CABO SAN VIEJO

INTRODUCTION

•1977 : Founded by Dave & Florence Blumenthal in California to change the unhealthy lifestyle of the people

•1982 : “Premier Total Vacation/Fitness Resort”

•1990s & 2000s : Opened several CaboDaySpa sites

OFFERINGSOne full-service overnight resort

4 CaboDaySpas

Fitness Centers

Beauty Saloons

Meditation Aquatic Centers

Sports Facilities

Sun-Bathing Areas

Healthy Cooking Classes

Spiritual Awareness

Classes

COMPETITORSCategory Firms Offerings

Destination Spas

Miraval, Canyon Ranch, Lake Austin, Golden Door

Extensive Spa & exercise offerings, General Focus on

wellness

Local day Spas & Saloons

Oasis Day Spa, Le Petite Retreat

Massage, Skin Care, acupuncture,

Saunas

Cruises Princess, Celebrity, Silversea, Seabourn

Gourmet Cuisines, Spas, fitness

centers, casinos

Vacation Resort

Four Seasons Resort Hualalai Esperanza Resort

Weight Training, fitness classes,

aquatic facilities

High-End health Clubs

The Sports Club Fitness & Personal training, Cafes, bars, Day care

MARKETING STRATEGY 6 persons in marketing department

6 regional sales managers

12 reservation specialists

2 public relations officers

MARKETING APPROACHThe goal was to meet specific revenues and occupancy targets.

Challenge was not to educate consumers about Cabo San Viejo concept but evoke “right emotions so that people are reminded that they want to feel special”.

Spending on advertising was only a small percentile of the gross profits.

It spent most on the brand awareness type ads. (i.e. online, radio, print )

They send occasional bulletin to the customers to inform about latest developments.

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

SALES STRATEGYCabo San Viejo was one of the few spas to maintain a sales force.

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

Goal was to keep occupancy at optimal level( i.e. 270).

Reduction of rates by about 35% in summers.

Organise receptions in major cities, introducing doctors , physiologists and other staff to the prospects.

The main aim was to instill correct perception about the brand

CUSTOMERS

Loyal Customers base included:• affluent, middle aged & female

Added 3500 customers each year• 65-70% word of mouth• 30% direct referrals by travel

agent• Repeat guest compromise

between 50-60% of all guest nights.

PROBLEMS FACED BY CUSTOMERS

Misconception in minds of the people:1. Its only for women2. Lack of awareness campaign

Low customers staff ratio (3:2:1) Outdated computer systems and no customer

database. Complaints about lack of loyalty program for

their loyal customer. Limited clientele due to expensive rate.

LOYALTY PROGRAM

To build loyalty show some loyalty

Analysis

Should Cabo San Viejo implement a rewards program?

Who should qualify? How should the “points” be accumulated?

What should the rewards look like?

Should rewards only apply to Cabo San Viejo or should they be redeemable at other places? If latter, then what types of partners?

CONCLUSION

Creating awareness among people towards their Health Status.Differentiated its product from other competitors like Miraval, Canyon Ranch.Efficiently distinguishing its Marketing Approach and Sales Approach.Seeking Customer’s Satisfaction and live up to their rising expectations.Customer Acquisition and Retention.REWARD PROGRAM : A Curse or A Boon.

Presented byGunjan Khurana

Kanika SharmaRupali NangwaniShikha Shubhangi SinghalVandana Menon

JUSTIFICATIONS

Mounting competition; Aging demographic customer base; Important for synergies between day

spas and resort. Customer Retention Indirect customer Acquisition

Not having a loyalty program would mean

“we are too good, we don’t need your business and we’ll be fine whether

you come back or not”.

BASIS FOR ACCUMULATION OF POINTS

Number of Nights; Number of Visits; Dollar amount Spent.

The other question that worried them was whether and how to reward guests who had already shown

substantial loyalty?

REWARDS CAN LOOK LIKE:

This could be done in the following ways: Enhanced Guest Recognition; Tangible Benefits; Special Guest Benefits.

Wrigley was more inclined towards Guest recognition.

Others believed it to be problematic and favored tangible rewards other than “tacky price discounts”.

IN WHICH FORM

To grant certificates redeemable at potential partners (e.g. Neiman Marcus, Tiffany’s) after a certain patronage.

whether it would help build loyalty for resort.

To select partners in a way that could sustain the prestige of the program and the brand.

Their loyalty program had to be “classy & understated”. They wanted to change person’s behavior but didn’t want it to be “crass”.