Hospitality 360 Flashcards
What is competitive structure?
A way of evaluating how well your business and its products or services are performing compared to your competition.
What is the cost-benefit analysis?
The process of examining potential changes to your business to see if the benefits outweigh the cots.
What is a force multiplier?
Tools that help you amplify your effort to produce more output.
What is throughput
The amount of materials that pass through a system - the effectiveness of your value stream.
What is a value stream?
The set of all steps from the start of your value creation until the delivery of the end results to your customer.
What is competitive positioning?
A marketing strategy that refers to how a marketing team can differentiate a company from its competitors.
What is situational analysis?
The process of gathering information on the internal and external environment to assess the firms current SWOT.
What is a consumers black box?
How a consumer processes external stimuli from your marketing mix.
What is MAD?
Mean absolute deviation.
What is pricing power?
Your firms ability to increase pricing over time. The less value you capture, the greater your pricing power.
What are the 4 ways to increase revenue?
- Increase the number of customers.
- Increase the average transaction size.
- Increase the frequency of transactions.
- Raise Prices.
What is the cardinal sin of marketing?
Being boring.
What is a trade off?
A decision that places higher value on one of several competing options.
What is “intermediation” and “disintermediation”?
Intermedia is when you ad a party between a buyer and seller. Disintermediation is the opposite.
What is bundling and unbundling?
Bundling is when you repurpose value that you have already created to contain even more value by combining multiple small offers into one larger offer. Unbundling is the opposite.
What is total asset ratio?
Indicates how many dollars of assets a company deploys in order to generate each dollar of sales.
What is content marketing?
A strategic marketing approach that focuses on creating and distributing relevant, consistent, and valuable content to attract and retain a clearly defined audience and drive profitable transactions.
What is a distribution channel?
The path a product or service takes on its way to the market.
What is pickup forecasting?
A forecast based on the current reservations on hand plus the projected pick-up, based on booking trends.
What is a demand-control chart?
A chart to help determine when to change your rate based on demand.
What is modularity?
Combining multiple forms of value to offer value in multiple ways.
What is operating profit margin?
How many cents of every dollars the firm retains after accounting for not only production costs, but everything else (Except the cost of debt & taxes).
What do hotels sell?
Time.
What is total asset turnover?
Provides information on how well a firm is leveraging all of its assets in the generation of sales.
What is the mercenary rule?
Don’t start a business for the money alone. Everything always takes more effort than you expect.
What is the market leverage ratio?
A ratio that calculates the portion of the firms capital that is contributed by lenders.
What is a brand strategy?
A holistic approach behind how a brand builds identification and favorability with customers and potential customers.
What is visualization?
The most effective way to get people to want what you have to offer is to encourage them to visualize their lives if they accept your offer.
What is a brand promise?
The articulation of what the experiential take away from the brand will be.
What are the core human drives?
- Drive to Aquire.
- Drive to bond.
- Drive to learn.
- Drive to feel.
- Drive to defend.
The more you connect with, the better.
What is reactivation?
The process of making your customers buy from you again.
What is education-based selling?
The process of making your prospects better and more informed customers.
What is option fatigue?
Too many options overwhelm customers.
What is consumer involvement?
The state of mind that motivates a consumer to make a purchase, or the importance a consumer places on a product.
What is a damaging admission?
An acknowledgement o the potential risks or drawbacks an offer may have.
*Can build trust.
What is a service?
A service is a form of value where you provide some type of benefit to someone in exchange for a fee.
What is a service terrorist?
A person who goes online and complains about any and everything.
What is the AEIOU method of listening?
Appreciative
Empathetic
Inquisitive
Open Minded
Understanding
What is agency?
A business model that focuses on marketing and selling an asset you don’t own.
How do you implement revenue management strategies?
Establish a baseline.
Understand the causes.
Develop a strategy.
Implement the changes.
Monitor the impact.
What is a “Hassle Premium”?
A premium you can charge for things people believe are too difficult or too much of a pain to take care of themselves.
What is audience aggregation?
Focusing on capturing the attention of a group of people with similar characteristics, then selling access to that audience.
What is the Iron Law of the Market?
Even the best idea will fail if no one wants it.
What are the 3 types of ratio analysis’ s that evaluate financial performance?
Profitability.
Asset management.
Capital and solvency.
What are the 4 dimensions of services in marketing?
- Intangibility.
- Perishability.
- Heterogeneity.
- Inseparability.
How is customer value defined?
