Sales Strategy Assignment: Case Study Analysis of DoubleTree

Question

CASE STUDY
DoubleTree has more than 300 hotels in 23 different countries. The chain is owned by Hilton and strives to deliver the term CARE (Creating A Rewarding Experience) for all of their guests. The CARE system starts with a warm chocolate chip cookie to welcome each guest. That is followed with stylish guest rooms, each including the Sweet Dreams by DoubleTree Sleep Experience. Most guest rooms offer the higher-quality CITRON bath products by Crabtree & Evelyn. DoubleTree also offers Fitness Rooms for their guests. As a result if the COVID pandemic, DoubleTree is planning to consolidate and automate their reservation systems to help rationalize costs and have been researching potential suppliers.

Julie, a salesperson for Micros, has been negotiating with DoubleTree regarding Micros's OPERA Reservation System (ORS). ORS, a central reservation system, is a part of an enterprise-wide room inventory management system offered by Micros. ORS has many outstanding features, including the following: It supports multi currency transactions and multi-language situations; allows customisation of rate structures for individual properties or groups of properties; can easily handle complicated situations, such as shared reservations, frequent-flyer, and loyalty program memberships, negotiated rates, and rate discounts; conveniently searches for room availability across all of the properties; can allow customers to process their own bookings remotely; and importantly, system updates and upgrades can be automatically downloaded and installed without having to reboot the system. Julie held online video conference meetings with the DoubleTree buyers on eight different occasions before the formal negotiation meeting. She had created a winwin proposal that she was sure would meet the needs of DoubleTree and Micros. Her boss had even congratulated her on her hard work and the proposed solution. "You're going to get it, I'm sure!" she had said. "And then we can start talking about that raise you've been asking for!"

Everything seemed to be going great in the negotiation video conference until Julie was startled to hear Kelvin Ling, the key negotiator for DoubleTree, practically shout, "Listen, Julie!" I can't believe you're asking that much for this little reservation system! The COVID pandemic has hit all of us in the hospitality industry very hard. Come to think of it, that's probably why you're trying to stick it to us with this price. Knock it off! Lower your price, or we'll go elsewhere!" He then proceeded to tell her how much he was willing to pay to lease her system.

Julie didn't know what to say. The price cut being requested by Kelvin was 5 percent less that Micros's minimum objective.

Read the above case study and develop a sales strategy assignment answering the following questions

QUESTION 1
You have explained to Julie about the Value Proposition Canvas that you learned about in your Sales Strategy course and she is eager to understand how to use the model in her negotiations with DoubleTree. Use evidence from the case to analyse Micros's OPERA Reservation System (ORS) to design the Value Proposition Canvas and a Value Proposition Statement for Julie to use in her negotiations. Include this in a short report for Julie explaining your rationale and why you think this will address DoubleTree’s needs.

QUESTION 2
In the light of Kelvin’s response, Julie will need to quickly assess and understand his characteristics so that she can appropriately adapt her sales approach. Help Julie analyse and identify Kelvin’s Mobilizer or Talker characteristics and role, and his possible role in the Buying Centre. Explain this in a short report for Julie using case evidence to illustrate your analysis and suggest how his Buying Centre role may impact the buying process.

QUESTION 3
Successful selling stems from a Sales Professional’s ability to be a creative problem-solver and adaptable. Julie realises that she will need to apply these skills to manage Kelvin’s response. Help Julie identify Kelvin’s Negotiation Mode and use case evidence to illustrate and support your answer. In an email to Julie, recommend a Negotiation Mode that she should adopt to help manage the situation and explain why this is appropriate in the circumstances.

QUESTION 4
Julie will also need to adapt her Selling Style to support the recommended Negotiation Mode and rescue the negotiations. Recommend an appropriate Selling Style that Julie should adopt and explain in a short report how she should apply the three Selling Activities of your recommended style.

QUESTION 5
Julie thinks that Kelvin’s response may be an objection related to price but is unsure how to manage this. Advise Julie on what she should do now to focus her negotiation strategy on building perceived value. Assuming this is a genuine objection, recommend two Effective Response Methods that Julie could use in combination to handle Kelvin’s objection and explain why these are appropriate.

Answer

Introduction to the case scenario of sales strategy assignment:
A strategy is the essence of any successful business. As explained by Vanhaverbeke, et al., (2017, pp. 3-15) for a business to grow strategy must be formulated but it should also be communicated effectively. Communication is also very important for any business operation. Effective commutations lead to a smoother operation which leads to successful strategy implementation. This case explored in the segments of sales strategy assignment deals with Julia an employee for Micros Ltd. who believed that she had almost finalized a sale of the company’s OARS system. But a sudden change in behavior from the lead negotiator for client company Double-Tree Kelvin during the final negotiation meeting throws her into confusion and uncertainty.

