INTRODUCTION•1977 : Founded by Dave & FlorenceBlumenthal in California to change theunhealthy lifestyle of the people•1982 : “Premier Total Vacation/FitnessResort”•1990s & 2000s : Opened several CaboDaySpasites
COMPETITORS Category Firms OfferingsDestination Spas Miraval, Canyon Ranch, Lake Extensive Spa & Austin, Golden Door exercise offerings, General Focus on wellnessLocal day Spas & Oasis Day Spa, Le Petite Retreat Massage, Skin Care, Saloons acupuncture, Saunas Cruises Princess, Celebrity, Silversea, Gourmet Cuisines, Seabourn Spas, fitness centers, casinosVacation Resort Four Seasons Resort Hualalai Weight Training, Esperanza Resort fitness classes, aquatic facilitiesHigh-End health The Sports Club Fitness & Personal Clubs training, Cafes, bars, Day care
MARKETING STRATEGY 6 persons in marketing department 6 regional sales managers 12 reservation specialists 2 public relations officers
MARKETING APPROACHThe goal was to meet specific revenues and occupancytargets.Challenge was not to educate consumers about Cabo SanViejo concept but evoke “right emotions so that people arereminded that they want to feel special”.Spending on advertising was only a small percentile of thegross profits.It spent most on the brand awareness type ads. (i.e.online, radio, print )They send occasional bulletin to the customers to informabout latest developments.They did very less cross-marketing between CaboDay Spaand Palm springs.
SALES STRATEGYCabo San Viejo was one of the few spas to maintain a salesforce.Sales team sold group and individual packages to high endtravel agencies in US and Canada.Goal was to keep occupancy at optimal level( i.e. 270).Reduction of rates by about 35% in summers.Organise receptions in major cities, introducing doctors, physiologists and other staff to the prospects.The main aim was to instill correct perception about thebrand
CUSTOMERS Loyal Customers base included:• affluent, middle aged & female Added 3500 customers each year• 65-70% word of mouth• 30% direct referrals by travel agent• Repeat guest compromise between 50-60% of all guest nights.
PROBLEMS FACED BY CUSTOMERS Misconception in minds of the people:1. Its only for women2. Lack of awareness campaign Low customers staff ratio (3:2:1) Outdated computer systems and no customer database. Complaints about lack of loyalty program for their loyal customer. Limited clientele due to expensive rate.
LOYALTY PROGRAM To build loyalty show some loyaltyAnalysisShould Cabo San Viejo implement a rewards program?Who should qualify? How should the “points” beaccumulated?What should the rewards look like?Should rewards only apply to Cabo San Viejo or shouldthey be redeemable at other places? If latter, then whattypes of partners?
CONCLUSIONCreating awareness among people towardstheir Health Status.Differentiated its product from othercompetitors like Miraval, Canyon Ranch.Efficiently distinguishing its MarketingApproach and Sales Approach.Seeking Customer’s Satisfaction and live upto their rising expectations.Customer Acquisition and Retention.REWARD PROGRAM : A Curse or A Boon.
JUSTIFICATIONS Mounting competition; Aging demographic customer base; Important for synergies between day spas and resort. Customer Retention Indirect customer Acquisition Not having a loyalty program would mean “we are too good, we don’t need your business and we’ll be fine whether you come back or not”.
BASIS FOR ACCUMULATION OF POINTS Number of Nights; Number of Visits; Dollar amount Spent. The other question that worried them was whether and how to reward guests who had already shown substantial loyalty?
REWARDS CAN LOOK LIKE:This could be done in the following ways: Enhanced Guest Recognition; Tangible Benefits; Special Guest Benefits. Wrigley was more inclined towards Guest recognition. Others believed it to be problematic and favored tangible rewards other than “tacky price discounts”.
IN WHICH FORMTo grant certificates redeemable at potentialpartners (e.g. Neiman Marcus, Tiffany’s) after acertain patronage.whether it would help build loyalty for resort.To select partners in a way that could sustainthe prestige of the program and the brand.Their loyalty program had to be “classy &understated”. They wanted to change person’sbehavior but didn’t want it to be “crass”.
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