The difference between what a customer believes they get from owning or using a product, and the cost of obtaining the benefits.
A want combined with purchasing power is called what?
A demand.
What 3 questions kick-start the marketing process?
- Who are our cusmters?
- What are their wants and needs.
- How can we satisfy them better than our competitors?
What are the seven P’s of services marketing?
- Product
- Place
- Price
- Promotion
- People
- Physical evidence
- Process
What is field testing?
Creating, using and iterating your offering before offering it to customers.
What is a minimum viable offer?
Offering the least amount of benefits possible to a customer to make the sale.
What is shadow testing?
Selling an offer before it actually exists, it lets you get critical feedback.
What are the 4 pricing methods?
- Value comparison.
- Price comparison.
- Discounted cash flow/net present value.
- Replacement cost.
What is perceived value?
How much a customer will be willing to pay for your offer.
What is an end result?
It is what you should be focusing on, it is what your offer provides. People don’t buy books, they buy knowledge.
List examples of capital structure and solvency ratios.
Quick Ratio
Current Ratio
Book Equity Ratio
Equity Multiplier Ratio
Market Leverage Ratio
List examples of profitability ratios.
Gross Profit
Net Profit
ROA
ROE
Operating Profit
What are critical assumptions?
Facts or characteristics that must be true in the real world for your offer to be viable.
What is the “point of market entry”?
The point where a potential customer becomes receptive to your offering.
What is qualification (marketing)?
The process of determining whether or not a prospect is a good customer before they purchase from you.
What is remarkability?
The act of being remarkable, which is the best way to attract attention, makes your offer worth purchasing.
Marketing is the tax you pay for not being remarkable.
What is a product?
A self contained unit of economic value.
What is “relative importance testing”?
A method that helps you determine what people actually want by asking them questions designed to stimulate real life trade offs.
What is ratio analysis?
An attempt to measure how well a company is leveraging its assets to generate sales.
Price transition shock.
A change in the price that shifts the market you appeal too.
What is addressability?
A measure of how easy it is to get in touch with people who might want what you are offering.
What is predictability?
Providing exactly what the customers expect.
What is a Brand Proposition?
A statement about your company that demonstrates to your customers the benefits of using your brand.
What are the three pillars of psychographics?
Activities
Interests
Opinions
What is “receptivity”?
Receptivity is a measure of how open a person is to your message.
People ignore what they don’t care about.
What is RevPASH?
Revenue per available seat per hour.
or
Revenue per available square foot per hour.
What is RRM?
Restaurant Revenue Management.
What is risk reversal?
A strategy that transfers some or all of the risk from the buyer to the seller.
What is “attention”?
The most important rule of marketing - attention is limited.
What is the definition of revenue management?
Achieving the most amount of value possible for the company while delivering the most amount of value possible to the customer.
What are levels of awareness?
How much a customer knows about their problem, potential solutions, and your offer.
What is a demonstration?
The way to demonstrate to your customers that your sales and marketing claims are true.
What is a prototype?
An early representation of what your final offer will look like.
Define Business
- Creates and delivers something of value.
- That people want or need.
- At a price they are willing to pay
- In a way that satisfies the customers needs and expectations.
- So the business brings in sufficient profit to make it worthwhile for the owners.
What is quality?
Fitness for purpose.
Quality = expectations - performance.
What is a probable purchaser?
The type of person who is perfectly suited to what you are offering.
What is expectation effect?
The effect whereby a customers perception of quality relies on expectation and performance.
Quality = expectations - performance.
What is a booking curve?
A tool to show how bookings materialize over a certain period of time.
What is ROH?
Reservations on hand.
What is DBA, WBA, and HBA?
Days, weeks, and hours before arrival.
What is a booking pace?
The rate at which reservations materialize over time.
What is the “service recovery paradox”?
A situation in which a customer think more highly of a company after the company has corrected a service issue.
What are the 3 universal currencies?
Time
Money
Opportunity Cost
What is hotel revenue management?
Selling the right room to the right customer at the right price at the right time.
What is a set point?
A minimum or maximum level of a reference level. As long as you are over/below the set point, you’re fine.
What is an earned media channel?
Consumer generated social media content.
What is a competitive set?
A group of hotels (or anything) you compete with at your property.
What is preoccupation?
The state of being preoccupied. The best way to break preoccupation is to provoke a feeling of curiosity, surprise, or concern.
What are the three dimensions of negotiation?
Setup
Structure
Discussion
What is iteration velocity?
