During the course of my former hospitality career, I have worked on a number of successful marketing campaigns. One of those campaigns focused on increasing my employer’s share of the day trip, motorcoach market. The campaign took place at a time when the U.S. economy was in the expansion phase of the business cycle and inflation was at a modest 3%. Both GDP and GNP were growing and Americans were enjoying a strong dollar. Here is a campaign snapshot:
About the Product
The day trip that I was marketing at the time consisted of a thematic, five hour festival that was held at a resort style hotel. The day trips ran throughout the year with varying themes. Although the theme varied, the format of the festival remained constant.
The guests would arrive at the hotel and enjoy a continental breakfast from 11 a.m. until noon. The thematic entertainment would follow from noon until 1 p.m. A grand buffet lunch was served promptly at 1:15 p.m. and ran until 2 p.m. An open bar was available as well. The thematic entertainment would resume after lunch and continue until 4 p.m. The trips were geared towards senior citizens and took place Monday through Friday.
A tier-pricing system was used to sell the product, with both tour operators and destination marketing organizations (DMO) receiving the lowest rates. Those at the farthest end of the demand chain, the SMURF groups, received the highest rates when booking directly with the hotel.
The tier-pricing was used to address the needs of those within the marketing channel. The tour operators and DMOs were equivalent to a wholesale or retail operation in a manufacturing chain. The SMURFs were the equivalent of the end-consumer. A benchmark price of $29 was employed. Day trips priced over that benchmark had previously proven to perform poorly.
At the time of the campaign’s launch, the day trip market was heterogeneous, which lent itself to a differentiated targeting strategy. The competitive environment was oligopolistic. As such, a marketing mix was developed for each target market segment.
The two macro target markets at the time were DMOs and SMURFs. Both markets were cyclical in nature, highly dynamic and greatly influenced by external market forces. Both macro markets were further defined into micro units. Business-to-business tactics were used with the DMOs and generational marketing tactics were used with the SMURFs.
The DMOs were first broken down geo-demographically. Most of the business was deemed to be coming from the New England and Middle Atlantic regions. Afterward, those segments were divided again based on segmentation variables such as volume usage and price sensitivity. The DMOs used dual channels of distribution and had a tendency to form strategic channel alliances. As such, push-pull demand tactics were used throughout the marketing channel.
The SMURFs were also divided by a host of variables into psychographic cohorts. The four primary cohorts were classified as the G.I Generation, the World War II Generation, the Silent Generation and the Boomers Wave 1 Generation. Most of the hotel’s SMURF business came from the Silent Generation cohort in the Middle Atlantic and New England regions.
The hotel was already considered the market leader and its day trip program’s gross income was well over the $6 million dollar mark. The attrition rate was less than 5% and repeat groups were booking up to two years in advance.
The marketing strategy was two-fold. First, we wanted to keep sales growing in the current day trip markets by connecting it to the hotel’s equally thriving, hub and spoke market. For those not familiar with the hub and spoke market, it involves overnight motorcoach tours. Guests would spend several nights at the hotel and spend their days traveling to area tourist destinations and restaurants. Second, we wanted to keep the hub and spoke guests at the hotel longer, thereby funneling more money into the hotel’s food and beverage coffers instead of those belonging to our competitors.
The marketing goal was achieved through a variety of methods. For starters, the hotel formed strategic alliances with the area’s tourism agencies as well as tapped into hotel franchise’s marketing resources. Affinity guides, online venues, trade shows, direct mail and familiarization trips were also used. Database marketing, bounce back and personal selling techniques played a heavy role too. Combining those elements into one seamless tapestry worked phenomenally well. When I left the company, the hotel was enjoying multi-million dollar revenues and market leader status in both the day trip and hub and spoke markets.
Killeen Gonzalez has a degree in marketing as well as hotel and restaurant management. She was also a certified hospitality sales professional for many years.
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