“._._..‘“...“ mum." FACTORS INFLUENCING THE MARKETING OF MEETING . FACILITIES AN EMPIRICAL STUDY OF THE BUYING/ SELLING RELATIONSHIP FOR CORPORATE GROUP MEETINGS Thesis for the Degree of Ph. D. MICHIGAN STATE UNIVERSITY KEN WARD McCLEARY 1977 LIBRARY Michigan S is re University This is to certify that the thesis entitled FACTORS INFLUENCING THE MARKETING OF MEETING FACILITIES: AN EMPIRICAL STUDY OF THE BUYING/ SELLING RELATIONSHIP FOR CORPORATE GROUP MEETINGS presented by Ken Ward McCleary has been accepted towards fulfillment of the requirements for Ph. D. . Marketing degree 1n fl% (:2; (/Major professor Date May 12, 1977 0-7 639 ' IIIIIIIIIIIZIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 310458 6940 $73: u .. A ‘N ‘0' v v-hi‘. "‘ \p :.;,= EIIIE 3‘“ K' F. 'l ABSTRACT FACTORS INFLUENCING THE MARKETING OF MEETING FACILITIES: AN EMPIRICAL STUDY OF THE BUYING/SELLING RELATIONSHIP FOR CORPORATE GROUP MEETINGS By Ken Ward McCleary This study examined the process through which corporations select sites for their meetings and how an understanding of this process by sales managers of meeting facilities affects success in attracting corporate groups. Both sides of the buying/selling rela- tionship were examined so that a comparison could be made between the buyer's stated needs and wants, and the seller's perceptions of these needs and wants. The buying side of the relationship was represented by a sample of fifteen corporate meeting planners. Sellers were represented by sales managers of fifteen properties with facilities capable of servicing corporate meetings. Hotels, resorts, conference centers and other types of meeting facilities are operating in an increasingly competitive environment. As more firms enter the hospitality industry, previously underdeveloped markets are taking on more importance. A survey of the literature of the industry reveals increased interest in the corporate meetings market. However, very little research has been conducted to determine the behavior and characteristics of this fret. PM V‘V“ Ken Ward McCleary market. Since the product in the study is being marketed to corpora- tions, it was treated as an industrial service. Thus, elements of industrial marketing, marketing in the service sector, and, par- ticularly, marketing in the hospitality industry were examined. In-depth personal interviews were conducted with meeting planners and sales managers. The interview schedule for meeting planners was designed to generate information about the buying pro- cess within the firm and to determine importance criteria in site selection and product satisfaction. Sales managers were probed to determine their understanding of the site selection process and the marketing strategies employed by their facilities in attracting corporate group business. All interviews were tape recorded, transcribed, and analyzed. In addition, a questionnaire was admin- istered to all interviewees to gather objective data on selection criteria. Each sales manager was ranked on twelve independent variables according to how well his responses indicated an understanding of the corporate meetings market. These rankings were then used as a basis for establishing the presence of relationships between each independent variable and the dependent variable, success in attracting corporate group meetings. Success is defined as the percent of occupancy derived from corporate group meeting business. The results of the study indicate that the purchasing process involved in selecting corporate meeting sites is similar to the pro- cess for other industrial products. Multiple buying influences were Ken Ward McCleary found to be present to a large extent, and rational buying motives predominated. The factors of greatest concern to meeting planners for initial product choice were, the comfort of the meeting room, price, and having a contact person from the facility assigned to the group to handle problems. The quality of food and housing accommo- dations were found to be more important for encouraging repeat pur- chase than for original site selection. The associations between each independent variable and success were computed using Jaspen's coefficient of multiserial correlation. This technique transforms ordinal data into interval data so that correlations can be computed. Stepwise regression analysis was used to develop predictors of success. The variable which demonstrated the greatest association with success relates to specialized advertising content. A positive attitude toward the corporate segment and an understanding of how corporations become aware of facilities, showed the next highest associations. This suggests that facilities are more successful in attracting corporate meetings if they specialize their advertising for that segment and understand how the segment can be reached. Positive correlations of other variables with success suggest the importance of understanding the buying process relative to the needs and wants of decision makers. This aids sales managers in designing a marketing strategy which concentrates on positive moti- vators for attracting the target market. FACTORS INFLUENCING THE MARKETING OF MEETING FACILITIES AN EMPIRICAL STUDY OF THE BUYING/SELLING RELATIONSHIP FOR CORPORATE GROUP MEETINGS By Ken Ward McCleary A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Marketing and Transportation Administration 1977 © Copyright by KEN WARD McCLEARY 1977 DEDICATION To Dr. William.J. E. Crissy--one of the great men in marketing. 111 ACKNOWLEDGMENTS This study could not have been completed without the help of the meeting planners from several corporations and the sales managers of the fifteen facilities included in the study. I wish to thank them all for taking the time to participate in the often lengthy interviews. Dr. Robert Blomstrom, provided his expert guidance and knowledge of the hotel industry as well as helpful suggestions. Dr. Leonard Bell has provided assistance and guidance throughout the doctoral program. To Dr. W. J. E. Crissy, chairman of my committee, I wish to express a very special and personal thank you. Dr. Crissy has been a friend and inspiration to me and others before me. The impact he has made on my life will never be forgotten. I also wish to acknowledge Dr. Robert Boewadt for his encourage- ment, and Professor David Ley for providing a special incentive. A final acknowledgment goes to my children, Blake and Ryan for trying to understand. iv v0.1 \ v-q \ now Id‘ TABLE OF CONTENTS LIST OF TABLE 0 O O O O O O O O O O O O O O 0 LIST OF FIGURES . . . . . . . . . . . . . . . Chapter I INTRODUCTION............ Problem Background. . . . . . . . Product Definition -- Meeting Services. . ..... Corporate Meetings as Industrial Products . Multiple Influences on Purchasing Synthesis . . . . . . . . . . . . Problem Statement . . . . . . . . Hypotheses. . . . . . . . . . Method of Investigation . . . . Limitations of the Study. . . . Terms and Definitions . . . Potential Contributions of the Study. II SELECTED REVIEW OF THE SERVICES, INDUSTRIAL, HOTEMARKETINGLITERATURE. . . . . Purpose 0 O O O O O O O O O O O O The Marketing of Services . . . . Marketing Theory Applied to Services. Channels and Location . . . . Product Development . . . . The Promotional Mix . . . . Pricing of Services . . . Industrial Buyer Behavior . Importance of Industrial Services Industrial Buying Models. . . . . The Hospitality Industry. . . . . Meetings and Conventions. . . . . Importance of Corporate Meetings. Meeting Facility Typology . . . . Meeting Trends. . . . . . . . . . Identifying‘Mseting Planners. . . Decisions Services Desired by Corporate Meeting Planner. 0 O O O O O O O O O O O Su-aryand Conclusions . . . . . V Page f1? 00‘ Chapter Page III RESEARCH METHODOLOGY ..... . . ........ . . 7O IntrOduc t ion 0 C O O O O O O O O O O ........ 7 0 Sample Selection. . . . . . . . . . . . . . . . . . 70 Administration of Interview Schedules and Questionnaires . . . . . . . . . . . . . . . . 72 Questionnaire Construction. . . . . . . . . . . . . 73 Interview Schedule Construction -- Meeting Planners . . . . . . . . . . . . . . . . . . . . . 76 Interview Schedule Construction -- Sales ‘Managers . . . . . . . . . . . . . . . ...... 78 Scoring Techniques and Definitions of Variables. . . . . . . . . . . . . . . . ..... 79 The Dependent Variable. . . ..... . . . . . . . 79 Independent Variables . . . . . . . . . ...... 80 Coding, Scoring, and Rankings for Independent variables. . . . . . . . . . . . . . . 80 Basis for Property Rankings . . . . . . . . . . . . 88 Iv DATA MYS Is 0 O O O I O O O O O O O I O O O ..... 90 Introduction. . . . . . . . . . . . . ....... 9O Needs and wants of Meeting Planners . . . . . . . . 90 The Decision Process for Site Selection . . . . . . 97 Multiple Buying Influences. . . . . . . . . . . . . 98 Members of the Buying Center. . . . . . . . . . . . 103 Factors Affecting Product Selection and Satisfaction Among Meeting Planners. . . . . . . . 107 Hegative Aspects of Meeting Facilities. . . . . . . 109 Summary - Meeting Planners . . . . . . ...... 110 Data Analysis - Sales Managers . . . . . . . . . . lll Rankings of Sales Managers. . . . . . . . . . . . . 112 Jaspen's Coefficient of Multiserial Correlation . . 114 Multiserial Correlations of Independent variables and Success. . . . . . . . . . . . . . . 116 Success Predictors. . . . . . . . . . . . . . . . . 118 Hypothesis Testing. . . . . . . . . . . . . . . . . 120 Summary . . . . . . . . . . . . . . . . . . . . . . 122 V IMPLICATIONS OF THE RESEARCH FINDINGS. . . . . . . . . 123 Introduction. . . . . . . . . . . . . . . . . . . . 123 Implications of Multiserial Correlations. . . . . . 123 Multiple Buying Influences. . . . . . . . . . . . . 123 Appeal to Several Decision Makers . . . . . . . . . 124 Active Solicitation of Corporate Group Business . . . . . . . . . . . . . . . . . . 12S Specialized Advertising . . . . . . . . . . . . . . 126 Understanding How Corporations Learn About Meeting Facilities . . . . . . . . . . . . . 127 Knowledge of Why Corporations Choose a Facility . . 127 vi c i‘ 53;“ Iiii Chapter Needs and wants vs. Need/Want Satisfiers. . Awareness of Attractive Aspects . . . . . Awareness of Negative Aspects . . . Performance with In-House Groups. . . . . Repeat Business . . . . . . . . . . . . . Attitude Toward Corporate Group Business. Summary of the Implications Correlation. . . . . . . Predictions of Success. . Summary . . . . . . . . . VI SUMMARY AND CONCLUSIONS. . . of Multiserial Introduction. . . . . . . . . Contributions of the Study to Contributions of the Study to Practice . . . . . . . . . . . . GeneralFindings......... Suggestions for Further Research. Conclusion. . . . . . . . . . . . APPENDIX Marketing Marketing I INTERVIEW SCHEDULE FOR.MEETING PLANNERS. II QUESTIONNAIRE.............. III INTERVIEW SCHEDULE FOR SALES MANAGERS. . IV CONFIDENTIAL DATA FORM FOR MEETING FACILITIES. BIBLIWM O O O O 0 O 0 I O O I O O O O O O O O O 0 vii Page 129 129 130 130 131 132 132 134 135 137 137 138 138 139 141 144 145 148 156 159 160 H A) 111 M 5-3 I-lI I-li Table 4-1 4-2 4-9 4-10 4-11 5-1 LIST OF TABLES Meeting Planners' Rankings in Selected Groupings of Factors Relating to Meeting Facilities - Mean Rankings by Respective Groupings. . . . . Composite of the Rankings of Meeting Planners for the Top Ten Variables Relating to meting Facuitie. I I I I I I I I I I I I I I Ranks of Factors Surrounding Meeting Facilities. Meeting Planner Profile. . . . . . . . . . . . . Sources of Information Contributing to Facility Awareness of Meeting Planners. . . . . . . . . Decision Stages and Roles in the Buying Center . Ranks of Sales Managers. . . . . . . . . . . . . Correlation Coefficients of the Independent variables I I I I I I I I I I I I I I I I I I I Multiserial Coefficients of Correlation and Determination. . . . . . . . . . . . . . . . . Summary of Increases in Multiple Correlation Using Stepwise Regression - All Variables hand“ I I I I I I I I I I I I I I I I I I I Summary of Increases in Multiple Correlation Using Stepwise Regression - ADCONT Excluded fromthquuation............... Summary of Associations of Independent Variables with Success . . . . . . . . . . . . . . . . . viii Page 92 94 96 101 102 104 113 115 117 119 121 133 Figure 1-1 3-2 LIST OF FIGURES Page Meeting Facility Typology. . . . . . . . . . . . . . . 57 Classification of Factors Relating to Corporate Meeting Facilities . . . . . . . . . . . . 74 Groups Involved in the Decision Process. . . . . . . . 82 sel CHAPTER I INTRODUCTION Problem Background Corporations hold a large number of meetings and conventions each year which take place at hotels, motels, and other conference facilities. Services and facilities available at these meeting sites vary widely. Purchasers of these services are faced with an almost limitless variety of possibilities and combinations to fit their needs. This study focuses on the process through which corporations select sites for their meetings, and what determines the success of meeting facilities in attracting corporate groups. The problem of attracting corporate group meetings is treated as an industrial mar- keting problem. The success of a meeting facility will be examined in light of how well the sales staff understands the organizational buying process for meetings, and howHwell a facility uses this knowledge to market its product. The marketer of meeting facilities has a very large potential source of business in corporate meetings and business gatherings. It is estimated that corporations spend over seven billion dollars a year on meetings, conventions, and trade shows,1 with estimates of 1Henry Lefer, ”The widening world of Business Meetings," Hospitality (February 1972), Management and Leisure Time Section. 1 an .' III, 3t :52! .1...‘ I ”at 3:0: .. .13: 2 the number of off-premises corporate meetings booked ranging from 300,0002 to $03,8003 annually, with an attendance of 24,342,200.4 Conditions of economics, location, special services required and other factors interact to provide criteria for the meeting site choice decision. With a large number of criteria being used to choose from a wide variety of available facilities, the suggestion is that it is extremely important for marketing managers of facili- ties offering meeting services to know and understand the buying process through which their services are acquired, and those factors that meeting planners find essential or attractive. Between 1929 and 1963, employment in services grew faster than in the goods sector by an annual rate of 1.72.5 Sometime in the 1950's the United States became the first "service economy" in the world, that is, with over 502 of the employed population asso- ciated with what are considered services rather than tangible goods.6 At the same time, output based on price adjusted gross receipts in the hotel and motel industry increased. Between 1958 and 1973 output rose an average of 3.82 per annum.7 Group meetings contributed ZIbid. 3Mel Hosansky, "1974 Market Data Report," Meetingg and Conventigns (December 1974), p. 12. ‘Ibid. 5Victor R. Fuchs, The Service Economy (New York: National Bureau of Economic Research, 1968), p. 29. 61bid. 7James A. Urisko, "Hotel/Motel Productivity, 1958-73," The Cornell H.R.A._Quarterlz_(Nevember 1975), p. 48. 1:3’ 3 considerably to this growth. In 1972, conventions, trade shows busi- ness meetings and exhibitions were attended by 19 million travelers, doubling the amount attending in 1963.8 ‘With approximately 342 of transient guests traveling on business or to attend group functions, many hotel and motel chains are deriving over 502 of their revenue from group business.9 With this rapid growth in the service sector and the hotel industry in particular, there has been relatively little research conducted into marketing strategies applied to services. An applica- tion of the marketing concept to determine what services should be offered seems to have attracted little attention from.marketers of group meeting facilities, other than armchair speculations. It appears that research into meeting services has been even more neglected than services in general. "For an industry.with a yearly volume approaching the $10 billion mark and which numbers among buyers and suppliers all the major corporations and associations in the country, as‘well as most hotels and airlines, the meetings field has "10 This been singularly devoid of good, hard statistical information. suggests a great need for research into the motives of the purchasers of meeting services and the criteria they use in selecting a product. Product Definition - Mbetigg Services It is very difficult to pin down a precise definition for an area of economic activity which encompasses over 502 of the marketplace. 81b1ds, pa ‘9. 91bid., p. 49. 10Hosansky, o . cit., p. 11. b5: dis with L are Lh busines siderec altbo scods sem 1m prov orga Olga 4 Host discussions of services mention the intangibility of the product, which leads to broad unmanageable definitions. Services include much more than the offerings of traditional types of private, profit-making businesses. Government and religious organizations might well be con- sidered as providing a service product, but with little concern for profit. Since many business meetings are conducted at non-profit institutions, such as universities, a definition which limits marketing strictly to profit-oriented business firms is unacceptable. Thus a broader definition for service marketing, such as has been promoted 11 "Put in the marketing literature relatively recently, is in order. another way, the common statement, 'the marketing of goods and services' is imprecise since the expository material which follows the statement typically focuses on the marketing of goods."12 we are concerned here strictly with the marketing of a service although many of the principles and techniques used for marketing goods can be applied. Marketing, whether it relates to goods or services by either profit or nonrprofit organizations, must still 3 The services involved in involve the basic concept of exchange.1 providing group meetings could be for a profit but may have some other organizational objective. Thus, we will not be concerned with the organizational objective, but rather with what criteria are used by 11Philip Kotler and Sidney J. Levy, "Broadening the Concept of Marketing," Journal of‘Harketing,‘Vol. 33 (January 1969), pp. 10- 15. 12John H. Rathmell, Marketing in the Service Sector (Cambridge, Mass.: Winthrop Publishers, Inc., 1974), p. 6. 13Philip Kotler, Marketing for Non-Profit Organizations (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1975), p. 5. moral $11050} attenti service same note a; bundle satisf finctia incluc' elimi: SEMI cont: ate g Stand “Duh lay .- a8 b Btaf that fact the fol; S corporations to choose a meeting facility regardless of the basic philosophy employed by the facility with regard to profit. "A product is anything that can be offered to a market for attention, acquisition, or consumption; it includes physical objects, services, personalities, places, organizations and ideas."14 Meeting services fit well into this broad definition of a product, but to be more specific as far as this study is concerned, our product is a bundle of particular services expected to yield certain benefits or satisfactions to corporations desiring space and services for con- ducting meetings. It should be noted that the definition does not include many market segments sought by a hotel or motel and even eliminates a number of different group functions such as weddings, service organization meetings, and social gatherings. The basic goal of this study is to determine what factors contribute to the success of a meeting facility in attracting corpor- ate group meetings. It would seem that a meeting salesman's under- standing of the decision process involved in selecting meeting sites would correlate with a facility's ability to book meetings. There may also be certain services or factors designated by meeting planners as being deciding factors in site selection which a facility's sales staff may or may not have considered. For example, it comes to mind that the quality of food offered by a hotel might be a deciding factor in site selection. However, there is much more involved with the purchase decision than may be seen at first glance. Consider the following statement made regarding group business: "VHany hotel men 141bid., p. 183. 6 have failed to realize that they are no longer in the food and lodging business. They are really in the education business and their accome modations serve a subsidiary role.