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Service Characteristics of Hospitality and Tourism Marketing

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Service Characteristics of Hospitality and Tourism Marketing By Philip Kotler

Service Characteristics of Hospitality and Tourism Marketing By Philip Kotler

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  • 1. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Chapter 2 Service Characteristics of Hospitality and Tourism Marketing
  • 2. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens “Managers do not control the quality of the product when the product is a service . . . . The quality of the service is in a precarious state – it is in the hands of the service workers who ‘produce’ and deliver it.” -Karl Albrecht ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 3. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens 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 ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 4. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens The Service Culture • The service culture focuses on serving and satisfying the customer • Empowers employees to solve customer problems • Majority of many countries’ GDP is service based ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 5. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Characteristics of Service Marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 6. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Management Strategies for Service Businesses • Service companies must increase their competitive differentiation, service quality, and productivity – Increase in competition and costs – Decrease in productivity and quality ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 7. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Service-Profit Chain Five Links: • Healthy service profits and growth • Satisfied and loyal customers • Greater service values • Satisfied and productive service employees • Internal service quality ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 8. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Three Types of Marketing in Service Industries ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 9. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Internal and Interactive Marketing • Internal marketing means the service firm must effectively train and motivate customer contact employees • Interactive marketing means the perceived service quality depends heavily upon the buyer-seller interaction during the service encounter ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 10. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Differentiation • Solution to price competition • Differentiation through people, physical environment, and processes • Differentiation through branding ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 11. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Service Quality • Exceed customers’ service-quality expectations • Expectations based on past experiences, word-of-mouth, and service firm advertising ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 12. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Common Virtues Regarding Service Quality 1. “Customer obsessed” 2. History of top management commitment to quality 3. High service quality standards set 4. Monitor performance closely ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 13. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Tangibilizing the Product • Providing “evidence” of the service – Promotional Material – Physical Environment – Employee appearance – Why is Trade Dress Protection important? ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 14. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing the Physical Surroundings • Improperly managed physical evidence can hurt a business • Surroundings should reinforce company positioning in customer’s mind • Organizational Image is how customers perceive your organization ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 15. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Stress Advantages of Nonownership • The customer does not have ownership of service product • Stress as a benefit – Rather than own and staff corporate lodging, negotiate a rate with a hotel and pay for only what you use ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 16. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Employees as Part of the Product • Employees are critical • Training and motivating employees to provide good customer service is internal marketing • A point-of-encounter is any point at which the employee encounters the customer ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 17. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Perceived Risk • Alleviate customer anxiety due to inability to experience the product beforehand • Familiarization trips encourage clients to experience the enterprise in a low- risk situation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 18. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Capacity and Demand • Due to perishability, managers must maximize service capacity and quality during times of high and low demand • Customer complaints increase when service firms operate above 80% capacity ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 19. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing Consistency • No surprises! • Not only should services be provided correctly, but they should be done the same way every time • Beware fluctuating demand and unintentional company policies that may affect consistency ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 20. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Managing the Customer Relationship – CRM • Combines marketing, business strategy and information technology to better understand the customers • Develop unique, lasting relationships with customers ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 21. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Service Failure • Problems will inevitably occur • Keep the customer informed • Provide service recovery options ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 22. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Overview of Service Characteristics: The Servuction Model ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 23. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Interaction Between Customer A and Customer B • Contact between customers can be positive or negative • In some cases interaction between customers can be managed • Customers can significantly impact all around them ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 24. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Contact Personnel • Contact personnel have a direct impact on the satisfaction of customers • Characteristic of inseparability of customer and employee during service delivery system ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 25. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens The Invisible Organization and System A service organization management must decide what they want the guest to see and what they want to keep out of the guest’s vision ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 26. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Best Practices • Ritz-Carlton Leadership Center offers innovative ways to: – Increase employee retention and loyalty – Increase customer retention and loyalty – Achieve service excellence in your industry – Effectively drive your organization’s culture, philosophy, vision, and mission ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 27. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Best Practices • Why are these hospitality and tourism organizations service leaders? – Chipotle Restaurants – Marriott Hotel and Vacation Club – Ting Tai Fung – Club Med – Disney – Aramark – British Airways ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 28. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms • Interactive marketing • Internal marketing • Organization image • Physical evidence ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 29. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms • Point-of-encounter • Service culture • Service intangibility • Service inseparability ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
  • 30. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms • Service perishability • Service-profit chain • Service variability • Trade dress ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens