controlling

Data at Individual countries

Regional Meeting

Global SFO Meeting

• KPIs• 360o Feedback• Customer Appreciation Night

• Comparison with other countries• Sharing of best practices• Evaluation at Regional level• Budget review

• Evaluation of performance• Offering feedback• Budget review

Evaluations

Benefit Cost

Potential Risks

Resistance Bottleneck

Risk Mitigation

Stage 1Go Local

Stage 2Go Regional

Stage 3Go Global

FUNFACT:In reality, SFO is at Stage 1! SFO is not implemented in Singapore!

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