Marketing project final

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  • Welcome to another and for this program final presentation of Front Row Productions. One of our many take-a-away(s) from Dr. Parsu's Class was the ability to create an easy to follow structured model of service marketing…an exercise in common sense and as we all have found out…common sense is not necessarily that common! We have applied each of the models from the lessons over the past 5 weeks to the Ritz Carlton in order to provide a structured and replicable approach from understanding to implementation of excellence in Service marketing
  • In the Soul of Service Berry speaks to focusing on a higher need than just a product. The Ritz firmly establishes this as part of their Core Strategy, It is about the need for care and comfort as if a guest is in their own home.The WOW factor refers to employee-guest experiences where the guests are literally “wowed” at services—we will speak to this more in relation to the employee segment of presentation.We know that competitive differentiation is diminishing in the face of all things “commoditized”. Generating emotional intensity, active listening, and other attributes that ensure quality are emphasized
  • As you can see the Ritz incorporates many of these question in their interview. Looking for a more complete employee an essential part of Executional excellence.
  • By using their Gold Standards and 6 P’s model they execute on three steps of service, which will be spoken to on the gold Standards slide. The Main part of this Standard is the Motto, We are Ladies & Gentlemen Serving Ladies and Gentlemen. These Gold Standards become ingrained in each employee of the Ritz Carlton from the back office to the front line. The six P’s model is made up of the points here: Needs or Problems are ID’d. The product is Genuine Care and the promises they make they follow though on actually…and the rest makes itself evident.
  • Read the first Bullet(2)The Ritz Carlton is positioned in an affluent segment and attracts these guests within their defined segment.(3) Are able to attract these guests due to the sub strategy design encompassed by daily employee lineups, Wow Meetings and Gold Standard
  • This a chart of the seven values of the Gold Standard which outlines the 3 steps of service:Warm Greeting to Fond Farewell; The Motto; The Employee promise—What the employees will exhibit when dealing with customers; the credo; and the service values of why an employee is proud to be employed by the Ritz Carlton. All of these Gold Standards create the emotional engagement of the Front-Line Employee.
  • Now we are going take the Ritz Carlton and apply the company to the Integrated Framework for Services Marketing . 1. Doing service right the first time
  • Para phrase slide: They have execution versus growth dilemma. Clearly defined core competencies. The line up links management to engage the staff. Constantly redefining the brand. The President and COO in group sessions, As Berry discussed in Chapter 3—Here senior leaders infuse their values into the fabric of the organization…lead with what the firm aspires to be in a top-down fashion.Its not about you reflects that need to prioritize the customers needs over the employees own.
  • Execution Vs. PricePrice as we learned is not a key determinant of Value especially for the affluent. Expect to pay more due to the abundance of non price benefitsThis is why it never cuts back on any service that touches a guest. Execution Vs EntrepreneurshipMainly due to their employee empowerment process; All employees engage in active listeingwher they determine guests needs and wants before they are verbalized in many cases.Ritz has Reduced Gap 3 with Technology Data Base installation called “CLASS” similar to USAA system tracking prefs, complaints, needs…
  • This is a brief snapshot of the world wide awards…all part of managing the Evidence.
  • Doing the Service very right the second time, Ritz Carlton’s Service Recovery.
  • Read to slide…FAST…..
  • Model on how RC puts structure to the basic recovery and empowerment process through customer interfaces. This model shows how an employee takes a guest to a warm welcome whether they are satisfied or dissatisfied to a fond farewell. . .This is a great BLUE PRINT to structure doing service right the first time and second time…very right. (Read TOP LINE as if Flow…10 second attention)
  • Front line empowerment from last slides come in many forms. Let me read this briefly…attention to spare rooms for overbooking…and communication of 1/10/100 rule. Serves as a metaphor.
  • Click Through
  • Here is the evidence and how it is managed…through their awards…word of mouth and third party surveys.
  • Click Through
  • Truly resultant of the Triangle or Pyramid model here. Ritz Carlton is moderate strategy because they do excellent whispering to the affluent as opposed to shouting to the public.Quality of service is superior because of the interactivity of the Ritz and the employees as in the level of empowerment, training and marketing into a line function is there. The company’s relationship with the guests in a structural model…no matter who the employee the relationship of being served is perceived as a company attribute, not just employee bound or luck of the drawThe employees wide flexibility and solution space in customizing experiences as well fixing issues reflects the external marketing.
