Hotel Revenue Management

2008-02-29T18:29:00.001+01:00

Dear Liz, I am really sorry for the "mise en page" and the grammatical errors that I certainly have.
I am so overbooked these days and I am doing it while working, so monday i will try to put the article more presentable (i am not in Paris this weekend).

Thank you a lot, your course was just wonderful. You pass the eager to learn, discover, apply the knowledge.
You pass your energy. I wish all the professors where so passionate about what they are doing like you.

For me you are the example of the real teacher and professor.

It has been a real pleasure to work with you!!!

2008-02-29T18:09:00.000+01:00

I have chosen to talk about the Biotechnology and Nanotechnology, as I know little about it, but the development in this field already affect strongly our life, and certainly our children will be touched by this phenomena.

The question that I am asking my self, is it a positive or a negative trend, how this will affect the near future and in the long-term.

Biotechnology:

As the name suggests it is the technology based on biology, especially in agriculture, food, science, and medicine.

"Biotechnology" means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use."

Biotechnology combines the following disciplines:
 Genetic engineering
 Molecular biology
 Biochemistry
 Embryology
 Cell biology

The practical discpiplines touched by this are:
 Chemical engeneering
 Information technology
 Robotics

A bit of history

Historically biotechnology is associated with the food industry, addressing the problems of femine and malnutrition.

After that the genetic engineering saw the birth, that’s when the biotechnology closely links the gotherment, the scientists and the society. In the 70’s the development of the synthesis of synthetic human inulin, gave a powerful spur to the evolution of biotechnology.

Today, The field of genetic engineering remains a REALLY heated topic of discussion in today’s society with the advent of gene therapy, stem cell research, cloning, and genetically-modified food. It is also used to produce biotechnological weapons. While it seems only natural nowadays to link pharmaceutical drugs as solutions to health and societal problems, this relationship of biotechnology serving social needs began centuries ago.

On the other hand, Biotechnology is also used to recycle, treat waste, clean up sites contaminated by industrial activities.

Red biotechnology is applied to medical processes - antibiotics, genetic cures through genomic manipulation.

Green biotechnology is biotechnology applied to agricultural processes. A controversial technology as really debatable whether more environmentally friendly or not.
White biotechnology, also known as industrial biotechnology, is biotechnology applied to industrial processes. An example is the designing of an organism to produce a useful chemical.
Blue biotechnology is a term that has been used to describe the marine and aquatic applications of biotechnology, but its use is relatively rare.

Bioeconomy : The investments and economic output of all of these types of applied biotechnologies form.

The main impacts are that the completely new products appear. The medicine and agriculture businesses are revolutionized; costs are cut drastically, which gives the margin for new and new researches. The economic impact also affects the patent creation, evolution of biotech startups, licensing fees. Scientific breakthroughs and technological progress will not only progress it will accelerate each year.

NANOTECHNOLOGY

I have decided to write also/more about the nanotechnology, as after having read couple of articles I have realized that this is also extremely interesting topic. I was little aware of this, at least I didn’t have any idea how far did the nanotechnology go.

Nanotechnology – refered to a field of applied science and technology that are working on the control of the matter on the atomic and molecular scale, normally 1 to 100 nanometers, and the fabrication of devices that lie within that size.

Manufactured products are made from atoms. The properties of those products depend on how those atoms are arranged. For example if we rearrange the atoms in coal, we get diamonds. If we rearrange the atoms in sand we get computer chips. If we rearrange the atoms in dirt, water and air we get grass.
The humanity went thourough a greatest development. First we made stone tools and flint knives we have been arranging atoms in great thundering statistical heards by casting, milling, grinding, chipping and the like. We've gotten better at it: we can make more things at lower cost and greater precision than ever before. But at the molecular scale we're still making great ungainly heaps and untidy piles of atoms.
Eventually, we should be able to arrange and rearrange atoms to:
1. Build products with almost every atom in the right place.
2. Do so inexpensively.
3. Make most arrangements of atoms consistent with physical law.
It will completely revolutionise MANY industries and will let us make most products lighter, stronger, smarter, cheaper, cleaner and more precise.

It is a highly multidisciplinary field.

Examples of nanotechnology in the modern use are the manufacture of polymers based on molecular structure and the design of computer chip

The advantages

What would it mean if we could inexpensively make things with every atom in the right place? For starters, we could continue the revolution in computer hardware right down to molecular gates and wires -- something that today's lithographic methods (used to make computer chips) could never hope to do. We could inexpensively make very strong and very light materials: shatterproof diamond in precisely the shapes we want, by the ton, and over fifty times lighter than steel of the same strength. We could make a Cadillac that weighed fifty kilograms, or a full-sized sofa you could pick up with one hand. We could make surgical instruments of such precision and deftness that they could operate on the cells and even molecules from which we are made -- something well beyond today's medical technology. The list goes on -- almost any manufactured product could be improved, often by orders of magnitude.

Origins and fundamental concepts

The first use of the concept was described by professor Feynmann in 1959.

Today the official definition is “the processing of, separation, consolidation, and deformation of materials by one atom or by one molecule”

Main discoveries: the birth of cluster science, invention of the scanning tunnelling microscope, fullerenes, carbon nonotubes, atomic force microscope.

Nano = one billionth of a meter.
Nanotechnology applications

The assemblers

The assemblers use programmable positional control to position molecular tools and molecular components, permitting the inexpensive fabrication of most structures consistent with physical law. Diamondoid materials in particular become inexpensive and commonplace, and their remarkable properties usher in what has been called the Diamond Age.

Nanomaterials
This includes subfields which develop or study materials having unique properties arising from their nanoscale dimensions.

There many many appmications
Cancer
The small size of nanoparticles endows them with properties that can be very useful in oncology, particularly in imaging.
Other
Although there has been much hype about the potential applications of nanotechnology, most current commercialized applications are limited to the use of "first generation" passive nanomaterials. These include titanium dioxide nanoparticles in sunscreen, cosmetics and some food products; silver nanoparticles in food packaging, clothing, disinfectants and household appliances; zinc oxide nanoparticles in sunscreens and cosmetics, surface coatings, paints and outdoor furniture varnishes; and cerium oxide nanoparticles as a fuel catalyst. Muchof what is sold as “nanotechnology” is in fact a recasting of straightforward materials science, which is leading to a “nanotech industry built solely on selling nanotubes, nanowires, and the like” which will “end up with a few suppliers selling low margin products in huge volumes."
Another large and beneficial outcome of nanotechnology is the production of potable water through the means of nanofiltration. Where much of the developing world lacks access to reliable water sources, nanotechnology may alleviate these issues upon further testing as have been performed in countries, such as South Africa

What will we be able to make in future?

