Hospitality Service Culture

Chapter Two: Hospitality and Tourism Service 2020
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“Managers do not control the quality of the product when the product is a service… the quality of the
service is a precarious state-it is in the hand of the service workers who produce and deliver it. “ Karl
Albrecht
2.1 Service Culture
Services Defined
Services are economic activities that create value and provide benefits for customers at specific times and
places as a result of bringing about a desired change in the recipient of the service. (Christopher
Lovelock). Unlike products, which are tangible, services are usually intangible. A service is not a physical
good; rather, it is the performance of an act or a deed. This performance often requires consumers to be
present during the production or delivery of the service. Service industries, including hospitality and
tourism, are actually selling consumers an experience.
Services have been defined to “ include all economic activities whose out-put is not a physical product or
construction, is generally consumed at the time it is produced and provides added value in forms ( such as
convenience, amusement, timelines, comfort, or health) that are essentially intangible concerns of its first
purchaser.
Service employees such as front desk agents, housekeepers, hostesses, wait staff, car rental agents, flight
attendants, and travel agents are responsible for creating positive experiences for customers. These
frontline employees are critical to the success of service firms and play boundary-spanning roles because
of their direct contact with customers. These roles are important because customers’ perceptions of
service firms are formed as a result of their dealings with the boundary-spanning employees.
Several reasons underlie the remarkable growth in services. Two leading services marketing experts,
Christopher Lovelock and Lauren Wright, cite numerous reasons for this growth:
 Changing pattern of government regulation. The reduction in government regulation has spurred
the growth of services.
 Relaxation of professional association restrictions on marketing.
 Privatization of some public and non - profit services
 Technological innovation
 Growth in service chains and franchise networks.
 Internationalization and globalization
 Pressures to improve productivity
 The service quality movement
 Expansion of leasing and rental businesses
IU, CBE, Department of Marketing Management, Tourism and Hospitality Marketing, Organized by Lingerew A. -
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 Manufacturers as service providers
 Pressures on public and nonprofit organizations to find new income sources
 Hiring and promotion of innovative managers
Definition of Service Culture
Tasks of a hospitality business is to develop the service side of the business, specifically, a strong service
culture. Culture includes the values, beliefs, norms, rituals, and practices of a group or organization.
Values: enduring beliefs that a given behavior or outcome is desirable or good
Common Values in the Western World
 Materialism/Home  Health/Youth
 Work and play  Technology (Progress)
 Family and children
Any policy, procedure, action, or inaction on the part of your organization contributes to the service
culture. Many companies are product centered and view customers from the stand point of what company
products or services they use. Successful organizations are customer- centered and focus on individual
needs.
Service culture is a system of values and beliefs in an organization that reinforces the idea that providing
the customer with quality service is the principal concern of the business. The service culture focuses on
serving and satisfying the customer. It has to start with top management and flow down. A service culture
empowers employees to solve customer problems. It is supported by a reward system based on customer
satisfaction.
2.2 Characteristics of a service
The Nature of Services: Difference between Goods and Services
Along with the growth in services, an appreciation for the ways in which services are different from
products has developed. The traditional ways of marketing tangible products are not equally effective in
services marketing. In many industries, marketing involves tangible manufactured products, such as
automobiles, washing machines, and clothing, where as service industries focus on intangible products
such as travel and food service. However, before we can explore how services get successfully marketed,
we need to examine the ways services differ from products. Lovelock and Wright have identified nine key
differences:
1. No ownership by customers. A customer does not take ownership when purchasing a service.
There is no transfer of assets. The customer only owns a service temporarily (e.g. in retaining a
holiday cottage, buying an aircraft seat, paying for time in a museum).
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2. Service products as intangible performers. The value of owning a high performance car or the
latest computer lies in the physical characteristics of the product and, to some extent, the brand
image it conveys. The value of purchasing services lies in the nature of the performance.
Intangibility is a key determinant of whether an offering is or is not a service. Very few products
are purely intangible or totally tangible i.e, there are very few “pure services” or “pure goods”
Services tend to be more intangible than manufactured products, and manufactured products tend
to be more tangible than services. Unlike physical products, services cannot be seen, tasted, felt,
heard or smelled before they are purchased. E.g. Prior to boarding, an airline passengers have
nothing but an airline ticket… promise of safe delivery to their destination. “Some one who
purchase the a service may go away empty-handed but they do not go away empty-headed…
they have memories that can be shared with others”-Robert Lewis.
The same is true in case of those tourists who visit a destination. Members of a hotel sales force
do not sell a room; instead, they sell the right to use a room for a specified period of time. When
Hotel guests leave, they have nothing to show for the purchase but a receipt. To reduce
uncertainty caused by service intangibility, buyers look tangible evidences that will provide
information and confidence about the service. The exterior of a restaurant and its cleanliness
provide signals as to the quality of the intangible service.
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3. Greater involvement of customers in the production process. Because consumers tend to be