  • This defines “Turning Marketing into Line Function”What ever it takes – Employees own the issue and see it to completion, Employee empowerment: Grants Wide Solution Space,Strong Beginnings and continuous learning such 250 – 300 hours in first year, Cora Griffith Philosophy that Berry talks about.Integration between HR, staff and marketing-High involvement model:
  • Marketing to employees Click through
  • As we see here…the two way communication takes a special type in the intensity of labor in the services industry. Great Listeners are bred at the Ritz Carlton reflecting its interactive marketing and great beginnings while hundreds of hours of Continuous learning are deployed to the staff. Empowerment results in a company engendered wide solution space.
  • To Reiterate:Sharing Same Value and PurposeCare and Respect for othersSmile NaturallySeek long term relationships And have talent for the job.
  • Bullet One:Environment of respect and dignity—instead of being regarded as employees the company treats them as ladies and gentlemen. Bullet Four: For SARS Crisis:Management took a 30% pay cut at the Portman China property rather than lay off employees. Employee satisfaction for that year was 99.99%
  • We have already looked at this earlier:Just another example of employee empowerment where they stop what they are doing and help the customer and break away from routine duties.
  • Read and Click through
  • Read off notes
  • Read off notes
  • Read off notes
  • Click and read through
  • Need to take into account the different level of relationships. The Financial, the Social and the structural. Drilling into each one Adam will describe
  • Customer Franchise is name of the Game.
  • Is the immediate pacification of smaller problems actually being reported on to the system and if, not are there a deeper systemic issue not being identified. Is this a TRI factor or a motivation factor? Is there a failsafe in the data base to flag use of unreported use of resources.The other question at hand is: If a hotel has a failure and if it is on the part of the managers. In our research we have seen them circle around a few hotels. When the top management of that hotel checks out you cannot guarantee that Ritz Quality Service is being followed at any level. This evidence however is gathered at eve of the Marriott acquisition and that article revised accordingly one year after research was done. The other question we have seen posed as recently as 2006 is whether or not the Encore (CLASS) system regarding customer preferences is actually an invasion of privacy and how secure is such intimate information on their database.
  • Marketing project final

    1. 1. Services Marketing Wayne Anderman Adam Berk Vince Rubiera Steve Sherwood 1
    2. 2. Presentation Structure • Core Strategy • Integrative Framework • Recommendations • Summary 2
    3. 3. Core Strategy: Defined • Unchangeable Needs vs. Products: – Mission: Genuine care and comfort to guests • Focus on underserved market: – Luxury stays providing WOW factor – Emotional intensity • Going beyond tangibles (commoditized within segment) • Personal attention/caring – Active listening systems to uncover needs • Bi-weekly WOW stories • Heavy investments made for systematic listening of front- line staff and guests 3 V
    4. 4. Core Strategy: Execution • First rule of execution: competing for the right talent – Behavior interviews: • Talent and value matching • People who care and respect others • What do they enjoy? • What motivates them? • What is their purpose in life? • Do they enjoy contact with others? • Do they smile naturally? • Do they fit culture and philosophy? – Strong Beginnings – Continuous Learning – Ownership Attitudes 4 V
    5. 5. Core Strategy: Execution • Execute using Gold Standards – Service values – Credo – Motto – Three steps of service • 6P’s Model – Problem or need of customer – Product – Promises – Personal Advantage – Positioning – Price/Value 5 V
    6. 6. Core strategy: Analysis • Focus on core strategy is so singular that it facilitates presentation excellence to the customer • Strategic boundaries established – Highly segmented for maximum effectiveness • Affluent guests • Clear priorities in sub strategy design – Employees who execute and understand the strategy, deliver constant image • WOW meetings • Line-up • The Gold Standard 6 V
    7. 7. Gold Standards – 7 Values Joy Teamwork SOCIAL PROFIT Respect Integrity Excellence INNOVATION 7 V
    8. 8. Doing the Service Right the First Time Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 8 S
