SUPPORTED BY
PINISI BACKPACKER HOSTEL
JL. Musaen 192/6A
BANDUNG
INDONESIA
+6222-86868610
SUPPORTED BY
PINISI RELAXATION
Jl. Halmahera no. 2 Bandung
Jl. Kenari no. 14 Sukabumi
0224240065
0266231016
SUPPORTED BY
ORANGE BUTTON
Jl. Baladewa Asri no. 14 Bandung - Indonesia
orangebutton@pinisirelaxation.com
Company Background
• Founded in 1977 by
Dave and Florence
Blumenthal
• Has a 5 Properties
1 Palm Springs Resort
4 CaboDaySpas
Cabo San Viejo History
Dave and Florence Blumenthal founded Cabo
San Viejo in 1977 in Palm Springs, California
Create a place where smokers, overweight
people & others could feel better and learn
how to live healthier lives
In 1982, leading magazine journalist wrote a
piece on Cabo San Viejo, billing it as the
nation’s “prime total vacation/fitness resort”
and bookings took off
Company Overview
• Located in Palm Spring
California, 150 acres in the
foothills of the San Bernardino
Mountains
• Accommodate a maximum
of 288 guest
• Facilities had expanded to include
an air-conditioned, 100,000
square-foot spa complex, 4,200
square foot golf performance
area, and 13,000 square foot
Aquatic Centre
Company Overview
Operating high-end
destination health resorts and
branded day spas
Have two product line: Cabo
San Viejo and CaboDaySpas
Primary value proposition is
the concept of wellness
Market Competitor
Destinatio
n Spa
High-End
Health
Clubs
Vacation
Resort
Cabo San
Viejo
Local Day
Spa
Cruises
Marketing and Sales Approach
6 persons marketing department
6 regional sales managers
12 reservation specialist
2 public relation officers
Marketing Approach
Handle pricing and promotions
Little cross marketing with Cabo Day Spas
Never made a financial commitment to large-scale
promotions
From Brochure, leaving it to public relations on Radio,
TV and print media
Sales Approach
Packages to high-end travel agencies in US and Canada
In Summer, reduce rates by 35% and get different client
base
Organized receptions in major cities
Problems and Challenges in
Marketing and Sales
Not to educate consumers
Lack of direct marketing
approach
Didn’t purchase and use
customer list
Misconceptions about Cabo
San Viejo
The Clientele
• Cabo San Viejo customers
were largely affluent,
middle-age, and female
• Cabo San Viejo receives
about 3500 new guest each
year
• Repeat guest comprised
between 50% and 60% of all
guest nights
• 32% of new guests returned
to the resort within five to six
years
• 62% of return visitors
returned again within five to
six years
Customer meet
reservation specialist
Booking a Visit
Reservation specialist consist:
Reservation
specialist help
customers plan
their vacation
Reservation
specialist get
thank you card
than anyone
All female reservation staff
Were highly knowledgeable
Having undergone an intensive training program
The Typical Visit
Average visit lasted
days
Average guest spending :
Average additional service:
455.97/day
165.36/day
Taking advantage of multiple services
(spa, health and healing, fitness classes, etc)
Rising Expectation
Staff members were hired and trained to
offer the very best in personal service.
Employee to guest Ratio
Intangible Rewards
Surprise
DATA ANALYSIS
Guest Analysis
Year
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005, Q1
Avg.
