Ithaca, NY, February 18, 2013 - Restaurant marketers tend to focus on target marketing strategies, but a new study indicates that mass marketing may actually be more effective in boosting business, according to a new report from the Cornell Center for Hospitality Research (CHR) at the School of Hotel Administration. In another new report from CHR, a panel of five industry CEOs call for a tight focus on the customer to boost industry revenue and asset value, as part of their analysis of the hospitality industries top challenges. The two recently posted documents are available at no charge from the CHR's website.
Cornell Study Finds that Target Marketing May Not Be the Best Strategy for Restaurant Growth
Although targeted marketing approaches seem to make sense for restaurant marketers, a new study from the Cornell Center for Hospitality Research (CHR) finds that mass marketing strategies would be the best approach for increasing business. The study, "The Target Market Misapprehension: Lessons from Restaurant Duplication of Purchase Data," by Michael Lynn, is available at no charge from the CHR.
"The conventional wisdom among both researchers and operators is that target marketing is the way to boost market share," said Lynn, who is the Burton M. Sack '61 Professor in Food and Beverage Management at the Cornell School of Hotel Administration. "However, my study found that the market is not that diversified—that is, the customers move from one restaurant type to another more or less in proportion to a brand's market share, and one restaurant's customers are not all that different from another restaurant's customers. For this reason, I believe that mass marketing strategies will be more successful than targeted approaches in bringing in customers."
Lynn's study sought to test the effectiveness of target marketing by determining the extent to which a particular restaurant brand shares its customers with other restaurant brands. The analysis found that the extent of sharing is almost completely explained by the restaurants' market share, rather than by their market targets, even among restaurants that have very different price points and concepts.
Each restaurant brand shared its customers with the other brands in proportion to the other brands' shares of customers and in inverse proportion to its own share of customers. Thus, big brands like McDonald's and Subway tend not to share customers as much as small brands. This pattern of data suggests that the different restaurant brands do not attract substantially different types of consumers, which in turn suggests that restaurant brands should aim most of their marketing efforts at increasing their appeal to all restaurant customers.
Keynote Panels Highlight Industry Challenges and Solutions
Creating value in the hospitality industry will require a stronger focus on the customer. This was one point made by a panel of five industry CEOs who provided their analyses of the industry's key challenges, as presented in a new proceedings from the Cornell Center for Hospitality Research. Part of that focus on the customer will require a forward-looking approach to education, according to five deans of top hospitality education programs.
The panel discussions are summarized in a new proceedings available at no charge from the Cornell Center for Hospitality Research: "Cornell Hospitality Research Summit 2012: Critical Issues for Industry and Educators," by Glenn Withiam. The panels were the keynotes for the 2012 Cornell Hospitality Research Summit, which brought more than 250 industry leaders and educators to the School of Hotel Administration for two intensive days of research presentations.
The CEOs highlighted the importance of operations excellence as this relates to the creation of value for the hospitality industry and improving customer satisfaction. Brand management continues to be important for the industry, particularly as hospitality companies continue their global expansion. The panelists also acknowledged the increasing influence of technology on all aspects of the industry.
Chaired by the school's Associate Dean Steven Carvell, the CEO panel members were Arthur Adler, managing director and CEO, Americas, Jones Lang LaSalle; Sebastián Escarrer, former CEO and vice chairman, and current board member of Meliá Hotels; David Peckinpaugh, president, Maritz Travel Company; Ted Teng, president and CEO, The Leading Hotels of the World; and Adam Weissenberg, vice chairman, global and U.S. travel, hospitality and leisure leader, Deloitte & Touche USA.
Technology is also radically affecting curricula and teaching methods, as outlined by the hospitality deans. A foremost consideration is finding ways to prepare students for the industry of future—an industry that will be increasingly global. This will require a greater focus on critical thinking, as opposed to industry knowledge.
The panel of five deans of global hospitality programs was chaired by Kirk Kinsell, president, The Americas, of InterContinental Hotels Group. The deans were John Bowen, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston; Kaye Chon, School of Hotel and Tourism Management, The Hong Kong Polytechnic University; Fabien Fresnel, Ecole hôtelière de Lausanne; Bjorn Hanson, Tisch Center for Hospitality, Tourism, and Sports Management, New York University; and Christopher Muller, School of Hospitality Administration, Boston University.
About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 75 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit www.chr.cornell.edu.
