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Chapter 2
Service Characteristics of
Hospitality and Tourism Marketing
Marketing services are different from
marketing goods.
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Chapter Objectives
Describe a service culture
Identify four service characteristics that affectthe marketing of a hospitality or travel product
Explain marketing strategies that are useful inthe hospitality and travel industries
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Key Concepts
Service Culture
Intangibility
Inseparability
Variability
Perishability
Internal marketing
Interactive marketing
Managing differentiation
Managing service quality
Tangibilizing the service
product
Trade dress
Physical evidence
Point of encounter
Managing perceived risk
Managing capacity and
demand
Managing consistency
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The Service Culture
Service Culture: A culture that supports customerservice through policies, procedures, reward systems,
and actions.
Service culture can be implemented:
Through employee communicationThrough company policies
Through personal actions
Empowers employees to solve customer problems.
Has to start with top management and flow down.
Organizations culture must support and reward
customer need attention.
Ritz Carltons Gold Standards
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Intangibility
Inseparability
Variability
Perishability
Cant be seen, tasted, felt, heard,
or smelled before purchase.
Cant be separated from service
providers.
Quality depends on who provides
them and when, where and how.
Cant be stored for later sale or use.
Characteristics of Service Marketing
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Intangibility
Services can not be seen, tasted, felt, heard, or smelled.
Tangible evidences reduce uncertainty
High risk associated with services.
Lack of tangibility after the experience
Companies should create memorable guest experiences
Tangibles provide signals as to the quality of the intangible
service.
Exterior and Interior design
Uniforms of employees
Someone who purchase a service may go away empty-handed,but do not go away empty-headed - Robert Lewis
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Tangible and Intangible
Products/Services
PurePure
tangibletangiblegood; nogood; noserviceservice
TangibleTangiblegoods withgoods with
somesomeservicesservices
Hybrid:Hybrid:equal partequal partgoods andgoods and
serviceservice
MajorMajorserviceservice
withwithminorminorgoodgood
PurePureservice;service;
no tangibleno tangiblegoodgood
Milk Computer
& Warranty
Meal at
Restaurant
Legal
Advice
Hair
Styling
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Inseparability
Customer-contact employees are part of the product
Other customers become part of service
The employee becomes part of service
The customer and the employee interact with the
service delivery system.
Customers and employees must understand the
service delivery system.Select, hire and train customers.
Select and train contact employees
Empower employees
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Variability
Services are highly variable Services are produced and consumed
simultaneously.
Service consistency depends on the service
providers skill. Fluctuating demand makes it difficult to deliver
consistent quality.
Lack of consistency a major source of customerdisappointment.
Guest expectations are different.
Train contact and non-contact employee
Quality can not be controlled; must be produced
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PerishabilityLack of ability to inventory
Lack of ability to inventory services can not be stored
Capacity and demand must be successfully managed
If services are to maximize revenue, they must manage
capacity and demand.
Change customer use pattern (Hourly, daily, seasonally)
Cross-train employees
Involve customer in the service delivery system
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Service firms use marketing to position themselves
strongly in chosen target markets.
In a service business the customer and frontlineservice employee interact to create service
Service providers must work to interact effectively
with customers to create superior value.
Successful service companies focus their attention on
both their employees and customers.
Management Strategies for
Service Business
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External marketing = company and customers
Internal marketing = company and employees
Interactive marketing = employees and customers
Management Strategies for
Service Business
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Internal Marketing
Internal Marketing:
The task oftrainingtrainingand motivatingmotivatingemployees to
provide good customer service.
* Customer contact employees* Supportive employees
Employees are a critical part of the product and
marketing mix
There is a need for internal and as well asexternal marketing.
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Interactive Marketing
Interactive Marketing:
Perceived service quality depends heavily on the quality
of the buyerbuyer--seller interactionseller interaction during the service
encounter. Service quality depends on both the service deliverer
and the quality of the delivery
The customer judges service quality not just on
technical qualitytechnical quality (the quality of the food) but also its
functional qualityfunctional quality (the service provided in the
restaurant).
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Management Strategies for Service
Business
1. Managing differentiation
Need to develop a differentiated offer, delivery
and image.
Offer innovative features
Airlines offer in-flight movie, advance seating,
frequent flyer award programs
QSR offers fast delivery services
Differentiate service delivery through: People Physical environment Process
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Management Strategies for
Service Business
3. Tangibilizing the service product
Promotional material,
Employees appearance, and
uniforms.
Physical environment
Building exteriors
Equipment Furniture and fixture
Signs
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Management Strategies for
Service Business
4. Managing the Physical Surroundings
Physicalevidence that is not managed
properly can hurt a business.
Poorly managed physical evidence sends
negative messages to customers.
Physical surroundings should be designed to
reinforce the products position (organization
image) in the customers mind.
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A Fishy Sign Story
NOW HIRING CLOSERS
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A Fishy Sign Story
NOW HIRING CLOSERS
Oops!! The C dropped off.
NOW HIRING LOSERS
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Management Strategies for
Service Business
5. Managing Employees as Part of the Product
In H&T employees are critical part of the
product and marketing mix
Human resources and marketing departments
must work together
The management should formulate policies
that support positive relations betweenemployees and guests.
Must manage service at the points of
encounter (R.Nykiel)
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Management Strategies for
Service Business
6. Managing Perceived Risk
Customers experience some anxiety before they
purchase hospitality and tourism services
A salesperson must reduce client fear and gain the
clients confidence.
FAM trips and sampling help alleviate anxiety
Hotels provide, rooms, food, beverage, andentertainment at no cost to the prospective client.
Customer loyalty increases for companies that have
provided a consistent product in the past.
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Management Strategies for
Service Business
7. Managing Capacity and Demand
Hospitality and tourism companies must adjust
their operating systems to enable them to operateat maximum capacity.
Complaints tend to increase when companies are
operating at full or near to full capacity;companies must remember that their goal is to
create satisfied customers.
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Management Strategies for
Service Business
8. Managing Consistency
Consistency is one of the key
factor in the success of a service
business. Basically, this means that
customers receive the service
they expect without unwanted
surprises.
Many factors work against
consistency
% 100 satisfaction guarantee
Product consistency
Price consistency
Procedure consistency
Service consistency
Taste consistency
Time consistency
Brand consistency
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Management Strategies for
Service Business
9. Managing the CustomerRelationship (CRM)
CRM is a managerial philosophy and practice
It combines marketing, business strategy, and
information technology to better understand the
customers, to custom-developed products for key
customers
CRM focuses on managing revenue opportunities fromcustomers, retaining customers, and enjoying a stream
of income from them over their lifetime.
Managing Switching Costs
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Next Chapter
The Role of Marketing
in Strategic Planning