‘ What this executive meant was that more and more group business is becoming educationally oriented. It may consist of product orientation meetings, management seminars, or a host of other similar functions. The important point to be grasped is that the meeting planner of today is looking more and more at those auxiliary services which will enhance his total pre- "15 Thus, there are a number of criteria to be considered sentation. in selling group functions. What the above statement seems to be saying is that the traditional selling points of a hotel are now more like Herzberg's hygiene factors.16 They need to be there as a minimum requirement for the sale, but do little as far as actually motivating a group to buy. A potential buyer may not be dissatisfied with the hotel but still buy somewhere else that offers more than simply food, lodging, and a few services. As we suggested above, hotel people may not be cognizant of what factors are deemed to be necessary or desirable by those charged with arranging accommodations for group meetings. For this reason, the study explores the perception of sales personnel involved in attracting corporate business, with respect to the desires and moti- vations of meeting planners. 15w. J. 3. Crissy, Robert J. Boewadt, and Dante u. Laudadio, Marketing of Hospitality Services - Food, Travel, Lodging (East Lansing, Michigan: The Educational Institute of the.American Hotel and'Motel Association, 1975), p. 24. 16Frederick Merzberg, B. Mausner, and B. Snyderman, The Moti- vation to work (2nd ed.; New York: John Wiley, 1959), p. 113. #79013: 2—», fioatiot var The cha non dur we} be: Fir as It shm accord: an be EMU! fill b 3%! ibicb work o descr: in am V111 - om PM P. 37 7 Corporate Meetings as Industrial Products Services, like goods, fall into a number of different classi- fications as developed in the marketing literature. 'In the marketing literature, goods are classified in various ways. The same classifications apply to services. There are consumer and industrial services just as there are consumer and industrial goods... While consumer pur- chases are typically distributed between durable goods, nondurable goods, and services, more realistically, the durable-nondurable dichotomy should apply to services as ‘well... The criterion is the length of time during which benefits are derived from the performance of a service... Finally, there are both shopping and convenience services, as well as shopping and convenience goods."17 It should be noted that services can be more generally classified according to consumer and nonconsumer markets. Nonconsumer markets can be further subdivided into markets represented by industry, government, and institutions. The problem of marketing group meetings will be treated as a problem in industrial marketing. Although much research has been conducted in the area of con- sumer buying behavior, there has been comparatively little work done which examines the decision process of industrial buyers. 0f the work.which has been done in the industrial area, most has been 18 "A systematic review of the marketins literature, or descriptive. an analysis of the references cited in any book on buyer behavior will reveal no more than a few studies in.which the buyers were indus- trial firms, intermediate marketing organizations, or other kinds of 17Rathmell, op. cit., p. 60. 18Frederick E. webster Jr., "Modeling the Industrial Buying Process," Journal of Marketing Research, Vol. II (November, 1965), p. 370. [01 Vie by as. 8 19 Even though more interest has been shown formal organizations." toward industrial buying in the last few years, the amount of research conducted has been small in comparison with consumer research. This is particularly disturbing since it has been estimated that by 1980, the total dollar volume of transactions among business firms will exceed the present Gross National Product.2 Multiplg_1nfluences on Purchasing Decisions The decision process in industrial buying behavior is far more complex than in consumer purchasing. Decisions may take several months to make and usually involve several people with diverse points of view and different choice criteria.21 webster and Wind see five basic groups as comprising the selection arm of an organization: users, influencers, deciders, buyers, and gatekeepers.22 Whether or not these groups are found in the decision process for choosing meeting sites has been questionable, since there has been little research in the area. Perhaps the most meaningful research with regard to the multiple influences involved in meeting site selection.was sponsored by the Quebec Planning and Development Council. The study concerned association buying of meeting services and found that ...it was possible to readily identify three distinct groups (elected officers, 1gl‘rederick B. Webster Jr. and Yoram Wind, Qgganizational Buying Behavior (Englewood Cliffs, N.J.: Prentice-Hall, Inc., 1972), p. 3. zolbid. 21Robert B. Weigand, "Why Studying the Purchasing Agent is Not Enough," Journal of Marketing, Vol. 32 (January 1968), p. 41. ZZWebster and Wind, op. cit., p. 77. beta 0 *0: I. I OH Dd. par Vol b— (I) / r) m #1 I 8 1.) Pro 9 permanent executives and regular members) within such organizations "23 which play a role in the decision. The study further noted that, "The identification and classification of members of the buying centre is often more difficult in other organizations."24 In order to study the decision process for corporate group meetings, it was necessary to consider the possibility that multiple buying influences are present. Thus, our study included exploratory research into the nature and extent of multiple influences with regard to the purchase of the product. The purpose of this effort was to determine if there was any correlation between a salesman's recognition of multiple influences and the success of a property in attracting corporate meetings. There has been some effort to develop models to describe the industrial buying process. While we will not be concerned with specifically testing any of the models or any parts of one model, the information gathered in this study may contribute to validating or rejecting parts of one or more buying models. The decision process model of organization buying behavior, postulated by webster, is used as an important illustrative model in relation to this study. In particular, the choice process part of the model focuses on the in- volvement of several people and choice criteria in product selection.25 23Paul A. Portin, J. R. Brent Ritchie, and Jules Arsenault, A Study of_;he Decision Process of North American Associations Con- Cerning the Choice of a Convention Site, Quebec Planning and Develop- ment Council, Volume I, Final Report, 1975, p. 17. 241bid., p. 17. 25Frederick E. Webster Jr., "Modeling the Industrial Buying Process," op. cit., p. 375. 10 This involvement is referred to as a multiple buying influence on product selection. The development and influences of modeling are discussed in detail in Chapter II. Szgthesis There has been a rapid growth of group meeting revenue in hotels and other meeting facilities in recent years with actual meeting fees and related activities generating billions of dollars. The characteristics of these groups and their decision processes may be similar to other buyers of industrial products. There has been little empirical research in the industrial area and even less in the area of industrial services. The marketing of group meeting services to corporations is an industrial service, is big business and deserves some serious attention. Problem Statement It is recognized that some meeting facilities are more effec— tive in attracting corporate meeting business than are others. The problem of this investigation is to determine what factors contribute to the success of properties in developing this market segment. One way to approach this problem is to delineate the needs and wants of those responsible for booking corporate group business and to study the process through which their decisions are made. Meeting facili- ties with different levels of success in booking group meetings are examined to see how their understanding of the decision process, the services they offer, and their marketing strategy affects their rela- tive effectiveness. It is important to note that the problem here considers only '5 not 8 notions Licb I! win: ‘. rating to tb The: the $10 11 group meetings, organized and held by business firms. Consideration is not given to trade association meetings, social functions, or con- ventions. The characteristics of meetings vary with the purpose for which they are held. In order to do a more complete analysis of the buying process for services surrounding a particular type of group meeting, the focus here is limited strictly to business meetings held by an identifiable firm. Purposes of these meetings might be new product introduction, sales discussions, training seminars, product line orientation, executive development courses, and the like. This limitation allows study of site selection for purposes which are some- what similar and which should require similar services, regardless of the company involved. The following major questions were dealt with in order to add to the body of knowledge covering the marketing of group meetings: 1. What is the nature of the decision process involved in selecting a site for corporate group meetings? 2. To what extent are multiple influences present in the purchase of corporate group meeting services? 3. What are the criteria used by corporate meeting planners (the people who act as purchasing agents for corporate meetings) for selecting corporate meeting sites? 4. Bow'well do the sales personnel at meeting facilities understand the needs and wants of meeting planners and the decision process for site selection? These questions were pursued to discover what factors contribute to the success of meeting facilities in attracting and servicing corporate group meetings. Marketing theory indicates that an understanding of the needs and wants of the customer will contribute to the success of a firm which subsequently appeals to these needs and wants. This 12 should be no different whether the product is electrical motors or meeting services. Hotels and other meeting facilities are constantly adding and adjusting services. Some of these services are necessary, some mar- ginal, and others may not be important at all. It would seem very, useful if a salesman for a meeting facility had a better idea of what services a person booking a meeting considers essential. For example, many hotels have elaborate lobbies, golf courses, and health clubs. These may be emphasized in the hotel's literature. If, however, the selection decision is almost entirely at the discretion of a meeting planner, who may be concerned primarily with audio-visual equipment and meeting room size, the promotional program may not only be mis- directed, but also detrimental in acquiring corporate group business. Since group meetings and conventions comprise a major source of the 26 and since the emphasis placed on attracting revenue for most hotels corporate meetings has been increasing, a study focusing on the problem of marketing to this segment is relevant, if not imperative. Hypotheses The central hypothesis of this study is: an understanding of the purchase process and the needs of meeting planners correlates with a meeting facility's success in attracting corporate group busi- ness. Several sub-hypotheses are suggested by the central hypothesis and the questions to be answered by this study. These are: 26"85,000 Meetings a Year Mean Big Money," Institutions/Volume Feeding (June 1, 1972), p. 29. 8. 13 Evidence that there is an understanding of the role of multiple buying influences on site selection for corpo- rate group meetings correlates with a facility's success in attracting these meetings. Evidence that a facility attempts to appeal to more than one group of decisionrmakers involved with site selection correlates with a facility's success in attracting corpo- rate group meetings. Active solicitation of corporation business correlates with a facility's success in attracting corporate group business. Specialized content in a meeting facility's advertising aimed at corporate decision-makers involved with meeting site selection correlates with success in attracting corporate group meetings. A.sa1es manager's understanding of how corporations learn about his particular facility correlates with success in attracting corporate group meetings. A sales manager's knowledge of why corporations choose his facility correlates with success in attracting cor- porate group meetings. The closeness of fit between the perceptions of a sales manager and the perceptions of meeting planners with regard to what services and characteristics should be present at'a meeting site correlates with a facility's success in attracting corporate group business. A sales manager's awareness of attractive aspects of 14 his property as they relate to the needs and wants of meeting planners correlates with a facility's success in attracting corporate group business. 9. A.sa1es manager's awareness of unattractive aspects of his property as they relate to the needs and wants of meeting planners correlates with a facility's success in attracting corporate group business. 10. Determination of a meeting facility's performance with in-house groups correlates with success in attracting corporate group meetings. 11. Aggressive follow-up aimed at repeat group business correlates with a facility's success in attracting corporate group business. 12. A favorable attitude toward corporate group business correlates with success in attracting that business. Method of Investiggtion The data for the study were gathered from a sample of fifteen meeting planners and fifteen salespersons involved with marketing group meetings. The meeting planners were selected through personal contacts with companies which were asked to identify an individual whose job included planning and booking meetings. The companies were chosen to represent several industries including plastics, banking, automotive, grocery wholesaling, accounting, insurance, chemicals, and electronics. This was done in an attempt to reduce the amount of bias in stated meeting requirements that might develop from using only one type of industrial organization. In two cases, meeting tion. Inter At th 20:31 open to vb. laste abili save: and I Varit redo prep 15 planners from a different division of the same firm were selected. The majority of the meeting planners were interviewed at their companies in Michigan. One planner was interviewed by telephone in New York City, and another was interviewed personally in Chicago, Illinois. The interviews were conducted as informally as possible, allowing the interviewee to expand as much as he wished on each ques- tion. During the course of the interview all questions from the Interview Schedule For Meeting Planners (Appendix I) were discussed. At the conclusion of the interview the meeting planner was asked to complete the first three sections of the questionnaire presented in Appendix II. The planners were asked to complete this with respect to what is important to them when choosing a meeting site. Interviews lasted between thirty and ninety minutes, depending on the avail- ability of time and the depth of knowledge of the meeting planner. The meeting facilities in the study were chosen to represent several different types including resort, suburban, downtown, airport, and university owned properties. The size of the properties also varied, with the smallest property containing 42 rooms and the largest 706 rooms. The diversity of property types and sizes was designed to reduce bias that might arise from choosing only certain types of properties, and also to obtain a more varied perspective. The person in charge of group sales was selected for the interview at each property. Typically, this person held the title of sales manager or director of sales. In the larger properties, however, the person interviewed often held titles such as convention manager or group sales coordinator. The goal in the selection process was to reach the person most directly involved with soliciting and booking one 335 P inter stud§ CUES 3.11 cm and am the wit sec ask tho obt the alt 16 corporate meetings. In two of the smaller properties this function was performed by the manager's secretary. For simplicity, the person interviewed will be referred to as the sales manager throughout this study. The sales managers were interviewed in depth, with interview times ranging from twenty minutes to ninety minutes depending on time constraints and the sales manager's knowledge and willingness to talk. All questions on the Interview Schedule For Sales Managers (Appendix III) were discussed, but an effort was made to keep the interview conversational and informal. Interviews with both meeting planners and sales managers were tape recorded so that responses could be more accurately reported. This also made the interview more relaxed, since the researcher could listen carefully instead of being forced to 27 the write everything down. As was the case in a similar study, presence of the tape recorder did not detract from the interview. After the interview, the sales manager was asked to fill out sections three and four of the questionnaire. (Appendix II) It was asked that the items in section three be rated as the sales manager thought a meeting planner would rate them. Section four was used to obtain the sales manager's perceptions of how he thought his property performed on the factors listed. When the questionnaire was completed, the sales manager was given a confidential data sheet (Appendix IV) along with a self-addressed, stamped envelope. He was requested to fill out the sheet, or have it filled out, and mail it. 27Philip Russell Tyler, "Correlates of Success in Convention Properties: An Empirical Study" (Unpublished D.B.A. dissertation, Mflchigan State University, 1972), p. 11. 17 The properties included in the study were either contacted by the researcher initially or first by a letter from the Director of the School of Hotel, Restaurant, and Institutional Management at Michigan State university. The letter served as an introduction for the researcher and indicated the legitimacy of the study. Shortly after the letter was sent, the researcher contacted the facility to set up an appointment with the sales manager. The interview schedules and the questionnaires were pretested in Chicago, Illinois. Insight gained here led to several changes in the interview schedules and a shortened questionnaire. When all the interviews were completed, responses were scored and all properties ranked according to the success criterion. The method of scoring, interpretation, and the statistics involved are described in detail in Chapter III. Limitations of the Study Care must be taken in generalizing the results of this study to other areas of service industry marketing or applying the results in other general marketing situations. The following limitations of the study should be specifically noted: 1. The characteristics and processes examined here are for corporate meetings only. The decision process involved with selecting sites for conventions and trade associ- ation meetings may, and probably does, vary consider- ably from corporate meeting site selection.28 28 Fortin, et. a1., op. cit., p. 11. 2. 3. 4. 18 The sample size was small, comprising fifteen meeting facilities and fifteen meeting planners from a popula- tion of thousands. Because the methodology involved lengthy interviews at diverse locations, time and expense precluded a larger sample. The samples of facilities and meeting planners were drawn primarily from.Michigan. Desired characteristics stated by meeting planners and sales strategies employed by meeting facilities may vary region by region. The use of the personal interview as the basic data gathering technique encourages a high degree of subjectivity, and limits the sophistication of statis- tical analysis. A significant element of subjectivity also appears in the technique used in scoring responses. It was felt that the exploratory nature of the study required that more depth than breadth be sought in the data gathering process. The questionnaire in Appendix II was employed to provide a degree of objectivity. The meeting planner was the only person involved in the site selection to be interviewed. Ideally, all members of the decision team would have been studied. This was done for two reasons: (a) corporations were unwilling to allow access to the people attending corporate meetings, and (b) a pilot study which involved inter- viewing all persons concerned with the decision indi- cated that the meeting planner had the majority of the responsibility for selecting the site. This study, l9 and the means used to identify buyer classes is dis- cussed at length in Chapter III. 6. The use of occupancy rate to define success has the limitation of giving little consideration of company goals with regard to corporate meetings. It also suhmerges the relationship between marketing costs and efficiency in attracting profitable business. Since the purpose of this study is to identify what marketing strategies are effective in bringing in corporate group meetings, occupancy provided by these groups gives a better picture than overall profitability. There is also a reluctance on the part of facilities to release profit data. Terms and Definitions There are a number of terms used in this study that are inter- preted differently throughout the marketing literature and thus have different connotations for different people. It is therefore important to define how these terms will he used here. A.list of important terms and their definitions for the purpose of this study follows: Success: Success can be interpreted many different ways. Profit is perhaps the most common.measure of success for business organisations. Since profit is not the primary concern of many meeting facilities, success will be defined here in terms of the facility's utilization. The most often used measure of utilisation in the lodging industry is occupancy rate which is defined as: number of rooms occupied number of rooms available 20 This measure has the advantage of allowing us to compare operations of different size using the same measure. Figures are presented on a yearly basis. Success in Attracting Corporate Group Business: The success criterion here is defined in terms of occupancy provided by corporate meetings over a one year period, and is given by the formula: number of rooms occupied by attendees of corporate meetings number of rooms available Service: Intangible marketing offerings deemed to have utility. Corporate Business Meetingi. A.meeting involves two or more people who come together for some purpose. The customer/prospect mix of a meeting facility may include many different markets, such as trade associations, civic organizations, and corporations. A.property will try to develop a need/want satisfier system.which matches one or several of these markets. For the purpose of this study, the determin- ation of need/want satisfiers for meetings held by corporations is of major concern. The definition of the market sought here, the corporate business meeting, is the coming together of two or more people for a purpose relating to the business of a sponsoring corporation. Buyer Class: Those people who have input into the purchase decision may share certain characteristics or certain criteria for making decisions which will aid in identifying groups of decision makers. This identification can be helpful to the marketer by allowing him.to concentrate his efforts on those actually making the purchase decision. The terms buyer class and buyer group are used inter- changeably, even though there may be only one person in a buyer class in many cases. [he use as prev: We!» sificat COUISE buyers me o toinc met the s will lathe ‘—4 F: :7 Mr: 21 Some researchers and authors involved with marketing promote the use of standardized breakdowns for buyer classes. Webster and Wind, as previously noted, group buyer classes into user, influencer, decider, buyer, and gatekeeper. Other authors use basically a three group clas- sification which includes purchasing agents, engineers, and users although mention is made that others may be involved.29 It is very difficult to agree with set classifications since buying processes differ product to product and organization to organization.30 In the course of this research, the degree to which identifiable classes of buyers are present in the selection of meeting sites will be pursued. Property: A term used in the hotel industry to denote any type of lodging establishment. This term is expanded in this study to include any facility offering meeting services for a fee. Book or Booking: This term refers to a firm commitment by a group to hold a meeting at a property. Potential Contributions of the Study This research deals with several areas of marketing that have received relatively little attention in the literature and have been the subject of few marketing studies. It is expected that the results will add to the body of knowledge in each of these areas. ‘Harketing business meeting facilities is seen as an industrial marketing problem. The product is, by definition, a service rather 29Jagdish N. Sheth, "A Model of Industrial Buyer Behavior," Journal of Marketing, Vol. 37 (October 1973). P. 52. 30George Risley, Modern Industrial Marketing (New‘York: McGraw-Hi-l, 1972), p. 118. 22 than a tangible good, and is a significant part of the total market of the hospitality services industry. Contributions will be related to these areas: 1. 3. The study may add to the body of knowledge in the organ- izational buying process for industrial products. The study may add to the body of knowledge concerning the marketing of services. The study may assist in identifying the classes of buyers involved with the purchase of corporate group meeting services. The study may add to the body of knowledge relating to marketing in the hospitality services industry. The study may provide empirical evidence of the relative importance of services and facilities to the meeting planner. This should prove especially valuable to hotels and other meeting facilities in the development of marketing strategies and the determination of what services to add or drop in order to attract the corpo- rate meetings market. A.profile of the "ideal" meeting facility will be drawn from the responses of the ‘meeting planners. CHAPTER II SELECTED REVIEW OF THE SERVICES, INDUSTRIAL, AND HOTEL MARKETING LITERATURE Purpose The purpose of this chapter is to examine major research and ‘writing which illuminates the state of development of the marketing field with regard to the sales of group meeting space. The focus of this study is on corporate meeting business. This focus necessitates the inclusion of two broader areas of marketing. Since the product studied is a service, an examination of the marketing literature relating to services will be pursued. Since corporate group meeting services are treated as an industrial product, the development of the industrial marketing literature as it relates to services also deserves attention. Finally, the greater concern of the chapter is to examine the literature of the hospitality industry with special attention given to the marketing of meeting services. The Marketing of Services The marketing literature dedicated to services is sparse. Although the importance of the service sector in the United States' economy is often pointed out--"commonly cited figures place consump- tion expenditures for services between 40 percent and 50 percent of the total..."1-there is very little marketing theory developed around 1John a. Rathmell, r ti he Service Sector (Cambridge, Mass.: Winthrop Publishers, Inc., I9’fi5, p. 3. 23 24 the service industries. The major emphasis in marketing has been to develop theory relating to manufacturing industries. "The marketing discipline has a strong 'goods' orientation. In academic courses in marketing, tangible goods are considered, but rarely services to any extent."2 From the broad "principles" texts to research in special- ized areas, the service sector usually receives only cursory attention. "The Service sector, also known as the 'tertiary' or 'residual' sector, has long been the stepchild of economic research. This was unfortunate but tolerable during the 19th and early 20th centuries when the shift from agri- culture to industry was in full swing and services were of lesser importance. Since the end of world war II, however, the Service sector has become the largest, and in many respects the most dynamic element in the United States economy." There seems to be some difficulty in even determining what a service is or what should be included in service classifications. Broad definitions such as "activities, benefits or satisfactions which are offered for sale,"4 are not particularly useful in pinning down what products are services and how they can be distinguished from goods. A more enlightening approach used by some authors is to focus on the characteristics of services and how they differ from goods. The characteristic mentioned most often is intangibility. While goods can be seen by potential customers, services must be purchased without the benefit of knowing exactly what they will be like. 2John a. Bath-ell, "what is Meant by Services?" Journal of Marketing, Vol. 30 (October 30, 1966), p. 32. 3Victor R. Fuchs, The Service Economy (new York: Rational Bureau of Economic Research), 1968, p. xxiii. “Philip Kotler, Harketi Hana ement (Englewood Cliffs, New Jersey: Prentice-Hall, 1976 , p. 73. 25 Besides the intangibility aspect, John Rathmell mentions several primary characteristics which distinguish services from pro— duction goods. "First, since there is no transfer of ownership in the sale of a service, relationships between buyer and seller and control over the use of the product are in- determinant. Upon transfer of possession in the sale of a tangible good, the buyer's control over the use of the product is absolute, except for some rather limited restrictions imposed by lenders in credit sales. A second and related differentiating characteristic of service lies in the interrelation of production and con- sumption. Goods are produced, sold, and consumed. Ser- vices are sold and then produced and consumed simultan- eously. A third characteristic is what might be called the 'in- being' nature of services...the capacity and capability to produce a service must exist before any transaction can take place. Note that the word is capacity, not inventory. Services are not stockpiled and the flexibility inherent in inventory is absent. Fourth, with the exception of a few machine-intensive service industries such as electrical utilities and auto- . mated telephone systems, uniform performance standards are difficult to attain. "5 In addition to these characteristics, Rathmell mentions the need to reconsider such traditional marketing functions as exchange and physical supply because of the difference in how these functions are performed in the services sector.§ Another way of looking at the difference between a good and a service is to look at the words themselves. "One implicit distinction is to consider a good to be a noun and a service a verb - a good is a thing and a service is an act. The former is an object, an article, 5Rathmell, Marketing in the Service Sector, op. cit., pp. 8-9. 611:541., pp. 9-10. 26 a device, or a material...whereas the latter is a deed, a performance, or an effort. When a good is purchased, the buyer acquires an asset; when a service is purchased, the buyer incurs an expense."7 It is often quite difficult to completely separate goods and services. There are extremes, such as management consulting, where the product is purely a service, or tobacco where the product is stricly a good. In order to provide utility to the user, however, most products require a combination of both goods and services. "Apart from these extremes, most goods, whether consumer or industrial, require supporting services in order to be useful; most services require supporting goods in order to be useful."8 Carl Gersuny and William R. Rosengren in their book The Ser- vice Society, define services to "...include all tangibles for which money is paid including military defense, banking, imprisonment, 9 transportation, and housing rentals." They further subdivide the service sector into three categories based on a classification developed by Nelson W. Foote and Paul K. Hart in 1953.10 "The Tertiary sector includes restaurants and hotels, barber and beauty shops, laundry and dry cleaning estab- lishments, home repair and maintenance, handicrafts once performed in the home, and other domestic or quasi-domestic services. The Quarternary sector includes transportation, commerce, communication, finance, and administration. 7Rathmell, "What is Meant by Services?" op. cit., p. 33. 81bid. 9 Carl Gersuny and William R. Rosengren, The Service Society (Cambridge, Massachusetts: Schenkman Publishing Company, 1973), p. 4. IONelson N. Foote and Paul K. Hart, "Social nobility and Eco- nomic Advancement," American Economic Review, 43 (Hay 1953), pp. 364-378. 27 Finally, the Quinary sector includes health care, education, and recreation."11 The meetings industry, which is the major concern of this study, falls primarily into the tertiary sector according to the above classifi- cation. The problem with definitions, such as the ones just mentioned is that they are imprecise. As Robert Judd points out, one of the reasons for imprecision is the listing of examples to accompany the definition. Judd prefers a definition of exclusion: "Marketed Services - A market transaction by an enter- prise or entrepreneur where the object of the market trans- action is other than the transfer of ownership (and title, if any) of a tangible commodity."12 In considering the definition proposed by Judd, another cone troversy arises. The term enterprise is commonly used to denote a business organization. It is difficult to exclude the values supplied by nonrprofit public and private organizations. Many of these organ- izations deal strictly in services and recent marketing literature has demonstrated an increased interest in these non—profit concerns. "Marketing, far from.being a management tool of exclu- sive interest to business establishments, has great rele- vance to the problems and challenges facing the nonprofit organization. All organizations depend upon exchange rela- tions to attract resources that they need, to convert them into useful products and services, and to distribute them efficiently to target markets. Marketing is a systematic approach to planning and achieving desired exchange rela- tions with other groups."13 11Gersuny and Rosengren, op. cit., p. 5. 12Robert C. Judd, "The Case for Redefining Services," Journal of Marketing, Vol. 28 (January 1964), p. 59. 13Philip Rotler, Marketing for Nonprofit Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1975), p. 13. 28 Thus, the literature seems to reflect a growing concern for services. This concern appears to be providing the impetus to not only pursue a depth of understanding of the service sector, but at the same time to broaden the total marketing orientation toward services to include previously neglected areas in nonprofit fields. Marketing Theory Applied to Services Within the general classifications of services, behavior of the individual services in the marketplace varies considerably, just as the behavior of individual goods varies. "...there is a greater elasticity of demand for services than for material goods. Increased income, in this view, is more likely to flow into services than into material objects, partly because migration into urban places tends to increase 14 income and make peeple more dependent on purchased services." On the other hand, certain services tend to be quite inelastic. "The demand for special services, is often inelastic if the supplier has a unique product. And the supply may be inelastic, too. The suppliers may consider themselves professionals and charge accordingly. For example, engineers, architects, and medical doctors have commonly accepted fee schedules, and the competition among them is not based on price but on quality of service."15 One of the major constructs of marketing theory is the market- ing concept. "The marketing concept says that a firm should focus all of its efforts on satisfying its customers, at a profit....those who believe in the marketing concept feel that customers' needs should be the firm's primary focus and that resources should be organized to satisfy those needs . "16 14Gersuny and Rosengren, op. cit., p. 4. 152. Jerome McCarthy, Basic Marketing: A Managerial Approach (Homewood, Illinois: Richard D. Irwin, Inc., 1975), p. 295. 16Ibid., p. 25. 29 While the marketing concept has become increasingly popular in manu- facturing companies, it seems to have delayed use by meeting facili- ties. Many hotels are still being built based on past architecture and design, and often have little consideration for the needs of the meeting planners whose business they are so anxious to attract. "... when your company is building a new property, what approach can we use to get to management, who in turn directs and contracts with the architect, that class A exhibit cases which contain standard 7' - 6" exhibit back walls do not fit on passenger elevators or even supposedly freight elevators with less than a 10' opening. These cases to not bend at the corners and the elevators do not have rubber walls. ...On rare occasions meeting planners have been invited to express their opinions about the interior design of a new hotel before it is constructed--and believe me we are aware of building and land costs... ...But don't ask us to accept a new 1000 room hotel that turns out to be primarily a bedroom hotel without comparable meeting space." Other examples of this seeming unwillingness to consider the meeting client are mentioned later in this chapter. A study conducted by George and Barksdale indicates that atten- tion to the marketing concept is not the only difference between manu- facturing and service firms with respect to marketing. "In comparison to manufacturing firms, service firms appear to be: (1) generally less likely to have market- ing mix activities carried out in the marketing department, (2) less likely to perform analysis in the offering area, (3) more likely to handle their advertising internally rather than go to outside agencies, (4) less likely to have an overall sales plan, (5) less likely to develop sales training programs, (6) less likely to use marketing research firms and marketing consultants, and (7) less 17Dolores Harrington, "Satisfying the Customer...And Customer Needs," HSMA World (July/August 1976), p. 11. likely percent uflmugh f6 discuss thl In the fol harmork If dunthe c Hith discx mndcesc hm chann' u not on well their vices area: area rect thel bution a “HVicea HCCarthj \ Vities 1 (Octobel Charm IE “’(Jant 30 likely to spend as much on marketing when expressed as a percentage of gross sales." Although few and far between, there are other scholarly works which discuss the application of marketing theory and concepts to services. In the following sections several of these are examined within the framework of distribution, pricing, promotion, and product development. Channels and Location If any one area of services marketing has been neglected more than the others, it is distribution. "Perhaps the greatest problem with discussing the distribution of services is definitional. Since services do not involve tangible products, it is difficult to discuss "19 how channel decisions are made. Donnelly feels that this attitude is not only shallow, but is also inhibiting. "Although marketing is defined in terms of services as well as products, marketers generally have concentrated their attention on products, with the assumption that ser- vices are marketed using the same guidelines. In most areas, this assumption has proved essentially true; in the area of marketing channels, however, it is not only incor- rect but its application has limited our understanding of the marketing of services."20 Donnelly's greatest criticism of the way in which the distri- bution aspect of services is presented centers around the belief that services must be produced and distributed simultaneously. For example, McCarthy states 18William R. George and Hiram C. Barksdale, "Marketing Acti- vities in the Service Industries," Journal of Marketing, Vol. 38 (October 1974), p. 65. 191b1d., p. 67. 20James B. Donnelly, Jr., "Marketing Intermediaries in Channels of Distribution for Services," Journal of Marketing, Vol. 40 (January 1976), p. 55. 31 "Most services do not involve physical products and, therefore, there is nothing tangible to move through a distribution system. As a result, the producers typically sell directly to their customers. Where the potential customers are widespread, however, agents may enter to provide the initial contacts."21 Donnelly, however, cites several examples where, "...indirect distribution of the service was made possible because 'products' were developed that included a tangible representation of the service. This facilitates the use of intermediaries becaugs the service can be 'separated' from the producer." In the hotel and travel industries this sort of representation has been prevalent for a long time, and is growing in importance. "...of increasing importance now to the lodging industry is the growth of indirect channels of distributing through such intermediaries as the travel agents, hotel representa- tives, tour operators, space brokers, airlines, and the centralized reservation and sales operations of franchised or chain hotels to help make the room sales for hotels."23 One of the reasons for the need for indirect channels is that the industry has a large number of little-known operations which cannot afford their own representatives to contact widely scattered potential customers. Most larger hotels will also have direct channels through which their sales personnel contact customers. Even hotels which belong to referral or chain organizations usually find it necessary to maintain their own sales force. "Regardless of whether the hotel is independent or affiliated, the direct channel between a given hotel and 21McCarthy, op. cit., p. 525. 