Chapter 2

Service
Characteristics of
Hospitality and
Tourism Marketing
“Managers do not control the quality of the product 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 produce and deliver it”

- Karl Albrecht
The Service Culture
• The service culture focuses on serving and satisfying the customer
• Creation of service culture must start from top management and
flow down.
Characteristics of Service Marketing
Service-Profit Chain
Service Profit Chain – which link service firm profits with employee
and customer satisfaction. It consists of five links:

1. Internal Service Quality

2. Satisfied and productive service employees
3. Greater service values
4. Satisfied and loyal customers
5. Healthy service profits and growth
Three Types of Marketing in Service Industries
Internal Marketing
• Means that the service firm
must effectively train and
motivate its customer contact
employees and all the
supporting service people to
work as a team provide
customer satisfaction.
External Marketing
• This is the traditional form
of business marketing,
showing customers how the
services provided by your
business benefit them.
External marketing includes
advertising, your website
and your company's social
media efforts.
Interactive Marketing
• Service firm that recognizes
perceived service quality
depends heavily on the quality
of the buyer-seller interaction.
 Management
Strategies for Service
Businesses
Management Strategies for Service Business
A. Managing Differentiation

• Solution to price competition is to

develop a differentiated offering.
The offer can include innovative
features that set one company’s
offer apart from that of its
competitors.
Management Strategies for Service Business
B. Managing Service Quality

• With hospitality products, quality is

measured by how well customers
expectations are met.
Management Strategies for Service Business
C. Manage Service Productivity

• Service firms are under great

pressure to increase service
productivity
• How can you increase productivity
with lesser cost?
• Cross-Train current .employees
• Harness the power of technology
Management Strategies for Service Business
D. Resolving Customer Complaints

• Resolving customer complaints is a

critical component of customer
retention.
Management Strategies for Service Business
E. Managing Employees as Part of the
Product

• The human resource and marketing

department must work closely
together.
• The task of internal marketing to
employees involves the effective
training and motivation of
customer-contact employees and
supporting service personnel
Management Strategies for Service Business
F. 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,
Management Strategies for Service Business
G. Managing Capacity and Demand

• First Service must adjust their

operating system to enable
business to operate at a maximum
capacity
• Second their must remember that
their goal is to create satisfied
customers.