The speed at which you can get through your iteration cycle.
What is framing?
The act of emphasizing the critical details of your offering and deemphasizing the others.
What is prime cost?
The total direct cost of production, including raw materials and labor.
What is constrained demand?
The demand when held back by rules, restrictions, and availability.
Supply side focused.
What is unconstrained demand?
Demand focused on pure customer demand, unfettered by supply constraints.
What are economic values?
Values people consider when considering a purchase.
1. Efficacy. 2. Speed. 3. Reliability. 4. Ease of use. 5. Flexibility. 6. Status. 7. Aesthetic appeal. 8. Emotion. 9. Cost.
What is a shoulder night in a hotel?
The night on either side of a peak day.
What is the allowable acquisition cost?
The marketing component of lifetime value. The more a customer is worth, the more you can spend to attract them and make them happy.
Lifetime value - value stream costs / customer base.
What is persuasion resistance?
A natural resistance against people who are trying to track you into agreeing to something not in your best interest.
What is a length of stay control?
A revenue management tool that requires customers to stay in a hotel for a required number of nights.
What does P.I.N stand for?
Position, Interest, and needs.
Used when stakeholders have varying positions. They may find agreement on interest and needs.
What is a fixed asset ratio?
A ratio that show sales generated for every dollar of fixed assets a company owns.
What does operating profit measure?
A firms ability to control operating expenses relative to sales.
What is a quick ratio?
Like the current ratio, measures a firms ability to pay short term obligations, but excludes inventory.
List examples of asset management ratios.
DSI
DSO
CCC
DPO
Days to turnover
Total asset turnover
What are the 5 parts of every business?
- Value creation
- Sales
- Marketing
- Value delivery
- Finance
What are the five formal ratios?
Operating
Productivity
Activity
Liquidity
Solvency
What is the iteration cycle?
A process to improve anything over time.
Watch, Ideate, Guess, Which, Act, Measure
What are the 5 barriers to purchase?
It wont work
It wont work for me
Loss aversion
Its too difficult
I can wait
What are the 10 ways to evaluate the market?
- Urgency
- Pricing Potential
- Cost of Value Delivery
- Customer Acquisition Cost
- Uniqueness of Offer
- Speed to Market
- Up-sell Potential
- Up-Front Investment
- Evergreen Potential
- Market Size
What is Value Capture?
The process of retaining some percentage of the value provided in every transaction
What is the benefit of hidden competition?
The benefit of knowing from the start that there is a market of paying customers.
What is social status?
A relative ranking of power of stats in a group.
What is the barrier to competition?
Every improvement to make your value stream better makes it harder for your competitors to compete.
What three things tell us how well our rooms are being managed?
Occupancy %
Average Daily Rate
RevPAR
What is lifetime value?
The total value of a customers business over the lifetime of their relationship with your company.
What is a rate fence?
Logical rules or restrictions designed to allow customers to segment themselves into categories based on needs, behavior, or willingness to pay.
What is an interest coverage ratio?
Measures a firms ability to cover interest expenses with cash flow generated from operations.
What is the current ratio?
Measures a firms short-term solvency, its ability to generate sufficient cash to meet obligations.
What is an accrual?
An expense incurred or revenue earned where cash has not changed hands.
What is restaurant revenue management?
Making choices and managing trade-offs between space, time, and price.
What are the six necessary conditions for revenue management?
- High fixed costs and low variable costs.
- The ability to take reservations.
- Relatively fixed seating capacity.
- Varied time demand.
- Varied pricing sensitivity.
- Perishable inventory.
What is a range (reference level)?
A spread of acceptable values, with an upper and lower level.
What is an error (reference level)?
Anything above zero is out of control (customer service complaints).
What does gross profit measure?
A firms ability to control the level of production expenses relative to sales.
What is differed income?
Money received for goods and services which have has not yet been earned.
What is DPO?
Days payable outstanding.
What is a fixed asset?
A asset that will not become liquid in the next 12 months.
What are the 4 rate fences?
- Physical location.
- Controlled availability.
- Customer charachteristics.
- Product line.
What is a current asset?
An asset that your company plans to convert to cash in the next 12 months.
What is the crusader rule?
Don’t enter into a business purely for the passion, you have bills to pay.
What is MAPE?
Mean absolute percentage error?
What is a hook in marketing?
A single phrase or sentence that describes an offers primary benefit.
What is DSO?
Days sales outstanding.
What is DSI?