22Donnelly, op. cit., p. 57. 23William.H. Raven, "Channels of Distribution in the Hotel Industry," in John M. Rathmell, Marketingpin the Service Sector (Englewood Cliffs, New Jersey: Prentice-Hall, Inc., 1975), p. 116. 32 the consumer, while absolutely vital, is concerned chiefly with the sales function. More specifically the individual hotel's salesmen concentrate on (a) maintaining sales contact with channel intermediaries such as tour operators, travel agents, representatives and transportation companies; (b) maintaining sales contact with community firms and organizations in an attempt to obtain lodging and function business; (c) following leads furnished by other sources." Departing from a conventional view of channels of distribu- tion, we might consider a channel to be more than a means of trans- porting a product to the customer. Since products such as meeting services usually require that the customer be present at a particular facility in order to consume the service, the physical distribution function might be examined in reverse. Instead of moving the product to the customer for consumption, logistics channels for meeting ser- vices could include the movement of the customer to the service point in order to consume. In this framework, transportation companies and guest pick-up services run by facilities are a crucial part of the logistics channel for meeting facilities. In this sense, service industry companies are exhibiting the same interest in vertical channel integration as in production industries. For example, United Airlines and Western International Hotels have joined forces, as have Eastern.Airlines and Rockresorts.25 There are other examples of the departure from considering the distribution of meeting services in the traditional sense. One inno- vation has been to take meeting services to the customer. A.few hotels are using electronic and video equipment to "distribute" 2“Ihid. 25Donald E. Lundberg, The Tourist Business (2nd ed., Boston, Mass.: Cahners Publishing Company, Inc., 1974), p. 29. 33 meeting experiences around the country, eliminating the need for actual physical attendance in order to participate in a conference. "Closed-circuit TV linking 21 major cities may change the nature of convention business in this country. In 1970, General Electric formed a permanent closed—circuit color television system which was installed in special hotel meeting rooms.... Instead of sales personnel traveling to a central resort or city for a sales meeting, they go to the nearest city included in the network."26 Location is a major distribution factor for service operations. The importance of location varies depending upon the type of services offered. For example, transient hotels and motels tend to be located close to major arteries. In this sense they might be considered to offer a "convenience" service while a resort which is located away from population centers might still draw meeting business because of its "shopping" or "specialty" nature. The importance of location may be overemphasized at the expense of ignoring other factors in the marketing mix. Product Development In developing a service product, many of the same concepts used in developing production goods should be considered. According to Rathmell, however, very little is done in the area of planning new services. "A.brief state-of-the-art review of formal and organized research and development in the service sector leads to the conclusion that it is at a very elementary stage today, with exceptions, of course. New service products 'happen'--they are not formally developed."27 26Ibid., p. 28. 27Rathmell, Marketing_in the Service Sector, op. cit., p. 61. 34 Even though services are developed in a wide variety of settings and conditions, marketing theory can be usefully applied in most cases. For example, services can be seen to have life cycles, much the same as goods. Using historical data, Klug and Brumwell have shown that air travel has entered into the maturity stage of its life cycle.28 Other services, such as stagecoach travel, have died while services such as child care are still in the growth stage. All products should be developed to meet the needs and pref- erences of the customer. Through marketing research, target markets can be identified and the service designed to satisfy them. Gersuny and Rosengren pay special attention to how services can be developed to fulfill the varied needs of individuals as they pass through their personal life cycle. "The necessary adjustments that persons have to make as they pass through this process from birth to death call forth a vast array of both private and public agencies in our modern service society. They offer services that aid in the adjustment to different stages of the life course in general and through the crises associated with the rites of passage from one age status to another."2 whatever the service, development principles can and should, be applied to provide better use of resources and greater chances for success. "The conventional steps of exploration, screening, business analysis, development, testing and commericial— ization apply to services as well as goods. They may be explicit, thorough, and scientific."30 28John K. Klug and Robin A. Brumwell, "Air Travel as a Camp nodity," in John M. Rathmell, Marketing in the Service Sector, Ibid. , Pp. 70-71. 29Gersuny and Rosengren, op. cit., p. 18. 3oBath-ell, Marketing in the Service Sector, op. cit., p. 63. 35 The Promotional Mix Some authors feel that promotion is the element in the market- ing mix which is emphasized the most by service industries. Authors do not agree, however, which promotional technique takes precedence. "'Communication plays a much stronger role than dis- tribution in the marketing of services,‘ says Dr. Peter Bennett, head of the marketing department at Pennsylvania State University. 'This shifts the emphasis to personal selling because an intangible service can't sell itself the way a machine can.'" 1 McCarthy notes further, "Since most service businesses have relatively undif- ferentiated products, their promotional task usually is persuasive in nature. The emphasis is on personal selling. When a service is new, information about price, avail- ability, and dependability is important. But competitors usually enter a profitable field quickly, and ersonal persuasion is then needed to hold customers."3 Donnelly, however, notes that advertising may receive too much emphasis. "The problem of making services more efficiently and widely available must not be ignored in favor of other elements of the marketing mix that are easier to deal with. For example, many service industries have been criticized for an 'overdependence on advertising.‘ The problem of overdependence on one or two elements of the marketing mix is one that service marketers cannot afford."33 Whatever promotional element receives the most attention, it seems that for the service sector in general, promotion has a smaller role than for goods. "It is often observed that promotion plays a more modest role in the marketing of services than of goods and some data 31Thayer C. Taylor, "Selling the Services Society," Sales Management (March 6, 1972), p. 25. 32McCarthy, op. cit., p. 525. 33Donnelly, op. cit., p. 57. 36 tend to support this notion. For example, only 10 of the top 100 advertisers in 1971 were service firms and several of these also manufactured industrial and consumer goods and, presumably, significant portions of their advertising dollars were expended to promote goods; moreover, the 10 service firms accounted for only 6.6 percent of adver- tising expenditures of the top 100 advertisers."34 It is not too difficult to understand the lesser emphasis on the promotion of services when considering the sector as a whole. It is only recently that lawyers have been allowed to advertise, and most nonprofit organizations have traditionally not considered promotion within their scope (even though all organizations engage in some sort 35 It appears that in the area of of communications-and promotion). meeting facility promotion both advertising and personal selling are used more extensively than for many other services. In the last few years even television commercials have been popping up, encouraging business groups to come to Holiday Inns, Sheraton, and other properties. Thus, the lodging industry seems to be using promotion in much the same manner as production industries, even though lodging budgets might be smaller in most cases. Pricing;of Services Many service industries are regulated by the government and do not engage in pricing in a marketing sense, although they are still subject to economic forces to some extent. Thus, while economic literature is quite concerned with pricing in regulated industries, the marketing literature tends to ignore these industries. Nonprofit 3I'Rathmell,‘liarketing in the Service Sector, op. cit., p. 92. 35 p. 200. Kotler, Marketigg for Nonprofit Organizations, op; cit., 37 organizations are also usually excluded from pricing discussions in the marketing literature for services, primarily because the profit maximization principle is absent. "Business firms set their prices to maximize their profits. The theory of profit-maximizing pricing is well worked out and widely understood, requiring knowledge of the demand and cost functions for the product. Nonprofit organizations price according to other standards, such as covering costs, matching competition, subsidizing certain groups, and so on." Kotler feels, however, that there is room for the application of price theory to nonprofit areas. "Marketers have.worked long and hard in the area of price promotion -- cents off, two-for-the-price-of-one, premiums, and so on - and can bring this expertise into nonprofit organizations."3 Since there is not very much concentration in non-regulated service industries, Rathmell feels that theory surrounding a monopo- listic market structure best describes pricing practices for services. "The theory of monopolistic competition is the most appropriate theoretical explanation of market conditions under which the prices of services are set. There are typically many sellers and many buyers. However, the seller has a unique product to sell: the performance of his own mix of human labor, aptitudes, and skill. A reputation for superior performance enables the seller to charge a higher price..."3 On a firm by firm analysis, the service industry reportedly uses the whole range of pricing policies39 and pricing methods."0 361bid., p. 70. 37Ibid., p. 71. 38Rathmell,‘llar‘keti_n_g in the Service Sector, op. cit., p. 74. 391b1d., p. 75. ‘°1b1d., p. 77. 38 However, as a marketing tool, pricing in the service sector appears to be subordinated to locational and promotional factors. Industrial Buyer Behavior Although there has been more written about industrial marketing than marketing in the service sector, the amount of literature is small compared to consumer marketing literature. This seems especially true in the area of buyer behavior. An article by Gordon McAleer, reporting the results of an empirical study, points out this problem. "Industrial marketers have probably suffered more from a paucity of information about their markets and buyer be- havior than consumer marketers...Industria1 advertisers, for example, traditionally have developed strategy pri- marily on the basis of historic assumptions about indus- trial buyer behavior."41 The results of McAleer's study indicate that in the area of industrial advertising, marketers don't understand their markets, and in fact may be misled by following historical 'concepts' of industrial buyer be- habior. "It was concluded that advertisers to each of these (industrial) market segments did not correctly perceive the influence of advertising appeals upon the respective market segments concerned. A careful review of the find- ings might also suggest the dubious value of utilizing certain concepts in their advertising."42 Another recent article agrees that the industrial sector has been neglected, but points out that recent years have seen some growth of interest in this area. alGordon HcAleer, "Do Industrial Advertisers Understand What Influences Their Markets?" Journal of Marketing, Vol. 38 (January 1974), p. 15. 421bid., p. 22. proce bein: behz or ; tri SGT su} 39 "The Industrial sector has long been regarded as the stepchild of marketing in terms of the amount of research effort devoted to its problems. There are, however, indi- cations that the situation may be changing. Research on industrial]organizational buying behavior is growing, and a considerable body of empirical knowledge about proces- ses surrounding the innovation and diffusion of industrial technologies and products has been developing."43 Even if there is an increased emphasis on industrial buying processes, this seems to be primarily for goods, with services again being neglected. "By far the large majority of research in both the fields of consumer and organizational buying behavior has been concerned with the purchasing decisions related to tangible products."44 Much of the literature which is dedicated to industrial buyer behavior related to goods can probably be applied to services also, or at least provide some theoretical framework for examining indus- trial services. Most of the literature which deals with industrial services cautions against treating services and goods as synonymous in terms of how they are marketed. For example, Taylor, quoting cone sultant Eugene B. Mapel, writes, "'When marketing a product, the primary task is to create a desire or need for the product in the mind of the consumer. Services are best marketed by meeting already established needs. The principle difference lies in the fact that the product usually determines the mar- keting strategy; while in services, the strategy often develops out of the motivational influences surrounding the service.‘ “Gary L. Lilian, Alvin J. Silk, Jean-Marie Choffray, and Murlidhar Rao, "Industrial Advertising Effects and Budgeting Prac— tices," Journal of Marketing, Vol. 40 (January 1976), p. 16. MPaul A. Portin, J. R. Brent Ritchie, and Jules Arsenault, A Study of the Decision Process of North American Associations Con- cerninggthe Choice of a Convegtion Site, Quebec Planning and Develop- ment Council, Vol. I. Final Report, 1975, p. 3. shor note put bel: inc 40 The subtle shift in sales emphasis will require a more systems type selling strategy and a widened role for the field salesman. Greater in-depth knowledge of the customer's business also will be required of the services salesman."45 Importance of Industrial Services It may seem as though the area of industrial services is too specialized to warrant much attention, especially considering the shortage of research in industrial behavior in general. It should be noted, however, that "Many service industries produce intermediate out- put (sold to other firms) as well as final output. Most observers believe that a portion of the growth of services is attributable to an increase in specialization and division of labor, i.e., a relative increase in intermediate demand for services."46 To be more specific, Taylor has compiled government data which show that 17.8% of purchases by manufacturing firms were from services industries and that 10.82 of goods purchased from manufacturing indus- tries were purchased by services industries."7 It is difficult to single out which industrial services tend to be the most important since Standard Industrial Classifications are not finely broken down and do not distinguish between output sued by businesses and that used by consumers. If we look at sales for Hotels and Motels (SIC 7011) we can see that it is a fairly large segment of the service sector ASTaylor, op. cit., pp. 24-25. Athchs, The Service Economy, op. cit., p. 39. (47Taylor, Ibid., p. 27. with 1' the If by Le! ‘mmm'u Cove' Fina bill brok Vice panc 311C rep 13a in 41 with receipts of 16.5 billion projected for 1980.48 The magnitude of the meetings industry is discussed later in this chapter. The importance of services surrounding goods is pointed out by Leonard Simon. "Technical product service is clearly a potential com- ponent of the marketing mix utilized by any manufacturer and therefore a means of differentiating the product. When suppliers' offers are equal as regards price, quality, and performance--i.e., various suppliers are competitive- 49 technical product service considerations come to the fore." Government figures show total GNP in 1975 as $1,516.3 billion dollars. Final product sales for goods were $696.3 billion and services $692.5 50 The types of industrial services mentioned above are rarely billion. broken down and accounted for in service industry figures. The ser- vices surrounding the industrial product are increasingly being ex- panded by manufacturers. Even though these services may be an integral component of the firmis marketing strategy, their effects and import- ance are all but ignored in the marketing literature and in government reports. Industrial Buying Models Modeling has become a popular practice to describe both con- sumer and industrial buying behavior. Much more has been accomplished in the testing of models in the consumer area than the industrial area. 48D. 8. Industrial 0utlook~1975 (Washington, D.C.: U. S. Department of Commerce, U. S. Government Printing Office 1975), p. 417. ‘9Leonard 8. Simon, "Measuring the Market Impact of Technical Services," Journal of Marketinngesearch, Vol. II, No. 1 (February 1965), p. 32. SOSurvey_of Current Business, Vol. 56, No. 10 (Washington, D.C.: U. S. Government Printing Office, October 1976), p. 8-1. 42 This presents a problem to industrial marketers who are told the value of developing strategies based on customer buying behavior. "Industrial and institutional marketers have often been urged to base their strategies on careful appraisal of buy- ing behavior within key accounts and in principal market segments. When they search the available literature on buyer behavior, however, they find virtually exclusive empha- sis on consumers, not industrial buyers. Research findings and theoretical discussions about consumer behavior often have little relevance for the industrial marketer. A buyer behavior model can help the marketer to analyze available information about the market and to identify the need for additional information."51 In recent years industrial buying models have acquired a high degree of sophistication in comparison with what Feldman and Cardozo call the classical or simplistic model. This model was based solely on price. "His (the buyer) sole duty is to buy what is speci- fied, at the lowest price per unit. To sell this "honest clerk," marketers presumably need only a complete catalogue and the lowest price. Pew, if any, industrial marketers can take such a model seriously."52 Webster and Wind present a comprehensive discussion of organi- zational buying models in Organization Buzing Behavior.53 They discuss models by categorizing them as (1) Taskroriented (2) NOntask-oriented 51Frederick E. Webster, Jr. and Yoram‘Wind," A.General Model for Understanding Organizational Buying Behavior," Journal of Marketipg, Vol. 36 (April 1972), p. 12. 52Wallace Peldman and Richard Cardozo, "The 'Industrial' Revolution and Models of Buyer Behavior," Journal of Purchasng (November 1969), p. 78. 53Webster and Wind, Organizational Buying Behavioga op. cit., pp. 12-27. 43 and (3) Complex models. All of these models' shortcomings are pointed out, and a case is made for developing an integrated model. "Available models for the most part overlook either task or nontask variables and are therefore inadequate analytical tools. An integrated model is required if we are to hve sufficient understanding of the organizational buying process as the basis for marketing strategy. It must recognize the complex interaction of task and nontask variables and of individual, group, organizational, and environmental factors in determining response to marketing effort. It must also recognize the alternative forms of buying response and the sequential nature of the organizational buying decision process."54 There are some obvious benefits to be gathered from the develop- ment of an integrated model of organizational buying behavior. A gen- eral model provides a framework from which research hypotheses can be developed and tested and also brings together previous theoretical developments to be examined as a whole. "It can be applied to all organizational buying and suffers the weaknesses of general models. It doesn't describe a specific buying situation in the richness of detail required to make a model operational, and it cannot be quantified. However, generality offers a compensating set of benefits. The model presents a comprehensive view of organizational buying that enables one to evaluate the relevance of specific variables and thereby permits greater insight into the basic processes of industrial buying be- havior. It identifies the classes of variables that must be examined by any student of organizational buying, practi- tioner, or academician."55 At first glance, the complexity of a general model is over- whelming. It has been pointed out, however, that if a model is to be applied to a specific situation, it can be simplified to make it more workable. sl.Ibid., pp. 26-27. 