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1 Service Characteristics of Hospitality and Tourism Marketing . COMPILED BY, P.SURESH, LECTURER, IHM,GWALIOR.

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Page 1: Quality service delivery

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Service Characteristics of Hospitality and Tourism Marketing

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COMPILED BY,P.SURESH,LECTURER,IHM,GWALIOR.

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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

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Key Concepts

Service Culture Intangibility Inseparability Variability Perishability Internal marketing Interactive marketing Managing differentiation

Managing service quality Tangibilizing the service

product Trade dress Physical evidence Point of encounter Managing perceived risk Managing capacity and

demand Managing consistency

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The Service CultureService Culture: A culture that supports customer

service through policies, procedures, reward systems, and actions.

Service culture can be implemented:Through employee communicationThrough company policiesThrough personal actions

Empowers employees to solve customer problems. Has to start with top management and flow down.

Organization’s culture must support and reward customer need attention.

“Ritz Carlton’s “Gold Standards”

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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 Service Marketing

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Intangibility• Services can not be seen, tasted, felt, heard, or smelled.• Tangible evidences reduce uncertainty • High risk associated with services. • Lack of tangibility after the experience• Companies should create memorable guest experiences• Tangibles provide signals as to the quality of the intangible

service. – Exterior and Interior design– Uniforms of employees

“Someone who purchase a service may go away empty-handed, but do not go away empty-headed” - Robert Lewis

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Tangible and Intangible Products/Services

Pure Pure tangible tangible good; no good; no serviceservice

Tangible Tangible goods with goods with

some some servicesservices

Hybrid: Hybrid: equal part equal part goods and goods and

serviceservice

Major Major service service

with with minor minor goodgood

Pure Pure service; service;

no tangible no tangible goodgood

Milk Computer& Warranty

Meal atRestaurant

LegalAdvice

Hair Styling

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Inseparability Customer-contact employees are part of the product Other customers become part of service The employee becomes part of service The customer and the employee interact with the

service delivery system. Customers and employees must understand the

service delivery system.Select, hire and train customers.Select and train contact employeesEmpower employees

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Variability• Services are highly variable• Services are produced and consumed

simultaneously.• Service consistency depends on the service

provider’s skill.• Fluctuating demand makes it difficult to deliver

consistent quality.• Lack of consistency a major source of customer

disappointment.• Guest expectations are different. • Train contact and non-contact employee

“Quality can not be controlled; must be produced”

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PerishabilityLack of ability to inventory

Lack of ability to inventory – services can not be stored Capacity and demand must be successfully managed If services are to maximize revenue, they must manage

capacity and demand. Change customer use pattern (Hourly, daily, seasonally) Cross-train employees Involve customer in the service delivery system

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Service firms use marketing to position themselves

strongly in chosen target markets. In a service business the customer and frontline

service employee interact to create service Service providers must work to interact effectively

with customers to create superior value. Successful service companies focus their attention on

both their employees and customers.

Management Strategies for Service Business

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External marketing = company and customers

Internal marketing = company and employees

Interactive marketing = employees and customers

Management Strategies for Service Business

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Internal Marketing Internal Marketing: The task of trainingtraining and motivatingmotivating employees to

provide good customer service. * Customer contact employees * Supportive employees • Employees are a critical part of the product and

marketing mix• There is a need for “internal” and as well as

“external” marketing.

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Interactive Marketing Interactive Marketing: Perceived service quality depends heavily on the quality

of the buyer-seller interactionbuyer-seller interaction during the service encounter.

• Service quality depends on both the service deliverer and the quality of the delivery

• The customer judges service quality not just on technical qualitytechnical quality (the quality of the food) but also its functional qualityfunctional quality (the service provided in the restaurant).

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Management Strategies for Service Business

1. Managing differentiation Need to develop a differentiated offer, delivery

and image. Offer innovative features Airlines offer in-flight movie, advance seating,

frequent flyer award programs QSR offers fast delivery services Differentiate service delivery through:

People Physical environment Process

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Management Strategies for Service Business

2. Managing service quality Delivering consistently higher quality than its

competitors The key is to exceed the customer’s service quality

expectations Identify the expectations of target customers

Empower frontline employees Develop a set of common virtues for service quality Set high service-quality standards. Watch service performance closely (own and

competitors).

“Promise only what you can deliver and deliver more than you promise”

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Management Strategies for Service Business

3. Tangibilizing the service product• Promotional material,• Employees’ appearance, and

uniforms.• Physical environment• Building exteriors• Equipment• Furniture and fixture• Signs

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Management Strategies for Service Business

4. Managing the Physical Surroundings Physical evidence that is not managed

properly can hurt a business. Poorly managed physical evidence sends

negative messages to customers. Physical surroundings should be designed to

reinforce the product’s position (organization image) in the customer’s mind.

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A Fishy Sign Story

NOW HIRING CLOSERS

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A Fishy Sign Story

NOW HIRING CLOSERS

Oops!! The C dropped off.

NOW HIRING LOSERS

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Management Strategies for Service Business

5. Managing Employees as Part of the Product In H&T employees are critical part of the

product and marketing mix Human resources and marketing departments

must work together The management should formulate policies

that support positive relations between employees and guests.

Must manage service at the “points of encounter” (R.Nykiel)

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Management Strategies for Service Business

6. Managing Perceived Risk Customers experience some anxiety before they

purchase hospitality and tourism services A salesperson must reduce client fear and gain the

client’s confidence. FAM trips and sampling help alleviate anxiety Hotels provide, rooms, food, beverage, and

entertainment at no cost to the prospective client. Customer loyalty increases for companies that have

provided a consistent product in the past.

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Management Strategies for Service Business

7. Managing Capacity and Demand Hospitality and tourism companies must adjust

their operating systems to enable them to operate at maximum capacity.

Complaints tend to increase when companies are operating at full or near to full capacity; companies must remember that their goal is to create satisfied customers.

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Management Strategies for Service Business

8. Managing Consistency Consistency is one of the key

factor in the success of a service business.

Basically, this means that customers receive the service they expect without unwanted surprises.

Many factors work against consistency

% 100 satisfaction guarantee

Product consistency

Price consistency

Procedure consistency

Service consistency

Taste consistency

Time consistency

Brand consistency

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Management Strategies for Service Business

9. Managing the Customer Relationship (CRM) CRM is a managerial philosophy and practice It combines marketing, business strategy, and

information technology to better understand the customers, to custom-developed products for key customers

CRM focuses on managing revenue opportunities from customers, retaining customers, and enjoying a stream of income from them over their lifetime.

Managing “Switching Costs”

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THANK YOU ALL

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