Days sales in inventory.
What is a reference level?
A range of perceptions that indicate a system is under control.
What are the 12 forms of value?
- Product
- Service.
- Shared resource.
- Subscription
- Resale
- Agency
- Lease
- Audience aggregation
- Loan
- Option
- Insurance
- Capital
What is AIDA (Marketing)
The cornerstone of modern marketing strategy. A = Attention I = Interest D = Desirability A = Action
What are the three competitive strategies for corporations?
Low cost leader
Differentiation
Niche Strategy
What is the low cost leadership strategy?
A strategy where you attempt to have the lowest cost structure so you can deliver the lowest prices to your customers.
What is the differentiation strategy?
A strategy to provide some source of value that is important to customers that they are willing to pay more for, or patronize your business more frequently than the competition.
What is a Niche strategy?
The strategy of finding a target market that competitors have largely chosen not to serve.
What is a market penetration strategy?
A firm using existing products to penetrate existing markets, grab a larger share, or increase sales.
What is market development?
Using existing products to develop new markets.
(maybe a market over seas)
What is a facilitating product?
The goods or services that are essential for a consumers satisfactory use of the core product.
What is a supporting product?
The nice to have elements that support the core product. They help a customer derive maximum value out of the product.
What is a core product?
A product that is the company’s primary promotion, service, or product.
What is a feature innovation?
A change to the existing core customer experience.
Example, laptops or gaming units in the rooms.
What is a Form Innovation?
A change to the existing customer experience that creates a new core experience.
Example - A hotel redesign.
What is a structural innovation?
A change that alters how the service is delivered.
Example - a slot machine where you wear a 3d headset.
What is a experience innovation?
A type of innovation that changes the experience of the customer.
Example - a smaller boutique hotel that is also called Circa.
What is a service innovation framework?
A way to categorize your innovation to gain perspective on the level of effort and change that might be required to implement your innovation.
What is the stage/gate model?
A services project management technique in which a initiative is divided in phases, separated by decision points. At each phases, a decision maker moves the initiative along.
What is the product lifecycle?
Describes the growth stages and eventual demise of service concepts.
What are the 5 stages of the product life-cycle?
Development
Introduction
Growth
Maturity
Decline
What is the Ansoff Matrix?
A model used to identify revenue generating opportunities for businesses.
What is the market penetration strategy?
Increasing sales of existing products to existing customers.
What is the product development strategy?
Introduce new products to an existing market.
What is the market development strategy?
Entering a new market with existing products.
What is a diversification strategy?
Entering a new market with new products.
What is a re-experience cue?
A inexpensive of free take-away that serves as a memory of the experience the guest enjoyed.
What are the three P’s of service?
People
Process
Physical evidence
What is a customer journey map?
A diagram that depicts the stages customers go through when interacting with a company.
What are the 4 methods hotels can use to set their prices?
Single rate pricing
Cost-based pricing
Competitive Pricing
Demand-Based Pricing
What is a reference transaction?
How individuals will decide what is a justifiable price to pay for a product or service by comparing it to other reference prices.
What is the concept of Dual Entitlement?
A rule that says it is fair for consumers to pursue lower prices and fair for companies to raise prices when their costs increase.
What is pricing science?
The application of social and business science methods to the problem of setting prices.
What is SEO?
Search Engine Optimization
What is SEM?
Search Engine Marketing.
What is user generated content?
Any content—text, videos, images, reviews, etc.—created by people, rather than brands.
What is a click-through rate?
The number of clicks a brand receives on paid ads or organic listings per the number of impressions (the number of times a brands ads/listing appeared on a search engine results page).
What is a conversation rate?
The percentage of visitors to a website who take action, such as those who make a booking or purchase.
What is a qualified available market?
The individuals or organizations in a particular market who are interested in a product, can afford it, and are not prevented from purchasing based on any other barriers.
What is the chain ratio method?
Involves multiplying a base number by several adjusting factors that are believed to influence market sales potential.
Q = n x q x p
Q = total market demand, N = number of buyers, Q = quantity purchased on average per buyer per year, p = price per unit
What is channel management?
A process where the company develops various marketing techniques as well as sales strategies to reach the widest possible customer base.
What is a promotion?
Short term incentives designed to stimulate demand.
What is price?
An exchange of value.
What is competition-based pricing?
A pricing model where your price points are heavily influenced by your competitors.
What is cost-plus pricing?
A pricing method where you total your costs and then add a markup.
