Download HMS - Technology and Management Strategies

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
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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
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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
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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
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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?
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Hospitality Management Strategies
By R.A. Nykiel
©2005 Pearson Education, Inc.
Upper Saddle River, N.J. 07458
HMS - Technology Strategies
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Perspectives
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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
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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
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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)
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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)
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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
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Computer hardware and software capable
of supporting data base marketing
2. Accurate information
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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
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(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
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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
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(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:
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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...
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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)
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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
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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
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Rationale
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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
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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
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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)
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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