    9. 9. Quality of Service • Execution vs. Growth “Product quality is a result of service quality” – Clearly defining core components of company values, quality standards and service tradition daily called “the line up” • Line-up is a world-wide process where leadership engages staff in discussion of the overall mission (motivational & guiding huddle) • Constantly redefining brand to remain relevant in the face of changing economics, evolving customer segments, domestic/international growth • President and COO attend all new hotel openings and conduct mandatory group sessions – New employee orientation – Developmental training – Daily line-ups – Positive and negative reinforcement – Mission statements discussed – Distribution of credo cards – Employee ownership assessment – “Its not about you” principle 9 S
    10. 10. Quality of Service • Execution vs. Price – Price insensitive customers – Focus on value • Customers expect to pay more for “Ritz-Carlton service” – “Never cut back on any service that touches a guest” • Entrepreneurship vs. Maturity – Confederation of entrepreneurs • Teamwork • Seamless handoffs – Employee empowerment – Active listening systems • Class Database (Gap 3 reduction) – Technology • Communication between employees to pass on names etc.. 10 S
    11. 11. Awards • AAA Five Diamond Award 2008 19 Properties Mobil Five-Star Award 2006 5 Properties Mobil Four-Star Award 2006 23 Properties Condé Nast Traveler: 2006 Top 100 Best in the World The Ritz-Carlton, Istanbul The Ritz-Carlton, Osaka The Ritz-Carlton, Millennia Singapore Travel and Leisure: 2006 Worlds Best Business Hotels 12 Properties Travel and Leisure: 2008 Best by Design No. 1: The Ritz-Carlton, Beijing Financial Street Travel and Leisure: 2007 Best Family Resorts The Ritz-Carlton, Bachelor Gulch The Ritz-Carlton, Reynolds Plantation The Ritz-Carlton, Naples The Ritz-Carlton, Grand Cayman The Ritz-Carlton, Cancun • Condé Nast Traveler: The Best by Design No. 1 in the Americas: The Ritz-Carlton, Santiago Condé Nast Traveler: The Best by Activities No. 1 in Asia, Australia and Pacific Nations: The Ritz-Carlton, Bali Resort & Spa Travel + Leisure: 500 Greatest Hotels in the World 2006 32 Properties Consumer Reports Consumer Reports’ hotel issue ranked The Ritz Carlton Hotel Company the No. 1 luxury hotel company in all areas including value, service, upkeep and problem resolution. Luxury Institute Awarded The Ritz-Carlton Hotel Company with the “Most Prestigious Luxury Brand” award Travel Weekly 2006 Readers Choice Awards, Best Luxury Hotel Company 2006 Readers Choice Awards, Best Upscale Hotel Company Forbes: Sure to Impress Travel Destinations Names The Ritz-Carlton Hotel Company the best Business Hotel Chain Weekly Diamond The Ritz-Carlton, Osaka ranked No. 1 for Japan’s Best Hotels DEPA Middle East Hotel Awards The Ritz-Carlton, Doha won Middle East Hotel of the Year, Best Conference, Catering and Banquet facilities and Young Hotelier of the Year. 2006 Market Metrix Hospitality Index (MMHI) The Ritz-Carlton Hotel Company ranked highest in customer satisfaction among luxury hotels. Dubai Quality Gold Award 2005 The Ritz-Carlton Dubai was awarded the Dubai Quality Gold Award 11 S
    12. 12. Service Very Right the Second Time Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 12 A
    13. 13. Ritz Service Transactions Ritz Carlton Service Type 1: Bellman greets arrival, pulls luggage, ID guest name tag 2: Uses Customer Interface Technology to alert Front desk for check-in 3: Use of Customer profiles prior to check in to customize room and other requirements. Ritz Carlton Service Type Ritz Carlton Service Type Process Service Delivery Outcome Routine Nonroutine Ritz Carlton Service Type 1: . Guest greeted by name and already checked in when arrive at desk 2: Guests are pre-checked out on date of departure. No physical action needed. Bill emailed to address on file. 1: Reservation errors 2: Hotel Oversold 3: Delays in check-in process 4: Unappealing tangibles (old/dirty rooms, smells, etc..) 1: Guests booked into “set aside” rooms 2: If oversold Ritz retains reciprocal agreements with other 5 stars. St. Regis, Mandarin oriental, in their markets. 3: Guest, served amenities while wait drinks, dinner, other employee or mgt discretion. Chauffeured by limo to hotel * All issues documented in guest’s folio, and made aware to management on daily in- house customer service report. 13 A
    14. 14. Ritz Empowerment Process Warm Welcome Anticipation And Compliance With Guest Needs Fond Farewell Employee Senses Guest Wish or Need Employee Breaks Away from Routine Duties Employee Applies Immediate Positive Action Determine Guest Reaction Document the Incident Employee Returns to Routine Duties Guest Memory System Escalate the Complaint Satisfied Dissatisfied ThreeTypesofService 1. 2. 3. 14 A
