Chapter 2 Service Characteristics of Hospitality and Tourism Marketing

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

³Managers 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 µproduce¶ and deliver it.´ -Karl Albrecht

©2006 Pearson Education, Inc. Upper Saddle River, NJ 07458

Marketing for Hospitality and edition Marketing for Hospitality and Tourism, 4thTourism, 4th edition Kotler, Bowen, and Makens Kotler, Bowen, and Makens

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

and Makens . 4th edition Marketing for Hospitality and edition Kotler. Bowen. Upper Saddle River. Bowen. NJ 07458 Marketing for Hospitality and Tourism. and Makens Kotler. Inc. 4thTourism.The Service Culture ‡ The service culture focuses on serving and satisfying the customer ‡ Empowers employees to solve customer problems ‡ Majority of many countries¶ GDP is service based ©2006 Pearson Education.

Inc. and Makens Kotler. and Makens . Bowen. 4thTourism.Characteristics of Service Marketing ©2006 Pearson Education. 4th edition Marketing for Hospitality and edition Kotler. Upper Saddle River. Bowen. NJ 07458 Marketing for Hospitality and Tourism.

4thTourism. Inc. 4th edition Marketing for Hospitality and edition Kotler. Bowen. and Makens . Upper Saddle River. Bowen. NJ 07458 Marketing for Hospitality and Tourism.Management Strategies for Service Businesses ‡ Service companies must increase their competitive differentiation. service quality. and Makens Kotler. and productivity ± Increase in competition and costs ± Decrease in productivity and quality ©2006 Pearson Education.

NJ 07458 . Bowen. and Makens Kotler.Service-Profit Chain Five Links: ‡ Healthy service profits and growth ‡ ‡ ‡ ‡ Satisfied and loyal customers Greater service values Satisfied and productive service employees Internal service quality Marketing for Hospitality and Tourism. Bowen. Inc. 4th edition Marketing for Hospitality and edition Kotler. and Makens ©2006 Pearson Education. Upper Saddle River. 4thTourism.

4thTourism. 4th edition Marketing for Hospitality and edition Kotler. Bowen.Three Types of Marketing in Service Industries ©2006 Pearson Education. Upper Saddle River. and Makens . Bowen. NJ 07458 Marketing for Hospitality and Tourism. Inc. and Makens Kotler.

4thTourism. Upper Saddle River. NJ 07458 . Bowen. 4th edition Marketing for Hospitality and edition Kotler. and Makens ‡ ©2006 Pearson Education.Internal and Interactive Marketing ‡ Internal marketing means the service firm must effectively train and motivate customer contact employees Interactive marketing means the perceived service quality depends heavily upon the buyer-seller interaction during the service encounter Marketing for Hospitality and Tourism. and Makens Kotler. Bowen. Inc.

4thTourism. physical environment. and Makens Kotler. Bowen. and processes ‡ Differentiation through branding ©2006 Pearson Education. NJ 07458 Marketing for Hospitality and Tourism. Upper Saddle River. and Makens .Managing Differentiation ‡ Solution to price competition ‡ Differentiation through people. Bowen. 4th edition Marketing for Hospitality and edition Kotler. Inc.

and service firm advertising ©2006 Pearson Education. Bowen. Bowen. word-of-mouth. Upper Saddle River. and Makens Kotler. Inc. 4thTourism. 4th edition Marketing for Hospitality and edition Kotler.Managing Service Quality ‡ Exceed customers¶ service-quality expectations ‡ Expectations based on past experiences. NJ 07458 Marketing for Hospitality and Tourism. and Makens .

Bowen. and Makens Kotler. High service quality standards set 4. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. Monitor performance closely ©2006 Pearson Education. History of top management commitment to quality 3. Upper Saddle River. 4thTourism.Common Virtues Regarding Service Quality 1. Inc. 4th edition Kotler. ³Customer obsessed´ 2. Bowen. and Makens .

and Makens . Inc. and Makens Kotler. NJ 07458 Marketing for Hospitality and Tourism. Upper Saddle River. 4thTourism. 4th edition Marketing for Hospitality and edition Kotler.Tangibilizing the Product ‡ Providing ³evidence´ of the service ± Promotional Material ± Physical Environment ± Employee appearance ± Why is Trade Dress Protection important? ©2006 Pearson Education. Bowen. Bowen.

and Makens Kotler. Upper Saddle River. Bowen. NJ 07458 Marketing for Hospitality and Tourism.Managing the Physical Surroundings ‡ Improperly managed physical evidence can hurt a business ‡ Surroundings should reinforce company positioning in customer¶s mind ‡ Organizational Image is how customers perceive your organization ©2006 Pearson Education. Bowen. Inc. and Makens . 4thTourism. 4th edition Marketing for Hospitality and edition Kotler.

and Makens Kotler. and Makens . negotiate a rate with a hotel and pay for only what you use ©2006 Pearson Education. 4thTourism. Inc. Bowen. Upper Saddle River. 4th edition Marketing for Hospitality and edition Kotler. NJ 07458 Marketing for Hospitality and Tourism.Stress Advantages of Nonownership ‡ The customer does not have ownership of service product ‡ Stress as a benefit ± Rather than own and staff corporate lodging. Bowen.