For example, nanotechnology will let us inexpensively make shatterproof diamond (with a structure that might resemble diamond fibers) in exactly the shapes we want. This would let us make a Boeing 747 whose unloaded weight was 50 times lighter but just as strong.
Nanotechnology will dramatically reduce the costs and increase the capabilities of space ships and space flight. The strength-to-weight ratio and the cost of components are absolutely critical to the performance and economy of space ships: with nanotechnology, both of these parameters will be improved by one to two orders of magnitude. Improvements in these two parameters alone (ignoring other advantages provided by nanotechnology) should improve the overall cost/performance ratio by over three orders of magnitude..
Beyond inexpensively providing remarkably light and strong materials for space ships, nanotechnology will also provide extremely powerful computers with which to guide both those ships and a wide range of other activities in space.
Another thing the development of the computer chips and computers. We should be able to build mass storage devices that can store more than a hundred billion billion bytes in a volume the size of a sugar cube; RAM that can store a mere billion billion bytes in such a volume; and massively parallel computers of the same size that can deliver a billion billion instructions per second.
UNFORTUNATELY, this will also develop the effectiveness and the precision of weapons.
We'll also be able to build weapons both inexpensively and much more rapidly, at the same time taking full advantage of the remarkable materials properties of diamond. Rapid and inexpensive manufacture of great quantities of stronger more precise weapons guided by massively increased computational power will alter the way we fight wars. Changes of this magnitude could destabilize existing power structures in unpredictable ways.
Military applications of nanotechnology raise a number of concerns that prudence suggests we begin to investigate before, rather than after, we develop this new technology.
Nanotechnology will also cut costs both of the solar cells and the equipment needed to deploy them, making solar power economical. In this application we need not make new or technically superior solar cells: making inexpensively what we already know how to make expensively would move solar power into the mainstream.
GOOD THINNG, nanotechnology will help to develop the surgical tools. With the precision of drugs combined with the intelligent guidance of the surgeon's scalpel, we can expect a quantum leap in our medical capabilities.

Nanotechnology should let us make almost every manufactured product faster, lighter, stronger, smarter, safer and cleaner. We can already see many of the possibilities as these few examples illustrate. New products that solve new problems in new ways are more difficult to foresee, yet their impact is likely to be even greater. Could Edison have foreseen the computer, or Newton the communications satellite?

It is difficult to predict what it will have as the effect on the business models, one thing is sure; it will revolutionize all the production processes, costs structure and the products and offer itself. There will be MORE OFFER, at LOWER COST, produced MORE QUICKLY and EFFICIENTLY and much more STRONG and PRECISE.

Read this article that debunks the main myths concerning the nanotechnology.

Certainly, both the biotechnology and nanotechnology will stay there and develop. It’s a really powerful fields that allows incredible outcomes. The knowledge and the number of patents are progressing at an incredible pace. Now, is it a good thing or not? I would say that depends in which hands lies the knowledge. I think that biotechnology and nanotechnology could be used for the good of humanity but may also be a really dangerous enemy if used in the pervert reasons.

The future will show us are we on the way on the development and these will greatly benefit the mankind, or having this power in human hands will lead to abuse and destruction?..

2008-02-09T12:16:00.000+01:00

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2008-02-05T18:35:00.000+01:00

INNOCENTIVE - Innovating Beyond Boundaries

1) About Innocentive
Founded in 2001, InnoCentive connects companies, academic institutions, and non-profit organizations, in one common goal: INNOVATE. Its network composes with more than 125,000 of the world's brightest minds on the world's first Open Innovation Marketplace™.
Their mission is to bring together creative minds to create breakthrough solutions that touch every human life. The areas of researches are very wide starting from system network, chemistry, biology, astronomy, design, nanotechnology, etc.
It might be a technical problem, a tricky business issue, a scientific hurdle, or a way to improve the quality of life.
The challenge types have official names: Ideation Challenge, Theoretical Challenge, Reduction to Practice Challenge.
The proliferation of prizes is attracting bright minds to stubborn problems.

2) Customers – the seekers, the companies, academic institutions and non-profit organizations post their challenges online and promise the financial awards for the best solutions. So far around 30% of the problems were solved.
· The seekers also get the consultancy service in order to make the most of its network. They also get help to correctly define their problem and estimate the appropriate award.
· The seeker increases significantly its R&D capacities.
· Reduce risk to costly research failures, and simply minimizes the costs of the research
· Creates the equal possibility and contributes to positive competition, small and medium companies can compete with Fortune 500, thus they achieve/maintain the competitive lead
· Stay ahead of competition through innovation and faster time to market
· Gain a lot of time in general, accelerate their R&D efforts
· Helps non-profit organizations to solve the life-changing challenges
· Enables breakthrough discoveries
· They reach to some of the world’s most creative thinkers
· Outsiders look at the problem from a completely different lens, innovation beyond the boundaries of your vision
· Project Roadblock
· Revival of the stalled projects
· Closure of the “dead” projects
· Good for image and a buzz

Suppliers – so called solvers, they supply with the solutions to the challenger. These are engineers, scientists, inventors, and business people.
· They get cash awards from 5,000 to 100,000 dollars, and they are protected to get the fair pay
· Their intellectual property is protected in the logistic and legal framework
· They have got the consultancy service as well, they got the feedback
· They are assured the confidentiality
· They enjoy the independence that comes to choosing what they work on and where they work, and when they work on it
· They have got an interesting intellectual challenge
· Recognition
· Business development opportunities
The end users of the companies and the society in general benefit from:
· Positive impact on the world
· Poor are being helped
· Breakthrough innovations
See also point 7 for additional benefits

The owner of the business:
· Positive contribution to the society
· Good image
· Participation in exciting discoveries

3) The categories of the customer groups served:
· Private companies
· Academic institutions
· Laboratories that got stuck with a problem
· Non-profit organizations

4) The revenue sources
· Gets the profit from the seeker, from the consultancy services.

