Marketing and sales: Cabo San Viejo
group a marketing analysis a case study “cabo san viejo.” I upload file. My section “marketing sales.” A small section. Break 3 pages. Include graphs citations good. The question answer paper “cab implement a loyalty program” group
Marketing and sales: Cabo San Viejo
According to Michael Porter’s Five Forces analysis, every company must position itself within a certain segment of the market, either taking a global strategy, or focusing on a particular demographic (Porter’s five forces, 2010, Quick MBA. For Cabo San Viejo, the focus of the company’s marketing and sales is clearly upon the high-end of the vacation traveler market. Rather than focusing on a narrow market segment, the company seeks to attract a wide range of high-end consumers, given the varied offerings of the resort. Marketing and advertising is currently a very small part of the company’s budget, and the emphasis of the advertising has always been on ambiance, rather than conveying the tangible rewards of the product. Advertisements are showcased in online, print, and radio and television venues. Little direct marketing is used, presumably because this would not please the high-end clientele. The only exception is a glossy, magazine-style publication called the Cabo San Viejo News, sent to former customers to encourage them to return. Cabo does not purchase or use customer lists for other forms of direct marketing, perhaps feeling that general marketing through direct mail would be insufficiently targeted to the necessary income bracket.
Unfortunately, the promotional strategies that do exist for Cabo San Viejo seem more advantageous for their partners than for the resort itself, such as the complementary $150 Neiman Marcus gift-card given to guests. While this suits the high-end image of the resort, few people will come to the resort specifically to this promotion, and the greatest beneficiary is likely to be Neiman Marcus, who will benefit from sales. Consumers who receive gift certificates are often pleasantly introduced to companies they might not otherwise have patronized and spent more than the value of the certificate. As a condition of the relationship, Cabo San Viejo could have requested a mutual ‘sharing’ of both companies’ customer lists, given the likely crossover between the demographic of the Texas-based luxury store and Cabo, but it did not.
A new strategy is demanded to attract returning customers, which makes the concept of a loyalty rewards program so attractive. A loyalty program would specifically encourage consumers to return to the Cabo resorts. It would also take the exclusive focus off of the Palm Springs location, and use a more broad and all-encompassing approach to promote the different resorts offered by the company. A consumer wishing for greater variety in travel might go to Palm Springs and then go to another company’s spa in a different location. But a rewards program gives consumers the incentive to try out different Cabo-branded retreats in new areas, or even the CaboDaySpas, an under-marketed aspect of the brand. By offering different types of rewards, based upon days spent at various locations or dollars spent, very loyal customers can get additional services. And even casual users can get discounts that might encourage them to patronize the lower-priced aspects of the brand, like service at a day spa.
The fact that Cabo San Viejo maintains a sales force is useful in deploying loyalty program, because there is an automatic base of sellers who can inform the customers about the program’s existence. The sales staff is well-managed, and has a clear target benchmark, namely to keep the occupancy of the Palm Springs location at 270. However, once again, to grow the brand, specific benchmarks for other resorts and services would make the sales staff more focused. For example, increasing the number of returning customers, of people who sign up for the rewards plan; increasing the number of customers who buy additional services or make use of other Cabo-branded items; and expanding the patronage of the day spans should all be tracked and goals and benchmarks should be sent on a consistent basis for improving these numbers.
A loyalty program would improve Cabo’s ability to enhance enrollment during times of the year that are traditionally ‘slow’ in terms of turnover. Before, was has been necessary to reduce summer rates by 35% because of slow sales. However, by giving customers additional rewards points and services during these seasonal downturns, traffic to the spas would likely improve.
Expanding the outreach to new customers seems essential and advertising the varied services offered at Cabo is a vital component of creating a wider and more expansive branding strategy. At present, so much of the company’s marketing is focused upon a single, large destination location, which does not give adequate attention to Cabo’s day spas, although regular patrons might use these venues on a more consistent basis. Additionally, despite its wide targeting of the high-end market, consumers often have a very specific image of the spa as very austere in terms of its food and the services it offers. Changing this focus to show that Cabo also offers desirable services such as massages, seaweed wraps, or other ‘pampering’ services would expand the client base. But for customers to discover these options, more aggressive marketing of the loyalty program would be required. Telling consumers they can join the loyalty program and get a free massage if they stay for a certain amount of days at the resort, or get a discounted aromatherapy session at a day spa if they join the rewards program and spend over a certain amount are examples of promotional deals that would attract attention to the brand and generate excitement about the new program.
References
Porter’s five forces. (2010). Quick MBA. Retrieved February 15, 2011
at http://www.quickmba.com/strategy/porter.shtml