Question 1 (Part 2):

Report and Value Proposition Statement
According to Payne, Frow and Eggert (2017, 45(4), pp.467-489), the Customer Value proposition plays a critical role in providing the promised value to customers. The OARS solution with its multitude of features (like multicurrency & multilingual booking, remote access, customizable rate structures, etc) is a perfect fit for the organization Double-Tree. The client company likes to align itself with a cutting-edge corporation dedicated to giving an amazing experience to consumers. This solution will provide customers with increased control over their bookings and will help the organization manage them much more effectively. Salient features like provision for loyalty programs and up-gradation without rebooting the system sets OARS apart from the competition and merges seamlessly with the existing system. As explained by Baldassarre et. al. (2017, 147, pp.175-186) sustainable business model innovation involves developing value propositions that create value for various stakeholders simultaneously e.g. customers, suppliers, shareholders, and investors as well as the society and the environment (Baldassarre et. al. 2017, 147, pp.175-186).

Q2: Kelvin’s Characteristics and Role in Buying Centre

Characteristics of Kelvin:
Kelvin can be classified as a talker, because contrary to an expected flow of the negotiation he immediately puts his points forward in a loud and raucous manner. He doesn’t speak about facts or numbers, he simply puts forth his views on the matter and directly creates pressure upon Julie. From the findings of Handfield, (2019, 83, pp.194-206) it can be derived that an important factor to be considered is that the entire conversation is happening over digital media and not physically. Although inter-personal vendor-client relationships will remain important, digital transformation in the modern age will change the nature of how these may unfold (Handfield, 2019, 83, pp.194-206).

He cannot be called a mobilizer because the defining characteristic of a mobilizer is the ability to possess a holistic view of the situation and successfully mobilize the given resources to meet their goal. In this case, he does not offer any solution as a mobilizer but rather puts out an open-ended veiled threat, that if Micros doesn’t match their quoted price, they will shift onto another option.

Kelvin’s Buying Centre Role
Kelvin is the lead negotiator for Double-Tree, hence he can be treated as the client’s primary spokesperson. He has a large amount of control over the decision to be made. But it must be clearly understood whether the views put forth by Kelvin are his personal ones or is he conveying what the management is saying. Grandietti (2017) opines that there are cases where a buyer-seller relationship is spoilt by one party withholding a secret from the other to exploit the inherent information gap. As lead negotiator Kelvin is looking at a variety of vendors and has access to many competitor data. If he is using these as leverage, then he has significant power within the buying center. As explained by Herking, (2019) a party should investigate at which amount of money the negotiation behavior gets affected. Thus, the line beyond which the negotiators change their behavior and become more significantly distributive can be understood. (Herking, 2019). This is key in successfully concluding the negotiations.

Q 3: Email to Julie

TO:

FROM:

DATE:

SUBJECT: Mode of Negotiation during Double-Tree conference.

Dear Julie,
We got to know that the key negotiator for the client Kelvin Ling has adopted the Competitive Mode of Negotiation during the meeting today. As you may know, the loss of one party is beneficial to the other. That is to say, that one party pushes upon the other their own agenda, keeping in mind their own objectives and not really empathizing with the other party. This is evident when Kelvin Ling behaves in an unprofessional manner over the negotiation meeting. He raised his voice to you over the video conference, demeaning our product ORS by calling it a ‘little reservation system’. He then further tries to pin an accusation on you that we are overcharging the client to set-off the losses Micros has incurred due to the COVID pandemic. This has created a very hostile negotiation environment where Kelvin is trying to push his own views upon us and insulting a respected employee in the process. At the very end, he villainously added, that if Micros does not reduce the asking price they will go to another vendor. Threatening to take one’s business to a competitor is a very basic form of negotiation and should have been done in any of the prior 8 discussions Double-Tree has had with you, not dropped like a bombshell during the final negotiation meeting. Individuals tend to move towards self-face saving and in group face-saving emphasis when they are met with the various threatening conditions directed at them or when the conflict between the two salient groups tend to be escalating (Dai and Chen, 2017, p.126). I personally believe you should adopt the Personal Mode of negotiation to soothe this over. Try asking Kevin some off-topic questions to lighten the mood and have a better understanding of his psyche. As you witnessed, his sudden outburst was both surprising and violent. This usually means that he is in a bad state of mind today. In all previous discussions regarding ORS, pricing was never an issue. So logically either Kelvin is trying to bring a win for their company by significantly reducing the cost to the company. Or, the client Double-Tree has tasked their key negotiator with an agenda to reduce the cost by the element of surprise and ferocity. I think you should try to understand if it is his choice or his organization’s. Then only you can identify whether to proceed with the Personal Mode or to adopt the organization mode, where you and Kelvin together try to convince Double-Tree. (Li et. al., 2018, pp.521-528) says that the essence of any extended business negotiation is to seek a win-win situation from a seemingly impossible situation.
All the Best,

Q4: Sales Style
Given the situation present in the case, it is apparent that Julie needs some out-of-the-box thinking to cement her sale and bring a win for her company. In sync with the underlying social theory, salespersons should react in a positive manner and bring necessary changes during the interaction with the customer based upon the perceived information (Wong and Tan, 2018, 23(1), pp.1-22). Hence the recommendation to Julie is to adopt an Insightful and Collaborative selling style. This style focuses on establishing two-way communication with the client and slowly moving towards a common and mutually beneficial goal. The end-goal is to highlight the issues the customer is facing and educating them on how the product/service can benefit the organization.