5) Competitors offering similar services include NineSigma, Yet2.com, and YourEncore.

6) The model can be applied offline but it is much less efficient in terms of cost, time and money, and the number of participant. Online model offers an exceptional opportunity to take the most of it.

7) The model is sustainable; it is more and more used worldwide. There are already competitors that exist. The companies themselves start adopting the so called Open Innovation Networks.
· Towards a new mode of producing ideas
There are the following advantages, which is also true for INNOCENTIVE:
· Experimentation – encourages experimentation and following the paths that were not ever followed before
· Innovation – rapid breakthrough discoveries
· Competition – Eliminates artificial constrains on choice of technologies and approaches, real competition occurs allowing the best products and approaches to win
· Disruption – Enables disruptive products and approaches to rapidly achieve market acceptance or even dominance
· Option Creation – Maximizes options for developers and users
· Responsiveness – Ensures participation of many segments including potential end users in the development of products.
· Quality- Rapidly discovering and correcting the flaws

When your product project participates in the Open Innovation program:
· The product is seen as important and valuable to a critical mass of users
· Widespread peer attention and review
· Strong positive network effects to use of the product
· Potential contributors can judge with relative ease the viability of the evolving project
· Motives are beyond the simple economic gain

There is a clear manifestation of the trend of the time: the shift in power from centralized institutions and toward the individual – from the centre to the edge
Every person is a leader; it is a network of mindset, so called “intellectual capitalism”, a “factory in every garage”

Another important trend that comes with the open innovation is “The Rise of the Naked Corporation”. That is a real need in transparency that is required by the information democracy and empowered customers. There is a certain pressure on the companies to make corporate values and governance more visible.
Rather to be scared to become transparent, the companies can make the really good use of it. It is good in case if the company is ethical and has superior value preposition.
Companies benefit from the completely new relationships between them, researches, customers and partner.

8) If I owned the business
· I would have increased the number of seekers and solvers by creating an offline conference event. I would have created a significant interesting buzz, probably putting some videos online. Participation in national televisions.
· I would have expanded the revenue sources by creating an online training system, where people could exchange their knowledge in forms of lectures
· I would have had a growth model for the business in the following way. Every new coming seeker would benefit from the interesting offer, as well as those have recommended the site. For the solvers I would have created a lot of buzz, designed the success stories online, and would have put some videos with success stories and interviews.

All sorts of industries could create or benefit from the Open Innovation system, for example:
· P&G Collaborative Ideation and Validation, eg spinbrush
· Linux , operating system created with the assistance of developers all around the world.

2008-01-21T19:05:00.000+01:00

What is a Social Entrepreneur?

Social Entrepreneur is a leader, who is willing and has the power to resolve some social problems that the government or the associations cannot deal with. He is trying to change the world for a better place. So he is not only there to make the margins, but contributing positively to the society as a whole.
He is able to sustain sound financial development of his enterprise to generate the revenue and procure it to finance at least partially for his social activities
Social entrepreneur is innovative, ambitious and persistent. “They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.”
He is charismatic person that makes people not only talk about problems but also ACT and ENGAGE and CHANGE.
‘There is nothing as powerful as a new idea in the hands of a first-class entrepreneur. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale.’
I think it’s a real shift, because the world is more and more concerned about the social problems, big companies having even Sustainable Development Departments. This is good for the company’s image. At the same time the help resolve difficult issues, and at the same time they promote the company for the customers, but also within the company to motivate the employees, create a hero, and make them understand that they contribute to the society.
Of course, the revenue should be taken into account, a comprehensive financing from the government or the associations should be assured.

2008-01-21T18:51:00.000+01:00

Vente-privee.com

1. Vente-privee.com – the six year old French company that holds invitation-only closeout sales over the Internet. It attracts over 1 mln visitors per day, generating over 40,000 sales of items.

It’s the first of kind mover in the completely new online business called Vente Privée.

Vente Privée previously only the off-line activity is the sales normally of the known brands within the frame of 2-3 days with discounts that go from 30 up to 70%. Items for sale include luxury apparel, accessories, wine and Champagne, household linens, baby clothes, and small household appliances. It works on the basis of invitation. Now luxury marks have turned to an online alternative.

Vente-privee.com proposes a completely new channel of distribution for brands. It has a unique approach to merchandising, what other closeout sales don’t develop at all.

2a. Consumers get the luxury brand products with up to 70 % of reduction. They are warned couples of days in advance of the upcoming sales. They considerable save their time and energy.
Internet Business model and thoughtful merchandising system makes the vente privée a pleasant experience. Products are easier to find. Whereas off-line Vente Privée were usually conducted in “bare rooms with cement floors and florescent lighting”, with lots of people, and no merchandising whatsoever.
Loyal customers are rewarded for their fidelity (e.g. magazine Rosebuzz)

Thanks to invitation (‘parrainage’) system the customer feels important and privileged to enter the so called ‘closed clubs’. Thank so the mailing the customer is always up-to-date with the upcoming sales.
By recommending the site to his friends, a user gets ‘les bond d’achat’

2b. The main advantage for the suppliers is that they are able to ‘dump’ their overstock in a very efficient way.
Furthermore they have more control of the brand image. The company proposes a unique value-added merchandising, using models, make-up artists, hairdressers, and photographers, and creates original music for advertising trailers to depict the products in the best possible light.
Another important thing is that the margins are twice more than in traditional closeout sales. The costs are minimised, both stock and sales. They have gained an entirely new channel of distribution. It helps to bring in new customers on- and off-line.
The relationships between the brands and venteprivee.com are really well established, thus they have gained on trust, which is really importation notion in today’s business.
Another important thing they are still able to maintain is the discretion, only the subscribed customers are informed about them.

2c. Partners. The only partner I have found is the MTV who recommends the CD they have recorded. I think it helps to the image of MTV as being young, innovative, close to customers, modern and up-to date with the tendencies.

