Hospitality and Tourism Marketing

Final Exam 2020 I

Name: Giuliana Carbajal____________________ Grade: _______________

Professor: Walter Vizarreta Duration: 120 minutes
Instructions:

 Be careful with your writing and orthography. This will be considered in your final
grade. Use a clear and understandable handwriting.
 Read carefully each question before answering. Administer your time effectively.
 Be clear and concise. Unnecessary extension in answers will not increase your
grade.
 May use a calculator if necessary. Notes, books, and other class material are
permitted.
 The exam has four pages.

1. Analyze the CRM strategy used by Hyatt Hotels Corporation. Use the
adequate framework (8 points).

Hyatt Hotels Corporation is an American multinational hospitality company that

manages and franchises luxury hotels, resorts, and vacation properties. The
Hyatt Corporation came into being upon purchase of the Hyatt House, at Los
Angeles International Airport, on September 27, 1957. As of March 25, 2018,
Hyatt has 777 properties in 54 countries. Fortune magazine ranked Hyatt #186
on its list of "America's Best Employers" for 2018.

Note: Make reasonable assumptions for the information you do not have.

Before doing the CRM, we must use the Framework Aaker

1. Potential market analysis: New citys/ countries they want to expand.

2. Analysis of Internal priority markets segments: Female and male from 30

to 65 years old, mainly retired or working on companies with an anual
income mainly medium to high.

3. Product/ Service Analysis: Lodgment/ accommodation 

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4. Current positioning strategy anylisis
a. What are their core values? Mostly integrity, honesty and being
trustworthy.
b. What do they stand for? They stand for trust and integrity, being
tolerant and inclusive with each one of their customers.
c. How are they perceived? Based on some reviews and comments
on their pages, they are perceived as a hotel that has an
outstanding service with proffessional workers that are always
trying to help customers and their own peers, they also have an
incredible capacity of solving any problem instantly.
d. What personality traits are they projecting? Generosity, integrity,
loyalty, kindness and openness.

5. Analysis of competitors positioning strategies 

a. Marriott International: for corporate travelers and accommodate
families, also for receptive tourism.
b. Hilton Hotels & Resorts: for families with kids, empty nesters,
single people and for corporate travelers,
c. Best Western: for corporate travelers and families.

6. Definition of desired positioning 

a. Target: Female and male from 30 to 65 years old, mainly retired or
working on companies.
b. Promise of differential benefits: This hotel chain will give to their
clients a unique experience on service. It is located in some of the
world's most stunning destinations, they offer a wide variety of
specially amenities, contemporary rooms, innovative restaurants
and bars.
c. Reason why: All their services are verified for all what Hyatt Hotel
Corporation is going to offer. The reviews and points on different
pages like TripAdvisor can reassure their services and warmness.
d. Personality/ tone/ style: Adult, Authentic, Serious, Friendly,
Helpful, Hospitable.

7. Value proposition
a. Functional benefits: It offers hospitality services in a safety and
hygiene way and it will provide other services related for
complementing and improving the experience of the guest.
b. Emotional benefits: Hyatt Hotels Corporation is focused on
creating experiences. Its mainly focused on offering a safety and
comfortable atmosphere in the hotel. Everything that this
company has is going provide to their customers a relaxing time.
c. Self-expressive benefits: Caring, educated and cultured guests.
They are careful about their personal choices and they also are
looking for comfort and good quality services, self-cautious and up
to invest in good accommodation which gives them confidence in
their services.

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 After we applied the AAKER Framework, now we’re going to analyze the
CRM Strategy:

Step 1: Identification
Identify and investigate about their possible and top customers and their
preferences. Also, identifying the different type of customers they have at
Hyatt Hotels Corporation

Step 2: Differentiation
They must classify their customers and then we create a database for
them differentiating based also on their needs.
Based on this they need to build a long term relationship with customers
and gaining their loyalty. This will start by offering and giving them the
specific service they want to their specific needs.

Step 3: Interaction
The interaction with the client is crucial because it will be because of them
if they are giving an outstanding service. They must engage their
customers in an ongoing dialogue that will allow them to learn more
information on their particular interests, needs, and priorities.
The interaction with the customers will minimize their inconveniences,
provide them benefits and create a bonding with Hyatt Hotels Corporation.

Step 4: Customization
Hyatt Hotels Corporation needs to personalize the service they are giving.
They must customize the service for their customers taking as
considerations every preference and need they have so they can gain
their loyalty, it will add a lot of value. 

Read and analyze the Phoning in Case and answer the question at the end of
the case (6 points):

Phoning in a Case

You are advising a credit card company that wants to market a prepaid phone card to its
customers. Analyze the conversation between an executive of the credit card company
(the interviewer) and you and then answer the question at the end of the case.

