Mercer University Marketing Discussion Questions

Question Description

Odyssey Vacations, a travel company that sells vacation packages, operates a VIP lounge at a major amusement park.

Customers that purchase special vacation packages from Odyssey Vacations to this amusement park get to use the lounge to relax during visits to the park.

Those customers that have used the lounge have very high satisfaction, but only about ¼ of the customers that purchased packages from Odyssey actually use it.

The lounge is one of many points of differentiation for the packages sold by Odyssey. Because there is so much competition, Odyssey has added several features to attract customers such as special parking, discounts on in-park dining and reserved seating for fireworks.

With the economy soft and the demand for vacation packages down, Odysseys sales to this amusement park are up down about 5% from last year’s levels.

The VIP Lounge is the most expensive of the points of differentiation Odyssey offers because of the staffing and related costs.

With sales down, the CEO feels that the cost of the lounge is cutting into the overall profitability and wonders if it is worth it to continue to operate the lounge. Wouldnt they still buy from us if we stopped offering this one benefit? the CEO added.

To understand whether the lounge is worth it you survey the front line travel agents who sell the product to the customers to see if having the lounge helps close the sale. The counselors state that while the lounge is a great benefit to offer clients, usually the price of the overall package is what closes the sale.

In addition, you also conduct an on site survey at the amusement park to see if customers are aware of the lounge and where it is located the survey results show that the awareness continues to be low.

Your intuition tells you that the lounge is of great asset to your company, especially because you are the only travel company that has an on site presence. You believe the lounge and all of the other benefits are what differentiates Odyssey and has stimulated the sales that you do have. You are also concerned that you’d have to lay off the staff that works for you at the lounge.

However, sales are down and your CEO is looking to cut costs and wants proof that this lounge is worth it. Your intuition says that the lounge is important, but you have no strong evidence to support it remaining open.

What is your recommendation to the CEO? Provide some support for your position.
Does bias play a role in your intuition?
Is this a battle worth fighting for or do you just do what the boss wants?

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