2d. For the owner the main advantage is of course the revenue – roughly a half-billion dollars, up 40% over 2006. The company claims being beneficent from the beginning of its operation. It is 30 times larger than nearest competitor.
The business model allows the owner to but the merchandise after it has been sold. The costs of stock are still being paid by the supplier, and the owner has only to reserve the items to be sold.
The percentage of return is rather low (around 2-5%).
Being the first in this Business Model has permitted to create a huge advantage over the competitors, building its strong brand name, consolidating the knowledge on the market, and establishing loyal strong relationship of trust with the suppliers.

3. The customers:
The customers are price-sensitive still attracted to known luxury brands. They are time-concerned as well, so they prefer to buy their products online.

4. Venteprivee plays the role of a middleman. They gain a margin from 20 to 40% per item.
Recently they have also created a CD featuring original music for advertising trailers created by their recording studio.

Nevertheless they still have to assure the costs of sales, site construction and the logistics.

5. The competitors are numeroud sites of Vente Privée that have occurred reacently, e.g. BuyVIP or Gilt Group

6. The model can apply offline, as this is how it has started.

7. I think the model is sustainable, as people are always rushing for sales. And in this model sales are all year long! The Internet is booming, buying online in closeout sales is much more pleasant experience than in real-life.

8a. I think they have already done a god job, by offering 8 euros for those who invite their friends. I think now it’s the time to invest more in Communication, to put ads online, or on the radio if it’s legal. If not then I would recommend creating a buzz.

8b. I would probably launched a line of cloths or different products with the VP logo, that would be connected with the fashion tendencies they are describing on their sites. Probably make this production also in limited series, to keep the business model and make the product more unique.

8c. Obviously, they need to expand in different countries of Europe, what they are already trying to do and Asia, probably South America.
Adding other industries to this Business Model, which they have already done too, eg.
Voyageprivee. Another example could be the cars, CDs, electronic devices, mobiles, etc.

Follow this link to see the article I have been using.

2008-01-12T12:51:00.000+01:00

http://en.wikipedia.org/wiki/Mashup_(music)

2008-01-07T22:05:00.000+01:00

Business Model Evaluation Easy Group

1. Easy Group founded was by Stellios, Greek businessman. His first brand was EasyJet, cheap flights. Then he expanded into other industries: cruises, cars, buses, pizzas, internet café, cinemas…etc, based on the same low-cost concept, making the products no-frill, cheap, available for the masses. In other business the customers are being ripped off. ‘It’s about value for the many, not the few’. Easy companies are based on the principles of the yield management, where customer pays less the further in advance they buy. Wikipedia gives the links to all the brands. We have also used the links that gives Wikipedia to the articles and the last year’s article “There could be a fight”

2. Customers can save their money and get the products that were before unaffordable for some of them. It gives more choice, some of them just don’t need the additional frills to the services, and they prefer to economize. It gives them the value, they feel respected and understood. As Stellios uses the same services, they don’t feel like the company is above them. In general he lowers the prices of the industries.

Suppliers benefit from the success of the company and increase their turnover.

Partners see more possibilities in developing their business and use the name of Easy to attract the customers. The number of customers increases and they can reach other social levels of people than they are used to.

For the owner of the business the comprehensive low-cost structure and internet booking helps to develop the business and assures the healthy profit margins. The company is one of a kind it’s a leader in low-cost sector and can compete with the real industry giants and conduct the price wars. They challenge the price elasticity.

3. Easy Group customers is the mass market, they are price-sensitive. They prefer to buy in advance to pay less. They are not concerned by the frills of the product, what they need is just the core product, no additional fees.

4. Having the low-cost structure plus increasing the volume of sales by proposing low prices helps in generating the healthy profit. The planes are fully booked, the pizza oven are operational over 50 percent of the time, and so on. They have less expenditure in staff and distribution as they sell generally online, product is really basic. The scandal makes the buzz, quite often contributes to good image, so promotional costs are reduced too.

5. In the airline business there are more and more direct competitors, amongst them:

Sky Europe

Ryanair

6. To ensure the low-cost structure the most of the business should be on the Net.

7. We think that in the middle term the model will be of a success, for the moment it’s the turnover is increasing. This is true for some industries, like airline, busses, cruises, cars. For new industries where Easy Group enter even Stelios is not really sure which one will work out.

8. If we owned the business we would have create more of the partnerships. We would have proposed a package of services like Easy Jet+Hotel+Car and create like Easy Voyage. We would have also promoted image of the responsible company who cares about their customers.

In order to expand revenue sources once again, we would have created EasyVoyages and we have also an idea of creating EasyGym, where customer could freely choose the dates and the period of his subscription, from tomorrow till one year and from 1 day duration till 1 year.

In the conventional methods of yield management, the company start to sell the products at a certain price, then lower if it isn’t selling fast enough, and rapidly high the price in the peak seasons or when the fixed costs are covered. Stelios did completely the opposite with Easy products. He starts the price with low headline price that grabs attention, and then raise it according to the demand. But the customer doesn’t know how high it will go, or how quickly.

EasyCruise works on the basis of other Easy Companies. It sails on different destinations now, and targets independently minded travelers at the age 20-40s. So the age of travelers differ a lot, because normally these are more aged people. This is due to the fact that Easy Cruise stays up to the morning at each port, so passengers can really enjoy the nightlife at each port. This repeats every night. Plus passenger can get up and get down whenever they want, with 2 nights minimum and 14 nights maximum on the board, so they are free to choose how long they want to cruise.
The itineraries are designed so that you can take a weekend, short break or a week away at any time of the year. Ships are designed in Easy “Orange” way. There is no spa pool, but there is a small gym. The design is rather simplistic. There are no windows
Prices are based on availability; early bookers got cabins lower price. The cleaning, food excursions, and other services are not included, but can be purchased separately.
Easy Cruise has touched younger generation, made Cruises more available, and appealed to people who have not previously considered of taking a cruise in their life. The cruise industry has become mass-market, it has democratized. This is become fast growing industry sector.
At the same time there is a growing protest from ecologically minded people.

The young adults seem to be interested by this offer. It’s getting popular. And people are switching from other means of transportation to take a cruise that has become as accessible as any other way of traveling. Cruising has become another sort of traveling package.

