Marketing Service

MKTG 3040

Service Delivery System and Blueprint

Of

Fragrance Hotel and traders Hotel

Written by: Jason Nicholas, Darren Kok Shi Wei, Aung Myitt

OO, Tran Long and Angel Lee

On

30th July 2010

Content Page

Executive Summary

1.0 Background

1.1 Fragrance hotel

1.2 Traders Hotel

Inspired by the legendary land featured in James hilton’s novel Lost Horizon published n 1933,

the name Shangri-La encapsulates the serenity and service for which Shangri-La is renowned

worldwide.

Hong Kong-based Shangri-La Hotels and Resort is Asia Pacific’s leading luxury hotel group and

regarded as one of the world’s finest hotel ownership and management companies.

The Shangri-la story began in 1971 with its first deluxe hotel in Singapore. Today, there are 66

hotels and resorts throughout Asia Pacific, north America and he Middle East, representing a

rooms inventory of over 30,000. In addition, new hotels are under development in Austria,

Canada, mainland China, France, India, Macau, Philippines, Qatar, Seychelles, Turkey and

United Kingdom.

Shangri-La legendary service can also be experienced at two Asia’s most prestigious recreational

clubs, the Aberdeen Marina Club in Hong Kong, and the XiLi Golf and Country Club in

Shenzen.

2.0 Service Delivery System in Hospitality Management

2.1 Literature Review

One of the discerning features of delivering services with delivering goods is the quantity of

customers contact in the delivery system (Nie and Kellogg 1999 cited in Zomerdik and Vries

2007). In other words, services are unable to be delivered without customers being present or

participate in the service delivery system, as it is the customers who create demand, uncertainties

and variation in the delivery system that involves facilities, staff and technology in the system.

Based on the facts above, service delivery systems effectiveness need to be reviewed accordingly

to the customers’ expectation, in which according to the customer approach contact (Chase 1978,

1981 cited in Zomerdik and Vries 2007), customer contact activities should be seperated from

non-contact activities to do justice to their different design requirement and maximize the

efficiency of the delivery system. Therefore, service organizations like hotel must consist of

front stage (office) and back stage (office). Metters and Vargas (2000 cited in Zomerdik and

Vries 2007) added that in several situations pairing front office and back office jobs can be a

viable strategy, meaning that the same employees can carry out both front office activities and

back office activities.

Therefore, this report will compare and analyze two hotels mentioned previously in terms of

their service delivery system and characteristics in a systematic and detail method.

2.2 Service delivery system in Fragrance Hotel

Fragrance Hotel

2.3 Service delivery system in Traders Hotel

Traders Hotel Singapore is located around Orchard Road shopping district. It is connected to

Tanglin Mall offering direct access to café, restaurants, and supermarket and of course, shopping

mall. The embassy district is in walking distance and the botanic garden are minutes away and

complimentary shuttle bus that goes to shopping district, business district and business parks are

provided. The hotel is 25 minutes drive to Changi International Airport. The fact that makes

Traders Hotel different from fragrance hotel is the range of comprehensive facilities and

attentive services. For instance, the minute a customer set in the hotel staff will greet the

customers sincerely, valet and bell boy services are also available. Furthermore, the high quality

of the service can be seen through the lobby which is attended by courteous staffs that make

customer feel at home and comfortable; adding to it, the receptionist area are being attended by 5

staffs, which is rarely seen to shortens the waiting time for checking in/out.

After checking in, customers will be pampered with a wide range facitilities and attentive

services provided in the hotel. Dining options include a poolside pub - casual restaurant - and

casual cafe. Atop the property a lush garden borders the outdoor free-form 30-metre swimming

pool and Jacuzzi. The fitness centre has a fully equipped gym plus sauna, steam, hyrdobath,

massage - and spa treatments. The business centre offers hi-speed Internet access and secretarial

services at reasonable rates. As well, wireless access is provided in the Lobby, and Traders Club

Lounge. For meetings the hotel has ten function rooms and a ballroom that holds 350. The

Hospitality Lounge is complimentary for early arrivals or late departures. The hotel has 546

guestrooms including 14 suites and 124 Traders Club rooms. Accommodations feature a

contemporary design with Asian influences. There are also 18 studio apartments for guests who

want extra space or a longer stay. All rooms have hi-speed Internet access - cable and satellite

TV - in-room safe - IDD phones - working chair and writing desk - linen bathrobes - plush

towels - and premium toiletries. Traders Club room has extra amenities such as personal

concierge - all day beverages - and evening happy hour in 17th floor exclusive Traders Club

Lounge. Guests in suites are entitled to Traders Club extras.

