Reference no: EM132668596

The Sunflower Hotel Company is a 100-hotel strong portfolio, mainly operating in Western Canada. This mid-market brand has been a market leader for over 20 years and has seen steady growth since its inception in 1999 with the opening of its first 120-room hotel in Kamloops BC.

The chain is run by the Smith family, and the principal owner of the company is a strong proponent of always providing value to clients and has always practiced what he preaches. He has personal relationships with several large key accounts and visits them regularly with his sales team.

The company operates on a 100% franchise model, and does not own any of the properties, but as part of its franchise offering, handles large key accounts on behalf of the franchisees and maintains key account relationships, handling large and medium corporate accounts in addition to Provincial and Federal Government accounts.

Mary Jane is the Key Account Manager for the chain, and among other accounts, is the owner of the strategic relationship with ABC Movers, a large moving and relocation company, which owns and operates over 200 moving depots across Canada, and is constantly in need of hotel rooms for its customers that move for personal, but mostly business relocation reasons.

John Smith, the procurement manager for ABC Movers called Mary to his office as he wanted to re-negotiate the terms of the key account relationship, in light of a competitive rate contract offering from a competitor hotel chain.

While Mary is aware of the emergence of this new competitor, she does not know the exact price offering that the competitor has made and is under tremendous pressure to retain this account.

Questions:

Problem 1. What options does Mary have to salvage this key account?

Problem 2. What can Mary offer John that is not presently part of the contract?