by Dr. John Hogan,
March 22, 2010
Readers of my writing over the years have likely noted my consistent
message about the need to keep the balance between “high tech” and “high
touch” in the hospitality industry. If we make too many guest interactions
function on automated systems, we will run the danger of changing from
an industry known for its service and unique hospitality to one that has
little distinction other than price
For years now, businesses globally have recognized and used a fundamental
approach in marketing, called The
Marketing Mix model. Informally labeled “the 4 P’s”, they were included
in business and hotel school classes beginning a generation or more ago
and remain in use today, although in an evolved fashion as technology has
These tools continue to be used by hoteliers as part of the overall
marketing strategy in attempts to generate the most favorable response
in targeted markets by blending as many of the 4P’s variables in ways that
understand and meet those markets’ preferences and needs.
Simply stated, the 4 Ps of the marketing mix are:
Product is usually defined as either a physical object or an intangible
service that is mass-produced on a large scale with a specific volume of
units. Intangible products are service based and include hospitality, tourism
and the hotel industry . In contemporary lodging, the Product has
become segmented by location and segment – luxury, upscale, mid-range,
economy, budget, etc. In addition, the massive introduction of branding
and sub-branding to many properties has brought the industry to a point
where the danger of becoming an indiscernible entity is very real.
Does a potential guest make a decision on the physical product being offered,
or on which brand is pushing better loyalty rewards this week? (And
the cost of those perks are paid for by the hotel ownership and then passed
on presumably to future guests)
The thinking from an earlier time was that a good product should sell
itself, but there are not really many “ bad “ products in today's extremely
competitive markets. In addition, all the brands have extensive customer
“something” service programs and departments created to try to reduce complaints
and build repeat visits.
The question on Product every hotel and/or brand must address is if
they have created what its’ targeted markets and guests wanted.
Providing a unique flavor in your hotel product/service must meet the needs
of your customers or they will not return, regardless of airline miles
or extra points.
As in the Product category, segmentation has defined some of the price
points. The global recession of the last two years has clouded some of
the traditional differences, as some resort and upscale brands have discounted
heavily to the point where the lower priced properties cannot effectively
compete. Price (the amount a customer pays) is determined by
market share, competition, operational costs, brand or product identity
and the customer's perceived value of the product. Pricing may increase
or decrease with frequency and pricing strategies must be planned and worked
daily. Hotels should have learned the lessons of the airlines and not just
compete based on being the lowest cost. The anger of flyers today
for being charged extra for almost everything has opened the way for certain
carriers to expand and others to enter what were previously lucrative and
exclusive markets. The associates of each kind of those airlines
have major differences as well in how and what communicate to their travelers.
I encourage you to observe the associates of Southwest Airlines, Virgin
Airlines, Singapore Air and a few others and contrast them with numerous
Cash flow is an obvious business critical factor and reasonable discounts
on a logical basis are often good business practices. Southwest Airlines
in the US has been consistently one of the most profitable carriers in
the past 20 years and, at times, is the lowest fare provider. A non-technical
look at their pricing strategies from only a consumers’ view will show
how they track demand and adjust prices accordingly, even in the economic
downturn. They are not always the lowest fare in a given market on a given
day, but their overall satisfaction ratings demonstrate their ongoing and
continued success. Consumers will always remain sensitive for fair
prices, discount options and special offers, but competing on Price as
the major component for success is not a viable or logical long-term approach
for most hotels.
This is the P that may have changed the most in the past 10- 15 years,
as Place represents the locations where a Product or in the case of lodging,
accommodations can be purchased. Technology has changed the distribution
channels via the internet and third party resellers and the changing role
of travel agents and instant communication has clearly changed the location
of reservations and guest access.
Marketing includes many faces to reach out to the targeted guests or
groups, including advertising, direct sales, sales promotions, public relations,
publicity, branding, media, etc. Promotion has evolved through technology
to become what is perhaps the most visible P, requiring a significant focus
to bring the Product (lodging experience) to the Place (distribution channels)
at a reasonable and competitive Price. While all four P’s still
link to each other, Promotion has become the one many hoteliers have concentrated
as their point of difference as the other three P's have become somewhat
eroded in their significance in today's markets.
