INTRODUCTION TO SALES AND MERCHANDISING
Sales and merchandising are the two prominent terms which are vital for starting a business. Both are the parts of marketing mix, which comprises product, pricing, promotion and place. Sales and merchandise are the two functions which are closely related but also they have some key differences (Feltenstein, 2010). Sales take place when the customer selects the products and completes the purchasing transaction. Whereas merchandising is the process of presenting goods for sale in a retail outlets in such a way that it influence customer buying decisions. This report discusses about the key components of product and how the product mix contribute to sales and profit. In this report Marriott hotel considered as an example. It also put a light on how market segmentation contributes to maximize sales and the describing the external sales techniques. Marriott Hotels and Resorts is one of the leading hotels in the UK and has constantly been ranked among the favorites since its inception back in 1957. One of the main reasons behind its success can be understood through fact as to how it sells its various products and services in the market. Special attention is paid to making sure that the needs and wants of clients or guests is satisfied.
Task A Elements of product in a hotel
Lo 1.1/1.2 how the product mix contribute to sales and profit
A product is just a marketing offering that someone wants to consume and purchase. It may either be tangible or intangible. A hotel offers guests a full range of accommodations and services which comprises room service, business service, public dining and so many other services and products (Hayes and Nenemeier, 2009). Rooms are the product of hotel which they serve to the customers. The key components of Marriott hotel room are:
Products of the hotel: The management at Marriott have paid attention to fact that they need to have many rooms so as to cater to needs of the clients in a much better manner (Johnson and Vanetti, 2005). In this regard, there are 156 rooms in Marriott hotels to which the staff as well as management pay a lot of attention to. There are three main restraints in the hotel where guest can have a good time. The three restaurants are: The Library Lounge for Afternoon Tea & Private Events; Leader’s Bar & Outside Terrace for drinks/snacks/dinning; and Gillray’s Steakhouse & Bar (Lea-Greenwood, 2008). While there is one spa at the hotel situated at County Hall.
Product mix is a range of associated products that a firm sells. The product mix contributes to sales and profits through sales mix. The hotel can use exclusive selling points highlight in their Room. They can develop marketing metrics according to promotional pricing strategy. Hotel trey to focus on premium class guests by offering them better services. They also develop unique strategy and provide special offers like memberships. Other than that, they also give exclusive offers such as holiday offers and spa offers and many more.
Product mix also contribution in improve the sales of hotel. The information of Product and service are flow through use of advertising, direct marketing and the Internet. The hotel also follow a unique pricing strategy to magnetize customers like offer room for premium class. They offer huge discount on their products. Marriott uses various kinds of promotion activities like public relations, mail campaigns to aim customers as well as retain existing customers. The location of hotel is at prime situation in city and provide first class facility so guests ready for spend money. The facilities offer by Marriott is luxurious rooms and quality service and thet also develop a relationship with the companies.
Lo 1.3 How market segmentation contribute to maximize sales
Market segmentation is the process of dividing a large homogeneous market into identifiable segments having similar wants and needs. The main objective of market segmentation is to plan a marketing mix that exactly matches the expectations of customers in the targeted segment (Nickson, 2013). Segmentation is more about customer’s desire than about the business needs to be to those consumers. Once the company has identified its market segment opportunities, it has to evaluate the different segment and make a decision on how many and which ones to aim. There are four main criterions on which market that the company operates in can function much effectively. One of them is that of the demographic segment. This type of market is divided on the basis of age, income, lifestyle, etc of customers of the target market. While geographic market segmentation states that market should be divided on the basis of geographical boundaries, i.e. on the basis of countries and/or regions. Psychographic segmentation is done keeping in mind the lifestyles of customers. Herein attention is paid to measuring buying behavior of clients and then dividing them. On the other hand, behavioral segmentation divides the customers according to knowledge of and attitude towards the product(s) that they possess. Management of the hotel have developed their operations in such a manner that they could cater to the needs of customers or guests who belong to demographic; geographic and psychographic segmentations.
