1980s brought some competitors for Club Med, like Super Club and Sandals in Caribbean and USA. These two hotel chains are good examples of competitors that well exploited Club Med strategy. Sandals focused more on guests segmentation strategy. They took resort’s differentiation of Club Med like in families and couples, and made more specialized by divided them into different economic classes. Guests with low level of income goes to resorts Sandals Inn and guests with high level of income goes to more upscale category of hotels - Sandals Spa. Sandals resorts also differ according target age and specific needs: Grande Sport or very active members, Beaches for kids and Beaches for adults. Sandals had similar to Club Med concept with bigger rooms and the
The Club Med (A) case examines the companies core values, innovative goals in providing a complete all-inclusive resort getaway experience for their customers, and competitive advantages and disadvantages the resort company had against others. They pride themselves on being innovators and on customer satisfaction, though they did begin to fall behind in some areas due to new competitors entering their category. Some of the Club Med issues were that they didn’t seem to actively take new threats very seriously, they were heavily catered towards the French/European culture, and how they didn’t have much flexibility in terms of adjusting their services to fit consumer needs better.
This will lead the hotel succeeding in filling up all available capacity, which is impossible for single segment. Moreover, serving several segments also bring profits to the hotel.
3. For each of the promotional activities you have identified as suitable, document the promotional objectives.
Since its inception in 1950, Club Med was a leader of its own. However, with the emergence of other vacation services organizations, Club Med soon lost its unique edge. Competitors such as Jack Tar and SuperClubs now included their own versions of “Club Med magic” – an all-inclusive price and a dedicated team of staff.
In 1997 the "Tour Customers" accounted for the highest business volume at CLL with 57% (1,710,000 overnight visitors) and rented over 80,000 nights. During the winter period this segment stayed the longest at CLL, between 7 to 14 nights. The greatest benefit from this sector to CLL was that rooms were booked well in advance and were guaranteed to be full. In the summer they spend the shortest duration at CLL, only one night, while receiving the highest discounts amounting to 27% of that of the independent customers. Perhaps, instead of such a high discount CLL can offer bundle compensation for size of the tour and number of nights spent at the hotel. The potential danger, resulting in a 25% decline in this segment, exists if CLL does not undertake any form of action that will further promote the "Tour Customers". The "Tour Customers" preferred smaller rooms; thus did not generate as much of revenue as they would have by renting larger rooms. Some of them demanded greater flexibility than the tours usually allowed. These customers required a lower level of service, which could potential transfer to CLL having more time to serve the customers that demand higher service, but also who are willing to pay for it. Due to the Asian economic crisis, CLL faces a threat of potentially losing its entire Asian market that accounts for 65% of the "Tour Customers". A
To remain profitable, hotels must operate with around 65-70% capacity . Due to seasonality, political and economic events, some hotels are finding it difficult to maintain profitable occupancy levels and have started to provide services along multiple levels within the industry's
Promotions, marketing, and advertisements are typically created to acquire and retain consumers and to sell large quantities of a product. Every consumer may have a different perception of the same marketing tactic. This paper will discuss a promotion that was experiences personally, to what extent it changed or influenced my behavior, if the decision to purchase or not purchase would have been made either way, if it would have been different in some way, and what the seller could have done differently so that I would have done what they wanted.
Research indicates that whilst a price reducing strategy, which is commonly used in response to strong competition, may see short term gains, rarely does it attract and retain new customers (Chan & Wong 2005). In Hong Kong many hotels have reduced their room rates to remain competitive, however the above implies that hoteliers would do better to understand how their services and facilities influence customer satisfaction rather than simply reducing
The researcher opines that by increasing prices a rise in the ADR can be achieved since it is a sum total of room revenue multiplied by occupancy %. However, while the prices are increased the existing guest may be resistance to pay the increased price with the same facilities provided by the hotel.
The promotionPromotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The pace and creativity of some promotional activities are almost alien to normal business activities.The cost associated with promotion or advertising goods and services often represents a size-able proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organization to develop and build up a succession of messages and can be extremely cost-effective.
EXECUTIVE SUMMARY COMPANY ORIENTATION COMPANY PORTFOLIO ISSUES TREATED PROMOTION OR NO PROMOTION? CANNIBALIZATION BRAND EQUITY EROSION FORWARD BUYING PASS-THROUGH STOCKPILING ENGEL’S LAW GENERAL REASONS TO CONDUCT A SALES PROMOTION PROMOTION FOR WHICH ITEM FINANCIAL ANALYSIS THANK YOU NOTE
Due to the uncertain economic and financial situation in 2008, the Marketing Department of the Terminus Hotel forecasted an average occupation level of 40% during 2009. In November 2008, the department received two offers from regular customers, the first at a rate of €90 for 10 rooms per day, and the second at a rate of €95 for 5 rooms per day. Both offers were rejected.