Chapter 9

2. Chapter 9 Communicating the offer

3. Lecture objectives • Understand the primary role of marketing communication in communicating the hospitality offer • Explain the marketing communication process • Evaluate each element of the hospitality communication mix • Understand the role of offline and online promotion • Plan a marketing communication campaign

4. Introduction Communicating the offer known as: • Promotion, the promotional mix, communication, the communication mix, customer communication or marketing communication • The public thinks – wrongly – it is only advertising and selling • Providing pre-encounter marketing mix meets target market needs, communicating offer should raise awareness, influence expectations and ultimately increase sales and profits • Sometimes companies think that marketing communication campaigns can compensate for deficiencies in other elements of the marketing mix • But if the offer does not satisfy customers, marketing communications is a waste of resources leading to problems with unhappy customers and negative word-of-mouth • The Internet has enabled organizations to perform both marketing communication and distribution activities online

5. Contemporary communications • In the past, companies tried to control what was said about their products/brands by dominating communication channels • Today, companies realize message control is impossible to achieve • sophisticated contemporary consumers/customers • ability to access information from multiple sources including online • Customer communications: bilateral or multilateral dialogue using face-to-face, phone, email, text, webform, blogs, discussion forums, comparison travel shopping websites and social network communities • Online communications described as: • business-to-customer and business-to-consumer communication (b2c) • customers-to-companies (c2b) • consumer-to-consumer (c2c) • Companies no longer control product, brand and corporate messaging, and this creates challenges in promoting or protecting a product

6. Three communication strategies To inform • Customers must be aware of marketing offers • Need to build brand awareness and product knowledge • Awareness of key brands researched • Communication objectives raise brand awareness To persuade • Brand-aware consumers still need to be persuaded to buy the company’s hospitality product • Consumers have choice and many competitors to chose from • Hospitality marketers need to persuade target audiences to buy their product instead of the competitors’ offer • Marketers stimulate buyer behaviour and offer incentives to book To build relationships with target audiences • Generating repeat and referral sales is crucial • Hospitality companies use a combination of online and offline communications with customers (e.g. loyalty club members) • Customer databases hold customer information • ICT systems generate automated marketing communications • Customer relationship management (CRM) and campaign management

7. Target audience Starting point for communications activity to establish who the target audience is: In hospitality, the target audience is: • end-users • intermediaries • key people in DMU (decision-making unit) Different target audiences: • have different characteristics • have different information needs • areexposed to different media, therefore different communication channels and messaging strategies are used to reach each audience

8. Marketing communication process • Sender = hospitality organization communicating with target audience • Target audience (receiver) = end-users, influencers, decision-makers, gatekeepers or intermediaries Target audience is precisely defined to ensure marketing communication reaches the right people cost effectively • Noise = communications from other sources (people and organizations) competing for the target audience’s attention and interfering with the sender’s message • Message = content that sender wants to communicate to the target audience • Media = various communication channels that senders can use to communicate with target audiences • Feedback =audience tells the sender whether communication objectives have been achieved See Figure 9.1

9. Figure 9.1 The communication process

10. AIDA Framework (AIDA) ensure that messaging decisions move audiences towards purchase AIDA: • Attention – the message should grab the target audience’s attention • Interest – the message should arouse the target audience’s interest • Desire – the message should stimulate desire so that the target audience wants to experience the product • Action – the message should encourage the target audience actually to take action now, such as call a reservation number, click on a website or make a booking

11. Message content Message content depends on campaign objectives, target audience characteristics, and knowledge of hospitality product Three types of message: Rational messages • appeal to target audience’s practical mindset • effective in markets where end-user has tangible requirements (business markets) • provides factual answers to reassure target audience Emotional messages • explicitly designed to arouse consumers’ passions/interest • effective in dining out and leisure markets Moral messages • linked to consumers’ belief and value systems • moral message is spiritual or ethical • religious organizations’ dedicated hospitality facilities for fellow believers • some hotels/restaurants promote their environmental or ethical beliefs

12. Message format • Messages received using our senses – sight, sound, smell, taste and touch • Message format – actual design of website, advertisement, brochure, press release, sales promotion, PR activity and sales visits • Creativity essential in message formatting to stand out from competing messages • Website format includes page layout, text, visuals, embedded audio or video files, links to external sites, opportunities for interactivity and visitor engagement; crucially, ease of navigation and simple-to-use e-commerce functionality so that potential buyers are able to book • Print advertisements and brochure format includes size, shape, layout, copy and illustrations • Publicity needs a gimmick or storyline that creates interest

13. Personalcommunication channels Personal communication refers to people who are directly communicating to each other: • face-to-face in a meeting • telephone or via PC/video-conferencing • email, text, web collaboration, fax or mail Advantages to personal communication: • personal interaction – by directly talking with customers and influencers; opportunity for dialogue so customer can ask questions about the brands and products • company can find out more about specific customer needs and wants

