1. Hospitality Sales and Marketing Creating Mutually Beneficial Value Exchanges Chapter Three

2. Creating Mutually Beneficial Value Exchanges  Newtonian law…”the more narrow the focus the greater the results”  Technology allows us to concentrate our sales efforts on complex business opportunities.  Traditional marketing efforts target the less complex sales channels –Promotions –Relationship marketing –Internet sales –Collaboration with 3 rd party sellers –RMS technologies

3. Creating Mutually Beneficial Value Exchanges  Selling is a social and managerial process by which individuals and groups of individuals obtain what they need, what and desire through creating and exchanging value with other individuals and groups of individual

4. Creating Mutually Beneficial Value Exchanges  Value to the buyer is found in three areas… –Product –Service –Ease of acquisition  Value to the seller is found in…. –Compensation received, revenue or in kind payment –The customer relationship

5. Creating Mutually Beneficial Value Exchanges  Exchange takes place when something of value is transferred from seller to buyer and from buyer to seller.  There are two types of exchanges –Transactional exchanges  A single seller or buyer can conduct transactions with many different buyers or sellers…usually not a win-win event –Relational exchanges  Sellers attempt to establish a long-term, trusting, win-win relationship with customers. Relational exchanges are on-going processes

6. Creating Mutually Beneficial Value Exchanges  Relationship exchanges breed significant benefit. –Business referrals –Repeat business –Lower selling costs  Lower selling costs become a value for both buyer and seller  Value by definition is “benefits-costs=value”

7. Creating Mutually Beneficial Value Exchanges  There are two ways to create value –Additional benefits are added while costs stay the same –Costs are reduced while benefits stay the same.  When we offer more value than our competition we create a competitive advantage  The competitive advantage is achieved through two customer perceptions of value –Value through differentiation –Value through lowest price

8. Creating Mutually Beneficial Value Exchanges  Why would differentiation be a slippery slope?  What about lower prices?

9. Creating Mutually Beneficial Value Exchanges  Products and services can be seen as a “bundle of benefits” which act as problem solving tools and therefore, are the foundation of differentiation.  Products and services are made up of four levels –Core products and services. Hotels sell beds and food –Expected products/services are the price of admission. These are “must haves”, they don’t motivate but do de-motivate.  Fitness room, coffee maker, internet, newspaper, etc. –Value added products/service are seen as more valuable than the competition  Location, theme restaurants, spa, sports facilities –Potential products/services  Rewards for loyalty

10. Creating Mutually Beneficial Value Exchanges  To motivate the sale whether it is transactional or relational requires exceeding expectations, or demonstrating value above the competition’s  It is here that we find the source for a competitive advantage  Unfortunately customers expectations continue to rise as we offer new motivational factors. These are duplicated within the marketplace thereby making it more difficult to create a competitive advantage.

11. Creating Mutually Beneficial Value Exchanges  It is logical then, that products and services are the buyer’s perceived value of benefits minus the costs of acquiring those benefits  Customer delivered value (CDV) = total customer value (TCV) – total customer costs (TCC)  Customers buy from the property that offers the highest customer delivered value  TCV is not only tangible features but more importantly intangible features such as relationships and trust.  Tangible and intangible features are also present in TCC. Other than money, intangible aspects like time, energy and the physical factors of worry and anticipation all help drive the cost equation.  For ~50% of our business CDV’s are based on judgment and judgment is influenced by the sales person or other marketing resources.  You are a major part of CDV and therefore play a major role in creating a competitive advantage.

12. Creating Mutually Beneficial Value Exchanges  CDV in effect is seen as “profit” by the customer. It is the excess of gain in value over costs