Age
47
48
48
48
49
50
50
51
52
53
54
55
57
58
Percentage of age
Total Total
Total
Stays 1st time Repeat <35 35-44 45-54 55-64
3576 1279
2297 13.2 27.2 32.6 21.3
4123 1415
2708 12.9 27.3 32.9 20.5
4329 1416
2913 11.5
27
32.7 20.5
4703 1551
3152 12.4 25.2 32.3 21.6
5219 1754
3465 11.8 25.9 33.3 20.4
5832 2053
3779 11.4 24.7 33.4 20.3
6774 2419
4355 11.5 24.1 28.5 23.5
8244 3563
4681 10.1 22.5 30.8 23.8
9446 4296
5150
9.2 22.2 30.6
25
8748 3684
5064
7.8 22.1 32.1 23.8
8399 3475
4924
8.3 21.2 30.7 25.3
8540 3567
4973
7
18.4 31.5 27.6
8698 3631
5067
5.6 17.4 32.4 28.4
2013
828
1185
4.1 17.6 30.8 30.1
>64
5.8
6.5
8.3
8.5
8.5
10.3
12.6
12.8
13
14.2
14.5
16
16.2
17.4
Guest Analysis
10000
9000
8000
7000
6000
Total Stays
5000
1st Time
Total Repeat
4000
3000
2000
1000
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Financial Analysis
Accomodation
Additional Services
Average visit (days)
Avarege Spending in each visit
2004 guests = 8.698
Newcomers : 3.631
Repeat : 5.067
$455.97
$165.36 +
$621.33
7x
$4,349.31
Marketing cost : $2.76 million
Advertising : $1.32 million
Guest newsletter : $150.000
Direct mail : $198.000
Internet marketing : $120.000
Acquisition cost /
Individual revenue:
$317.31 / $4349.31
= 7.30%
Acquisition cost :
$2.76 million/8698
= $317
A Loyalty Program?
Should Cabo San Viejo implement a rewards program?
Who should qualify? How should “points” be
accumulated?
What should the rewards look like?
Should rewards only apply to Cabo San Viejo should
they be redeemable at other places? If then latter,
then what types of partners?
How to Proceed
Contra Opinion :
Some managers opposed to a loyalty program
because of operational concern
Computer system was not reliable to support such
a program
History poor management
Computer system outdated
Customer records inaccurate or incomplete
CONTRA
• The client expect the best and
very demanding, its better for
us to do nothing than to
implement something that
we really can’t deliver
• Everybody must get treated
equally, whether first time or
repeat customer
• Cabo san Viejo better focus
on improving customer
relationship management
practices in other areas
• Reward program will
eliminate the feeling of
surprise
PRO
• Loyalty program will forces
company about building
customer equity in a
systematic way
• Loyalty program forces you
to clean up your database
• Loyalty program forces you
to get the details right
• As a catalyst for creating a
set of systems so that you
are 100% certain and that
you are treating your
customers as well as you
can possibly treat them
OUR RECOMMENDATIONS
COMPANY ANALYSIS
Demography




All ages
Male and female
Job : less than high school, high school, collage, worker,
housewife
income level : above $100.000
Demography
Above 30 years old
Male and female
Worker, housewife
$150k ++
Geography
 urban and rural people
 USA
World wide
Geography
Urban people
California
Psychograph and Behavior :
 people want to rest and relaxation
 people who like to take vacation 5 times per year
 People who like spa treatments and pamper
 people who seek health experience
 people want to lead a healthier life
 traveler/ backpacker
 value oriented
 sensitive price
Psychograph and Behavior
People who like to take healthy
vacation and want to rest and
have relaxation
Loyalty
Likehood to Renew/ Repurchase
Definitely
will
I am not satisfied
with the service
but I have no
other options, so
I stick with it.
Hostages
Probably
will
Probably
Will Not
I am very happy
and I will tell
other people
about great
service!
Loyalist
I am satisfied but
I might look for
other better
services.