55Frederick E. Webster, Jr. and Yoram Wind, "A General Model for Understanding Organizational Buying Behavior," Journal of Marketigg, Vol, 36 (April 1972), p. 12. 44 "One can however, simplify the actual application of the model in a specific study in at least two ways. First, several variables are included as conditions to hold cone stant differences among types of products to be purchased (product-specific factors) and differences among types of purchasing organizations. These exogenous factors will not be necessary if the objective of a study is to de- scribe the process of buying behavior for a specific product or service. Second, some of the decisionrprocess variables can also be ignored if the interest is strictly to conduct a survey of static measurement of the psychology of the organizational buyers."56 Perhaps the most widely accepted general models are those developed by Sheth57 and Webster and Wind.” Both of these models take note of the importance of multiple buying influences at each stage in the buying decision process. As noted above, one of the problems with a general model is the difficulty in applying it to specific situations. For example, the denotation of engineers as a class of buyers may not be applicable to many service-oriented products. Fbrtin emphasizes this point in relation to research con- ducted in the consumer area. "The implications of the...research related to the structure of influence in multiple person purchasing situr ations are at least three in number. First, the research must be product specific which in this particular case refers to the specific 'purchase' of a meeting/convention site. Second, it can be expected that the perceptions as to the extent of influence on the site selection process ‘will vary across different members interested in the deci- sion. Finally, it is probable that the nature and extent of the influence exerted by different participants involved in the process will vary across different elements of the overall decision.” “Jagdish n. Sbeth, "A Model of Industrial Buyer Behavior," Journal of‘Marketipg, vol. 37 (October 1973), p. 51. 5711.14. , p. 51. 53Webster and Wind, ”A.General Model for Understanding Organi- zational Buying Behavior," pp. cit., p. 15. 59Fortin, et. a1., 0 . cit., p. 17. 45 The scope of an integrative model makes testing the model as a.whole unfeasible. As a result, parts of the model are tested a little at a time, in product-specific situations.’ There are several studies reported which test either parts of general organizational 60 This models or theories relating to industrial buying behavior. process has a long way to go, however, before any model can be cone sidered to be validated. The Hospitality Industgz The hospitality industry, of which meeting services are a part, is a multifaceted member of our economic structure. The major segments of this industry include restaurants, clubs, travel services, hotels, and other meeting facilities. The literature relating to the hospitality industry consists primarily of articles written in trade journals and several "how to" text books. The majority of the litera- ture is aimed at making suggestions for improvement of operations and discussing current problems, rather than providing any theoretical framework or scholarly research. Recently, more attention has been given the hospitality industry by academicians. This has been reflected by the growth of universities offering degree programs in Hotel and Restaurant Manage- ment and the publication of a few sound textbooks and research findings. 60See, for example, Leon G. Schiffman and Vincent Gaccione "Opinion Leaders in Institution.Markets," Journal of'Marketing, vol. 38 (April 1974), pp. 49-53; Donald R. Lehmann and John O'Shaughnessy, "Difference in Attribute Importance for Different Industrial Products," Journal of‘Marketigg, vol. 38 (April 1974), pp. 36-42; William.D. Perreault, Jr. and Frederick A. Russ, "Physical Distri- bution Service in Industrial Purchase Decisions," Journal of‘Marketing, vol. 40 (April 1976), pp. 3-10; and Fortin, et. al., op. cit. 15 c The A can. C3 :3 (b a-‘hi hr r—‘lrf 46 The marketing literature related to the hospitality industry is even less sophisticated than the general services literature. Tyler61 groups the hotel marketing literature into three categories: conceptual, operating checklists, and customer analysis. The latter two categories are concerned primarily with day to day operations and do not provide general constructs of value to the industry as a whole. One of the major contribution in these categories is The Full House,62 which focuses on merchandising techniques and specific marketing problems. This type of "how to do it" literature, while providing some useful ideas and helpful techniques, does not lend itself well to generalizations. Crissy, Boewadt, and Laudadio63 have developed the first com- prehensive marketing text which brings together many segments of the industry. The book provides a theoretical base for the industry, to which sound marketing theory is applied. This type of literature helps to unify the industry and focuses on marketing philosophies, rather than trying to point out step by step development of specific marketing programs. The need and concern for a more intense development of marketing is reflected in the growth trends of the hotel-motel industry. In 61Philip Russell Tyler, "Correlates of Success in Convention Properties: An Empirical Study" (unpublished D.B.A. dissertation, Michigan State University, 1972), p. 18. 62C. Dewitt Coffman, The Full House (Ithaca, New York: Cornell University School of Hotel Administration, 1971). 63W. J. E. Crissy, Robert J. Boewadt, and Dante M. Laudadio, _yarketing of Hospitality Services--Food, Travel, Lodging (East Lansing, Michigan: The Educational Institute of the American Hotel- Motel Association, 1975). 47 1948 there was a reported 36,219 hotel-motel establishments in the United States with a total of 1,853,723 guest rooms. By 1974, these figures had grown to 45,150 establishments with rooms totalling 2,751,000. What is more significant is that during this same period, the average occupancy rate dropped from 85% to 61%.64 These figures indicate that competition has become more intense resulting in an even greater need for a marketing orientation. Meetings and Conventions As the squeeze on occupancy rates took place, facilities pro- viding accommodations began to look for new market segments that previously had received little attention. The corporate meeting came into focus in the 1960's as a large potential source of business. As mentioned by an official of the Western International Hotel chain, new markets are often not seriously considered. "Sometimes we assume the present market is the same as the potential market, but this is not always the case. For instance, one hotel has found indicators showing that the corporate meeting is a good new market, although it has never been significant before."65 While this article was written in 1970, other writers see the recogni- tion of the meetings market as beginning in the mid-1960's. This era was the beginning of a great amount of marketing effort and specializa- tion which was to be aimed at courting corporate meeting business. "By the mid-60's, because of the demands these new kinds of management conferences and training programs 6 4Harris, Kerr, Forster and Company, Trends in the Hotel-Motel Business--l975 (U.S.A. ed., New York: Harris, Kerr, Forster and Company, 1975), p. 3. "The Style of Western International," Hospitality (July 1970) , p. 11-510 48 created, some dissatisfaction was already being felt with previously accepted meeting environments. Meetings held in home offices were interrupted with messages and tele- phone calls. That type of hotel function space designed for banquets, cocktail receptions, and a multitude of other public affairs, left much to be desired as a learn- ing environment. And university campuses, thought to be conducive to serious training programs, couldn't offer the amenities appropriate for management level meetings and were available for only limited periods during the year."66 The literature is sometimes very specific in pointing out the difference between a "convention" and other types of group business. Conventions have been around on a large scale for a long time and have been actively sought by hotels. Marketing strategies being developed in many properties are concerned with shifting or adding to the mar- keting effort aimed at other types of groups. The nature of these gatherings is often educational rather than frivolous as conventions often have the reputation of being. "You note that I use the words 'meeting', 'conference', and 'seminar', but not convention. Any hotel or motel bidding for the industrial meeting, conference, or seminar, must understand that the participants are not attending to be entertained, which the word 'convention' might imply, but are attending in order to learn, to become better quali- fied to do their own particular jobs."67 Thus we have a market segment separate from conventions which has greatly different characteristics and requirements. While the literature reflects a growing awareness of the importance of this mar— ket segment, little solid research has been done to discover the wants and needs of the people involved and how best to service them. 6Donna Zack, "Conference Centers -- Where the Meeting is King," Meetings and Conventions (May 1975), p. 49. 67 Charles V. Crumb, "Getting More of the Industrial Seminar Market," Hotel and Motel Management (March 1968), p. 22. 49 Articles written on the subject tend to be more concerned with specu- lating on what services it is advisable to have, than with discovering the needs of the people planning and attending the meeting. Importance of Corporate Meetings It is only recently that attempts have been made to assess the importance and economic potential of corporate meetings. As late as 1961 the literature made little reference to meetings other than con- ventions. Typical of this attitude is an article which appeared in Fortune magazine discussing the battle for business between the Shera- ton and Hilton chains. "According to the New York Convention and Visitors Bureau, conventions supply between 25 and 30 percent of all hotel revenues. In many cities convention business is what holds up occupancy rates in the face of declining transient business. ...the share for Hilton as a chain runs 35% for con- ventions and about 50% for the Palmer House and the Conrad Hilton."68 Later articles placed more and more emphasis on the meetings aspect of group business and its potential. An article in Institutions notes, "Sales meetings and conventions are more important to a hotel's financial health today than ever before."69 By the 1970's an effort was being made to assess the total market for corporate meetings. This produced a wide variety of esti— mates, all of which indicate a large market for purveyors of meeting 68Carl Rieser, "Sheraton versus Hilton Playing Checkers with 60 Thousand Rooms," Fortune, LXIII (January 1961), p. 164. 69"The Business of Business Meetings," Institutions (March 1969), p. 79. 50 services. A 1971 article appearing in the Cornell HRA Quarterly states, "Some 200,000 company conferences are held each year, most of them in hotels and motels."70 By 1974, estimates of the corporate meetings market had escalated considerably, indicating a growing market which was attract- ing increased attention. "In 1974, there were over 500,000 meetings held by corporations outside of their company offices. There were also 92,000 meetings held by associations, a total of almost 600,000 meetings."71 And, "...total expenditures on off-premises (corporate) meetings over the last 12 months comes to $2.4 billion. This money was spent on 503,800 meetings, with 24,342,000 attendance."72 Discrepancies among figures are quite large when examining data reported by different publishers. The above article quoted a figure of $2.4 billion spent on corporate meetings, while another article, appearing in Hospitality magazine notes, "Corporate spending on meetings--l.5 billion a year—~13 dramatically up over a few years ago."73 Even with inconsistent figures it is clear that corporate meetings comprise a large market segment. Add other types of corporate get-togethers and the figures are even greater. 7OHarlan Perrins, "Company Conferences in Hotels," Cornell HRA Quarterly (February 1971), p. 67. 71 Walter A. Green, "Business Meetings Must Yield Solid Returns," Meetings and Conventions (May 1975), p. 14. 72 Mel Hosansky, "1974 Market Data Report of the Meetings and Conventions Industry," Meetings and Conventions (December 1974), p. 12. 73 Herbert Wilson, Untitled Article, Hospitality (October 1975), p. 13. 51 "Last year, corporations like yours spent $7 billion on 300,000 meetings, trade shows, and conventions."74 MeetingpFacility Typology Most corporate meetings were traditionally held either at com- pany offices or at hotels. However, with a growing concern for execu- tive development, middle management training and the trend toward con— tinental and global conglomeration, a need has arisen for more special- ized meeting facilities away from the interruptions and constrained atmospheres which are previously suitable.75 As a result, many com- panies have been moving their corporate meetings away from the office and into conference facilities.76 This movement has brought about the development of many different types of facilities and a higher degree of specialization. Hotels which are catering to, or trying to develop meeting business are adding services to attract corporations.77 The emphasis placed on corporate business varies property to property. The development of airport hotels such as the Hyatt Regency O'Hare in Chicago illustrates a new concept in location and the great amount of emphasis placed on booking group business. An interview conducted in 1971 with Pat Foley, General Manager of the Hyatt Regency at O'Hare International Airport, is indicative of this attitude. "According to Foley, Hyatt is placing its emphasis on group business. As much as 80 per cent or more of our 74Henry Lefer, "The Widening World of Business Meetings," Management and Leisure Time Section, Hospitality (February 1972). 75Walter A. Green, "A Case for Productive Weekend Meetings," Meetings and Conventions (June 1975), p. 32. 76Zack, op. cit., p. 49. 77Crissy, et. al., op. cit., p. 65. 52 business will be in the category of the businessman and his meetings. Advance bookings at opening time were more than $9 million. The airport hotel is right on target for the needs of 10 to 1,000 persons. Hyatt opened the first 'fly-in' hotel in Los Angeles, and the Regency Hyatt House at O'Hare is our vote of confidence in the airport/hotel/ meeting concept and Hyatt's bid for leadership in the field, according to Foley.78 The philosophy behind the airport hotel is to provide locations where businessmen from all over the world can fly in, have their meeting and fly out, without having to fight traffic or spend a lot of time. Other hotel chains, such as the Marriott Corporation have also engaged in extensive development of this market segment. The highest degree of specialization in meeting facilities is demonstrated by the rise of the conference center. These facilities are designed to cater to group business of many types. "Today, a number of conference centers exist which offer a wide variety of settings and even a variety of philosophies about the features which make them suitable for certain kinds of meetings."79 These conference centers range from converted mansions, typified by the Harrison Executive Conference Center in Glen Cove, New York, to full service accommodations such as the Woodlands Inn near Houston, Texas. An even newer trend in conference facilities is to develop sophisticated communications and audio-visual centers. These confer- ence facilities, like the Multimedia Forum in Kansas City's Crown Center complex and the Watergate Conference Center in Washington's famous Watergate Complex, often offer no overnight accommodations, but 78"The Quality Approach," Hotel and Motel Management (July 1971), p0 34. 79Zack, op. cit., p. 50. 53 work closely with local hotels.80 There are many hotels, motels, and resorts that bill theme selves as conference centers. Some of them are owned by corporations or trade associations. Others may even be owned by unions, such as the MEA Conference Center near Battle Creek, Michigan which is owned and operated by the Michigan Education Association. Of the centers catering primarily to businessmen, "...the leader seems to be Harrison Executive Confer- ence Centers with three 'Harrison Houses' in Glen Cove, New York; Lake Bluff, Illinois; and Southbury, Connecticut. The first two are old mansions recently converted to plush conference sites, the Southbury center, opened late last year, was built from the ground up as a meeting place."81 Another type of meeting facility is offered by colleges and universities. Many schools, both large and small, have conference facilities ranging from meeting rooms in student unions with housing in dormitories, to full service operations, such as the Kellogg Centers for Continuing Education found throughout the country. Most of these meeting facilities are designed to handle a diversity of meetings, including student functions. Perhaps the most business-oriented meeting facility operated by a university is Michigan State University's Management Education Center in Troy, Michigan, which opened in August of 1975. "The center, with its 319-seat auditorium, dining facility and conference rooms, provides an attractive alternative to meeting in a hotel... There is also a business-oriented library, and a computer hook-up with the MSU campus. 8OZack, op. cit., p. 50. 81"New Centers in the Outskirts," Sales Management (Monday, August 21, 1972), p. 31. 54 While (John) Patterson (director of the center) refers to area hotels as competitors, he says the overlap in ser- vices is only partial since the center will only book business-related events."82 The growth of meeting facilities at universities probably has also contributed to the growth of other types of meeting facilities as people catering to meetings realize that one of their most important products is education.83 The downtown hotel, motel, or motor inn is the traditional location for meetings. The larger properties have been more concerned with conventions in the past, but are also beginning to realize the value of the smaller business meetings. However, the emphasis in many locations still seems to be on conventions. "Philadelphia, where convention business comprises about 70% of the city's income from visitors (vs. 30 percent from tourists), is still very much alive as a convention city..."34 "The Pfister (in downtown Milwaukee) is currently running about 50—50 convention and transient business. "85 Many of the newer hotels are tied to the commitment of the city where they are located, to pursue convention business. The Detroit Plaza, a Western International Hotel opening in Detroit's Renaissance Center in the Spring of 1977, is a central part of the city's plan to 82Gregory Skwira, "Accommodations for Business..." Detroit Free Press (Sunday, October 19, 1975), p. B-l. 83Crissy, et. al., op. cit., p. 24. 84Muriel Adams, "Philadelphia Rallies in Wake of Bellevue Stratford Closing," Meeting_News (February 1977), p. 4. 85"Marcus: Marketing in Milwaukee," Hotel and Motel Manage- ment (September 1974), p. 24. 55 revitalize the downtown area, and attract conventions.86 Resorts have long viewed group functions as a way of smoothing out seasonal peaks and valleys,87 and hardly any new resort is built without considering meeting and convention business.88 For example, Boyne Mountain, a ski resort in Northern Michigan, has recently added a large convention hall flexible enough to handle many types of group business. Resorts allow businessmen the opportunity to work and relax at the same time. The choice of location is virtually unlimited and can provide a variety of atmosphere, year after year. As the fear of the inner-city grew during the last decade, so did the trend toward suburban hotels. These types of hotels are usually located in a wealthy suburb of a major city, possibly near the headquarters of large corporations. The philosophy behind this con- cept is that people no longer want to stay downtown and that suburban access is considerably easier. Another type of meeting facility is provided by transportation companies. Executives have long taken the opportunity of meeting in lounges at airports or in airplanes to conserve time. Expanding this concept, some companies have held meetings for large groups on chartered aircraft during transatlantic flights and on cruise ships. A meeting planning book published by SM/Sales MeetipgghMagazine, points out, 86"Detroit's Downtown Gets a Tonic," Business Week (August 9, 1976), p. 52. 