Selling Hospitality Chapter 16 Sales Channels and Intermediaries Connecting products with markets profitably
Gaining Competitive Advantage • “For a business to be viable at all, it must do something well. For it to win in a competitive market, though, it has to do something better than its competitors.” • To achieve competitive advantage, you have to be better than your competitors at something your customers consider important. • That somethingcould be a better product or service, a lower price, or providing customers what they want and how they prefer to acquire it.
Hilton’s Sales Channels A mixture of • a hotel-specific sales force • a national sales force • the Internet • telephone sales centers • centralized reservation centers supported by national marketing campaigns • sales intermediaries such as travel agencies and tour wholesalers • strategic alliances with airlines and credit card companies
Chapter 16 Outline • What channels are being used in the hospitality industry and why? • What implications do these channels have for the hospitality sales professional? • How should the channels be managed to make them an integrated go to market system?
Types of Travel Agencies • Vacation stores • Commercial agencies • Direct response agencies • Cruise only agencies (no airline accreditation) • Consolidators • Meetings, incentive, convention, and expositions (MICE) • Tour operators • Preformed versus FIT • Inbound (receptors) versus outbound
Channel Mixes Come in Three Forms • Intensive • Selective • Hybrid
Example of Intensive versus Selective Channel Coverage ‘ Intensive ’ High Value of Internet Med sale Telemarketing Direct sales Low Low Med High Need for customization
Example of Intensive versus Selective Channel Coverage ‘ Intensive ’ ‘ Selective ’ High High Value Value of Internet of Med Med sale Telemarketing sale Direct sales Direct sales Tele- marketing Low Low Internet Low Med High Low Med High Need for customization Need for customization
Hilton Hotel Corporation is looking for a marketing intern that would work directly with the DOSM on various projects such as: • Web marketing and design • Ad development and placement—intern would need to be familiar with PageMaker or similar software • Package research, design, and implementation • Tracking of package results • Travel agent incentives and tracking of the results—Hilton Hotel programs • Group incentives and tracking of the results—Hilton Hotel programs • Market segment report development and analysis
Example of a Hybrid Channel Coverage High Sales force Value Travel agencies + of Med Internet sale Telemarketing Call centers No coverage Internet Telemarketing Low Call centers Low Medium High Need for customization
So Why Not Use All Sales Channels? • Multiple sales channels may end up chasing the same sales (channel shift versus channel lift). • Not all channels will be profitable in every product-market segment. • Channel conflict problems arise.
Re-Engineering the Sales Process Reduces costs; improves quality