By segmenting the market, the company increases the benefits from product or service. And if the need of that particular segment which is targeted by the company is fulfilled so it delivers a higher value proposition, and it also increase the chances of a sale (Ransley and Ingram, 2001). If the company continuously performs well in segmenting the market, it also can increase the value of the customers through repeat business. Market segmentation is a very useful and effective process which has to be kept in mind by management as well as marketing department of the corporation. It can be supported through fact that the process of market segmentation, to a great deal influences profit earning capacity of the organization. In this regard it may not be wrong to say that being careful while carrying out this process may prove to be a very good way for the firm (Wong, 2004). Influence of market segmentation on profits can be understood through fact that it would lead to such a situation where the business firm can know their strengths and weaknesses. By segmenting the market, management would be in a position where they would know what are the needs and wants of their various customers and find out the ways through which they can be met.
Task B Describe the external sales development techniques
Lo 2.1 Factors affecting buyer behavior
Buying behavior is the decision processes of individual involved in buying and using products. Organization needs to analyze buying behavior for; buyer reactions to the marketing strategy of the company and create a marketing mix that satisfies customers (Yost, 2006). While purchasing any product the customer is gone through a decision process and it consists of five stages: problem recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior. Buying behavior of the consumers is influenced by so many major factors:
Cultural factors: It comprises consumer’s culture, subculture and social class. These factors are often intrinsic in the values and decision processes of individual (Nielsen, 2011).
Social factors: It consists of different groups such as reference groups, member groups and aspirational groups, family, roles and status. This clarifies the outside influences of others on the purchase decisions of people either directly or indirectly.
Personal factors: In this factor variable such as age and lifecycle stage, economic circumstances, occupation, lifestyle, personality and self concept are included (Buttle, 2014). These may explain why the preferences of buyers frequently change according to the situation.
Psychological factors: This factor affecting the purchase decision of buyer, it includes motivation (Maslow's hierarchy of needs), learning, perception, attitudes and beliefs.
One of the main factors which affect overall performance of the company is that of psychological and cultural factors. This is so because of reason that Marriott is an international hotel, meaning that it functions in the global arena, because of which it has to face many of the above mentioned factors. All these factors effect on customers and help to develop product and brand preferences. While some of these factors cannot be directly controlled by marketers, understanding of their impact is very important as marketing mix strategies can be designed to appeal to the preferences of the target market (Halepete, Hathcote and Peters, 2005).
Lo 2.2 Advertising media for sales and development situations
Advertising in business is a form of marketing communication used to support, influence or manipulate a group of people. There are different means of advertising such as newspapers, magazines, billboards, radio, television and internet. This all are the means through which promotional messages are transferred to public using words, pictures and speech.
Marriott can use different advertising media to promote it products into the market. The effective way of advertising for hotel is internet (Hill, 2013). With the help of this media they can increase their brand awareness and making strategy that they can reach to their target audience. Through this effective means of advertisements they get good response and it helps in:
Televisions: For hotels as well, marketing and promotion is of great importance. In this regard, advertisements through televisions are one of the most important measures because of reason that it has the ability to reach to a large number of audience and influencing their behavior. But by the hospitality firm it is not used very extensively.
Radio: It is another very useful method which can be used by management as well as marketing department of the hotel, so as to reach to a great number of people. Though it is characterized to have a very wide and deep reach, it is not given too much of importance (Johnson and Olsen, 2009).
Websites: In the modern age it is one of the best methods through which company can promote its various good and services in the market. Not only does it have a very wide reach, but it also is a very effective tool in marketing and promoting goods.
Lo 2.3 Evaluate external merchandising to maximize customer value
Merchandising is described as an art in which products are displayed in such a way that it helps in increasing sales and inspires consumers to spend more on that product. External merchandising is divided into three categories:
Mass merchandising: Selling of merchandise in large quantity to many people is mass merchandising (Link, 2012). It is broadly distributed and purchased usually in bulk. In this strategy hotel target every guest by offering them same type of products and services at appropriate price.