87"The Seasonal Resort Needs Conventions," The Cornell HRA Quarterly (November 1962), p. 32. 88Lefer, op. cit., Management and Leisure Time Section. 56 "Conventions aboard cruise ships have an added lure of glamour and meeting planners have the most captive of all audiences. If you charter the entire ship, you have no problems with meal functions or recreation. The whole ship is yours."89 The concept of group meetings in the air is still relatively new, and is used most often as a part of a longer meeting to be held at the destination. The types of meeting facilities discussed here include most of the settings available to corporations away from their corporate offices. It should be pointed out that many restaurants and clubs also have meeting space available which is widely used by business groups. The type of meetings held here are usually rather short and rarely involve the need for lodging and other services offered by specialized meeting facilities. Different sources have developed their own meeting facility typologies. Hospitality magazine classifies the types of facilities as: l. intown hotels, 2. cruise and charter, 3. conference center, and 4. resorts.90 This typology leaves out the important airport facility and does not take note of the suburban property. Another publication lists six types of facilities: large metropolitan hotels, motels, small hotels, motor inns, airport hotels and cruise ships.91 The difficulty with this is in defining the differences between large hotels, small hotels, and motor inns. The typology presented in 89The Theory_and Practice of Convention Management (Phila- delphia, Pennsylvania: SM/Sales Meetings Magazine, 1974), p. 20. 90Lefer, op. cit., Management Leisure Time Section. 91The Theogy and Practice of Convention Management, op. cit., p. 19. 57 Figure l is more a matter of convenience than an attempt to incorpo— rate the various typologies presented in the literature. FIGURE 1 MEETING FACILITY TYPOLOGY Main Main Classification Advantages* Disadvantages* Airport Fly-in, fly-out Away from business Modern facilities (most) district Limited entertainment Downtown Close to other busi- Deterioration of inner nesses city Nightlife, shopping, Drive time from air- entertainment ports Resort Seclusion Distance from office Recreational facili- Atmosphere may be too ties relaxed Suburban Easy access Distance from airport Cruise Ship University Facility Conference Center Away from inner city Captive audience Good food and facili- ties Educational environ- ment Human resources Special attention, facility Away from interruptions and office Away from other busi- nesses Communication with office Departure locations Often non-professional Lack comforts of com- mercial hotels Distance from office Limited entertainment *These are generalities and are not true in all cases. 58 Meeting Trends There are several changes taking place in the area of group meetings. Some of these are due to changing economic conditions, others to the realization of the educational value of meetings. According to William White, national sales manager for the Fairmont chain in 1972, "The number of meetings held by large corporations seems to be increasing as management discovers the need to in- crease person—to-person contact. Regional meetings on a regular basis, either as a replacement for an annual national meeting or to supplement it, appear to be the direction cor- porate business is taking. This, of course, provides us with an even larger and more lucrative market."92 However, in the midst of the energy crisis, expense accounts were cut back and some companies also tried to scale down meetings. This attitude was typified by Raymond Hall, writing for Industrial Marketing when he urged that there be a minimum amount of entertain- ment and banquets. He also recommended that regional meetings "should not last more than one day, and should be held at an airport motel located centrally within the region."93 Fortunately, certain types of meetings took a new importance. Economic bad times may call for more importance than ever to be placed on a sales meeting to portray optimism and stimulate those salesmen who are having diffi- culties making sales.94 As noted earlier, indications are that the 92"85,000 Meetings a Year Mean Big Money," Institutions/Volume Feeding (June 1, 1972), p. 29. 93Raymond Hall, "Reps Urge Fewer, Leaner Sales Meetings: Ex- plore Alternatives," Industrial Marketipg (July 1973), p. 42. 9('Milton Astroff, "Sales Meetings--Why Your Next One Could Be Your Most Important One," Sales Managgment (April 8, 1974), pp. 26-28. 59 meetings market did grow from 1970-1975, so that economic and energy problems had only a temporary effect, if indeed there was an effect. A trend that does appear to be here to stay is a movement toward smaller meetings. "Groups aren't always hordes. In fact, in the past few years, the number of shorter, smaller meetings and educational seminars have multiplied."95 "While attendance per meeting has dropped, the number of meetings is increasing. And that trend is expected to continue. As meetings become smaller, the market is broadened for smaller properties, which in the past have been forced to watch the grand hotels with large ball- rooms corner most of that business. A growing number of hotel sales managers now admit that they have to sell twice as many meetings just to make up for the drop in size of the average group booked."96 This trend appears not only in hotels and motels but also in the specialized conference centers. "Harrison Conference Center can accommodate conferences of up to 200 persons, however in 1975, 50 percent of these meetings had fewer than 20 participants and 15 percent assembled fewer than 10 people."97 The small group theme has also been incorporated into the textbook literature. Crissy, Boewadt, and Laudadio emphasize: "An important point to remember regarding group busi- ness is that most of it involves small groups. The majority of group business serviced by the industry con- sists of groups of less than fifty who stay three nights or less. This means that even a manager of a modest- size property can reap some of the benefits of group meetings if he is willing to invest some time, money, and effort."98 95"85,000 Meetings a Year Mean Big Money," op. cit., p. 29. 96"Trends Toward Smaller Meetings Broadens Market for Small Operators," Motel/Hotel "Insider" Newsletter Weekly (November 17, 1975), p. 1. 97Walter A. Green, "Not for Meeting Planners Only," Meetings and Conventions (January 1974), p. 12. 98Crissy, et. al., op. cit., p. 24. 60 The trend toward smaller meetings is not only a major trend but also one that affects all types of facilities within the industry. Meetings held within the lodging industry itself are also taking on a new character as the industry becomes more complex. "The typical lodging convention is changing faster than at any time in history. Gone is the day when the major purpose of a hotel convention was to socialize. Gone also is the day when people went to attend a con- vention just to look for a job. The lodging business has become such a sophisticated industry that it's difficult to keep up on what is going on without attend- ing conventions regularly."99 One of the topics of concern in these meetings is the determination of sources of new business for which the corporate business meeting pro- vides great potential. In fact, as one source points out, "Not only is convention-meeting business big--it's the fastest growing source of business for hotels today. ...one travel industry source estimates that multi-national conventions are growing at the rate of ZOZ/year--a par- ticularly important fact to bear in mind these days as energy shortages cut into vacation traffic."100 The internationalization of meetings illustrates an important competitive pressure that is being felt by facilities specializing in meetings. Now 0.8. convention sites are feeling pressure not only from facilities in the same town or region, but from properties throughout the world. The specialized conference center is an added pressure, but even locations that have previously been considered strictly vacation areas are popping into the picture. 99"Lodging Conventions Become More Sophisticated to Meet New Industry Needs," Motel/Hotel "Insider" Newsletter Weekly, Vol. VII, No. 41 (June 28, 1976), p. 1. 100"Meetings and Conventions: Slicing Up a $1 Billion Pie," Service World International (March 1974), p. 20. 61 "Competition: It's heavy and growing more so. Between cities...between countries...between individual hotels. And other types of facilities are getting into the act. In America, a small chain of meetings-only resorts called Harrison Executive Conference Centers is growing from three to six properties. In the UK, Motel Burstin has announced plans to build a conference circuit of five major hotels. Holiday clubs, too, see the convention-meeting business as an excellent way to fill beds in off-peak seasons, some- times selling at reduced rates. France's Club Mediterranee is actively seeking such business..."101 Identifyipg,MeetingiPlanners The focal point of the sales effort for meeting facilities is usually the meeting planner. One of the problems faced by hotel sales‘ managers is the identification of this individual within the organiza- tion. Large companies often have professional planners who devote the majority of their time to selecting facilities and running meetings. "In many large companies, meeting facility arrange- ments have become a specialty. What's more, many of the men in these positions have backgrounds in the hotel industries. Companies, more than ever before, are becoming extremely exacting and demanding in terms of what they want and need in hotel facilities."102 While these people may be demanding, they are easily identified and usually know what they are doing. Another way of identifying company meeting planners is through their trade associations. Members of these associations have a wide range of responsibilities, but most have some meeting planning duties. 1011bid., p. 20. 102"The Business of Business Meetings," Institutions (March 1967), p. 79- 62 "There are thousands of association and company meeting planners. For example, the American Society of Association Executives claims almost 5,000 members; Meeting Planners International has some 200 members; the Society of Company Meeting Planners has 100."103 These people are the ones who tend to plan large national and inter- national meetings as well as a number of smaller training sessions and seminars. "The average such planner was actually committed to holding more of the largest meeting--3.5--in the next 12 months than he was the next largest--3.0. The overall corporate planner expected to run 4.7 meetings in the 20-49 range and 3.7 meetings in the 50-99 one."104 It is more difficult to locate persons in companies who plan meetings as a small part of their regular job. Waters defines a meeting planner as "...an individual who plans, organizes and directs company functions of all types such as banquets, conventions, and "105 sales meetings. This definition covers a wide range of people in an organization who may hold almost any job within the company. An article in Meetings and Conventions notes, however, that "More often than not, one (a corporate meeting planner) rises in sales and eventually receives responsibility for sales meetings."106 103"Sales Generators," Hotel and Motel Mapgggment (January 1974), p. 25. 104Mel Hosansky, "1975 Market Data Report of the Meetings and Conventions Industry." Meetings and Conventions (December 1975), p. 42. 105Wayne Waters, "What is a Company Meeting Planner?" Meetings and Conventions (May 1973), p. 36. 106"Profile of a Meeting Planner," Meeting§ and Conventions (August 1973), p. 55. 63 Whatever the position a planner holds, one of the most diffi- cult problems facing the hotel sales manager is the identification of, and communication with, both full and part-time meeting planners. This person is usually the initial contact for selling meeting ser- vices to all decision makers involved, and the one towards which the sales program is aimed. Services Desired by Corporate Meeting Planners The needs and wants of corporate meeting planners vary according to the individuals involved and the type of meeting to be conducted. Most corporate meetings will involve elements of both business and recreation. The degree to which each element is stressed will cause some variance in setting priorities for services among meeting planners. The literature which deals with meeting services and sales is comprised almost exclusively of articles in trade publications. These articles are based primarily on the personal experiences of the authors, rather than on empirical research. The subject of desired services is approached in several different ways ranging from long, detailed checklists to general comments about location and surroundings. SM/Sales Meetingp_magazine has published a 194 page meetings guide that has extensive checklists for aiding meeting planners in selecting facilities as well as suggestions on how to run a meeting.107 The Hotel Sales Management Association has looked at the same aspects 107The Theory and Practice of Convention Management, op. cit. 64 of meetings, but from the hotel's standpoint.108 It is interesting to note that the priorities with regard to desired services varies among meeting planners. There are those who emphasize food and lodging; "What do we look for when we select hotels and motels? First we look for comfortable but unpretentious quarters and good food at reasonable costs."1 9 This attitude seems to be changing somewhat as meeting planners come to expect good food and lodging as a minimum requirement for all facilities. Substandard rooms and meals may cause a group to book elsewhere for future meeting sites, but other factors seem to comprise the deciding criteria for initial and repeat business. This is re- flected in the fact that many writers do not even mention food or housing but give detailed stress to other factors. "A business meeting for us requires (1) easy access to an airport and (2) functional facilities with good sound, lighting, comfortable tables, chairs, and assur- ance that everything is on time and on target."110 Other meeting planners feel that the staff makes the differ- ence. For example, Herbert G. Hardy, Executive Vice President of the Lumber and Building Materials Association of Ontario notes, "With the competition which exists in the hotel busi- ness today, and let's face it, most hotels at least in the major centres, provide fairly comparable facilities--I believe that the time has come for every hotel seriously interested in competing for convention business to have a 108HSMA Group Sales Manual (Atlantic City, New Jersey: Hotel Sales Management Association, 1959). 109Crumb, op. cit., p. 22. 110Jay Weathermen, "Your Customer is Speaking...Are You Listening?" HSMA World (July/August 1976), p. 22. 65 professional convention service manager on staff to pro- vide this most needed liaison between planners and hotel staff."111 There seems to be a difference of opinion as to which type of facility offers the best atmosphere and services for corporate meet- ings. Some writers feel that airport hotels have improved to the point where they will receive greater attention from meeting planners in the future. These hotels offer a number of advantages to the meeting planner. "...with an acute need for meeting facilities convenient to air transport but not downtown, full-service hotels began springing up within a few minutes drive of airports. And, because the price of land was cheaper near an airport than in the central city, they could offer services that most city hotels could not. Meeting space was ample. Recreational and entertainment facilities such as pools, tennis courts, putting greens, health clubs, restaurants, cocktail lounges and nightclubs became common."112 The entry of the specialized conference center has attracted the interest of many meeting planners. These facilities allow execu- tives to get away from the office and meet in an atmosphere of exclu- sivitity.113 Donna Zack points out nine factors to consider when looking at conference centers: size, the type of meeting to be held, environment, staffing, audio-visual, ratio of meeting to sleeping 111Herbert G. Hardy, "How to Sell Successful Meetings," HSMA World (November/December 1976), p. 13. 112Mel Hosansky, "The Airport Hotel is Alive, Well and Soaring into the Future," Meetings and Conventions (August 1976), p. 66. 113See walter A. Green, "A Case for Productive Weekend Meetings," op. cit., p. 22; Yvonne Middleton, "Why, When and How to Use a Conference Center," Meetings and Conventions (August 1976), pp. 57-63; "New Centers in the Outskirts," op. cit., pp. 31-32; and "Meeting Trends," Meetings and Conventions (February 1973), p. 57. 66 space, food service, recreation facilities and cost.114 These might be listed for considering any type of facility. Whatever the type of meeting, it is clear that airports, conference centers, cruise ships, and resorts are providing stiff competition for the traditional hotel. Writers in the field tend to emphasize services that surround the actual physical facilities and the staff. There is some mention, however, of how meeting facilities can be made more attractive to meeting planners through special services. For example, provision for spouses accompanying the conferees is mentioned115 and the aid of the facility in the selection of program speakers has been cited also.116 Some hotels seem to be recognizing the trend toward stiffer competition. Jack Knight, Managing Director of the Kingsmill Inn and Conference Center notes, "However, today, the Conference Planner is able to con- sider more than just the 'convention' hotel, because there are now facilities designed to provide a total environment for the serious business of corporate meetings...and planners will diligently search for a property which com- pletely meets their stringent requirements for today's conference."117 The sales strategy of the Pfister Hotel in Milwaukee tries to minimize coordination problems by having the same person who books group busi- ness, plan the details, and do the follow-up work. This reduces the number of complaints often expressed by the meeting planner that he llazaCR, OE. Cite, pp. 54-560 115Hosansky, "1975 Market Data Report," op. cit., p. 37. 116Hardy, op. cit., p. 13. 117Jack C. Knight, "What Do Conference Planners Really Want?" Resort Management (February 1976), p. 8. 67 is shuffled from person to person without knowing with whom he is really working.118 A more extreme experiment was conducted by the Pittsburgh Marriott. The hotel planned an entire conference including enter— tainment, beer breaks, dinner at other restaurants, sightseeing, and a special ladies' activities program. This took the planning of special events off the shoulders of the association having the con- ference.119 Marriott also considered group business in the design of their Los Angeles hotel. These considerations included 40,000 square feet of meeting space and a separate entrance for the lobby area and convention facilities to reduce crowds and promote privacy.120 There are other examples of hotels trying to solve the problems of group meetings,121 but the match between the needs and wants of cor- porate meeting planners, and the need/want satisfier systems of those who market meeting services, is far from perfect. Summary and Conclusions This selective review of the marketing literature pertaining to the service sector, industrial buyer behavior, and meeting services has demonstrated that varying amounts of research and attention have been given to each area. The theory relating to industrial buyer 118"Marcus: Marketing In Milwaukee," op. cit., p. 25. 119"This Marriott Creates a 'Catered Convention,‘ Hotel and Motel Managgment (June 1974), p. 38. 120Alvin W. LeFaivre, "Why New Hotels Offer Opportunities for Meeting Planners," Advertising Age, Business Meetings Selectors for Marketing Executives section (October 22, 1973). 121 Perrins, op. cit., pp. 67-74. 