Chapter 2 - Service Characteristics of Hospitality and Tourism
Managing Service Quality
What hospitality products, qualities measured by how well customer expectations are met.
Managing Differentiation
the solution to price competition is to develop a differentiated offering. The offer couldn't include innovative features that set one company's offer apart from that of its competitor.
Organization Image
the way a person or group views an organization
Service Culture
A system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business
Four Characteristics of Services
1. Intangibility 2. Inseparability 3. Variability 4. Perishability
Three Types of Marketing
1. Internal Marketing 2. External Marketing 3. Interactive Marketing
Seven Management Strategies for Service Businesses
1. Managing Differentiation 2. Managing Service Quality 3. Manage Service Productivity 4. Resolving Customer Complaints 5. Managing Employees as Part of the Product 6. Managing Perceived Risk 7. Managing Capacity and Demand
Revenue Management
A pricing method using price as a means of matching demand with capacity
Managing Capacity and Demand
Because services are perishable, managing capacity and demand is a key function of hospitality marketing. First, services must adjust their operating systems to enable the business to operate at maximum capacity. Research has shown that customer complaints increase when service firms operate above 80% of their capacity.
Variability
Characteristic of Services - their quality may vary greatly, depending on who when, where, and how they are provided
Inseparability
Characteristic of Services - they are produced and consumed at the same time and cannot be separated from their providers
Intangibility
Characteristic of Services - they cannot be seen, tasted, felt, heard, or smelled before they are purchased.
Perishability
Characteristic of Services - they cannot be stored for later use
Resolving Customer Complaints
Critical to customer retention
Implications & Service Strategies for: Perishability
Implication: - short shelf life Service Strategy: - forecasting - buffering
Implications & Service Strategies for: Inseparability
Implication: - task uncertainty - workflow uncertain Service Strategy: - level demand - responsiveness
Implications & Service Strategies for: Intangibility
Implication: - don't know what to expect - not much to show for $ spent - difficult to prove performance Service Strategy: - tangibilize the intangible - provide surrogates - assurance
Implications & Service Strategies for: Variability
Implication: - inconsistent servers, customers, situations Service Strategy: - selection.training - selection/communication - empowerment/ empathy
Managing Employees as Part of the Product
In the hospitality industry, employees are critical part of the product and marketing mix. The human resource and marketing department must work closely together. The task of internal marketing to employees involves the effective training and motivation of customer contact employees and supporting service personnel.
Interactive Marketing
Marketing by a service firm that recognizes that perceived service quality depends heavily on the quality of the buyer-seller interaction
Internal Marketing
Marketing by a service firm to train and effectively motivate its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction
Physical Evidence
Tangible clues such as promotional material, employees of the firm, and the physical environment of the firm. Physical evidence is used by a service firm to make its product more tangible to customers.
Managing Perceived Risk
The high risk that people perceive when purchasing hospitality products increases loyalty to companies that have provided them with a consistent product in the past.
Service Profit Chain
a model that shows the relationships between employee satisfaction, customer satisfaction, customer retention, value creation, and profitability.