Personalized merchandising: It is one of the cost effective means of all promotional media. By understanding the basis of the customer’s needs company can increase its revenue. Customer created product lists decision through navigated site, base on communications, reviews and rating and all such factors taken into consideration to focus individual personality (Miller and Rice, 2006).
Segmented merchandising: In this category, hotel constructs separate catalogues for their guests to meet the need according to their interest. In order to classify in this category there are two factors product and demography which are taken into consideration by the company.
There are so many advantages of external merchandising; it retain ideal customer and serve them better quality services (Piercy, 2007). It also helps in increasing customer satisfaction, improve communication with customer’s and profitability will be increase, segment the market effectively.
Task C Describe the internal sales promotion and merchandising
Lo 3.1 Influence of design and layout on customer spending
There are so many factors that can influence the spending of customers. Marriott hotel is the world class hotel industry provides services for premium class people. If the location of the hotel is at any pick point so it attracts more and more customers and force them to invest or spend their money (Tesone, 2005). The site of the Marriott hotel is so attractive which increases the glow of hotel. If focusing on internal structure of hotel, the interiors of Marriott are very beautiful lucrative, this is famous for its uniqueness. The reception and cherished library of the hotel attract the premium class people. There is an aquarium with so many colorful fishes inside it and so many flowerpots everywhere with good fragrance (Wood and Brotherton, 2008).
Other than this, there are so many other value added services and facilities provide by hotel like separate room for meeting, general room description, entertainment facilities, and business amenities for business people. By providing all such facilities by the hotel they can charge for the services and the guests are happy and ready to money for premium and luxury services (Nelson, 2012). They also introduce exclusive offers such as special holiday offers and spa offers and many more to attract customers so that they can spend more during their vacations. Customers also catch the attention through those offers and schemes and happy to spend huge amount on fulfill their luxurious needs. Other elements which can force customers to spend more are; discounts, quality service and accommodations. For most of the hotel industry flexibility in business create a center of attention for more customers (Buttle, 2007).
Lo 3.2 Review and evaluate the effectiveness of internal merchandising materials
Internal merchandising is a means through which the organization increasing its occupancy rates and maximizing profitability. It is the strategy which plans to establish a strong relationship with the individuals who promote the hotel in the market. Marriott treats their guests and travel agents well so that they can successfully compete for the increasing volume of business (Feltenstein, 2010). Any employee of the hotel who is in a position to encourage an upgraded purchase should be offered with the training and merchandizing plays an important part to turn these employees into salespeople. If they get success in treating their customers in a positive manner so they win customer loyalty and contribute to the hotel's revenue. Internal merchandising plan of an organization comprise of:
- Consistency: It includes all customer contact areas and making beautiful logo, brand name or positioning statement (Hayes and Nenemeier, 2009).
- Coordination: Goods and services provided by company securely linked with marketing plan.
- Condition: It is very basic thing to place menus, table tent cards and guest directories at proper position and the information mention on that clearly portray.
The materials which are included in internal merchandising of hotel offers JW Steakhouse dining suit, which proposes breakfast, lunch and dinner. To attract premium class guests red bar and bourbon bar are the most popular bar present in hotel (Johnson and Vanetti, 2005). The internal infrastructure of the hotel increases the sales and they serve unique facilities like fitness center, parking facility, provide high speed internet access, and etc.
Lo 3.3 Evaluation of different promotional activities
Promotion is the method use by organizations to spread awareness about the product or service to customers and stakeholders. Once the company identified the target market, they will have a good idea of the best approach to reach them, but most of the businesses use a mix of advertising, personal selling, sales promotion and public relations to promote their products or services (Lea-Greenwood, 2008). Organization uses different promotional activities according to the situations. Different promotional activities are:
Advertising: It is a form of communication planned to influence potential customers to select product or service over that of competitors. In order to focus on business class people the hotel can advertise their products and services and convey the message that they offer facilities like auditoriums, meeting & conference rooms with the option of audio visual equipment (Yost, 2006).