2008-01-06T20:53:00.000+01:00

‘Freemium’

In the world of direct mail, the word freemium (in use since at least 1988) refers to a sample of the company's product that is sent along with a marketing piece (think: tiny boxes of cereal, "personalized" pens, detergent samples, etc.).

freemium adj. Relating to a business model that offers basic services free, but charges a premium for advanced or special features.

Skype gives some of their services for free. And then charges premium for extra services. They same we have seen with Musicovery on our last class. Another example Winamp

Free + premium = freemium

Attract users with free services, then charge them a premium for special features.
Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.

Freemium 2.0. Or, the business model known as Google.

Here is the site I used to get the information.
+ reduced costs of communication
+ Freemium 2.0 by giving the services for free you can become an intermediary that is a platform between businesses and the users whose attention you have and whose intentions you understand.

- Word of Mouth maybe not enough go get all the customers as you would have gotten with marketing advertising as the mainstream buyers need to be pushed to buy the products anyways
- Works only if the product is REALLY good and worth recommending

2007-12-20T23:39:00.000+01:00

The Long Tail phenomenon

This concept was first described by Chris Anderson in 2004 in Wired Magazine to describe some business models such as Amazon or Netflix. It has completely changed the view on the revenue sources in entertainment business.

Anderson argued that not only popular hit products contribute to company’s revenue, but also the non popular downstream products, moreover they can bring more cash and sometimes the volumes of their sales exceed those of the bestsellers.

This is true for the businesses where distribution costs and inventory store are of a little significance. The Long Tail thus without no additional costs serves the small niches. This is mostly applicable for Web-business or mass market retailers.

The Long Tail phenomenon can also be applicable in terms of distribution channels, where small niche target sites can in volume better sell you product that big sites, or advertisers, like Google who gains more money from the small advertisers.

‘Popularity no longer has a monopoly on profitability’

In Long Tail the main principle is make everything available, discovering new markets and expanding them. There are no extra costs, geographical position is of no matter anymore, so even if there just few customers out there, make the product available, adapt to personal tastes and use the strategy of mass customizations.

The Long Tale phenomenon is a threat to physical but I think in long term, the can still be safe for couple of years from now, people not familiar with Internet will still go there to search for blockbusters. But when the new generation will arrive, they can easily replace the physical stores. There is also threat of new entrants that will create the similar Long Term models online, but the sites like Amazon have a great notoriety, so it will be difficult to replace them.

The Long Tail phenomenon a great opportunity for ones and a major threat for the others shows us one more time that the business world is constantly evolving, and that to stay in business one should be proactive.

Here you can find some studies related to the long tail phenomenon.

2007-04-30T13:00:00.000+02:00

Second part of the Final Exam

1) Social sharing sites

The world is always on the move, and the Internet has revolutionized the marketing techniques for many companies. We live in the times when “virtual becomes real”. People are more and more familiar with utilization of the Internet and with what’s going on there. The new generation acquires this knowledge from their childhood. People demand and share information. The travel sector has had a great influence of this ‘sharing’ trend. The travel 1.0 was price driven. The travel 2.0 have made it possible to easily compare the price as well as added other significant factors for comparison. People are looking for better experience.

Social sharing sites are the sites where people, individuals, organization, associations can share their ideas, videos, pictures, opinions, experiences, news, etc. This are really interactive sites, where people can link to each others site, create cross links, forums etc. The most popular is MySpace, an online community that lets people meet their friends' friends. It allows share photos, journals and interests. Mer personally I use LiveJournal, as all Russian people use it.

I have already written in my blog before about social networking sites, and the Social Networking 3.0, that people start talking about. So I will recopy a party of this post, since I have found a lot of interesting information

Nowadays, we talk about the third generation of social-networking technology has hit the Web, and it's about content as much as contacts.

The idea of social sharing sites at the beginning was to let users build online profiles that advertised their interests and to help them connect with friends and friends-of-friends around one of those interests -- whether it be finding a job, making a sale, or repairing an old motorcycle.

Not so popular at the beginning, now it has become a real business. Now members are using their networks for practical purposes, like finding job candidates, locating business and legal services, coordinating group activities, promoting its company, association or organization. It connects people and it has become really a personal media, and it is free!!!

iMeem, relatively new social network company hopes to attract members by building all their activities not around a virtual representation of their social network, but around instant messaging technology. Indeed, the company's name is a combination of IM, for instant messaging, and "meme," meaning an idea spreading through a network. In terms of technology use they are leapfrogging all the older competition.

iMeem is built around a buddy-list window that shows a user which of her friends are online. From that window, she can send and receive instant messages, join group chats, keep a blog, and share photos, videos, podcasts, playlists, and the like with other users using a peer-to-peer system related to the technology behind the original Napster.

Wikipedia gives a list of social networking sites.

2) The influence on the customer's choice.

The customer now is much more informed, it can compare more easily and doesn’t want to be cheated. Customers want more experience at a lower price. Companies are obliged to adapt as to what a customer wants, who is now a master and is imposing the rules of the game.

The companies have to be completely transparent and create the customer confidence.
The challenge now is not only get customers to try your product, but also make them loyal, as the customer tends to switch the brands more often than before. The customer is more prudent than before, they check travel sites 35 times over 90 days before they book. They want to be sure of what they are buying before they chose.

Customers become more and more of the marketing tactics, so for them and independent opinion (word of mouth) worth much more than the advertising.

Marketing segments are dead. Customers are gathering by their interests and hobbies. They are empowered as never before. This article supports this assessment.

Actually I was looking through a bunch of article that you can find them all here.

3) What can hoteliers do?

Hoteliers can integrate to social networking in their business sites. To enhance the image, be more customer-oriented, has an immediate honest customer feedback, to constantly improve the quality. The enterprise transparency is essential in today business world. Companies can create forum, video, picture and experience exchange.

But first of all, hoteliers must accept the reality of the power of the consumer to control the selection and purchase of all travel industry products.

Second, in the words of Joseph Buhler of The New York Times: accept, embrace, innovate, join. Those who do not take this position will probably not survive!

Third, become acquainted with the process; don’t defer management, knowledge and participation solely to the IT staff.

Try to integrate following techniques: Blog, podcasts, RSS feed, C2C, Travel 2.0 , know what social Networking sites your customers use.

People now share their plans and dreams of travel, for example. This interactive process of the online travel community will continue to grow as the consumer’s power of communicating conditions the offering of the travel product.