present when receiving service within a hospitality operation, they remain involved in the service
production. In many instances, they are directly involved through the element of self-service.
Examples of this can be seen in fast-food restaurants as well as in hotels that provide automated
check-in and checkout by means of either a machine or a video connection through the television.
Airlines have greatly expanded self-service with in their operations as a means of reducing labor
costs. In most hospitality services, both the service provider and the customer must be present for
the transaction to occur. Customer-contact employees and customers are part of the product.
Customers and employees must understand the service delivery system, since they are both
coproducing the service. The food in a restaurant, welcoming culture of the society, history of the
destination… may be good, but if the service person has a poor attitude, knowledge or provides
inattentive service, customers will not be satisfied with their experience. Wom will follow
Services are produced and consumed simultaneously in interactions between the customers and
service provider with no delay between the two. As a result the tourism provider has only one
chance to ‘get it right’- the option of replacing or returning the product which exists in relation to
physical products is excluded.
4. People as part of the product. People or firms that purchase services come in contact with other
consumers as well as the service employees. For example, a hotel guest waits in line at the front
desk or the concierge-desk with other guests. In addition, the guests share facilities such as the
pool, the restaurant, and the fitness center. Therefore, service firms must also manage consumer
interactions to the best of their abilities to ensure customer satisfaction.
5. Greater variability in operational inputs and outputs. In manufacturing setting, the
operational production can be controlled very carefully. For example, staff carefully manage
inventory and precisely calculate production times. Services, however, are delivered in real time,
with many variables not being fully under the control of managers. Services are highly variable.
Their quality depends on who provides them and when and where they are provided. There are
several causes for service variability. Services are produced and consumed simultaneously, which
limits quality control. Fluctuating demand makes it difficult to deliver consistent products during
periods of peak demand. It depends on the services provider’s skill/experience, Time/length of
service/tiredness, Lack of communication and heterogeneity of guest expectation.
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It is difficult to standardize a service since it will differ because of variations in customer experience and
variations in peoples’ performance in delivering the service.
Macdonald’s, British Airways, Forte and other large tourism organizations attempt to overcome the
problem by standardization of operational procedures and training methods in order to reduce variation in
the human performance that constitute the service act.
6. Harder for consumers to evaluate. Consumers can receive considerable information regarding
the purchase of products; however, they often do not obtain it for services. Prior to buying a
product, a consumer can research the product attributes and performance and use this information
when making a purchase decision, especially an important one.
7. No inventories for services. Due to the intangible nature of services, they cannot be inventoried
for future use. Therefore, a lost sale can never be recaptured. When a seat remains empty on a
flight, a hotel room stays vacant, or a table stays unoccupied in a restaurant, the potential revenue
for these services at that point in time becomes lost forever. In other words, services are
perishable, much like produce in a supermarket or items in a bakery. It remains critical for
hospitality and tourism firms to manage supply and demand in an attempt to minimize un used
capacity. For example, restaurants offer early-bird specials and airlines offer deeply discounted
fares in an attempt to shift demand from peak periods to non-peak periods, thereby increasing
revenue and profits. Service cannot be stored. A service ‘dies’ if not consumed with in a given
time. It cannot be stored. A package holiday, a hotel room which have not been booked at eh time
they are available are lost for good. Hence rapid demand shifts, typically through last minute
price cutting, are necessary to reduce the lost revenue accruing from unused capacity.
8. Importance of time. Hospitality services are generally produced and consumed simultaneously,
unlike tangible products, which are manufactured, inventoried, and then sold at a later date.
Customers must be present to receive the service. There are real time limits to the amount of time
that customers are willing to waiting to receive service. Service firms study the phenomenon of
service queues, or the maximum amount of time a customer will wait for a service before it has a
significant (negative) impact on his or her perception of service quality.
9. Different distribution channels. The distribution channel for services is usually more direct than
the traditional channel (i.e manufacturer-wholesaler-retailer-consumer) used by many product
firms. The simultaneous production and consumption normally associated with service delivery
limits the use of intermediaries.
 Tourism has all the characteristics of services.
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A service is a time-perishable, intangible experience performed for a customer acting in the role of co-
producer. (James Fitzsimmons). Service marketers must be concerned with four characteristics of
services: intangibility, inseparability, variability, perishables and non ownership.
2.3 Management Strategies for Services Business