Digital Communication: In the modern age it is one of the best ways through which the hotel can look to reach to a wide number of customers; and thus identify their needs and wants. In this regard it may not be wrong to say that the use of social media and online marketing may prove to be very good options for the company.
Sales promotion: It relates to short term incentives that encourage the sale or purchase of a goods or services. They focus on middle class people by offering them cost effective products with good quality (Nielsen, 2011). So that they can not only focus on premium class but also put an effort to attract middle class people. Herein, the hotel uses a variety of tools such as Happy hours, where for some particular time, customers are provided with cheaply priced products in the bars, restaurants and the rooms as well.
Public relations: It is the planned and continued effort to establish and maintain shared understanding between an organization and its public. The hotel provide special offer to the premium class people like memberships, special holiday package, and spa offers so that they can maintain good relationship.
Task D Describe the role of staff in maximizing sales
Lo 4.1 Evaluation of personal selling techniques
Personal selling is direct communication between a sales representative and potential buyers in an effort to influence each other in a buying decision (Wong, 2004). It requires excellent knowledge of goods and services to sell product and stream about their benefits. It has several advantages such as provides a full explanation or information of product, can be directed to exact qualified prospects. If the hotel has developed and maintains good relationship with their clients so customer attracts more towards them (Ransley and Ingram, 2001).
There are so many different ways through which personal sales are execute and contain make contract with other organization, select right employee & train them so they are able to sell products. In order to maintain good relationship and get in touch with their clients the company organizes many events at their hotel (Nickson, 2013). The industry should be involved and take part in cultural and community programs so they attract large amount of people towards their products and services.
Lo 4.2 Influence of operational design on sales revenue
The menu and design is the most important internal marketing and sales tool, management of Marriott hotel has to market products and services to its customers. The hotel has to design its operations in such a way that it can influence on the sales revenue (Miller and Rice, 2006). In order to achieve this they take so many measures and try to implement it in an effective manner so that they can increase their overall profitability and market share. The key things which hotel has to keep in its mind o increase sales revenue:
- Operation should be plan in an effective manner to decrease cost and increase efficiency.
- They use highly efficient HVAC (heating, ventilation and air conditioning) system in their rooms which can save energy and reduce the costs.
- Hotel has to use only those products in their inn which can save energy as well as costs.
- Offering special facilities to guests extra charge for such amenities so they can generate more and more income (Tesone, 2005).
- Communicate with past and future clients and maintain strong relationship and get in touch with smart phones and used many other types of modern technology and social sites.
- Proper use of hotel space for host business gatherings, social events, parties in off seasons.
- In order to encourage customers, providing them appropriate services and request them to refer new guests.
Lo 4.3 Key principles that should be included in a sales training programme
Sales training programme is a very important tool which is used to train sales people so that they can influence people to use their products or services (Wood and Brotherton, 2008). There are so main key principles that should be comprised in a sales training programme:
Knowledge about customers: In most of the training program the trainee give complete knowledge about different category of customers and given ideas about how to treat with premium class and middle class people.
Comprehensive: Through this training the sales people have complete information about services (Hill, 2013). It requires direct expertise, clearly knows about positive and negative aspects of product which offer to customers.
Reliable and consistent: This can help in develop trust through proper communication with client.
Training and Development: It is another area where management or authorities of the hotel should pay a lot of attention to, because it is the only way through which performance and productivity of the employees can be improved. In this regard it may not be wrong to say that through such sessions, the firm can gain long term loyalty from staff members.
Other than this, there are other principles such as technical knowledge related to different departments, develop presentation skills, and the training sessions has quality like performance oriented, modular and interactive.
Through this report it can be conclude that sales and merchandising played a very important role in most of the business. In hotel industry merchandizing affect a lot to the operations and can decide the brand image. This report discussed about key components of Marriott hotel products. There are two and the most important components such as facilities and quality of accommodations. Both include many factors such as quality of furniture, size of room, meeting facilities and many others.
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