Interactive management of technological tools by the consumer is indispensable for the when, where, why and how of the travel experience. According to PhoCusWright, technology is easy; management of it by the consumer has change the face and usage of the Internet to dreaming, planning and sharing opinions about the potential destination.

Hoteliers can also use buzz marketing, as in create different videos, imagine stories , curious ouctures, maybe even anekdotes or cartoon movies and put it on the internet. It should be something cusious or funny so that people are going to send it to each other on the chain letter.

TripAdviser (get the truth, then go) and Gusto (travel + lifestyle) have already understood this.
Tablet Hotels have real-time customer ratings.
Who is who in hospitality, a valuable online networking platform for the hospitality industry
The Hoxton Hotels who allow customers to leave their feedback.

4. Can hotels effectively establish an online conversation with customers?

Hoteliers have to understand that social networking sites and technical tools create wonderful opportunities for them to get their message to the people who are most likely to buy their products, as well as it creates of course a lot of challenges. Hoteliers should look for the social networking sites that reach just the customers needed and communicate with them.

Another thing they could do is that they can set up the alarms to be informed of anytime that the hotel was mentioned. And if the negative feedback is found good managers will try to correct the mistake. You were telling us the example during the class when manager corrected the mistake, and then the person who was claiming wrote about the fact that he was offered recompense. This creates a really positive opinion.

The Web 2.0 and social networking appears to be a solution that will bring about the greatest possible efficiency to marketing and advertising spending. It is bringing user-generated content to the Web site. As I have already mentioned that before, the customers become impervious to traditional media. Over one-third of social networkers spend less time watching television and reading newspapers and magazines. The peers’ opinion becomes more important than any other source of information.

The social networks have a huge power. It is a kind of a new "door" for advertisers to enter where they can find a discrete, highly-targeted slice of the population to which their advertising messages would have the most appeal and would most likely result in their products being purchased. The challenge here is to "identify the social networking sites whose 'communities' of visitors closely match the profile of their target customers and prospects."

Sure all that takes a lot of time, but the market is already responding to this need, and the first outsoursing comapnies star appear that will do the analysis for the hotels.

Another effective way is to integrate the possibility of social networking within your proper site. It enhances image of the transparent company and allows even more leverage the advertising budget.

P.S. Just for you to now, I have had a lots of technical problems of posting this blog. There was really a mess with all this links, Blogger has a lots of bugs, it was deleting parts of my text and mixting up the links.

2007-04-21T20:13:00.000+02:00

Dear Liz,

I have been working with Anna Godefroy, but I have forgotten to post it on my blog. You can see our work and the time of posting on her blog. Nethertheless, I will post it here the copy too.

KUBEHOTEL

avantgardehotels.com

Reach

The site focuses on modern and sophisticated travelers with requirements for a high quality and high-tech facilitiesProposes to download Avantgard toolbar and e-mail newsletters in order to have a constant and real-time interactivity with the end userThe site appears on the 1st page of the Yahoo search at the search terms "design hotel". As to the Google, the Kubehotel is on the first lines itself when the "design hotel" search words are used. So, the Avantgardehotels.com could be good for the Kubehotel as to american and english-speaking audience.We have found no concrete numbers as to the customers’ reach; we suppose that we should ask them to send the presentation.Only Translated into French, Spanish, Italian, and German.

Image

Contemporary trend-setting design concept hotelsPromotes the image of innovative hotels where extra coolness comes as a standard, artistic touchThe site represents a very limited number of properties (80 hotels in 70 destinations), thus very selective siteIn France only 4 hotels presented

Forward distribution

Can also be booked on the Avangard’s toll-free number, by e-mail and travel agencies can book on the GDSNo forward distribution found but the site invites everyone to put Avantgardhotels’ linked logo on their sites

hotelclub.net

Reach

Multi-national site, more than 10 languages availableMore than 4.7 million unique visitors per monthTwo types of bookings: lastminute and planed, thus different customers (business and leisure customers),Price-sensitive customersRSS feature – increases the frequency of browsing

Image

Site represents a wide selection of accommodation, from one to five stars, from motels to luxury and apartments (25000 in 120 countries)general site which stresses the possibility of big discounts, up to 60%

Forward distribution

Developed affiliate program, 50% net commission earned on each booking – possibility to control the commission by the means of the discounted rated provided, 100 days visitors tracking, comprehensive reporting, possibility to chose the product, help in building the brand, lastminute affiliate programTravel agencies programs – Up to 20% disounts from already discounted Hotel Club rates, integration of the booking engine into the agency’s website, etc.

minotel.com

Reach

Target markets are the United States, Canada, Japan, China, Great Britain, Germany and Switzerland. Business customers.Key words in the meta search do not match our concept.

Image

Minotel unites small capacity 3-4 star hotels which are big for their consistency, their quality and their authenticity. Designed for family-owned and -managed hotels at a moderate price. Cozy and friendly atmosphere and personalized service.

Forward distribution

The site has a very diversified and well developed forward distribution system: tour operators, travel agencies, GDS, IDS, electronic distributors, and site partners with commissionable links. No affiliate programs though. The site has its own special attractive voucher program and other special promotions.Our hotel will be presented on our web site Minotel.com on at least three screen pages comprising photos and texts in several languages. Furthermore, our hotel will be featured in more than 20 million brochures and hotel guides which are producted and distributed each year on all five continents by our network of more than 150 tour operators.The hotel will be part of various packages or specially targeted offers aimed at a large individual clientele.Reservation confirmed in writing by one of their reservation offices is guaranteed and reimbursed in case of cancellation. In addition to the promotion made for your hotel through Minotel’s commercial service, the publication in our hotel guides generates a walk-in clientele, contacting you directly and paying for their stay on the spot, at your indicated tariff.

CONCLUSION

We have found out that the sites’ quality is very different: the Minotel is very well developed and the least developed is the Avantgardhotels site. As the amount of information provided on the distributor’s sites is not equivalent, it was impossible to do a fare comparison. That’s why we had to do some assumptions.