Services managers can do several things to increase services effectiveness in the face of intrinsic services
characteristics.
Successful services companies focus-
 Employees and customers.
They understand the service profit chain, which links service firm profits with employees and customer
satisfaction.
The chain consists five Links
1. Healthy service profits and growth- superior service firm performance.
2. Satisfied and loyal customers- satisfied customers who remain loyal, repeat purchase, and
refer other customer.
3. Greater Service Value- more effective and efficient customer value creation and service
delivery.
4. Satisfied and productive service employees- more satisfied, loyal and hard working
employees.
5. Internal service quality- superior employee selection and training, high quality work environment and
strong support for those dealing with customers.
All these suggests that service marketing requires more than just traditional marketing using 4Ps. It
requires internal and interactive marketing.
Hospitality jobs, which include hotel jobs, resort jobs, restaurant jobs and other foodservice jobs, require
constant positive interaction between individual employees and guests in order to establish a connection
that will keep the business thriving
 Internal marketing- the service firm must effectively train and motivate its customer-contact
employees and all the supporting service people to work as a team to provide customer
satisfaction.
 Interactive marketing- perceived service quality depends heavily on the quality of buyer- seller
interaction during the service encounter.
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Today as competition and costs increase, and productivity and quality decrease, more marketing
sophistication is needed.
Service companies face the task of increasing three major marketing areas: managing competitive
differentiation, service quality and productivity.
 Managing Differentiation- because of price competition, service firms need to develop
differentiated offer, delivery and image to outsmart rival firms.
The offer can include innovative features that set one company’s offer apart from its competitors’. For
example, airlines have introduced such innovations as in-flight movies, advance seating, frequent-flier
award programs, etc to differentiate their offers. Service companies can differentiate their service delivery
in 3 ways/3Ps/-through people, physical environment and process. Finally, service companies can also
differentiate their images through symbols and branding.
 Managing Quality- deliver consistently higher quality than its competitors.