    15. 15. Service Recovery • Front-line empowerment – $2000/$5000 to enhance or recover service – Stop what they are doing to address customer issues – Investigate and document into database – 1/10/100 rule • $1 to fix today - $10 to fix tomorrow - $100 to fix downstream – Listening to identify issues – Spare rooms reserved for problems – Agreements with other 5 star hotels in case of overbooking – Quality improvement and problem solving procedures • Systematic recovery standards/procedures 15 A
    16. 16. Managing and Exceeding Expectations Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 16 S
    17. 17. Managing and Exceeding Expectations • The evidence – JD Power and Associates • Always exceeding the expectations of customers – Top U.S. Hotel Chain Survey: 1st place, 5 consecutive years • Relationship of price to value – Recent third party survey • 99% Satisfied • 80% Extremely satisfied – Business week 2008 survey • Ranked top of customer service champs • Increased employee satisfaction & improved customer service 17 S
    18. 18. Marketing Into a Line Function Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 18 W
    19. 19. Marketing Service Grid MediocreSuperior Moderate Aggressive Optimum Strategy Possible “Overkill” Need to Move Up Instead of to The Right Counter- Productive Strategy Technology 19 W
    20. 20. Marketing Into a Line Function • Ritz-Carlton ensures all customer-employee contact (regardless of that employee’s function) is handled in superior fashion so that each interface involves marketing the company. • Investment in Employee success • HR focus is tied into developing the marketing line function – Recruitment and managing with a focus on marketing – Employees know what their supposed to do (No role ambiguity) • Communicated: all employees touch customers directly or indirectly – Authority to make changes (No lack of perceived control) • WOW stories: Huddles with real stories-Employee Heroics – Chef in Bali flies in eggs and milk for customer special diet – Hotel Laundry: fails to remove stain; Hotel Manager flew to deliver reimburse check – Does two things: 1-Reinforces Customer Service skills (2) gives employees local fame (recognition) • “Class” database – Client Book: Past folio’s and tracking-to customize service consistently across all properties • Gold Standard and 7 core values addressed previously 20 W
    21. 21. Employee Engagement Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 21 W
    22. 22. Employee Engagement • Success rules: Listen first—this is the “It’s Not about You” approach. – They use Malcolm Bridge National Quality Award evaluation process. – Benchmark other businesses outside hospitality and invest heavily in listening to staff, customers and investors • Management listens to the needs of the employees  Ritz employees enabled to listen and deliver to the needs of their guests. • 250-300 hours of training: – Operational aspects – Desired outcomes employees need to produce for their customer. • Understanding these outcomes, the frontline is empowered to create the Ritz experience. – $2000.00 per day per guest authority and $5000 management to do whatever is necessary to enhance as well as recover stay. 22 W
    23. 23. Requirements for Employees • Providing the “finest personal service and facilities to our guests who will always enjoy a warm, relaxed yet refined ambience” • To cultivate the type of employee that delivers such high service standards, and as we saw in slide 4, are a fit to the existing culture 23 W
    24. 24. Feelings about working at the Ritz • The sign at employee entrances states “We Are Ladies And Gentlemen Serving Ladies And Gentlemen” • Leaders with determination: way management is viewed • Supportive line managers: work closely with employees in promotional plans and career request considerations • Management emphasizes their leadership consistency in taking care of employees – Executive team works with employees when issues arise no matter how small they may be – When it comes to big things they point to the SARS crisis in 2003 (35% occupancy vs. 85%) 24 W
    25. 25. Ritz Empowerment Process Warm Welcome Anticipation And Compliance With Guest Needs Fond Farewell Employee Senses Guest Wish or Need Employee Breaks Away from Routine Duties Employee Applies Immediate Positive Action Determine Guest Reaction Document the Incident Employee Returns to Routine Duties Guest Memory System Escalate the Complaint Satisfied Dissatisfied ThreeTypesofService 1. 2. 3. 25 W
    26. 26. Marketing to New Customers Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 26 A