Our strategy is to choose an agency in the “Long Tail”. We strongly believe that in our case it is extremely important to promote our image, as our hotel in a conceptual one, and we don’t want it to be associated with non-conceptual hotels. We have really specific customers: modern travelers,

Avantgardhotels.com has little but very specific coverage, just what we are looking for. We assume that the reach – cost ratio is favorable. At the same time, the site promotes only 70 hotels, with only 4 hotels in France. The image corresponds perfectly to our image. Among the three sites this one seems to be the most appropriate, however we need to do further investigation (by phone) to find out more about their coverage (this information is not very clear on the site). We know though that it is translated into 5 languages, which is good for us as they cover more countries than us.

Hotelclub.com rather big coverage, though too general and have all sorts of accommodation in its database. Very expensive, the discounts are too high.

Minotel.com – as to our estimation, it is generally speaking the best of the three reseller sites we have analysed. However, it does not fit our concept and target and consequently will not provide a good stream of customers. This site would fit perfectly to the base2stay hotel.

2007-04-20T01:14:00.000+02:00

Commentary to Chloe's blog

Chloe has found a really interesting article concerning new concept of hotel in the Airport. This hotel is intended for the people who take transfers or got the flight delayed and need just couple of hours of sleep. I find this idea great, because I travel a lot and I’ve been always thinking that that kind of place in the airport should exist. I so much don’t like to sleep in the chair, always worrying about your bag and being intimidated by other people. I’m sure there is a real need of this hotel in the market, and it will be very popular!

2007-04-20T01:04:00.000+02:00

Social Networking 3.0

A social network - is a kind od structure made of individuals or organizations that are tied by one or more specific types of relations, such as financial exchange, friendship, hate, trade, web links, hobbies, etc
In the Internet there exists a bunch of sites that propose to create social networks online:
myspace.com, secondlife.com, livejournal.com, facebook.com, etc…

Now we talk about the third generation of social-networking technology has hit the Web, and it's about content as much as contacts.

Read this article, that talks more in detail about it :
The idea of these companies was at the beginning to let users build online profiles that advertised their interests and to help them connect with friends and friends-of-friends around one of those interests -- whether it be finding a job, making a sale, or repairing an old motorcycle.
Not so popular at the beginning, now it has become a real business.
Now members are using their networks for practical purposes, like finding job candidates, locating business and legal services, coordinating group activities, promoting its company, association or organization. It connects people and it has become really a personal media, and it is free!!! People share opinions, pictures and videos.
iMeem, relatively new social network company hopes to attract members by building all their activities not around a virtual representation of their social network, but around instant messaging technology. Indeed, the company's name is a combination of IM, for instant messaging, and "meme," meaning an idea spreading through a network. In terms of technology use they are leapfrogging all the older competition.
iMeem is built around a buddy-list window that shows a user which of her friends are online. From that window, she can send and receive instant messages, join group chats, keep a blog, and share photos, videos, podcasts, playlists, and the like with other users using a peer-to-peer system related to the technology behind the original Napster.
I think it really has a future, because there are so many programs out there, computer is overloaded, people have to long on to so many things. Whereas if we will have all-in one it would just be great!

2007-04-06T00:43:00.000+02:00

M2B mobile travel technology

Since we talk about mobile distribution, I have decided to comment on both articles that I’ve used during research: “Asia is ready for mobile travel technologies” as well as “Assessing the potential of mobile travel services in Asia”.

Both of the articles argue that it is Asia that is targeted for this distribution channel. It is promising market, with almost billion mobile subscribers, the number that grows by 20% annually. People are constantly on-the-go and quite often have no time to get to PC. They have the most advance mobile infrastructure.

Different marketing activities to encourage the usage of these channels should now be undertaken by travel suppliers and intermediaries. As well as the technology utilized should be adapted to each market.

These will help to increase customer satisfaction, differentiate from the competitors and increase sales.

I think that this channel has a lot of perspectives, and I agree that especially in Asia for the moment, where people are more acquainted with advanced technologies, there is huge market of subscribers, and a lot of businessman. Eventually this market will come to Europe too.

2007-04-06T00:04:00.000+02:00

The comment on Alexander’s blog

The article “A real-world travel agency that books virtual-world travel packages” is really interesting as it shows that Internet traveling goes all beyond our imagination and that people are ready to book online the virtual tours! Still it’s possible, and the second life has proven it by its success, where people really live their second life, fond the families, go to bars and restaurants, make their business. So why not develop virtual traveling?
I think that Synthravels got it right and on time, and they will skim the milk, very smart!
Although I am really against all virtual friendships, or love stories and I prefer real life, I know that there are lots of people that for different reason are stuck in virtual life.

2007-04-05T23:33:00.000+02:00

Hotel Affiliate Programs

What are hotel affiliate programs? How do they work? Where do they fit in the distribution channels?

Hotel affiliate program fits into modern trend of affiliate marketing. An affiliate is rewarded for every visitor, or subscriber, or a customers, and as well as all the sales provided through his effort is rewarded. There are different types of the compensation or commission, e.g. based on a certain value for each Impression (CPM), click (Pay per click), registrant or new customer (Pay per lead) or (Cost Per Acquisition / CPA), sale (usually a percentage, Pay per sale or revenue share), or any combination of them.
It’s a ‘pay for performance model’, meaning there is nothing paid to affiliate, until there is a result, besides for the initial setup.
The hotels also start using these programs:
Hotels.com: http://www.ian.com/, a division of Hotels.com. They have a real expertise in these fields, and provide the partners with cutting edge technology, highly competitive travel products from all the domains and industry leading support, such as University, 24/7 global call center sales and Customer Care Support, highly trained Account Managers to answer any questions you may have, Search Engine Optimization support, Online Statistic package.

2007-04-05T21:32:00.000+02:00

Mobile Role in Hotel Distribution

1. Research: find 2 channels for mobile hotel distribution

1) www.lastminute.com
2) www.02.ie/i-mode

2. How do they work?
For the lastminute.com you have a possibility to browse their tickets, flights, and holidays from the handset. There is also a service of SMS deal and flight alerts/
02 is a leading provider of mobile services, offering communications solutions to customers and corporates in Ireland and the UK. They have recently introduces i-mode mobile service, with the help of which a user have an access to a huge range of the top websites at the touch of the mobile button. There are lots pf categories, and one of them is Travel. This service allows to browse, book, and buy the ticket, flight, or a journey.
It includes the site such as Aer Araan, ArgusCarHire.com, eBookers, GoHop.ie, Hostelworld.com, lastminute.com, MyHoliday.ie, Worldres.com

3. How does a hotel participate?
Some hotels are launching their own direct mobile booking services, like Malmaison Hotels, which makes the real-time end-to-end reservations possible via mobile. The service works across all mobile operator networks and on virtually all mobile handsets and devices.
But for the moment it’s mostly the travel suppliers and intermediaries that start introducing more and more mobile services in order to differentiate.

