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Chapter 2:

Service Characteristics of Hospitality and Tourism Marketing

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Intangibility

Inseparability

Variability

Perishability

Can’t be seen, tasted, felt, heard, or smelled before purchase.

Can’t be separated from service providers.

Quality depends on who provides them and when, where and how.

Can’t be stored for later sale or use.

Characteristics of Services

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Intangibility (main characteristic)

High risk associated with services. It is difficult to evaluate service before the experience.

Also, because of invisibility, good performance goes largely unnoticed. How do we correct this? How do you make the service product

tangible?

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Inseparability Service encounter, Moment of truth

(The employee and customer become part of the service)

Customers become a part of the service. Examples? What problems does this cause?

What are the points of encounter for a customer who has a dinner in a fine-dinning restaurant?

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Variability:How can we manage these? Service quality Capacity Demand

Fluctuation Communication issue and guest expectation

Consistency – how often has your stay in a hotel been flawless? How to manage consistency?

Perishability How do we manage capacity and

demand? Why do we manage capacity and

demand? What if we have planned ahead

and we have customers who “no show?”

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Service Marketing

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Managing Differentiation

Solution to price competition Differentiation through people, physical

environment, and processes Differentiation through branding

In your groups, describe 5 SPECIFIC ways you are going to differentiate yourself from your direct competition.

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Tangibilizing the intangible Use tangible surrogates to represent the

service (providing “evidence” of the service) Promotional materials Physical environment Employee appearance

http://www.youtube.com/watch?v=8nfUMbRcM7c

And Create a strong organization image Engage in post-purchase communication Stimulate “Word of Mouth” & Publicity

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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

Exceed customers’ service-quality expectations

Be “Customer obsessed” Quality commitment High service quality standards Watch service performance closelyhttp://www.youtube.com/watch?v=OaZnCu1hc0I

Expectations based on past experiences, word-of-mouth, and service firm advertising

Managing Service Quality

Problems will inevitably occur

Keep the customer informed

Provide service recovery options

“Bad news does not get better with age!”

Service Failure

Due to perishability, managers must maximize service capacity and quality during times of high and low demand Examples?

Customer complaints increase when service firms operate above 80% capacity Demands create changes to

services/operations

Managing Capacity and Demand

No surprises! Services should be provided

correctly, and done the same way every time

How is this achieved?

Managing Consistency

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Useful marketing strategies in the hospitality and travel industries Positioning strongly in the chosen target

markets Effective interaction between customers and

employees Managing differentiation Managing service quality Tangibilizing the product Managing the physical surroundings Managing employees as Part of the Product Managing perceived risk Managing capacity and demand Managing consistency Managing the customer relationship (CRM)

Best Practices Ritz-Carlton: legendary service

96% guest satisfaction Malcolm Baldridge National Quality Award Best company in the U.S. for employee

training Motto: “We are ladies and gentlemen

serving ladies and gentlemen.” Every employee has $2,000 to spend on

a guest http://www.youtube.com/watch?v=7h7yIlCtgnU