3.0 Marketing Strategy

3.1 Market Segmentation

Market segmentation is the dividing of a market into a smaller segment that require separate

products or marketing mixes; the process of classifying customers into groups with difference

needs, characteristics or behavior (Adam et al 2008). In fact, segmentation is the most important

step to any businesses, as one cannot cater to every single customer with different need and

characteristics.

But, who do Fragrance and Traders hotel targeting and how do they position themselves?

3.2 Demographic Segmentation

Demographic segmentation is the dividing of the market into groups based on demographic

variables such as age, sex, income, occupation, and nationality (Adam et al. 2008). Demographic

segmentation and geographic segmentation will be used to explain the concept used in both

hotels. One reason is that the demographic and geographic variables are easier to measure than

most other types of variables, like psychographic and behavioral.

Fragrance and Traders hotel are similar in the sense, however, the segmentation approach of their

business are different in concept. Fragrance hotel is one of the leading chain hotel that target

tourists, with the concept of ‘perfect blend of warm hospitality wrapped in affordable luxury’

(Fragrance hotel 2010). In a sense, Fragrance hotel is a budget hotel that provides affordable

accommodation to tourists that fall into the categories of low and medium income level.

In contrast, Traders hotel cater mainly to business and leisure travelers that demand for a high

quality and value for ever single cent they spent. In other words, high-end customer, with a lot of

disposable income, that consists of professional worker such as, Chief executive officer and

manager.

The concepts used for both hotels might be different, but, the results of segmentation are the

same, which is high efficiency and productivity in providing services.

3.2 Geographic segmentation

Traders Hotel is located near the MRT and shopping centre, as well as, business district like

Orchard or Cuscaden Road. Moreover, these places are the most convenience location is

Singapore. Because their main target market is the person who has a high income and business so

this is the best location for them to attract this group of customers as well. In addition, the fact 76

per cent of all tourists to Singapore to visited Orchard Road and spent more than 200 million

(John Burton 2007), This is a big amount and also bright a big influence to this area economy

face as well. In compare with the Fragrance Hotel Pearl, it has located in the small street and

active night life style such as Geylang which is “Home to the Malay community, local street food

and the infamous red-light district, Geylang is a colourful blend of culture, local cuisine and

unique architecture“(http://www.booking.com/hotel/sg/pearl).

Although to compare together there is a big different between them but both of them have

already got their own goals and strong competitive power for every segment, especially the

Fragrance Hotel Pearl.

3.3 Targeting and Positioning

Trader’s hotel is very successful in the hospitality market with a renowned reputation and solid

image in customer’s mind. The same is to Fragrance hotel, but, the two are perceived by the

customer’s differently, which as mentioned, both the hotels are targeting different segment with

dissimilar concepts. But, how to they position themselves in the customer’s mind?

Firstly, they supply to the customers reliable services and available information. Service is

intangible product and very high risk so that the customers need more information and warrantee

to reduce their risks. In fact, Trader’s hotel has advertised their services on mass media which

can spread huge customer’s attendants in many regions but it is costly, too. Secondly, Trader’s

hotel try to build the close relationship with the customers by understand deeply their needs and

wants and try to satisfy them as well as they can. For example, they try to give more benefits to

customers which take an advance from competitors like every room has smoking room (take care

of customer’s health), free shuttle bus services for customers, baby sitting, swimming pool, spa,

especially they express their respect to the customers at the first sight and make them feel

respected and welcomed. (http://www.booking.com/hotel/sg/traders-singapore.en.html

2009).This is a smart strategy not only get customer attention but also to score mark inside their

heart and certainly it’s brand name also has carved. Moreover, they also concentrate more on

human resources and company image which are others factors that to maintain for both the

company powers and brand name.

In contrast, The Fragrance Hotel Pearl is the budget hotel and their strategy is very specific and

smaller market size. For instance, they focus on the back packers travellers and domestic

customers who are not really concerned too much on the quality and brand name. Back packers

travellers and domestic customers usually they just need a place comfortable to enjoy their sleep,

convenience and economy. That is why for the budget hotel they can save a lot of money for

advertising, training staffs, transportations or high quality of facilities. (Erica Berte et al, 2010).

4.0 Servicescape

The concept of a servicescape was developed by Booms and Bitner (1981) to emphasize the

impact of the physical environment in which a service process takes place. Booms and Bitner

(1981) defined a servicescape as "the environment in which the service is assembled and in

which the staff or business and customer interact, combined with tangible commodities that

facilitate performance or communication of the service" (Booms and Bitner, 1981, p. 36).