More About Your
News Being Published on Hotel-Online Inquire Here
Study Finds High-End Hotel Transaction Prices are Moderating While
Small Hotel Deal Pricing Continues to Increase / February 2013
Study's Paint a Mixed Picture for Restaurant Daily Deals and
Sustainability in Hospitality Making Slow but Steady Progress /
What Has Long Been Suspected - Social Media Reviews Drive Hotel
Reservations; Cornell Center for Hospitality Research Reports a 1 Point
Increase for Reviews Allows for an 11.2% Rate Increase / November
Hospitality Quarterly Study Documents Hotels' Recovery after Terrorist
and Economic Crises; U.S. Hotels Made Unexpectedly Rapid Recovery /
New Studies from the Cornell Center for Hospitality Focus on Service
Improvement; How to Make the Most of Service Scripts and Human
Resources Marketing / October 2012
|Cornell Hospitality Research Summit Focused on Rapid Changes in Hospitality Industry / October 2012|
Cornell Hospitality Research Summit Opens Monday, October 8, 2012 -
Only a Few Slots Remaining for Registration / October 2012
School of Hotel Administration Turns 90; Program Began with One
Professor and 20 Students who Attended their First Class on September
20, 1922 / September 2012
Center for Hospitality Research Reports Examine How Hotels Report their
Carbon Footprints and How Hospitality Stocks React to Corporate
Earnings Surprises / September 2012
Hospitality Research Summit Preview: Over 90 Presenters & Panelists
Share Top Industry Ideas / September 2012
Registration and Award Nominations for Cornell Hospitality Research
Summit Close Soon / August 2012
Hospitality Research Summit Will Feature Over 80 Industry-focused
Presentations / August 2012
Industry Stocks Appear to React More Sensitively to Interest Rate
Changes by the Federal Reserve According to New Study, 'Saving the Bed
from the Fed' by Cornell Center for Hospitality Research; Also
Available, a Brief on Chain Growth, 'Age, Size, and Survival and Growth
of Franchise Chains' / July 2012
Center for Hospitality Research Hospitality Tools Series Posts New
Items; A New Restaurant Table Tool, a Roundtable Discussion on
International Challenges and Opportunities, and a Profile of Schneider
Electric's Energy University / May 2012
Center for Hospitality Research to Present 2012 Hospitality Research
& Analytics Award; Honor Recognizing Hospitality Industry Best
Practices Driven by Research and Analytics will be Awarded During the
Cornell Hospitality Research Summit in October 2012 / May 2012
Center for Hospitality Research Names 2012 Industry Relevance Award
Winners Recognizing Faculty who Have Created a Report or Tool that has
had a Significant Impact on the Hospitality Industry / May 2012
Tool from Cornell Center for Hospitality Research Helps Hotels
Communicate Their Green Story; Additional Reports Analyze Corporate
Strategies / April 2012
Reports from Cornell Center for Hospitality Research Focus on Effects
of Hotel Strategic Pricing and Financial Benefits of Management
Integrity / March 2012
Zahn to Emcee the Cornell Hospitality Icon & Innovator Awards Gala
Helping to Honor the Tisch Family, the 2012 Recipients of the Cornell
Icon of the Industry Award / February 2012
Family Named 2012 Recipients of the Cornell Icon of the Industry Award
/ December 2011
New Cornell Center for Hospitality Research Studies Examine How Social
Couponing is Working for the Hospitality Industry / Novmeber 2011
Hospitality Design Roundtable Aimed to Define the Rapidly Expanding
Boutique Hotel Segment and What Customers Want / October 2011
Research Surveys Restaurant Takeout Operators Regarding Online Ordering
and Introduces a Spreadsheet-based Tool Assisting Hotel Managers in
Making Strategic Comparisons Among Competitors / September 2011
Center for Real Estate and Finance Presents HVS Hotel Valuation
Software Tool Free of Charge / August 2011
Center for Hospitality Research Study Finds Customers Give More
Credibility to the Green Activities of Large Restaurant Companies When
Small Competitors Launch Green Initiatives; Consumers are Skeptical
When Large Chains Promote Initiatives in the Absence of These Small
Competitors / August 2011
2011 Cornell Hospitality Quarterly Features Study of Hotel Guests'
Preferences Regarding Sustainability in Hotels / July 2011
Study Proposes Uniform Sustainability Reporting Framework for the
Hospitality Industry / July 2011
Law, Service Innovation, and Brand Management Addressed at the Cornell
Center for Hospitality Research Spring Roundtables / May 2011
Hospitality Research Summit Participants Say that the Focus of Internet
Presence Must be on Customer Experiences to Build Your Brand / May
Hospitality Research Summit Explores the Dimensions of Electronic
Distribution and Revenue Management; Chief Thread is Need for Hotels to
Establish and Maintain Price Integrity / April 2011
Study Finds That Well-Designed Hotel Energy Saving Treatments Do Not
Diminish the Guest Experience; Study Tested Reduced Television Power
Levels and Alterations in Bathroom Lighting in Guest Rooms by Surveying
192 Guests of the Hotel Statler / March 2011
Report Outlines Six Step Process on How to Develop a Destination Brand;
Student Team Created Plan for Marketing and Branding Zambia as a
Tourism Destination / January 2011