Chapter Nine Understanding Organizational Customers

Chapter Nine

Understanding Organizational Customers

© 2008 Pearson Education, Upper Saddle River, NJ 07458.

All Rights Reserved.2

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




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




Generic Organizational Market

Influential factors: Site visits Correspondence with sales staff Word of mouth




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”




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




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




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




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




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




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




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




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




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




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




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)




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




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




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




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




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




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




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




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




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




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




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




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?

Documents

Chapter Nine Understanding Organizational Customers