You: What is the role of our company? Do we simply market cards or must we
create them ourselves? Are we expected to provide the telephone
services?

Interviewer: This card will be co-marketed with an outside phone company. We do not
need to perform telecommunication functions.

You: What are our expenses connected with the card?

Interviewer: We must pay 15 cents for every minute we sell. We also have to pay
$1.00 as a start-up cost for the card and card systems.

You: What are our marketing expenses?

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Interviewer: We normally use slips of paper that are attached to the back of our credit
card payment envelopes. We sometimes also send customers a direct
mailing – in a separate envelope. Or we can have telemarketers call
selected customers.

You: What’s the cost of each of these marketing techniques, and what is their
response rate?

Interviewer: Telemarketers have a 2 percent response rate and cost $1.00 per call.
Direct mailing cost 40 cents per mailing and has a 0.50 percent rate of
response. Our payment attachments have a 0.25 percent rate of
response, but only cost us 5 cents each.

You: I’m going to assume we will sell one-hour phone cards. That will cost us
$9.00 for the minutes and a dollar per card – so each card costs us $10.

Interviewer: Okay, that sounds reasonable.

Additional information
 Assume there is a fixed cost per month of US$ 20,000.
 Assume the price of a 60-minute phone card is US$ 50.

Questions:

a) Suppose the company wants to get a US$ 10,000 profit per month: how
many phone cards per month would the company need to sell? (3 points)
Most commercial version: 60 MINUTES

Contribution Margin: Price – VC = 50 – 10 = 40 dollars

Break Even Point: Fixed Cost / Operational Contribution Margin =

20,000/40 = 500

Q: (20,000 + 50) / 40 = 501.25

They should make 200 phone cards per month so they can get a
$10,000 profit per month.

b) Indicate three actions the company could take to improve the profitability
of this project (3 points).
i. They should rise the price
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 ii. They should consider a different marketing technique because the
ones they are using maybe they are not efficient enough to obtain
the profitability they really want.
iii. They need to optimize the rate of response.

2. Considering the case Bridge Feasibility Study, discussed in class, answer the
questions located at the end of the case (6 points).

Bridge Feasibility Study

Your client, DevCo, is an international infrastructure developer. DevCo specializes in

building and operating roads and bridges, recovering its investment through toll charges.
It typically enters a new country by bidding on and winning a concession from the
government- which, in general, is simply the right for a party build and operate
infrastructure for a set period of time. Currently, it is submitting a competitive bid to build
a new toll bridge over a river in Argentina to connect two cities. The government request
bids in terms of a toll rate charged per vehicle.

Background data

 The bridge will support vehicle traffic only.

 The toll rate must be in whole peso increments (All information given will be in terms
of Argentine pesos, denoted by the $ symbol).
 Presently, 20,000 vehicles traveling between the two cities everyday use a non-toll
bridge 10 miles downriver.
 Your subcontractor conducted a field study and estimated the following values of
time for the 20,000 vehicles currently using the free bridge:

Value ($/hour) Number of Vehicles

10.00 3,000
5.00 7,000
2.50 10,000

TOTAL 20,000

 Vehicles using the free bridge travel an average of 40 miles per hour. On average,
the new toll bridge would save drivers ½ hour.
 Your subcontractor has estimated latent demand1 at the three price points, in terms
of vehicles per day (vpd):
$3 toll rate: 1,000 vpd
$2 toll rate: 3,000 vpd
$1 toll rate: 5,000 vpd
 It will cost $40 million to build the bridge.
 Annual operating costs include $ 5 million in fixed maintenance, and 8 centavos per
vehicle in variable maintenance.
 DevCo will own and operate the bridge in perpetuity.
 Assume no taxes.

1
Latent demand: Vehicles currently using alternative ways other than the free toll bridge.
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 There is probably a difference in the cost of gas for a driver taking the toll bridge
versus the non-toll bridge, since the distance traveled is different. For this analysis,
assume that this difference is embedded in the value of time, so no additional
calculations need to be made to account for gas.
 The company chooses to use a 20% discount rate per year to reflect both their cost
of capital and the risk inherent in this type of project.

Questions:

a) How would you go about determining what toll rate to bid? Support your answer
with statistics (3 points).

By doing this analysis I will determine the toll rate 2 because it is a higher
income. It will be $26,000.

b) Would it be a profitable business for DevCo? (3 points).

Sadly, it will not be profitable because the Net Present Value is negative. It
means will lose money/ not getting back what I invested in.

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