14. Non-personalcommunication channels • Non-personal communication channels include all online and offline print, broadcast and display tools • Non-personal communication channels cannot personalize interaction, and so is not guaranteed to capture the attention and respond to concerns of the target audience • Design and production of mediated communications need specialist suppliers, such as design companies, advertising agencies, print companies and PR agencies • Agencies offer creative expertise in copywriting, graphics, photography, radio, television and online advertising • Agencies provide advice and professional services in delivering marketing communication campaigns

15. Figure 9.2 The hospitality communication mix

16. Projecting brand image • Quality and design communications material reflect/project desired brand positioning to target audiences • The colour, photographs, graphic design, style of copywriting and quality of materials used influences consumers’ perception of hospitality brand • Online and offline marketing collateral need to complement each other to project consistent brand position • Intranet technology enables hospitality chains to deliver brand-consistent marketing communications across all units • Brand manual and brand standards provided via intranet digital format, standardized sizes/layouts for logos, brand identities, adverts, print material and signage • Online database of marketing assets: photographs, marketing campaigns and press releases, support current marketing activity (online brand library) • Unit planning a marketing communications campaign accesses the Intranet, customizes promotional material, inputs menus, prices, dates, contact details

17. Figure 9.3 Guest preference form

18. Print material Print material for individual hospitality units includes: • stationery • brochures, tariff and price lists • menus and wine lists • conference brochures • wedding brochures • function menus • promotional material for the sales team • in-room information (hotel facilities and in-room service menus) • special product brochures • special price promotional flyers • newsletters Print material produced for branded chains includes: • corporate directory listing all branded units in the country, region or world • corporate leisure breaks brochure • corporate conference brochure • group business brochure targeting tour operators • corporate sales teams’ sales support material • corporate newsletters • loyalty club leaflets, application forms • special promotions

19. Figure 9.4 Langan’s Brasserie menu

20. Figure 9.4 Continued

21. Sales force • Sales includes telesales team and face-to-face contact by sales team • Employing salespeople is expensive, costs include: salary, commission and bonuses; travel and accommodation costs; professional presentation equipment; mobile/laptop to demonstrate products, locations, prices; and administrative support • Personal selling is the most expensive form of marketing communication • Major hotel companies employ extensive worldwide face-to-face sales teams and telesales support • Small hospitality companies do not employ salespeople, but the outward-looking owner/manager can perform this role

22. Advertising • Advertising is any paid-for mass communication in the media, owned by third parties • Advertising reaches wide audiences, but ratio readers, listeners, viewers who are potential customers is relatively small • Therefore, advertising is relatively expensive, and difficult to measure its effectiveness • Company controls message content, message format and message source • There are legal, voluntary and social constraints that advertisers need to recognize • Most hospitality advertising is aimed at consumer and business markets • The following media is used in advertising campaigns: • online media • newspapers, magazines, tourist board publications, guide books • broadcast media (radio, cinema and television) • outdoor media (billboards and posters) • ambient media (buses, taxis, over-ground and underground trains, gas and petrol stations) • Media selection depends on campaign’s marketing communication objectives, the audience, the medium delivers, and the available budget

23. Figure 9.5 Magazine advert targeting the family market

24. Sales promotion and point-of-sale • Primary role sales promotion and point-of-sale material is to stimulate short-term or immediate sales • Hospitality organizations use POS for: • new product launches (to attract trial purchase) • during low and shoulder periods (to boost demand) • customer contact points (to promote in-house offers) • Effective sales promotions are designed in advance • Many sales promotions are bundled products at attractive prices, with more value for customer • Design and pricing of packaged sales promotions must be: • carefully targeted • competitive (competitors will plan their own sales promotion) • costed – both the level of the discount and the promotional costs • creative! • for a fixed time period only

25. Figure 9.6 Point-of-sale collateral

26. Public relations (PR) • Aim of PR is to generate positive publicity in media; ‘free’ publicity, because space and time are not bought • Effort, creativity and networking required to generate media coverage is not cheap • PR profession (structured career pathway, formal examinations) • Major hospitality corporations employ PR managers in head offices • Corporate PR role includes: • managing publicity aimed at financial stakeholders and political bodies • crisis management (e.g. when a case of food poisoning is reported in the media) • promoting corporate image and specific brands • PR needs activities, events, ‘human interest stories’ that generate brand awareness and raise brand image • Success measured by print column inches and air time minutes, but sales generated by PR are difficult to measure

27. Sponsorship • Sponsorship used with PR to obtain publicity • Major component in financing sports, arts, cultural activities and events • Football teams, tennis stars, golf tournaments, music festivals, art exhibitions, literary events, etc., depend on other organizations for financial support • Hospitality companies provide financial donations or complimentary services such as accommodation in sponsorship arrangement for publicity • Sponsored activities promote the name of sponsor on clothes, equipment, posters and vehicles during the event • Sponsorship is the focus of a marketing communications campaign • Key customers invited to sponsored event as VIPs • Cost of sponsorship linked to media coverage generated

28. Direct marketing • Direct marketing (DM) is direct-to-consumer communication direct mail, door drops, SMS (text messaging), email promotions • DM informs and persuades customers to respond to offer • DM in larger companies use loyalty club data for regular communications; also popular with smaller hospitality businesses • Leaflets, newsletters and seasonal greeting cards are cost effective and help maintain customer relationships • DM is powerful marketing communication tool: • company has complete control of the message, medium and timing of its delivery • customers and prospective customers are precisely targeted • message easily personalized • removes intermediaries and commissions • impact of the DM campaign has immediate results • costs and return from a DM campaign can be measured

29. Planning marketingcommunication campaigns • Set objectives • Set budget • Define target audience • Agree marketing communication strategies and tactics • Plan implementation • Measure results of the campaign

30. Marketing communication budgets Affordable • small hospitality operators make promotional decisions on what is affordable • owners respond to media offers, make judgments on ‘gut instinct’ Percentage of sales • many hospitality businesses set marketing budgets as a percentage of last year’s or next year’s sales • ‘norm’ for marketing costs depends on hospitality sector • problem that communication budget is not linked to business needs

31. Marketing communication budgets (continued) Competitive parity • major hospitality brands fight for market share • significant marketing communication activity • aware of competitors communication campaigns • competitive parity budget concept based on spending a similar amount of money on marketing communication activity as competitors • if competitor tries to increase share of voice (SOV) by increasing budget, then competitors match increase in spending to maintain their SOV Objective and task • objective and task approach adopts systematic method by setting objectives and agreeing the marketing communications tasks needed to deliver those objectives • costs are calculated on communication activities • marketing communication budget agreed • too complex for smaller companies • preferred method of larger organizations

32. Push and pull strategies • Alternative strategies for managing sales via intermediaries • Push strategy prioritizes intermediaries as the main target audience • Marketing communication activities focus on intermediaries who expected to influence end-users buy brand • Pull strategy prioritizes marketing communication activity to end-users • Aims to make brand customer’s first choice by direct decision, or when discussing requirements with intermediary See Figure 9.7

33. Figure 9.7Push and pull strategies

34. Measuring the results • Effective measurement of results based on setting measurable marketing communication objectives • Marketing research measurements (brand awareness/image) • companies employ market research agencies to establish current levels of awareness and image before campaign starts • provides benchmark setting a measurable objective • during/after campaign, agency uses same research methods to establish changes in levels of brand awareness and brand image • Response measurement and ROI • measurable behavioural response as measure of effectiveness • calls to the contact centre, website visitors, coupon redemptions, competition entries, bookings • many people/processes involved in monitoring and reporting behavioural response • reservations department, or the telesales bureau, record number of bookings • online promotions and bookings are easily monitored using appropriate technology • advertisements ask consumers to quote a code when calling for more information • However, some campaigns stimulate lots of interest and few sales – so conversion ratio of turning enquiries into bookings is critical

35. Conclusion • Marketers are responsible for communicating the hospitality offer • Most visible part of marketing • Managing a communication campaign involves: • agreeing available budget • setting campaign objectives • delivering a consistent message across all elements of campaign • creativity increases effectiveness of campaign • agencies provide professional, specialist marketing communication services • marketing communication activities should be measured and evaluated

36. References and further reading • Chaffey, D., Ellis-Chadwick, F., Johnston, K. and Mayer, R. (2006). Internet Marketing: Strategy, Implementation and Practice (3rd ed.). Prentice Hall. • Lander, N. (2009). ‘Beware the Small Print’. Financial Times, April 25/26, Arts and Weekend, p. 4. • McCabe, S. (2009). Marketing Communications in Tourism and Hospitality: Concepts, Strategies and Cases. Butterworth-Heinemann. • Morgan, N. and Pritchard, A. (2000). Advertising in Tourism and Leisure. Butterworth-Heinemann. • Reich, A. Z. (1997). Marketing Management for the Hospitality Industry. John Wiley • Shoard, C. (2007). ‘I have a lot of curiosity’. Financial Times, June 23/24, Life and Arts, p. 3. • Smith, P. R. (1995). Marketing Communication: An Integrated Approach. KoganPage • TRI HotStats. (2010). TRI Hospitality Consulting. London: TRI. • Wai-sum Siu, W.-S. and Fung, M.-Y. (1998). ‘Hotel advertisements in China: a content analysis’. Journal of Professional Services Marketing (now published as: Services Marketing Quarterly), 17 (2), pp. 99–108. • Yeshin, T. (1998). Integrated Marketing Communications. Butterworth-Heinemann. • Zeithaml, V. A. and Bitner, M. J. (2003). Services Marketing (3rd ed.). McGraw-Hill.