68 behavior appears to be the most developed, although empirical research is still minimal compared to other areas of marketing. The service sector is still in its infancy with respect to any kind of unified theory. Basic movements toward developing service classifications and a framework within which to study the service sector have been made. The literature of the meetings industry consists almost entirely of articles in trade publications with only a few notable exceptions.122 The treatment of corporate meeting services as an industrial product is not apparent, nor does this market attract significant attention as an area of research. It was only recently that any reliable data were even sought to delineate the importance of the meetings industry and the wants and needs of buyers.123 The study of the meetings literature, along with the empirical investigation, points toward the following conclusions: (1) the mar- ket for corporate meeting services is large and growing, (2) in gen- eral, facilities that offer meeting services do not understand, and are not satisfying, the needs of their customers and (3) there is a lack of a marketing orientation in the meeting services field, in particular, an unwillingness or inability to follow the marketing concept. The volume of writing in the meetings field may point to an increased interest in developing more sophisticated marketing strategies in the future. As competition in the hotel industry 122See Philip Russell Tyler, op. cit., and Paul A. Fortin, et. al., pp. cit. 123Hosansky, "1974 Market Data Report of the Meetings and Conventions Industry," op. cit., p. 11. 69 toughens, meeting business is likely to become even more important.124 The movement toward specialization will probably continue, and to be successful, properties will find it necessary to understand and develop all types of group business. 12('"Meetings and Conventions: Slicing Up a $1 Billion Pie." 02. Cito, p. 200 CHAPTER III RESEARCH METHODOLOGY Introduction The purpose of this chapter is to explain the research method- ology employed in the study. The process used to select the samples, the construction and administration of interview schedules and ques- tionnaires, and analysis techniques used, are discussed. Sample Selection The goal of the sample selection was to allow an examination of both sides of the buying/selling relationship for corporate group meetings. Meeting planners were interviewed to gain a perspective of their perceived needs and wants that could not be gained from the literature. Their responses allowed for a direct comparison between the needs and wants on the demand side of the meetings market, and the need/want satisfier system on the supply side. The sample of meeting planners was drawn from a wide cross section of industries to see if a general pattern occurred. The sample firms were selected because of convenience of location and willingness to cooperate with the study. The criterion used for selecting the meeting facilities was that at least one property representing each of the following cate- gories be included: resort, downtown hotel, suburban hotel, 70 71 university meeting facility, and a hotel, motel, or motor inn out- side of a large city or in a small town. This criterion was used to minimize the effects that location might have on sales strategy. It is recognized that hotels located in different environments have locational advantages and disadvantages, and must use different means to contact potential customers. The wide variety of facilities chosen for the study accentuates the locational differences allowing them to be filtered out. Attention can then be focused on similari- ties across meeting facilities which can be examined to determine what factors are in common to all types of successful and unsuccess- ful properties. In two cases, characteristics of two categories of facilities were present at the same property. There was no attempt to determine the extent to which each facility handled corporate business or its attitude toward that mar- ket before selecting the property. The sizes of the properties varied considerably, again by design. This was done to reduce bias which might be caused by choosing only vary similar properties. Since the success criterion is expressed in percentages, size does not con- stitute a determinant of success as it is defined for this study. For example, a hotel with one hundred rooms, which ran a ten percent occupancy of corporate meetings is considered to have the same degree of success as a hotel with one thousand rooms that ran a ten percent occupancy. This is so, even though the one hundred room hotel aver- ages only ten rooms of corporate meeting business while the one thousand room hotel averages one hundred. 72 Administration of Interview Schedules and Questionnaires All interview schedules and questionnaires were administered in person, with the exception of two cases where, because of time constraints, the questionnaires were filled out and mailed after the interviewer left. In another case, a meeting planner was interviewed by phone and the questionnaire was sent and returned by mail. A11 interviews, including the telephone interview, were tape recorded with the knowledge and consent of the interviewee. Every meeting facility and every meeting planner contacted cooperated with the researcher in providing data, except for one hotel and one meeting planner. In some cases, participants were hesitant to cooperate after the initial contact. In these cases, a letter from the researcher was sent to further clarify the nature and confidentiality of the study. In addition, the Director of the School of Hotel, Restaurant, and Institutional Management at MiChigan State University also wrote letters to those who were hesitant, assuring them of the legitimacy of the study. The interview schedules contained many open-end questions. The interviewees were encouraged to elaborate as much as they desired, which accounts for the differences in the length of the interviews. Those sales managers who were knowledgeable about the corporate meetings market tended to spend considerably more time with the interviewer than those who were not. Among the meeting planners, those who booked the greatest variety of meetings tended to give the longest interviews, although the time variance was not as great as among sales managers. At the end of the interview with each sales manager, a 73 confidential data sheet was left to be filled out and returned in a self-addressed, stamped envelope. The cooperation on the part of the meeting facilities was outstanding, with properties responding rapidly. A.brief explanation of the data sheet was provided the sales managers to ensure understanding of the questions to be answered. Information was asked for in several different ways in an attempt to get complete answers. In two cases, blank spaces were completed by the interviewer from information gained via the personal interview. ngstionnaire Construction The questionnaire (Appendix II) is composed of four parts. Each section was designed to generate information on factors which might be present at meeting facilities. The meeting planners were asked to fill out the first three sections of the questionnaire. This was done toward the end of the interview in the presence of the researcher so that any items unclear to the meeting planner could be explained. Each part of the questionnaire was designed to obtain differ- ent perspectives on the same set of fifty factors relating to meeting facilities. Part I listed variables in groups of five. Each group contained one item from each of five general classifications of factors. The five general classifications are: l. locational factors, 2. recreational facilities, 3. factors affecting the meeing atmosphere, 4. personal services provided and 5. total atmosphere of the meeting facility. These items are listed in Figure 3-1. The goal of this section was to determine if any dominant patterns of concern appeared which related to any particular class of factors. The items listed 711 naoou uoosw nu noon monuslaooso maoou umosw sumac mouuu uonuo no“: vuuwasou Ho>oH ouuun mucousuuuumm muaaoa usuaauu on < mama uo uuuuouu can we awunuv Housuoouwsuu< «aoou usuuuol cu moods vouwuoa maoou goose naoou uaosw vuusuoanw Haw: apnea cabsuuowaoo .asowusnm amazouaao uaouomaoo .usowouwmu huuawosm any um mucus oanuuumuos one sums muonmwoau< Hausa ecu wawuoouw< uuouonm uwmun m.»uuauuuu up vovu>oua muoxwomm wsusumubo was wsuuuoa on» mausawae :« vw< oua>uoo unloads manaafia>a ouu>uoo usuuuumhawm ouu>uou wsqsaoao hum van mundane oHnuHuoew shonaaon nouusu muuasuuauon mo muwaaooaua>< mow>uou loom caduceus sou ovum poem voou amuse uuvouu u0nua mo consumouu< vmvw>oum moou>uom unassumm undo! vououwu u0u use! vowu¢> anomaa was souuo loou uuuuool mo huowua> may: almanoum: mamas: ou nsouw ou voswauum huuawusu unu Iouw assume uowuaou 4 usoou «caucus a« «cascade vooo nsoou mauuuoa ad Queues odowuuouaoo ounuau¢>s ususnusuo Husuu>|oumsc mo huouus> one: «Hoaaaw>n swauwsnouu Husua>|owv=s voaawxm uovuo measuoa moon nu unusawsuo Hasua>uoav2< Auouov wows .uoqsv .vosowuwvaou uwuv naoou unauooa oanmuuouaoo vuvw>uv on use unau naoou «canon: «you! awuuouud uuouoam cums nosu< sauuuouu nu omaaou uuuusuoo huaawuwu onu us uuwun ousuouaulaaon mauso>o onu nu «mused kuuxuou a nu oabsads>s usasuuauuousu A.uuo .oanwu Hose .Hawoswmv aoou undo usoou uoosu nu souoa>oaou uoaoo coupons u0u ssuuoun pudenda A.ouo .ouwuwnl .mssouv ands sudden hounds onusou «Hoe uuusoo nausea doom wdaaadzm flwdouuaouuou assiduoao .aulxuono anon swan ouasuu n so vauwuoa madame: uuuo uo soumou oeu wanna: nouuuauusu nouusuuonnnauu vooo _ sous uuouuu a nu souusuqu unmade muqouu>wss uonouoanou a so souuwooa sous aspusbss a nu souuuuoa buuauusu can as ounnaadbu ouw>uoo use Hanson hues sauna u as asbunsov nouuwooa uuwxumn scum uuonuwn as uuos aouuwoon deouuwuoa mmHHHAHudm OZHHMHZ NHdflomuoo OH 02HH¢AN¢ mmoaudh ho ZOHH-(c) Purchase Process Awareness of Multiple Buying Influences 7, 7(d), 7(e), 7(f), lS(a)-(d) Marketing Information System 6, 10, lO(a)-(b), ll, 13, 13(a) Market Seggent Attractiveness Attitude Toward Market Segment 18, 19 Emphasis on Repeat Business 13, 13(a), 14 Neeleant Satisfier System Understanding of Facility's Image 12, 12(a)-(c) Perception of Customer Needs 8, 9, 12(a)-(c), 15(d), 16, 21 Meeting Purpose Identification 4, 4(a) Customer Definition 4, 5 Sales Strategy Personal Selling 7(8)-(C). 9 Advertising and Promotion 20 Tactics l7 79 The Interview Schedule for Sales Managers was pretested in Chicago, Illinois. The information gained in the pretest led to revi- sions in wording, the elimination of some questions, and the addition of others. The pretest also contributed considerably to the con— struction of the Interview Schedule for Meeting Planners. Some subject areas were much more difficult to approach than others. This problem is reflected in the large number of questions relating to some subject areas and the small number relating to others. Scoring:Techniques and Definitions of Variables The scoring technique used permits a ranking of each property on each of twelve independent variables. While ranking of variables is a relatively inefficient technique of scaling observations, it allows a more concise classification of responses than mere descrip- tion offers. The ordinal scale can then be transformed into an interval scale if certain assumptions are made. The dependent vari- able is measured on an equal interval ratio scale. The Dependent Variable Success. The success variable was designed so that all meeting facilities could be compared, regardless of size. This was done by dividing the total number of rooms attendees of corporate group meetings occupied, by the total number of rooms available. All properties were ordered according to their score on this variable. It is possible, using this measure of success, that a property with a high overall occupancy and a good profit picture could still score very low on success. It is emphasized, therefore, that the scale indicates success in attracting corporate group business only, 80 and says nothing of the overall success of the property. Independent Variables Every property in the study was ranked on each of twelve different independent variables. The rank of the property depended on the sales manager's response to the questions asked during the interviews. Since each interview was tape recorded, the sales man- agers' responses could be listened to, transcribed, and scored, ex post facto. The scoring techniques were developed to give equal weight to each independent variable. Each independent variable relates to one sub-hypothesis. The rank of each property on an independent variable is used to determine the degree of association between that variable and the dependent variable. The degree of association is measured by using Jaspen's coefficient of multiserial correlation, designated as M51 This technique and how it is used is discussed in detail in Chapter IV. Coding, Scoring;,and Rankings for Independent Variables (1) Multiple Buying_lpfluences (MULINF). This reflects the sales managers understanding of the purchase process involved in selecting corporate group meeting sites. Interviews with meeting planners indicated that there are several people involved in the selection decision to greater and lesser degrees. The groups involved were identified as the meeting planners, influencers, deciders, and attendees. The descriptions of these groups, their relative 1Linton C. Freeman, Elementary Applied Statistics (New York: John.Wiley and Sons, Inc., 1965), p. 131. f2 81 importance in the decision process, and their relationship to the groups proposed by Webster and Wind are presented in Figure 3—2. The rank of each property on this variable was determined by the sales manager's ability to identify the decision groups and to discuss the relative influence of each. The properties were then ranked according to their scores. Understanding of Multiple Influences in the BuyingpProcess Evaluator Very Good Understanding Fairly Good Understanding Average Understanding Fairly Poor Understanding Very Poor Understanding w (2) Diverse Appeal (DIVAPP). This variable relates to the sales strategy of the property. In the promotional mix, a property may try to appeal to several groups in the buying process. A property which directs its promotion at only one group, or has no stated objec- tive for the promotion is ranked low, while a property that designs the sales strategy in an attempt to reach several specified groups is ranked higher. Appeal to Several Groups of Decision Makers in Promotion Rank Evaluator Appeals to Four Identified Groups Appeals to Three Identified Groups Appeals to Two Identified Groups Appeals to One Identified Group Not Able to State Objective l-‘NWbUI 82 “homuoo suz .omuaau woosoawsuv uoupweom « an Hosoausn .aa-au .aa .Aauau ..oau .uu-u..uumupma uo .wswa vs- Iduow was ..un .uouuaoa .u Jouuovouhw .uousosauow uo uosduan nuances . .oo>«u haaosaa .uuuouooo cu oousonoun oo>wu nosuouam wsusouuos ow usouuonsu Issuuuau souuso was assauuowwsu can: ouodooaouuv ouoeooxouuc .usoquQBH .usuuu wsuusuuoussos ow usuauuomoo sodas >uo> suuwo muoxmmom .souuouu scum oanooa caduceuou soumo .auuwouq so luowuo was ad was: sowuuuoa now) madame ooauuso ouad .uouuwouu ou oo>au mouus> mausou>uosa no monoquQIH Isoono aou scum wswwsou souuquAuoo was .asouw o no unsuu0dsw huo> no cusses: .wsuuool msaosouuu oadoom nooosuuu< sumo: .amdwuuoa oususm uou souuoooa cusses ou uonuona mo sowouuoo cw udduu0nfl« huo> .ouuoeu huuoooum Husuuo odious .uooloa was». ououomuoo .voos uonosu vow degassed Hoodedoumoow usoauuodoo .uosaoad wouuoos on he: so mowouooo noses madman: .uousuam .souuuoaoo ouuo so souuwuow Hosea msuuooa song uonuo soeuon a uH sea was! a» uosom o>wn on) udoouom uuuvuooa uuuowuon .ouosousn uuodou uo condo aw ouoosouuw .huuodoud sues usuawswu .uusowo Ho>ouu .souwoum onu so use we uoasmam wsquooa sues: nucleons .ououoo huwauowu sea mouuou> souuouoa assuage o as wswxooo o>on on: uo>uusuouo .oouuwuouooo uosuo uOu uswquQBH use: .umonuusm .uuoowuuo .uuosdoam uswuuoa uonuo uooaou uou unsuuoqaw mucos0uu< ouo vooaaudn .oaoooum sowuuouv .usouuoaaw zuo> nos AHkuosoo usauso moods-sou ouw uo .wquuuuo .hanouovuosoo souum> oouauuoalu you .usouuoowwsw 0316 0:3 «Hooch uuooausamaH musedosausu .uouuwuo Hoses-use .ooo: usoluuunoo .uouwswvuoou Ho>ouu .muwuuuooo .uosssam magnum! auscuuuououa .uomusul nous. .uouuuuaou kuuuuu uOm mauouuoouo .umsuu nouns «no mo uueaul a on but .uooauov mo oHou usuOMuom hadusup .muaawuuu noouuou use .nusuluusuuuu .nuoquusuuu uooa ow usouuonau use: ost .nwswuooa nude on: usouuum uuusawam «mauve! sushsm bosom usouusu naouuuswason souoauuo wuwhsm aw ouosqudsH odouuuoom non one osowuauuouon uou 3833325 on; a H530: ~ mwnuoum IOHMHUHG NIH 2H QMDHODZH mmDOuU Nun MfibOHh (3} the effort Strength 11 keting des personal a aimed excl are ranked focused or to the c accordin Property fleeting These p( I Mined 3 highly ContEnt 83 (3) Active Solicitation (ACTSOL). This variable relates to the effort that is expended in attracting the corporate meeting. Strength in this area is indicated by an aggressive program of mar— keting designed to attract corporate meetings. This is reflected in personal and telephone solicitation, direct mail, and other promotions aimed exclusively or in part at the corporate market. The properties are ranked according to the extent to which the marketing effort is focused on corporate meetings. Active Socilitation of the Corporate Meetings Market .EEEE. Evaluator Heavy Solicitation Fairly Heavy Solicitation Medium Solicitation Fairly Light Solicitation Little Solicitation I—‘NUDL‘UI (4) Advertising Content (ADCONT). This variable pertains to the content in a facility's advertising. The properties are ranked according to the emphasis placed on corporate meeting services. Each property supplied the researcher with the package that is mailed to meeting planners inquiring about the possibility of booking a meeting. These packages were content analyzed to determine the amount of content aimed specifically at corporate meeting planners. Properties with highly specialized content ranked high while those with general content ranked low. 84 Specialized Content of Advertising Aimed at Meeting Planners Rank Evaluator 5 Highly Specialized 4 Fairly Specialized 3 Balance Between Special- ized and General Fairly General Mostly General l-‘N (5) Facility Awareness (FACAWR). This variable relates to the sales manager's awareness of how corporations learn about facili- ties and their services. Sales managers who were able to state how this awareness took place were rated high, while those who were un- sure were rated lower. Consideration was also given to sales managers who based their responses on actual feedback obtained from corporate groups. Understanding of How Corporations Learn About the Facility 'Rsnk. Evaluator Good Understanding Fairly Good Understanding Medium Understanding Fairly Poor Understanding Poor Understanding l-‘NWJ-‘UI (6) Selection Criteria (SELCRI). This deals with the sales manager's knowledge of why his particular property is selected as a corporate meeting site. Sales managers were ranked based on how well they were able to justify their responses and how closely this related to what meeting planners indicated they based their decisions on. 85 Knowledge of Why Corporations Choose A Facility Rank Evaluator Large Amount of Knowledge Fair Amount of Knowledge Medium.Amount of Knowledge Little Knowledge Very Little Knowledge l-‘NUJ-‘UI (7) Closeness of Fit (CLOFIT). This variable relates to the closeness of fit between perceptions of sales managers and meeting planners. Meeting planners were asked what services and character- istics were desirable at meeting facilities which were possible sites for corporate meetings. Sales managers were also asked what they thought were desirable characteristics of corporate meeting sites. The closer the sales managers' perceptions were to those of the meeting planners, the higher they were ranked on this variable. Closeness of Perception Rank Evaluator 5 Very Close 4 Fairly Close 3 Neither Close Nor Diverse 2 Fairly Diverse 1 Very Diverse (8) Attractive.Aspects (ATTASP). This variable assesses the sales manager's awareness of the ability of his property to ful— fill the needs and wants of meeting planners. Specifically, it con- siders whether the sales manager is aware of the strong points of his property relative to the corporate meetings market. Sales managers who mentioned factors stated as being necessary by the meeting planners interviewed were rated higher than those who mentioned other factors. 