relationship marketing in sevices

7/31/2019 Relationship Marketing in Sevices

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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458

Chapter 11:

Building Customer Loyalty

Through Quality


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Figure 11-1


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Traditional Marketing

Orientation to single sales

Discontinuous customer contact

Focus on product features

Short time scale

Little emphasis on customer service

Limited commitment to meetingcustomer expectations

Quality is the concern of the

production staff

Relationship marketing

Orientation to customer retention

Continuous customer contact

Focus on customer value

Long time scale

High customer service emphasis

High commitment to meetingcustomer expectations

Quality is concern of all staff

Relationship Marketing Compared With

Traditional Marketing


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Customer Delivered Value

CustomerDelivered ValueEquals

Minus

Total customer Value

Total customer

cost

(Products, services,

personnel, and image

values)

(Monetary, time, energy,and psychic costs)

(Profit to theconsumer)


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CustomerSatisfaction

Customer Satisfaction with a

purchase depends on the

products performance relative to

a buyers expectations.

If performance exceeds or meetsexpectations the customer is

highly satisfied or delighted.


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Customer Satisfaction Versus

Customer Loyalty Customer satisfaction How well

expectations are met

Customer Loyalty

Behavior Do customers come back or

intend to come back

Emotional Attachment Do customerspread positive word of mouth and perform

other partnership activities


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Five Levels of Relationships

Basic

Reactive

Accountable

Proactive

Partnership

The company sells the product but does not follow-up

The company sells the product and encourages thecustomer to call when the have problems orquestions.

The companys representative checks on customerafter the sales and the event to make sure thingswere satisfactory and to get feedback.

The salesperson or others in the company phonecustomers from time to time to seek suggestions.

The company works continuously with the customerto discover ways to develop better value.


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Three Customer Value-

Binding Approaches

Financial benefitsFinancial benefits

Social benefits

Social benefits

Structural tiesStructural ties


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Establishing a Relationship

Marketing Program Identify the key customers meriting

relationship management

Assign a skilled relationship manager toeach customer

Develop a clear job description for

relationship managers


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Establishing a Relationship

Marketing Program Have each relationship manager

develop annual and long-range

customer relationship plans Appoint an overall manager to

supervise the relationship managers


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Internal Costs

Rework (back of the house)

Facility Downtime

Loss of Morale

High employee turnover

Loss of employee marketing


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Complaint resolution

Approximate percentages that will

purchase again if they have a complaint

82% if resolved quickly

50% if resolved

15% if not resolved

9% if they don't communicate theircomplaint


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Managers and employees should treat

complaining customers as the most

important customer - and listen to their

complaints

Complaints and problems create

opportunities to develop loyalty

Knowing customer value gives us an

idea of how far we want to got fix the

problem


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Managing the

Perceived

Service QualitySource: Christian Gronroos


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Benefits of Service Quality

Retaining customers

Avoidance of price

competition Retention of good

employees

Reduction of costs


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Developing a Service Quality

Program1. Supply strong leadership

2. Integrate marketing throughout the

organization

3. Understand the customer

4. Understand the business

5. Apply operational fundamentals


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Developing a Service Quality

Program6. Leverage the freedom factor

7. Use appropriate technology

8. Practice good human resourcemanagement

9. Set standards, measure performance,

and establish incentives10.Feed back the results to the

employees


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Managing Capacity

Involve customers in the deliverysystem

Cross-train employees

Use part - time employees

Rent or share facilities and equipment


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Managing Capacity

Schedule downtime during periods of

low demand

Extend service hours

Use technology

Use price


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Customers as Employees

Reservations

Check - out

Check-in Salad bar

Honor bar - concierge

floor

Macaroni Grill - wine Fast food - beverages

Cook Steak


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Managing Demand

Use price to increase or reduce Use reservations

Overbook

Use queuing

Shift demand

Change salespersons assignment

Create promotional events


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Waiting Time

Unoccupied times feels longer than

occupied time

Unfair waits are longer than equitablewaits


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Chapter 11: Figure

11-3: Conceptual

model of service

quality - the gap

analysis model.

Source: Leonard l.

Berry, A.

Parasuraman, and

Valarie A.Zeithaml.


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Close Gap 1 by;

1. Talking to customers

2. Talking to customer contact employees

3. Marketing information systems--

customer surveys-- analysis by

segment-- focus groups

4. Reducing levels of management


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Close Gap 2

1. Management Commitment-- resources,

internal marketing, reward systems

2. Use of hard and soft technology

3. Shift demand

4. Is meeting customer expectations

financially feasible?


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Close Gap 3

1. Training

2. Internal marketing, pride

3. Teamwork

4. Reward systems

5. Service quality audits


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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler John Bowen James Makens Upper Saddle River NJ 07458

Close Gap 4

1. Know the capabilities of the firm

2. Good communications within the firm

3. Internal marketing-- teamwork

relationship marketing in sevices

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