The key is to exceed customers’ service quality expectations. “Promise what you can deliver and deliver
more than you promise. Customer retention is perhaps the best measure of quality-a service firm’s ability
to hang on to its customers depends on how consistently it delivers value to them. Thus, whereas the
manufacturer’s quality goal might be zero defects, the service provider’s goal is zero customer defections.
 Managing productivity- by training current employees better, hire new employees who will work
harder or more skillfully for the same pay, designing more effective services, etc.
1. Tangibilizing the Product-
. Promotional material, employees’ appearance, and the service firm’s physical environment all help
tangiblize the service. Below are some of the ways which help to tangiblize the service product.
Ways to tangiblize the service product:
 Trade dress- Is the distinctive nature of a hospitality industry’s total visual image and overall
appearance. The owner must design an effective trade dress while taking care not to imitate too
closely that of a competitor.
 Employee uniform and costumes- these have a legitimate and useful role in differentiating one
hospitality firm from another and for instilling pride in the employees.
 Physical surroundings- Physical surroundings should be designed to reinforce the product’s position
in the customer’s mind. You should avoid such things as sighns with missing letters, burned-out
lights, parking lots which are full of trash, etc.
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 “Greening” of the hospitality industry - the use of outside natural landscaping and inside use of light
and plants has become a popular method of creating differentiation and tangibilizing the product.
2. Managing Employees-
The hospitality industry relies heavily upon its staff to deliver quality service at all times.
In the hospitality industry, employees are a critical part of the product and marketing mix.
3. Managing Perceived Risk-
The high risk that people perceive when purchasing hospitality products increases loyalty to companies
that have provided them with a consistent product in the past. One way of combating concern is to
encourage the client to try the product in a low-risk situation. Some service companies also provide FAM
trips to meeting planners and travel agents.
4. Managing Capacity and Demand-
Because services are perishable, managing capacity and demand is a key function of hospitality
marketing. First, services must adjust their operating systems to enable the business to operate at
maximum capacity. Second, they must remember that their goal is to create satisfied customers. Research
has shown that customer complaints increase when service firms operate above 80% of their capacity.
Managing supply and demand in the service organization such as a hotel or restaurant is very difficult.
Demand for services comes in waves and often is not as consistent as one would like. The demand may
be seasonal, as with resort hotel, or it may fluctuate by time of day, as with restaurants. It might also
fluctuate by day of the week, as is the case with business oriented hotels. The following strategies can be
used to manage supply and demand
a. Modify price. Prices can be used to transfer demand from peak periods to non peak periods.
Many restaurants in tourist areas use “ early bird” prices to encourage price sensitive consumers,
such as families and senior citizens, to eat earlier.
b. Develop programs to boost nonpeak demand periods. When the fast-food companies first began
operation, they were open only for lunch and dinner. They did not offer breakfast. After many
years of operation, most began to develop breakfast programs that resulted in a very significant
increase in total revenue. This represents an example of how fast-food restaurants stimulated
demand during a nonpeak period
c. Shift demand through reservations. All of the major hotel chains maintain toll-free telephone
reservation services. If demand for a particular location exceeds capacity, rather than losing the
business they will simply offer to make a reservation at a hotel that is close to the desired
location. If a hotel company operates multiple brands and the hotel at which the guest is seeking
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a reservation is full, the reservations agent will offer to make a reservation at a nearby hotel that
is owned, franchised or operated by the same company.
d. Increase personnel efficiency. By using part-time employees and cross-training employees to
perform two or more jobs, management can improve employee productivity. Restaurants can
decrease the time required to take orders and prepare meals, enabling them to serve more
customers in the same time period.
e. Increase consumer involvement in self-service aspects of the service delivery system. Service
firms are able to decrease labor costs and increase supply by having consumers become more
involved in the service delivery process. A common trend in restaurants is to offer buffet-style
service.
5. Managing Consistency-
Consistency means that customers will receive the expected product without unwanted surprise. E.g. in
the hotel industry this means that a wakeup call requested at 7:00am will occur as planned. "You get a lot
of repeat customers, and a lot of that has to do with the quality and the consistency". The traditional 4Ps
marketing approach work well for goods, but additional elements require attention in service business.
Rooms and Bitner suggested 3 additional 3Ps for service marketing: people, physical evidence and
process.
 People- for most services are prepared by people, the selection, training and motivation of
employees make huge difference in customer satisfaction.
 Physical evidence- a hotel will develop a look and style of dealing with customers that realize its
intended customer value proposition whether its cleanliness, speed or some other benefit.
 Process- the production process and organization system is also one element of customer
satisfaction.
2.4 Differences between Tourism Marketing and Other Services
Service tourism is different from the marketing of physical products. However, it also manifests
differences from other services. These differences include the following: The marketing of services
dependent much on interdependence of Marketing, Operations, and Human Resources.
1. Principal products provided by recreation/tourism businesses are recreational experiences and

hospitality, on whether or not to visit your business or community.
2. Instead of moving product to the customer, the customer must travel to the product (area/community),
3. Travel is a significant portion of the time and money spent in association with recreational and tourism
experiences,
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4. Tourism is more supply-led than other services.
Marketing begins with a bottom- up sequence of planning that starts with detailed analysis of the
customer, the market and the environment and only then does marketing planning begin. Tourism
marketing often reverses this pattern. Tourism tends to be supply-side rather than demand-side led.
Whereas produce in other service sectors such as finance and communication may be designed after
intensive research into consume requirements, tourism marketing is often a matter of taking an existing
place product and then determine who might be interested in purchasing it. The typical pattern in
destination marketing is for national or regional authorities first to decide that they wish to develop
tourism in their areas, and only after that decision to begin thinking on the potential customer/ tourist.
5. The tourism product is frequently a multiple one involving cooperation between several
suppliers.
Tourism is often a combinatory produce which requires the deliberate or non-deliberate collaboration of
several different parties in providing the tourism products. An inclusive package holiday, for example,
involves a partnership between, at minimum, a transport carrier, a tour operator, a accommodation
supplier and a range of destination organization (car rent firms, attractions).
Control over the product is thus dispersed and the shortcoming of one organization may adversely affect
the reputation of others (e.g. poor hotel food or airport delay may bring criticism on a tour operator who
set up a package holiday).
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Hospitality Service Culture

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Chapter Two: Hospitality and Tourism Service 2020

3. Greater involvement of customers in the production process. Because consumers tend to be

2.3 Management Strategies for Services Business

 Managing Quality- deliver consistently higher quality than its competitors.

1. Principal products provided by recreation/tourism businesses are recreational experiences and

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