    27. 27. Marketing to New Customers • Physical environment – Design: Indulgent, Unified, and “refined design” sensibility – Furniture, carpet, rugs, marble etc.. – Ambient: • regulated HVAC & lighting • lit make-up mirrors • Extras: tissues holders, towel racks, phones • allergy sensitive rooms and extra towel racks – Social factors • White glove greeting – fond farewell • “Class” database Types of Evidence Physical Environment PriceCommunications 27 A
    28. 28. Marketing to New Customers • Communications – Tangibilize the message • Implicit Guarantee • Credo • Messages point to awards received (evidence) – Tangibilize the service • Lion logo (regal) • Silver platter service Types of Evidence Physical Environment PriceCommunications 28 A
    29. 29. Marketing to New Customers • Price – Matches perceived value – In-line with physical environment and communications – Higher price for affluent customers expecting more Types of Evidence Physical Environment PriceCommunications 29 A
    30. 30. Marketing to Existing Customers Doing the Service Right the First Time Doing the Service Very Right the Second Time Managing and Exceeding Customers’ Expectations Delivering Quality Service Turning Marketing into a Line Function Building a Marketing Organization Marketing to New Customers Marketing to Existing Customers Marketing to Employees Maximizing Marketing Potential 30 A
    31. 31. Marketing to Existing Customers • Level three relationship – Financial • Expectations = service = value • Price point acts as barrier to reassure affluent guests • Exclusivity level – Social • 1:1 / Gold Standards – Structure • Class database – customizing/tracking each stay Relationship Level Type of Bond(s) Degree of Service Customization Primary Marketing Emphasis Sustainable Competitive Differentiation Three Financial, Social and Structure High Service Delivery High 31 A
    32. 32. Service Quality to Customer Loyalty Service Quality (White glove attentive “Par Excellence”) + Product Quality ( Silver Platter Tanglibles) + Price (Not big determinant of Value BUT admission ticket) = Perceived Value (Awards and Guests Satisfaction)  Customer Loyalty (Recurring Business-Franchise) W
    33. 33. Recommendations In over 1800 Google items, Business Source Premier , & ABI Inform searches the only issues concerning Ritz Carlton to be found by this group were those which other service providers took lessons from the Ritz Carlton. The Ritz Carlton Leadership Group is a B2B unit which emphasizes and imparts TQM to other Business Industries! W
    34. 34. Challenges/Recommendations Challenges: Employees not reporting problem resolutions on smaller scales? Hotel failures – management not following Gold Standards* Privacy Issues with CLASS system: Who is really seeing it.** Recommendations: Recovery resource usage should be tied to incident reporting, systematically On-site quality managers reporting directly to corporate Create a user profile that customers can log in and view info kept on their stays; $ spent to preferences noted. *Columbia B-School Case Study 1998 **University of Texas at Austin, Syllabus questions W
    35. 35. Ritz Carlton Summary: • The ZOT is extremely high and narrow • They are under the microscope and must ensure there is no deviation from those things which have earned them their rank • There is no room for error in their station, as the epitome of service quality • Continue framing TQM as a journey, not a destination. W
    36. 36. Resources • The Portman Ritz-Carlton. (1998, January). Institutional Investor, 32(1), W6. • DeCocinis, The Portman Ritz-Carlton: Setting up our Ladies and Gentlemen for Success, Primary Source Info • Ritz-Carlton’s Application for The Malcom Baldridge Award, Primary Source Info • Bruce Serlen (2004, February). Ritz Receives Highest Mark In Every Deluxe Criterion. Business Travel News, 21(2), 16. • Karen Robinson-Jacobs (20 November). Dallas' Ritz-Carlton ranked No. 1 large hotel in Zagat guide. McClatchy - Tribune Business News • Ritz-Carlton 10-K’s, Hoovers.com • The Ritz Carlton Philosophy; Cutomerexpectations.com, 08122008 • Learning-from-The-Ritz-Carlton-Customer-Serivce-Philosophy, ezinearticles.com • Kanes, www.island.lk/2001/11/04/busine08.html Asia's Best Employers Treat their Workers Well, Far Eastern Economic Review 2001 • The Ritz-Carlton Individual Incentive Awards Program. (2008, November). Incentive, 182(11), 49. • Gallo, C, Employee Motivation the Ritz-Carlton Way Business Week, Feb, 2008 • www.ritzcarlton.com • The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company , • Joseph Michelli, McGraw-Hill Professional 2008 • Berry, Discovering the Soul of Service: The Nine Drivers of Business Success, Free Press 1999 • Parasuraman, A. Course Pack Service Marketing MKT 672 Section 62 Fall 2008 36

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