Lodging Industry, Sales and Marketing

Lodging industry, sales and marketing play important roles in the survival of individual lodging operations and the industry as a whole. Indeed, the two work together to create a platform for business success in the industry. At the basis of this, according to O'Neill, Hanson and Mattila (2008, p. 355), is customer equity. This means that marketing is driven by customer-centered approaches, which in turn drives sales.

Specifically in the hospitality industry, this means that the relationship between marketing and sales should be investigated to determine the exact drivers of sales in the marketing mix. According to O'Neill, Hanson and Mattila (2008, p. 355), marketing is the direct driver of customer demand. Hence, this is one of the major investments in the lodging industry. According to the authors, marketing and sales expenses average 7.4% of revenues for full-service hotels and 7.9% of revenues for limited-service hotels. Indeed, the sheer volume of these expenses is second only to employee expenditures.

There is a close connection between marketing and sales. Marketing means providing potential customers with information about the lodging operation, its features, and its differentiation from other competitors in the market. Sales refers to further marketing features that occur after customers have been gained. Loyalty programs are an example of such expenses. Furthermore, the lodge needs to differentiate itself from others by means of "special" features such as welcome gifts to customers who book in.

Sales also refer to the excellence of service provided for customers who have been gained. Great expenses are incurred to ensure that the service and products provided at lodges are excellent. This includes expenses such as training personnel and employing specific personnel to attract further customers and retain existing ones. While marketing is therefore used as an initial customer incentive, sales mean that further incentives are created to retain those who already have experience of the lodge in question. This dynamic, in turn, drives competition and provides the industry with the means of its survival.

Market segmentation, targeting, and positioning are also important factors in the marketing process. According to Rudra (n.d.), all markets are made up of segments. This is the result of differential factors among consumer characteristics and their buying behavior. In the lodging industry, this generally relates to budget. Consumers who need lodging are usually those who are on holidays or those who are on business trips. These provide two main segments for the markets. Within these two segments, there are further budget segments, ranging from low to higher and top tier segments.

In the lodging industry, market segmentation would then depend upon the type of consumer that the lodge is aiming to target. Families would most likely form part of the budget segment. Here, the lodge would seek to attract a high volume of consumers in order to gain as much as possible revenue from them. Means at their disposal to target this market would then be sales items such as loyalty programs and marketing items such as special packages or features that are included in a budget price.

Higher-end lodges or five-star establishments would focus more on specialty items that can be offered at a higher price for higher quality. Valet services, designer jewelry, personalized service, and specialty rooms are some of the means at the disposal of higher-end marketers.

These segmentation and targeting practices then combine to provide the lodging operation with its marketing position. Depending upon its offering and consumer target, lodging operations position themselves at certain levels within the market. Five-star hotels that generally target high-end, high-budget consumers would for example position themselves as such in the market, whereas lower-end, budget establishments position themselves at a different segment.

According to Feiertag (2010), hotel and lodge marketers often confuse the terms "leads" and "prospects." The author notes that the distinction between these is the key principle in successful prospecting. First, it is therefore important to distinguish between the terms. According to the author then, a marketing lead refers to an entity or person who might result in a sale. Prospects refer tot those who are in a position to do business with a lodging operation should they choose to do so. Prospecting then refers to the identification of potential prospects by means of investigating leads.

According to Feiertag (2010), leads can be found in several sources, including newspapers, telephone books, business listings, hotel staff and offices, chamber of commerce membership lists, the Internet, and so on. To make this method of prospecting worth the time and effort involved, salespeople must be aware of the best and most productive way to develop leads into prospects.