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Technology Applications and Management Chapter 11 Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology and Management Strategies Technology Database Strategies Electronic Marketing Strategies Systems Purchasing Strategies Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Driving Forces New technologies Lifestyle patterns (speed) Human scarcity (labor) Revenue growth (service/loyalty) Cost/efficiencies Security Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Driving Forces Expedite the purchasing/consumption process Feeders to databases Chips - Scanners - Multitask Devices Storage and sorting devices Wireless Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Lifecycle Patterns (speed) Delivery times Convenience factor now part of the value equation Human Scarcity Labor shortages Decreased competency Customer satisfaction levels Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Revenue Growth Improving the repeat factor Quality of service/profitability (PIMS) Customer/account management REVPAC Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Cost/Efficiencies (“Test of Five”) 1. Does it solve a problem? 2. Does it save money or reduce labor? 3. Will it help increase revenue? 4. Does it provide a strategic competitive advantage or perception of favorability? 5. Will the technology lifecycle justify the investment? Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Perspectives Pre-consumption During Consumption Post consumption Hospitality Management Strategies By R.A. Nykiel Increased response satisfaction and revenue ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Trends Impacting the Industry Internet usage increasing Wireless applications Communications devices growth Online business partnerships Internal communications (training) Labor/time replacement technologies Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Applications Marketing - (Web sites, global linkages, customer profiling, database marketing, pricing, revenue management, etc.) Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Applications Operations - (security, electronic key systems, HVAC/utility cost control, inventory management, scheduling, labor replacement, process expediting, etc.) Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Applications Development - (product/service offering modifications, new product/service development, new designs, etc.) Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Technology Strategies Components Marketing Database Operations Revenue enhancement Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Strategy - Database Marketing “ Getting your message directly into your target audiences’ hands is what data database marketing is all about.” Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Components - Database Marketing Strategy Marketing Factors + Operations Factors = REVENUE Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Definition - Database Marketing “ Marketing programs which take customer information from a computer, analyze it, and use it for acquiring new customers or getting more business from existing customers.” Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Database Marketing Strategies Reasons for success: Geographic segmentation Demographic information Psychographics Advertising clutter Weakening of the traditional TV networks Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Database Marketing Strategies (continued) Reasons for success Overabundance of product and service offerings Shifting and declining brand loyalties Better customer information and resultant service Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Influences on the Development and Popularity of Data Base Marketing Advertising Clutter/ Excessive Promotions Credit Cards Data Base Marketing Technology Hospitality Management Strategies By R.A. Nykiel Demographics/ Psychographics, Etc. ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Marketing (continued) Three key elements: 1. Technology 2. Accurate information 3. Prioritization Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Marketing (continued) 1. Technology Computer hardware and software capable of supporting data base marketing 2. Accurate information A data base is only as good as the integrity of the data it contains Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Marketing (continued) Accurate information Essential components of information: Valid records Correct addresses Correctly spelled names Most recent purchase activity Clean lists (lists free of invalid or out-ofdate information) increase response rates, reduce costs and improve return on investment Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Marketing (continued) 3. Prioritization Improves return rates and increases revenues Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Group Priorities for Direct Mail Group Group Group Group Hospitality Management Strategies By R.A. Nykiel A -- Recent Purchasers B -- Frequent Purchasers C -- Large Purchasers D -- Similar Purchasers ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Retain customers through organized recognition programs Acquire additional business from existing accounts Identify the best potential targets for new business Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Retain Guests Through Recognition Identify best customers Establish internal dialogue Plan appropriate “tokens of appreciation” Monitor and maintain list Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Acquire additional business from existing guests “The best target for new business is an old customer” Establish external dialogue Identify best prospects Create offers Track results Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Identify best potential targets for new business Profile your “best customer” Use external sources to supplement: Survey your guests Use secondary sources Select outside lists and design offers Test lists and offers Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Marketing Information Model Market Profiles: Trading Areas Frequent Users Rack Prospects PMS/POS TAs. Sales and Catering Corp. Package Group. Market Research Competition Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Profiling... To To To To Hospitality Management Strategies By R.A. Nykiel identify new prospects create more targeted messages have a basis for measurement compare to the competition ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy Profile Alternatives Service Usage • Products Purchased • Day of Week • Geographic Location Psychographic (continued) Geographic • Booker Location • Company Office • Where Guest Lives Demographic • Media Usage • Discretionary $ • Household Income • Age •Presence of children • Presence of Children Hospitality Management Strategies By R.A. Nykiel Individual Customers ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy Profile Alternatives Service Usage • Products Purchased • Day of Week • Lead Time • Types of hotels • Trips per year • Size of Group •Travel Agent • Wholesaler • Tour Operator Booker Type • Sports • Sightseeing • Evening Group Profile Hospitality Management Strategies By R.A. Nykiel (continued) Leisure Group Recreational Needs ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy Profile Alternatives Service Usage Company Profile Hospitality Management Strategies By R.A. Nykiel • Products Purchased • Day of Week • Lead Time •Geographic Location •Branch or HQ •Revenue (continued) • Medical • Manufacturing • Banking/Finance Industry Type • Golf/Recreation • Function Space • Evening Business Group Meeting Needs ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Internal and External Data Bases Internal Data Bases Mailing Lists Customer History Sales Account File External Data Bases Census Demographics Auto Purchases/Credit Card Usage Cluster Systems: Geo-demographic based systems Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Strategy (continued) Strategic and Tactical Marketing Strategic: identify target groups Plan Analyze Interpret Tactical: find and communicate with prospects Locate Reach Test Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Ten Keys to Successful Data Base Strategy 1. 2. 3. 4. 5. Preplan Target specific audiences Select an appropriate message Predetermine return on investment Maintain creative consistency Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Ten Keys to Successful Data Base Strategy (continued) 6. Integrate mailings with your overall marketing program 7. Use “clean” mailing lists 8. Know when to mail 9. Repeat your message 10. Track the results Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Data Base Marketing “ A database, no matter how copious, is not information. It is information’s ore. For raw materials to become information, it must be organized for a task, directed toward specific performance, applied to a decision. Raw material cannot do that by itself. ” Peter Drucker Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Electronic Marketing Strategies All technology driven All changing Many on the increase Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Selecting Weaponry Electronic Marketing Strategies Telemarketing Electronic shopping TV shopping Fax mail E-mail Voice mail Web advertising PCD’s Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Electronic Marketing Strategy Rationale Speed Convenience More intrusive More compulsive More direct Faster response Less expensive Breaks clutter Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Electronic Marketing Strategy Functionality Part of the total marketing strategy / weaponry / plan Limitations Linkages Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Electronic Marketing Strategy Principles Build and actively manage a customer base Develop a clear concept of how to take advantage of the Internet Put your banner on related Web sites Be easily accessible Be quick in responding to customer calls Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Electronic Marketing Strategy Internet Strategies 1. Do research 2. Provide information 3. Provide discussion forums 4. Provide training 5. Provide online buying and selling 6. Provide online auctioning or exchanging 7. Provide online “bits” delivery Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 Technology Strategies Systems Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Systems Strategies Reservation Systems (GDS) Order Taking (process) Revenue Management (yield) Inventory Allocation Outsourcing Co-oping Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS – Systems Strategies (continued) Property Management Time/Labor Management Customer Retention Systems Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458 HMS - Systems Strategies (continued) Purchasing Business to business Consortiums/joint-ventures Economies of scale New customer services Hospitality Management Strategies By R.A. Nykiel ©2005 Pearson Education, Inc. Upper Saddle River, N.J. 07458