2007-04-04T23:32:00.000+02:00

Disappearing front desk

This article describes the new tendency of replacing the old-fashioned front desks with those that resemble tables, podiums, information desks at the mall, and other alternative ways. This is done to add a ‘modern’ wave to hotel, reduce the lines and increase customer satisfaction. One of the peculiarities of this new tendency is to make the clerks more flexible, so that they can leave their desk, or even give them electronic tablets to remove the desk completely.
In addition new electronic kiosks are introduced that allow them check-in without ever talking to a hotel employee.
I think it is a good idea to implement new front desk strategies in your hotel, to stay up-to-date, still kipping in mind that the changes in customer habits will take time, and still the majority prefers old-fashioned face-to face contact, and no new technologies could replace it. The best way out is to have contingent and coherent mixed style.

2007-03-23T17:54:00.000+01:00

“Hotel California” Eagles

Some people knew a long time ago how to create a buzz…
Read this curious article about how one smart hotelier created a buzz: a rumor that it was his hotel that the legendary song was talking about and create whole business around it.
Well, done even those most probably it’s not true!

2007-03-23T15:11:00.000+01:00

Opaque Sites

So the opaque websites its different from others OTA, unlike “transparent” travel sites such as Expedia.com and Orbitz.com — which identify the service providers with whom you’re dealing — opaque sites like Hotwire.com and Priceline.com won’t tell you the company you’re doing business with until you enter your credit- or debit-card number. By then, what you see is what you got: Everything is final, with no refunds or exchanges.If you don’t mind flying blind, purchasing your travel needs from an “opaque” Web site could save you a bundle.To read the whole article click here

2006-12-07T00:34:00.000+01:00

Am I in Heaven, or Am I in My Hotel?

This article talks about the overall tendency in luxury hotel business of increasing sophistication in customer demand, who want that luxury become superluxury, and hotels are forced to respond.
Every luxury hotel has to think nowadays of installing the spa facilities in their venue, have helipads, and other sophisticated amenities. The hotels are closing for renovations, many new hotels are being opened, all trying to overcome one another in terms of sumptuous design and trying to predict the popular locations in the future.
I think that in order to stay competitive nowadays in the long term in the constantly growing competitive environment, every hotel group has to constantly innovate and invest in its amenities and design in order to be distinguished among the competitors and gain the notoriety.

2006-11-30T15:51:00.000+01:00

This conceptual image shows what a hotel room of the future might look like.

An early look at the hotel of tomorrow

This is project called HOT – Hotel of Tomorrow, conducted by HD Hospitality Design magazine and Gettys, a Chicago-based design firm, in order to create the hotel rooms of the next generation prior to others. This is not simply amending the existing amenities but creating totally new ones. The ideas are really futuristic starting from nano-painted walls, self-cleaning sheets, bed converting to shower, to health-measuring floor, and fashion consulting system.
This seems to be a real step forward in hotel design and increasing customer satisfaction.
Definitely, the hotels will implement them first will benefit from increased attention. The problem here is how to maintain all this complicated system. And wouldn’t it lead to increased costs. On the other hand, won’t it be too much for a customer, who will need to learn how to use these new amenities, and there are still some technophobes, and this could lead to a an inverse reaction, that customers would get annoyed by the complexity of the offer.
I think that the best is to find the golden middle between innovations and the classical offer, and introduce the innovations progressively.

To read the article, click here.

2006-11-23T00:15:00.000+01:00

Nonstop Growth for Online Travel

This article is emphasizing on the online travel booking as the main source of revenue that is 39% of all travel revenue by 2011, according to report from JupiterResearch.
This article shows the importance of the Internet travel distribution channel and proves with the results obtained by the research that it will continue gaining power, as the customer purchasing power grows, products online become more sophisticated and compliance is enhanced.
This article confirms how it is extremely important for a hotel or an airline to have its own online reservation system, as well as other online channels of distribution.

2006-11-16T07:48:00.000+01:00

European hotel guests get room keys on mobile phones thanks to NFC

This article is about the next step in improvement of frequent business travels satisfaction. This seems to be the logical step in this process of enhancement.
It is about a new system to get your key and room number on your telephone, thus no need for business travelers to pass at the front desk. In order to benefit from the offer, one has to have a NFC (Near Field Communications) compatible mobile and ask for the service while reserving online. The predictions are that by 2010, 50 % of the mobiles will be NFC compatible. The business travelers are likely to be the early adaptors. This system exists for the moment in the pilot version, but the frequent business travelers seem to love it.
I this that this step is important because it shows that there is always a way in improvement and hotels in order to succeed must constantly innovate, because the customers needs become more and more sophisticated. And once one hotel adapts a system, the others will be obliged to follow them in order to maintain their competitive advantage.
To read the article, click here: http://www.contactlessnews.com/library/2006/10/05/european-hotel-guests-get-room-keys-on-mobile-phones-thanks-to-nfc/

2006-11-08T23:37:00.000+01:00

Travelocity Incentives Gives the Gift of Travel with Launch of Hotel Gift Cards

Travelocity, the American sixth largest online travel company, based in Texas, has recently launched Travelocity Incentives, a unique brand for the moment in the travel industry that represents an entirely new distribution channel, which is based on selling travel gift cards.
These gift cards of $25, $50 and $100 value are sold online and in more than 1000 retail locations and lets customers redeem them at more than 30000 hotels worldwide in more than 140 countries.
This is a real step forward in selling travel offer, and makes it easier to purchase and share the gift of travel, letting people decide at a convenient time for them which hotel to chose.
This completely new distribution channel has a great potential to develop in the future.
Too read the article: http://www.wiredhotelier.com/news/154000470/4029341.html

2006-11-08T23:00:00.000+01:00

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