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Chapter 2 Service Characteristics of Hospitality and Tourism Marketing

2. Chapter Objectives. Describe a service culture Identify four service characteristics that affect the marketing of a hospitality or travel productExplain marketing strategies that are useful in the hospitality and travel industries. 3. Key Concepts. Service CultureIntangibilityInseparabilityVariabilityPerishabilityInternal marketingInteractive marketingManaging differentiation.

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Chapter 2 Service Characteristics of Hospitality and Tourism Marketing

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    1. 1 Chapter 2 Service Characteristics of Hospitality and Tourism Marketing

    2. 2 Chapter Objectives Describe a service culture Identify four service characteristics that affect the marketing of a hospitality or travel product Explain marketing strategies that are useful in the hospitality and travel industries

    3. 3 Key Concepts

    4. 4 The Service Culture

    5. 5

    6. 6 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

    7. 7 Tangible and Intangible Products/Services

    8. 8 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

    9. 9 Variability Services are highly variable Services are produced and consumed simultaneously. Service consistency depends on the service provider’s skill. Fluctuating demand makes it difficult to deliver consistent quality. Lack of consistency a major source of customer disappointment. Guest expectations are different. Train contact and non-contact employee

    10. 10 Perishability Lack 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

    11. 11 Management Strategies for Service Business

    12. 12 Management Strategies for Service Business

    13. 13 Internal Marketing Internal Marketing: The task of training and motivating employees 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 as “external” marketing.

    14. 14 Interactive Marketing Interactive Marketing: Perceived service quality depends heavily on the quality of the buyer-seller 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 quality (the quality of the food) but also its functional quality (the service provided in the restaurant).

    15. 15 Management Strategies for Service Business 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

    16. 16 Management Strategies for Service Business 2. Managing service quality Delivering consistently higher quality than its competitors The key is to exceed the customer’s service quality expectations Identify the expectations of target customers Empower frontline employees Develop a set of common virtues for service quality Set high service-quality standards. Watch service performance closely (own and competitors).

    17. 17 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

    18. 18 Management Strategies for Service Business 4. Managing the Physical Surroundings Physical evidence 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 product’s position (organization image) in the customer’s mind.

    19. 19 A Fishy Sign Story

    20. 20 A Fishy Sign Story

    21. 21 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 between employees and guests. Must manage service at the “points of encounter” (R.Nykiel)

    22. 22 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 client’s confidence. FAM trips and sampling help alleviate anxiety Hotels provide, rooms, food, beverage, and entertainment at no cost to the prospective client. Customer loyalty increases for companies that have provided a consistent product in the past.

    23. 23 Management Strategies for Service Business 7. Managing Capacity and Demand Hospitality and tourism companies must adjust their operating systems to enable them to operate at 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.

    24. 24 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

    25. 25 Management Strategies for Service Business 9. Managing the Customer Relationship (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 from customers, retaining customers, and enjoying a stream of income from them over their lifetime. Managing “Switching Costs”

    26. 26 Next Chapter The Role of Marketing in Strategic Planning

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