For e.g. Mango Masala, the hangout restaurant in the city centre Ajmer uses fluorescent colors,

wrought iron furniture , collages on the walls and a mock aero plane suspended from the ceiling

to excite its guests and suggests that it is the ‘happening place’ of the city. Depending on the

nature of desired and designed encounter a servicescape can be of the three possible types – a

self servicescape, interpersonal servicescape and a remote servicescape.

However, for the purpose of this report, only interpersonal servicescape will be explained.

4.1 Interpersonal servicescape

In hospitality operation, such as hotel, a close interaction between the customer and provider and

as such, servicescape of the hotel must be able to facilitate this interaction. Furthermore, for any

businesses that falls under this category, their servicescape designs must be able to attract, satisfy

and facilitate the activities of both conducive to the interaction between employee and customers.

4.2 Role of Servicescape

A servicescape is not a passive setting it plays an important role in service transactions. An

evaluation of the roles they have in service encounters will reveal how important it is to design

an appropriate servicescape .A servicescape plays four important roles and through this the

servicescape of both hotels, fragrance and traders hotel will be compared in detail.

4.2.1 Servicescape as Packaging

Servicescapes ‘package’ is similar to tangible product’s package. It consists of other elements of

physical evidences, such as the building design, exterior and interior look, as well as, facilities

that offer and communicate an image to the customers of what they should expect ‘inside’

(Zeithaml and Bitner 2003). It is the corporeal manifestation of the service idea for interest

groups to form a shared appreciation-ma perceptible metaphor for an intangible service. They are

predetermined to render an intended image to the service concept and evoke a particular sensory

and emotional reaction that sets the stage for a germane experience that augments the efficacy of

the offer. Appropriate servicescaping is a sure shot way to create an image that the service

provider is seeking to put up. It also helps moderate customer expectation and reinforces his

experience and reminiscences.

Servicescape is an outward appearance of organization and thus can be critical in forming initial

impressions or setting up customer expectation. For instance, Traders and Fragrance hotel, which

are using this aspect to attract their specific customers, as mentioned in the segmentation section.

Fragrance hotel outlook is very well designed and simple with the expectation from the

customers that what they are going to get is an affordable, but high quality accommodation. As

for, Traders hotel, the exterior and interior are those of a 6-starts hotel with state of the art

interior and exterior design, as well as, facilities. From that the customers can aspect above the

standard services, with a high quality, comfortable and convenience stays.

4.2.2 Servicescape as Facilitator

Another important job of servicescape is to act as an a facilitator in assisting both the customers

and service employees to make most of the opportunity it should make the service consumption

comfortable convenient for the customer. For instance, the conducive environment inside the

Traders hotel can make the service pleasure to experience from the customer;s point of view and

a pleasure to perform from the employee’s. Thus, the concept of having a well designed,

functional facility will enhanced or inhibits the efficient flow of activities in the service setting

making it easier or harder for customer and employee to accomplish their goals (Zeithaml and

Bitner 2003).

4.2.3 Servicescape as Socializer

Design of servicescapes aids in socialization of both the customers and employees, conveying

expected roles, behavior and relationship (Zeithaml and Bitner 2003). Compare the servicescape

of a public bank with that of a private bank. In a public bank a large part of the floor is marked as

restricted, leaving little space in the form of an arrow aisle along the outer walls of the hall for

customers. The message is clear –customer must not enter the restricted area, which is where the

most important job of the bank, internal operations, is conducted and by entering to that area,

customers will be interfering with that task, whereas, private banks approach customers with

conviviality. It is the same with Traders hotels, where the level of interaction of customers and

employee is very high. Therefore, customer must be allowed to have more space and be a central

to all activity and with the casual interaction between both parties a bond will be formed and

satisfaction will be assured (Zeithaml and Bitner 2003).

.

4.2.4 Servicescape as Differentiator

According to Zeithaml and Bitner (2003), ‘ the design of the physical facility can differentiate a

firm from its competitors and signal the market segment the service is intended for. With the

layouts a customer can make out what kind of hotel it is. A dominance of beautiful and luxurious

of Traders hotel differentiates it with the small, yet standardized Fragrance hotel. Furthermore,

the huge difference factors are the level of dining possibilities, each signaled by the differences

in design.

5.0 Critical Evaluation of Fragrance and Traders hotel

5.1 Fragrance hotel

5.2 traders hotel

6.0 Conclusion

7.0 Recommendation

References