CABO SAN VIEJO(Rewarding Loyalty)

(MARKETING MANAGEMENT I GROUP 2)

Arnab Kumar MitraAnisha Goenka

Arun MukherjeeAvontika AgarwalShashank Shekar

Introduction

• Founded by : Dave and Florence Blumenthal in 1977.

• Mission : To help people unlock hidden potential so that they can become healthy, happy and self actualized.

• Offerings : Massage, Body Treatment, Physiology, Therapy, Nutrition counseling, Hair and Nail care, Palm Spring Resorts for vacations etc.

• Price is from 3588 $ to 5844 $.

CABO VIEJO MEXICO

SWOT Analysis

• Strengths: - First and Leading Brand- Wide range of offerings- Excellent staff and facilities- World class gyms, swimming pools etc

• Weaknesses- Incomplete customer database

- No direct marketing - No data mining & relationship management - Too high pricing

SWOT Continued

• Opportunities: - Diversification and expansion - Tap other affluent segments - Increase customer loyalty and CLV

• Threats - Increased customer expectation - Stiff competition - Losing competitive advantage

Major Issues faced by Management

• Misconception in the minds of people• Limited clientele due to high rate• Outdated computer information systems• No customer data centric approach• Confusion regarding reward program• Complains about lack of loyalty• Competition from brands like Miraval, Canyon

Ranch, Lake Austin etc• Lack of awareness campaign

Customer Value or Profit? (DILEMMA)

Marketing Strategy• 6 persons in marketing department• 6 regional sales managers• 12 reservation specialists• 2 public relations officers• The goal was to meet specific revenues and occupancy targets.• Challenge was not to educate consumers about Cabo San Viejo concept

but evoke “right emotions so that people are reminded that they want to feel special”.

• Spending on advertising was only a small percentile of the gross profits.• It spent most on the brand awareness type ads. (i.e. online, radio, print )• They send occasional bulletin to the customers to inform about latest

developments.• They did very less cross-marketing between CaboDay Spa and Palm

springs.

Sales Strategy

• Cabo San Viejo was one of the few spas to maintain a sales force.

• Sales team sold group and individual packages to high end travel agencies in US and Canada.

• Goal was to keep occupancy at optimal level( i.e. 270).• Reduction of rates by about 35% in summers.• Organize receptions in major cities, introducing

doctors , physiologists and other staff to the prospects.• The main aim was to instill correct perception about

the brand

Customer Survey by CABO

74%

21%3% 2%

OutstandingVery goodSatisfactoryUnsatisafactory

Adding Customer Value(LOYALTY PROGRAM)

• Adding financial and value added benefits• Charge lower rate to regular customers (RETAIN THEM).

Rooms should be well furnished• Send gifts to customers like cards etc on regular

occasions.• Design special package for a couple in special occasions • Membership cards like free privilege for gym, swimming

etc. • Increase staff size for personal interaction with the client• Incentives and rewards for employees

Adding Value Continued

• Networking with suppliers etc• More cross marketing • Leverage public relations like print media• Offer surprising benefits for the customers• Special reward program• Partnership management with (Like Tiffany’s) to

maximize delight by offering gift certificates• Organizing concerts etc to attract more customers

Possible Strategies• Retain customers through loyalty programs• Bonus programs, free services • Cut down prices, can go for “Value Pricing”• Concentrate on men. Use data mining• Establish value equity and brand equity through

direct marketing• Assess customer satisfaction at all time• USE CRM SOLUTION - CRM is beyond business.

Envisages emotional and personal bond among people

Holistic CRM Approach

Customer Life (N)

N = 1 1 - CR

Holistic CRM Continued

• Focus on existing customers• Maximize revenue opportunities• Do more with less through attractive offers• Increase marketing productivity directly• Maximize customer delight• Invest in right IT software (CRM, SIEBEL etc)• Invest in social networks like Facebook etc• Differentiate offerings and segment customers• Try to achieve “CUSTOMER DELIGHT”

Understand Customers (Target Market)

• Dissatisfied Customers: Looking for some other resorts.

• Satisfied Customers: Open to next better opportunity - CRUCIAL TO RETAIN

• Loyal Customers: Returns despite competitors

• PROVIDE DELIGHT ALL TIME

Capture Value from Customers (CABO’s Proposed strategy)

Building the Right Relationships with the Customers

Butterflies True Friends

Strangers Barnacles

PotentialProfitability

High

Low

Short-term Customers

Long-term Customers

Create Virtual Platforms of CABO Resorts for brand extension

THANK YOU