I am dissatisfied
and I will tell
others how
unhappy I am
with this service
Defectors
Mercenaries
Definitely
Will Not
Very
Dissatisfied
Satisfaction
Very Satisfied
SWOT Analysis
Strength:
 First and Leading band
 Wide offerings
 Flexibility
 Excellent staff
 Excellent facilities
Opportunities:
 Increase customer loyalty
 demand will increase with
increase in health awareness
 untapped market segments
 diversification and expansion
Weakness:
 Inaccurate and incomplete
customer database
 Little cross and direct
marketing
 Limited capacity
 Didn’t have a financial
commitment to large-scale
consumer promotions
 Uneducated consumers
Threats:
 Stiff competition
 Increasing consumer expectation
 New entry players
 There are many competitor with
competitive price
7P Analysis
Product: Health and Relaxation Resort
Price: From $778,8/night
Place: Palm Spring, California
Promotion:
Advertising, Guest newsletter, Direct mail, Internet marketing
Physical Evidence: Beautifully landscaped ground
People: Full ranged of wellness services
Process: Customer interact with reservation specialist
A Loyalty Program?
Should Cabo San Viejo implement a rewards program?
Loyalty
Likehood to Renew/ Repurchase
Definitely
will
Hostages
Loyalist
Defectors
Mercenaries
Probably
will
Probably
Will Not
Definitely
Will Not
Very
Dissatisfied
Satisfaction
Very Satisfied
Because most of visitors are repeat
guests and they think that reward for
them is important
Benefits :
To understand the customer-firm relationship
Maintain consumer loyalty
We recommend Cabo San Viejo build customer data
base and launch member card program to build
customer relationship and maintain customer
loyalty.
Why Should We Use Database?
Benefits :
• To know customer’s data
• To record customer wants
• To decide which customer should
receive a particular offer
• To know promotion given
• To avoid serious customer mistakes
Key Concepts :
• Customer database
• Database marketing
• Mailing list
Why should a Member Card?
To differentiate customer’s level
To create sense of belonging from customers
To motivate customers on buying products
Who should qualify? How should “points” be
accumulated?
Most profitable
Customer Pyramid
Good relationship
customers
Platinum
Gold
Iron
Poor Relationship
Customers
Unprofitable
Lead
Leveling member card based on
consumer value
Platinum
Titanium
Gold
Platinum
Iron
Gold
Lead
Basic
Basic
Platinum
First-time
Potentials
Clients
Customers
Prospects
Repeat
customers
Advocates
Members
Gold
Partners
Titanium
Points
Every $100 spent equals to 20 points
POINTS
Card Type
< 1000 Basic
1000 – 3000 Gold
3000 – 5000 Platinum
> 5000 Titanium
One member card consist only one name.
Only the card’s owner available to use the card.
First comer automatically get Basic Member Card
What should the rewards look like?
Basic
Free biking
Golf discount
Summer Camp discount
Birthday card
Gold
Birthday gifts
Candid photos
Flower and welcome drink
Platinum
Special event promotion
(anniversary party)
Special dinner
(dinner for Platinum + Titanium members only)
Titanium
Free for some facilities in CaboDaySpas
Free in-room massage
Private fitness lesson
Terms and Conditions
Rewards for facilities at Cabo San Viejo given at low occupancy time
Put the Reservation Specialist’s name on birthday cards, promotion, or other
delivered gifts
Reservation required for claiming the reward, so Cabo San Viejo could prepared
well before the customer come
The reward doesn’t have to be given at the same year, but depend on customer’s
time availability
Should rewards only apply to Cabo San Viejo, or
should they be redeemable at other places? If then
latter, then what types of partners?
It also has reward that could
be redeemable at CaboDaySpa
WHY?
As a synergy between Cabo San Viejo
corporation to maximize their profits
RECOMMENDATION FOR
MARKETING AND SALES PROBLEMS
Lack of direct marketing approach
Didn’t purchase and use customer list
(No customer database)
Not to educate
consumers
Misconceptions about
Cabo San Viejo
Create
Consumer
Database
Insert Cabo San Viejo
in television program
to inform about the
TRUE benefit and
value.
Like : “Wisata to Cabo”
RECOMMENDATION FOR
MARKETING AND SALES PROBLEMS
Build relationship with travel agents
30% of new comers come as a result of direct
referrals by travel agents
Direct marketing to East Coast region
Increase the potential market
More collaboration with CaboDaySpas
Increase potential new comers from CaboDaySpas
location