Selling Activities
In this case, the first Selling Activity of Julie should be, to establish a good rapport and connection with the other party. Despite getting green signals from DoubleTree during all previous meetings, Kelvin starts behaving so oddly during the final meeting. Here it is up to Julie as an adaptive salesperson to connect with Kelvin and try her best to understand what is the governing force behind this sudden hostile negotiation tactic. Is it personal, organizational, or sheer bad luck? This question needs to be answered.

The next activity is to take the conversation into the convincing stage. Though she may have done this before, Julie should identify the salient features offered by their product ORS. She should be able to map these to the requirements of Double-Tree and highlight to Kevin that their product is superior to that of competitors. She should also make it clear that the price-tag that comes with the product is not inflated to cover the losses incurred during the COVID pandemic (as Kelvin has accused her.) but rather a standard price for a quality item.

The final and most important selling activity is Collaboration. From the viewpoint of Yurova et al., (2017, 34, pp.271-277) while there may be a great deal of information available, they may not necessarily be accurate, hence the salesperson is presented with both a challenge and an opportunity to use adaptive selling techniques to conclude the sale (Yurova et al., 2017, 34, pp.271-277). In this scenario, Julie must come up with innovative solutions to the problems in collaboration with Kelvin. Primarily, she should emphasize on the efficiency of the product. Then if possible (due to availability of data) show how incurring this on-time cost will save repeated expenses in the future. Since the price quoted by Kelvin is 5% lower than Micros’s minimum objective, Julie can't possibly agree completely to the terms of Kelvin. At least to break-even, Double-Tree needs to raise its offer by 5%. Innovative solutions available to Julie, in this case, maybe, implementing a demo version of the ORS for a limited time so Double-Tree can witness first-hand the benefits of the tool. She can also suggest a finance scheme for the client, wherein they agree upon a price and can dole it out in pre-determined instalments. If Julie and Kevin can successfully co-ordinate through these three activities both Double-Tree and Micros will benefit.

Question 5: Effective Response Methods for Julie
The onus is now upon Julie to build the perceived value of their product ORS in the eyes of Kelvin. Now, even though she has probably covered this before, she should take diligent care in explaining how the features of ORS will benefit Double-Tree. Features like multicurrency transactions shared reservations, and loyalty programs should be highlighted along with the ease of use. Limbu et. al. (2016, 31; 5, pp.654-667) finds that the impact of empathy on outcome performance is not significant through adaptive selling, but rather perspective-induced empathy directly influences the outcome performance. In this case, Julie must successfully empathize with Kelvin’s position to have a better understanding of the rationale behind this sudden change in behavior and adapt her sales pitch accordingly.

Two Effective Response Methods for Julie
As applied by Carmen and Cubillo, (2018) the first method that will serve Julie well is The Revisit Method that also known as the Boomerang Method, this method turns the objection raised by the buyer into a reason for purchase. There is evidence to support that in customer/supplier negotiations, supplier negotiation behavior can be a combination of both integrative and competitive actions within the negotiation in question (Carmen and Cubillo, 2018). Since the primary issue with accepting the deal is the price of the system, Julie can turn the tables around. Kelvin currently thinks that the price of the product is too high for the services it is intended to provide. Julie can seize this opportunity to highlight the salient features of their product. Kelvin may or may not be aware of the ease of access OARS will bring into DoubleTree’s operations. So Julie must, using relevant examples and calculations provide a demonstration of how well OARS can tackle both mundane and difficult tasks. By successfully creating the image of value-addition in Kelvin’s mind, she can justify the quoted price of the product.

The second method that should be adopted by Julie is The Referral Method. This method pulls up past examples where the initial concerns have been forgotten after the use of the product. Marimon and Berbegal-Mirabent (2018, 5; 1, pp.94-108) says that a customer would agree to change to a new scenario if there is a prospect of increased savings than the existing scenario. Now it may be difficult for Kelvin to see the bigger picture, especially when they are about to spend a huge amount of money during a depression in the hospitality industry. So Julie can pull up examples from her past clients and use that to explain to Kelvin the benefits of the OARS product. She can put forth instances where other clients were also on-the-fence about using Micros’s product but after implementation of a new automated system how satisfied they all were with the end result.

Conclusion:
There exists a multitude of options for Julia to explore, the key focus for her should be understanding the psyche of Kevin while simultaneously creating value for their product by highlighting the salient features. By successfully adapting her sales technique she can complete the transaction and secure her career.