With that as an introduction, I am now ready to share the second
half of this column with the curious title of
An Unlikely Salute to Collin Raye
Collin Raye is an American country music singer, who made his debut
on the country music scene in 1991 with the release of his debut album,
which included his first Number One hit in "Love, Me". This was the
first of four consecutive albums released by Raye to achieve platinum certification
the United States for sales of one million copies each. He maintained
several Top 10 hits throughout the rest of the decade and into 2000.
Between 1991 and 2007, Raye charted thirty singles on the U.S. country
charts and he also had success on the Adult Contemporary format as a duet
partner. Four of Raye's singles reached Number One on the Billboard country
music charts and he has recorded eleven studio albums, a Christmas album,
a compilation of lullabies, a Greatest Hits compilation, a live album,
and a live CD/DVD package.
I lived in Nashville for more than 15 years and while I was aware of
some of his work, I had not seen him perform. Raye was touring the
US in the 2009 holiday season and was scheduled to perform at a unique
venue in Phoenix, AZ, the Celebrity Theatre. Two weeks before the
show, we were contacted by a ticket service announcing this show offering
special pricing for mid-section seating. My bride and I have been to a
number of excellent shows at this 2,000 seat, theatre in the round and
we booked two seats.
When we arrived, we were pleasantly upgraded to prime seating in the
first six rows, as the theatre overall was significantly less than fully
booked. The performers and theatre management made the decision to upgrade
almost everyone to maximize their enjoyment.
What struck me about this was the fact that we had tickets to other
shows, where performers in similar situations had either cancelled their
performance or verbally complained during much of the show about the poor
attendance. Rather than thanking the people who did support them,
they chose to deliver a less than stellar performance and left a very poor
impression on those attending.
On this same tour, Collin Raye and his band performed at several concert
halls and arenas that had significantly larger numbers in attendance.
What we noticed that night was a different 4 Ps that can have meaning to
Many contracts give performers an option to cancel or reschedule a
show if a certain number of tickets are not sold. Raye and
the Celebrity Theatre management and ownership made the decision to show
their professionalism and appreciation for those who had booked by performing,
even with low numbers.
This performer has been singing some of the same songs for almost 20
years, yet he and his band shared their passion for the work as if this
were their first tour.
When an entertainer takes the time to speak with and interact with
the audience, their sense of connection and pride shows.
This was likely the smallest crowd on the four-week tour, but no one
in the audience would ever have known. For more than two hours complete
with two encore numbers, this band and entertainer gave the audience 100%
of their efforts and their showmanship as if they were performing for a
crowd of 15,000.
The 4 Ps of Marketing remain an important part of strategies in successful
hospitality businesses today. The 4Ps of Personal Attention, as illustrated
by Collin Raye also can provide us in hospitality a lesson in “high touch.”
“Our business life is not to get ahead of others, but to get ahead
to break our own records, to outstrip our yesterdays by our today,
to do our work with more force than ever before.”
Stewart B Johnson (UK artist known for his figurative work)
|Keys to Success Hospitality Tip of the Week:
Review the current AAA/CAA (or other national) rating system and determine
your hotel’s diamond or star rating. Evaluate if you need to take steps
to maintain or improve your standing.
TO SUCCESS is the umbrella title for my new 2010 programs, hospitality
services and columns. This year’s writings will focus on a wide variety
of topics for hotel owners, managers and professionals including both my
"HOW TO" articles and HOSPITALITY CONVERSATIONS. My segments Lessons from
the Field, Hotel Common Sense and Principles for Success will be featured
at appropriate times in the year as well.
Feel free to share an idea for a column at email@example.com
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All rights reserved by John Hogan and this column may be included in
an upcoming book on hotel management. The opinions expressed
in this article are those of the author and do not necessarily reflect
the views of this publication
John Hogan is a successful hospitality executive, educator, author and
consultant and is a frequent keynote speaker and seminar leader at many
hospitality industry events. http://www.linkedin.com/in/drjohnhoganchache