2/23/2020

“Managers do not control the quality of the product

Chapter 2 when the product is a service . . . .
The quality of the service is in a precarious state –
it is in the hands of the service workers who
Service ‘produce’ and deliver it.”
Characteristics
-Karl Albrecht
of Hospitality
and Tourism
Marketing

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Chapter Objectives The Service Culture

• Describe a service culture • The service culture focuses on serving
and satisfying the customer
• Identify four service characteristics that affect
the marketing of a hospitality or travel
• Empowers employees to solve
product.
customer problems
• Explain marketing strategies that are useful in
the hospitality and travel industries • Majority of many countries’ GDP is
service based
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

1
 2/23/2020

Characteristics of Service Management Strategies for

Marketing Service Businesses
• Service companies must increase their
competitive differentiation, service
quality, and productivity

– Increase in competition and costs

– Decrease in productivity and quality

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Three Types of Marketing in

Service-Profit Chain
Five Links:
Service Industries
• Healthy service profits and growth

• Satisfied and loyal customers

• Greater service values

• Satisfied and productive service employees

• Internal service quality

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

2
 2/23/2020

Internal and Interactive

Marketing Managing Differentiation
• Internal marketing means the service
firm must effectively train and motivate • Solution to price competition
customer contact employees
• Differentiation through people, physical
• Interactive marketing means the environment, and processes
perceived service quality depends
heavily upon the buyer-seller
interaction during the service • Differentiation through branding
encounter
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Common Virtues Regarding

Managing Service Quality
Service Quality
• Exceed customers’ service-quality 1. “Customer obsessed”
expectations
2. History of top management commitment to
quality
• Expectations based on past
experiences, word-of-mouth, and 3. High service quality standards set
service firm advertising
4. Monitor performance closely

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

3
 2/23/2020

Managing the Physical

Tangibilizing the Product
Surroundings
• Providing “evidence” of the service • Improperly managed physical evidence
can hurt a business
– Promotional Material
• Surroundings should reinforce company
– Physical Environment positioning in customer’s mind

– Employee appearance
• Organizational Image is how customers
perceive your organization
– Why is Trade Dress Protection important?
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Stress Advantages of Managing Employees as

Nonownership Part of the Product
• The customer does not have ownership • Employees are critical
of service product
• Training and motivating employees to provide
• Stress as a benefit good customer service is internal marketing
– Rather than own and staff corporate
lodging, negotiate a rate with a hotel and • A point-of-encounter is any point at which
pay for only what you use the employee encounters the customer

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

4
 2/23/2020

Managing Capacity and

Managing Perceived Risk
Demand
• Alleviate customer anxiety due to
• Due to perishability, managers must
inability to experience the product
maximize service capacity and quality
beforehand
during times of high and low demand

• Familiarization trips encourage clients to

• Customer complaints increase when
experience the enterprise in a low-risk
service firms operate above 80%
situation
capacity
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Managing Consistency Managing the Customer

Relationship – CRM
• No surprises!
• Not only should services be provided • Combines marketing, business strategy and
information technology to better understand
correctly, but they should be done the the customers
same way every time
• Beware fluctuating demand and • Develop unique, lasting relationships with
unintentional company policies that customers
may affect consistency

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

5
 2/23/2020

Overview of Service Characteristics:

Service Failure The Servuction Model

• Problems will inevitably occur

• Keep the customer informed

• Provide service recovery options

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Interaction Between
Contact Personnel
Customer A and Customer B
• Contact between customers can be • Contact personnel have a direct impact
positive or negative on the satisfaction of customers

• In some cases interaction between • Characteristic of inseparability of

customers can be managed customer and employee during service
delivery system
• Customers can significantly impact all
around them
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

6
 2/23/2020

The Invisible Organization Best Practices

and System
• Ritz-Carlton Leadership Center offers
A service organization management must innovative ways to:
decide what they want the guest to see – Increase employee retention and loyalty
and what they want to keep out of the – Increase customer retention and loyalty
guest’s vision – Achieve service excellence in your
industry
– Effectively drive your organization’s
culture, philosophy, vision, and mission

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

Best Practices Key Terms

• Why are these hospitality and tourism
organizations service leaders? • Interactive marketing
– Chipotle Restaurants
– Marriott Hotel and Vacation Club • Internal marketing
– Ting Tai Fung
– Club Med
• Organization image
– Disney
– Aramark
– British Airways • Physical evidence
©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens

7
 2/23/2020

Key Terms Key Terms

• Point-of-encounter • Service perishability

• Service culture • Service-profit chain

• Service intangibility • Service variability

• Service inseparability • Trade dress

©2006 Pearson Education, Inc. Marketing for

Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition ©2006 Pearson Education, Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,and
andMakens
Makens