86 Level of Awareness - Attractive Aspects Rank Evaluator High Level Fairly High Level Medium.Leve1 Fairly Low Level Low Level HNw-l-‘U'I (9) .Nggstive Aspects (NEGASP). This is similar to the previous variable, but assesses the sales manager's awareness of negative aspects of his property. The responses of the sales manager were compared to factors listed as being negative by meeting planners. An awareness by sales managers indicates that they understand the. property's shortcomings, so that they can be corrected or deempha- sized in communications with meeting planners. Level of Awareness - Negative Aspects Rank Evaluator High Level Fairly High Level Medium.Leve1 Fairly Low Level Low Level HNW§UI (10) Inhouse Performance (INHOUS). A.meeting facility's assessment of how well it performs 'with groups while they are visit- ing the property is the concern of this variable. There are many things a sales manager can do to determine performance. These range from.conversations with the meeting planner to comment cards in the guest rooms. A facility which engaged several data gathering tech- niques was ranked higher than those who had few or no mechanisms for feedback. 87 Performance Determination With In—house Gropps Rank Evaluator Good Determination Fairly Good Determination Medium Determination Fairly Poor Determination Poor Determination HNUDbUI (11) Repeat Business~(RPTBUS). This variable pertains to the effort expended by a meeting facility to encourage repeat cor- porate group business. Such activities as contacting meeting planners before they leave the facility, sending follow-up letters, and asking for dates when future meetings are to be held indicate aggressive- ness toward repeat business. The amount of repeat business a facility is able to attract also gives a good indication of how well they performed with groups which have visited the property. Followbup on Repeat Business Rank Evaluator 5 Very Aggressive 4 Fairly Aggressive 3 Neither Aggressive Nor Passive 2 Fairly Passive 1 Very Passive (12) Facility's Attitude TowardACorporate Group Business (FATCGB). Some properties do not see corporate meeting business as a market they wish to pursue. As a result, their success relative to the dependent variable may be limited because effort is expended on other markets. The FATCGB variable relates to the facility's attitude toward corporate meetings as a source of business. Sales 88 managers who mentioned this market as the top priority for the future were ranked high on the attitude scale, while those who listed it as having little or no appeal ranked low. Facility's Attitude Toward Corporate Group Business Rank Evaluator 5 Highly Favorable 4 Mildly Favorable 3 Neither Favorable nor Unfavorable 2 Mildly Unfavorable 1 Highly Unfavorable Basis fpr Property Rankings The interviews with meeting planners provided the comparison base for property rankings on independent variable 1-2 and 5-9. A composite of the meeting planners' responses, augmented by literature in the field, was compared to the sales manager's interview answers. The closer the fit between the comparison base and the sales manager's responses, the higher the property was ranked. In addition, the questionnaires filled out by meeting planners contributed to the ranking for variables 7-9. Facilities were ranked on ADCONT accord- ing to the content of their direct mail package, and the sales manager's responses. Rankings on variables 10-12 were based solely on sales manager response. It is realized that the designation of property ranks is some- what subjective. However, the hours of interviews with corporate meeting planners, coupled with the meetings literature, provided a wide base for facility evaluation. Since this is an exploratory study, the researcher felt a need to use personal interviews to 89 gather primary data. This method allowed clarification of questions by the interviewer, and thus eliminated much of the inaccuracy which can result from different interpretations of questions on mail sur- veys. The use of both free and directed response open-end questions accomplished two goals. The free response questions "permit the respondent to say whatever he thinks or knows; the response may be more genuine than that given if his reply is channeled along a 3 The directed response questions are more definite certain line." and allow comparable answers to be obtained. The researcher took special care to rate properties objec- tively, and the questionnaire analysis contributed to the objectivity of rankings on certain variables. Caution must still be used, howb ever, in applying the results of the study, and the assumptions behind the statistical tests should be noted. 3David J. Luck, Hugh G. Wales, and Donald A. Taylor, Marketing Research (Third Edition), Prentice-Hall, Inc., Englewood Cliffs, New Jersey, 1970, p. 195. CHAPTER IV DATA ANALYSIS Introduction The study contributed information about both sides of the buying/selling relationship for corporate group meetings. The data generated by interviews with meeting planners is primarily subjec- tive in nature and was used as a partial base for evaluating the responses of the sales managers. While the major thrust of the study is aimed at determining effectiveness criteria for facilities desirous of attracting corporate meetings, it is useful to present some of the observations relating to meeting planners that were developed along the way. Needs and Wants of MeetinggPlanners Since little research has been done in the corporate meetings market, it was necessary to gather data in order to achieve a basic understanding of meeting planners' needs and wants. This information ‘was gathered in two ways: objectively, through a questionnaire; and subjectively through personal interviews. In this section, the results of the questionnaires are examined, the results of the inter- views will be discussed in the second section. The questionnaire consists of three parts. Each part asks for information on the same set of fifty variables. Part I presented 90 91 the respondent with ten sets of variables, with five variables in each set. Each set of variables contains one variable from each of five general classifications of variables as presented in Figure 3-2. The respondent was asked to force rank the variables from each set in order of importance on a scale of one to five. The purpose of this exercise was to familiarize the meeting planner with the vari- ables involved, and to see if variables from any one classification dominated. The method employed in Part I can be criticized particularly because results could vary considerably if different variables were grouped together. However, it is interesting to examine the relative importance of the mean scores within groupings. The mean scores for all variables are reported in Table 4-1 by their respective groups. Since respondents were instructed to give the most important item a rating of number one and the least important a number five, the greater the importance placed on the item by the meeting planners as a group, the lower the mean score. It is tempting to consider location to be the primary impor- tance factor in site selection. It should be noted, however, that there is no group in which location receives the highest mean score. In only two cases, group C and group G, is location even ranked second as an importance criterion. The classification that ranks the highest is, Factors affectingpthe meetingfatmosphere. Six of these variables have the highest within group means and the remaining four ranked second. Another way of classifying a portion of the fifty variables is by grouping together factors relating to the staff. If this is 92 TABLE 4-1 MEETING PLANNERS' RANKINGS IN SELECTED GROUPINGS 0F FACTORS RELATING TO MEETING RACILITIES - MEAN RANKINGS BY RESPECTIVE GROUPINGS Cramp Fac tor Mean A Warm snd hospitable staff st the facility 1.4 Swimming pool 4.3 Meeting rooms that can be divided 2.4 Location user an airport 2.6 Acceptance of major credit cards 4.4 B Comfortable meeting rooms (air conditioned, quiet, nice decor) Efficient, competent employees Tennis courts Good food Free parking NHONN 0.059 UOQNN C Free ics machines Audio-visual equipment in good working order Location downtown in s large city Golf course nearby Spacious, comfortable lobby D Health club (sauna, message. etc.) Room service Well appointed guest rooms Skilled sudio-visusl technician svsilsble Rental car service available st the facility 3 Location in s suburban eras Guest rooms located close to meeting rooms Availability of hospitality suites Planned program for spouses Hide variety of audio-visual equipment available NONI-“U .‘NHU. UUNHU bNO‘NH C UIUIUHN .UQNN F Color television in guest rooms Bollboys svsilsbls Architectural design of two stories or less Comfortable chairs in meeting rooms Location on s college or university campus UHUUU C 6 Laundry and dry cleaning service A no tipping policy Good lighting in meeting rooms Gems room (pinball, pool table, etc.) Located in s resort area NUHUU C B A contact person from the facility assigned to group to handle problems Babysitting service svsilsble Good transportation facilities within the region or city Entertainment svsilsbls in s cocktail lounge in the evening Satisfactory price level compared with other sites N“N.H s 1 Clean guest rooms Meeting located on s cruise ship Webs-up service Wide variety of meeting room sizes and layout Well-informed staff at the facility J Fast check-in, check-out Cocktail lounge in facility Aid in planning the meeting end obtaining speakers provided by the facility's staff varied menu for catered mssls Queen-sized beds in guest rooms owooo oomab buuou annoy UNNO'N ”NU.” O 93 done we can see that staffing factors also rate very high, with top rankings going to: 1. warm and hospitable staff at the facility. 2. A contact person from the facility assigned to the group to handle problems, 3. Well-informed staff at the facility (tied with Wide variety of meeting room sizes and layouts), and 4. Fast check- in, check-out. The results of this section of the questionnaire are consistent with concerns expressed in the personal interviews. Again cautioning that results could change if variables were grouped differently, it is interesting to look at grouping B. This grouping contains the factor labeled Good food, which has a mean rating of 2.6 compared to; 1.2 for Comfortable meeting rooms and 2.2 for Efficient, competent employees. In this section of the question- naire, recreation factors rated fairly low. The second part of the questionnaire was designed to force the meeting planners to rank their top ten criteria in order of importance from the same list as in Part 1. Space was provided in which meeting planners could add variables which were not included in the original lists. The fact that no meeting planner wrote in an additional variable would seem to indicate that the list of fifty was fairly exhaustive. By asking for only the ten most important variables, the data could be examined to see if there were any trends when con- sidering all fifty variables at once. Each factor mentioned was weighted depending upon the level at which it was ranked. A number one ranking was given a point value of ten, number two, a nine, etc. The values for each variable were then summed and all variables mentioned were ranked against each other. Table 4-2 presents the results of these rankings. 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A contact person from the facility assigned to the group to handle problems . Queen sized beds in guest rooms . Efficient. conpetent enployees . Comfortable chairs in meeting rooms . Guest rooms located close to meeting rooms . Rental car service available at the facility 3 is 5 6. Maitting‘ service avallfile 7 8 9 . Good food iO. A gene room (pinball, pool table. etc.) ll. Well-informed staff at the facility i2. Meeting rooms that can be divided l3. Location downtown in a large city lb. Architectural desim of two stories or less i5. Entertain-It avalidlle in a cocktail lounge in the evening l6..WIde variety of meeting room sizes and layout l7. Well-qpolnted guest rooms l8. Swinlng pool l9. Aid in planning the meeting and obtaining speakers, provided by the facility's staff fl. Varied menu for catered meals 2i. Pinned progrmn for spouses . ~ ‘22. Located in a resort area M; 1 23. Spacious. mfortfile lobby Fairly Important Neither important Nor Unimportant Not Very important Very important Unimportant 2h. 25. 26. 27. 28. 29. BI. 32. 33. 3‘9. 35. 36. 37. 38. 39. ho. hi. #2. #3. bk. #5. “6. h7. h8. 1:9, 153 Good lighting in meeting rooms Golf course nearby Good transportation facilities within the region or city Skilled audio-visual technician available Dellboys available Health club (sauna. message, etc.) . Fast check-in, check-out Availability of hospitality suites Location on a college or university campus Laundry and dry cleaning service Meeting located on a cruise ship Free ice machines Clean guest rooms Satisfactory price levels compared with other sites Acceptance of major credit cards A no tipping policy Wake-up service Wide variety of audio-visual equipment available Cocktail lounge in facility Location in a suburban area Color television in guest rooms Comfortable meeting rooms (air conditioned, quiet, nice decor) Free parking warm and hospitable staff at the facility Audio-visual equipment in good working order Location near an airport Tennis courts 154 [AQT i! Dirggtlons: in this section we are concerned with your perception of how well this facility provides for the factors listed in Part ill. Outstanding Please check on the left hand side, the appropriate box which best describes the degree of performance you feel has been achieved by this facility in each category. Note: if the service or factor listed is not present or does not apply to this facility, please mark the column farthest to the right entitled “not present at this facility." Wot present at this facility Good Fair Poor Very Poor i. Room Service 2. A contact person from the facility assigned to the group to handle problems . Queen sized beds in guest rooms . Efficient, competent employees . Comfortable chairs in meeting rooms . Guest rooms located close to meeting rooms . Rental car service available at the facility 3 h 5 6. Babysitting service available 7 8 9 . Good food ID. A game room (pinball, pool table, etc.) ll. Well-informed staff at the facility l2. Meeting rooms that can be.divlded l3. Location downtown in a large city lb. Architectural design of two stories or less i5. Entertainment available in a cocktail lounge in the\avening l6. Wide variety of meeting room sizes and layout pg l7. wellbappointed guest rboms l8. Swimming pool l9. Aid in planning the meeting and obtaining speakers. provided by the facility's staff 20. Varied menu for catered meals 2i. Planned program for spouses 22. Located in a resort area 23. Spacious. comfortable lobby Outstanding Good Fair Poor Very Poor IIot present at this facility 155 Good limiting in meeting rooms Golf course nearby Good transportation facilities within the region or city Skilled audio-visual technician available Dellboys available iieelth clnb (same, message, etc.) Fast check-in, check-out Availdility of hospitality suites Location on a college or university cmpus Landry and dry cleaning service Meeting located on a cruise ship Free ice machines Clean guest rooms Satisfactory price levels cowared with other sites Accqtance of major credit cards A no tipping policy Heine-up service Wide variety of audio-visual equipment available Cocktail lounge in facility Location in a uburbm: area Color television in guest routs Comfortfile meeting rooms (air conditioned, quiet, nice decor) Free parking Warm and hospltfiie staff at the facility Audio-visual equipment in good working order Location near an airport Tennis courts .1 MI I II I. - l APPENDIX III INTERVIEW SCHEDULE FOR SALES MANAGERS 156 APPENDIX III INTERVIEW SCHEDULE FOR SALES MANAGERS Try to get as complete an answer to each question as possible. What is your position with this facility? What is your official job title? What is your occupancy rate? a. WOuld you please estimate what percent of your business comes from group meetings? b. What percent of this business comes from corporations? c. What percent of corporate business is repeat business? What are the purposes of the business meetings which are booked into this facility? a. Which purpose is the majority for? What portion of these meetings are sponsored by one corporation only? (As opposed to a trade association or professional con- vention.) Do you know how the people who book meetings generally learn about your facility? If yes, please explain. How many people do you feel are involved in making the decision on the choice of a meeting facility for the majority of the meetings you book? a. Who do you usually talk to from a company in order to book a meeting? b. Do you ever talk to more than one person from a company? How often? c. Do you alter your sales presentation for each person? d. What are the positions of the people you talk to in order to book a meeting? e. Who do you feel makes the final decision on site location? f. Is the initial contact usually the person who signs the reservation agreement and arranges the details of the meeting? How often is this the case? I III I II ill-lit i 10. 11. 12. 13. 14. 15. 157 Why do you feel that your facility is chosen as a site for business meetings? (Pursue this for more detail if necessary.) What factors do you emphasize in a sales presentation to a meeting planner? a. Why do you emphasize the factors just mentioned? To your knowledge, do most meeting planners ask for feedback from the people attending the meeting? a. If feedback is obtained, are comments made concerning the suitability of the meeting facility and its services? If yes, do you have access to this feedback? b. What do you do with feedback that you obtain from attendees? Do you do any research on the company you are trying to book before talking with a person from that company? Explain. How do you think that prospective meeting customers view your facility? (For example, what do you think their perception of your services, image, and facilities is?) a. Are there services which you don't offer, but you feel should be offered? Explain. b. What do you feel is the most attractive aspect of your property, to corporate meeting planners? c. What do you feel is the least attractive aspect of your property, to corporate meeting planners? Do you receive feedback from.the meeting planner‘with regard to your facility's performance? If yes, how is this feedback obtained? a. What do you do with this feedback? What followbup do you do after a group has met at your property, to try to develop repeat business? Please list the factors you feel are most important to each of the following groups which may be involved with group meetings. (Try to get several items for each group.) a. The meeting planner (the person who booked the meeting). b. The person attending the meeting. c. The person who initiates the meeting. (This would be for a meeting that was booked for some other person in the company.) II III: I! I all 16. 17. 18. 19. 20. 21. 22. 158 d. Which of the above groups do you try to appeal to in your advertising and personal selling efforts? Why do you feel that groups fail to return to your facility after they have had a meeting here? Please describe the process you go through to contact clients and book meetings. Do you consider corporate group meetings as attractive types of business for your facility? Why or why not? Of all sources of business, which type of business would you like to pursue more aggressively in the future? Second choice? Third choice? WOuld you please provide me with copies of the promotional material which you send out to prospective corporate groups? Give Part III of the questionnaire to the sales manager. Ask him to rate the factors listed as he thinks the meeting planner would rate them. Give Part IV of the questionnaire to the sales manager. Ask him to rate how well his facility meets the listed criteria, according to his own perceptions. APPENDIX IV CONFIDENTIAL DATA FORM FOR MEETING FACILITIES 159 APPENDIX IV CONFIDENTIAL DATA SHEET - CORPORATE GROUP MEETING STUDY Corporate Grogp Meetipg - a meeting sponsored by an identifiable corporation. Please provide the following data to the extent possible. All data will be kept confidential, and will in no way be identified with your particular property. Number of guest rooms Number of guest rooms occupied by people attending corporate group meetings in the last year Total number of people staying overnight while attending corporate group meetings If you do not keep figures on the two previous questions, please estimate the percentage of total occupancy de- rived from corporate group meetings Annual percent of occupancy What percent of total occupancy was from all types of group meeting business? Number of corporate group meetings held at this property in the last twelve months What percent of corporate group meeting business in the last twelve months was repeat business from groups which attended meetings at your facility within the two years previous? What was your average room rate for those attending corporate meetings in the last twelve months? (This should include an average rate for single and double occupancy combined.) What is your average single occupancy room rate? A What is your average double occupancy room rate? 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