Upper Saddle River. NJ 07458 Marketing for Hospitality and Tourism. Bowen. 4thTourism. and Makens .Managing Employees as Part of the Product ‡ Employees are critical ‡ Training and motivating employees to provide good customer service is internal marketing ‡ A point-of-encounter is any point at which the employee encounters the customer ©2006 Pearson Education. and Makens Kotler. 4th edition Marketing for Hospitality and edition Kotler. Bowen. Inc.

4thTourism. Bowen. and Makens . Upper Saddle River. Bowen. 4th edition Kotler. Inc. and Makens Kotler. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism.Managing Perceived Risk ‡ Alleviate customer anxiety due to inability to experience the product beforehand ‡ Familiarization trips encourage clients to experience the enterprise in a low-risk situation ©2006 Pearson Education.

4th edition Marketing for Hospitality and edition Kotler. and Makens . 4thTourism. Inc. Bowen. NJ 07458 Marketing for Hospitality and Tourism. and Makens Kotler. Bowen. Upper Saddle River. managers must maximize service capacity and quality during times of high and low demand ‡ Customer complaints increase when service firms operate above 80% capacity ©2006 Pearson Education.Managing Capacity and Demand ‡ Due to perishability.

NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. and Makens Kotler. and Makens . 4th edition Kotler. Bowen. 4thTourism.Managing Consistency ‡ No surprises! ‡ Not only should services be provided correctly. Inc. but they should be done the same way every time ‡ Beware fluctuating demand and unintentional company policies that may affect consistency ©2006 Pearson Education. Upper Saddle River. Bowen.

Upper Saddle River. 4th edition Kotler. and Makens Kotler. Inc. 4thTourism. and Makens . NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. Bowen. lasting relationships with customers ©2006 Pearson Education. Bowen.Managing the Customer Relationship ± CRM ‡ Combines marketing. business strategy and information technology to better understand the customers ‡ Develop unique.

Upper Saddle River. Inc.Service Failure ‡ Problems will inevitably occur ‡ Keep the customer informed ‡ Provide service recovery options ©2006 Pearson Education. Bowen. 4thTourism. 4th edition Kotler. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. and Makens . and Makens Kotler. Bowen.

and Makens . 4th edition Kotler. 4thTourism. Bowen. Upper Saddle River.Overview of Service Characteristics: The Servuction Model ©2006 Pearson Education. and Makens Kotler. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. Bowen. Inc.

Inc. Bowen. 4thTourism.Interaction Between Customer A and Customer B ‡ Contact between customers can be positive or negative ‡ In some cases interaction between customers can be managed ‡ Customers can significantly impact all around them ©2006 Pearson Education. and Makens . Upper Saddle River. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. Bowen. and Makens Kotler. 4th edition Kotler.

NJ 07458 Marketing for Hospitality and Tourism. Bowen. and Makens Kotler. Upper Saddle River. Bowen. and Makens .Contact Personnel ‡ Contact personnel have a direct impact on the satisfaction of customers ‡ Characteristic of inseparability of customer and employee during service delivery system ©2006 Pearson Education. Inc. 4th edition Marketing for Hospitality and edition Kotler. 4thTourism.

Bowen. 4th edition Kotler. Upper Saddle River. NJ 07458 Marketing for Hospitality and edition Marketing for Hospitality and Tourism. 4thTourism. and Makens . Bowen.The Invisible Organization and System A service organization management must decide what they want the guest to see and what they want to keep out of the guest¶s vision ©2006 Pearson Education. and Makens Kotler. Inc.

and Makens Kotler. and Makens . Bowen. vision. Bowen. 4thTourism. and mission ©2006 Pearson Education. philosophy. NJ 07458 Marketing for Hospitality and Tourism. 4th edition Marketing for Hospitality and edition Kotler. Upper Saddle River. Inc.Best Practices ‡ Ritz-Carlton Leadership Center offers innovative ways to: ± Increase employee retention and loyalty ± Increase customer retention and loyalty ± Achieve service excellence in your industry ± Effectively drive your organization¶s culture.

NJ 07458 Marketing for Hospitality and Tourism. 4thTourism. and Makens . and Makens Kotler.Best Practices ‡ Why are these hospitality and tourism organizations service leaders? ± Chipotle Restaurants ± Marriott Hotel and Vacation Club ± Ting Tai Fung ± Club Med ± Disney ± Aramark ± British Airways ©2006 Pearson Education. Upper Saddle River. Bowen. 4th edition Marketing for Hospitality and edition Kotler. Inc. Bowen.

NJ 07458 Marketing for Hospitality and Tourism. and Makens . and Makens Kotler. 4thTourism. Inc.Key Terms ‡ Interactive marketing ‡ Internal marketing ‡ Organization image ‡ Physical evidence ©2006 Pearson Education. 4th edition Marketing for Hospitality and edition Kotler. Bowen. Upper Saddle River. Bowen.

Bowen. 4thTourism. Upper Saddle River. Inc. and Makens Kotler. NJ 07458 Marketing for Hospitality and Tourism. and Makens . Bowen.Key Terms ‡ Point-of-encounter ‡ Service culture ‡ Service intangibility ‡ Service inseparability ©2006 Pearson Education. 4th edition Marketing for Hospitality and edition Kotler.

Key Terms ‡ Service perishability ‡ Service-profit chain ‡ Service variability ‡ Trade dress ©2006 Pearson Education. and Makens Kotler. Upper Saddle River. 4th edition Marketing for Hospitality and edition Kotler. Inc. 4thTourism. NJ 07458 Marketing for Hospitality and Tourism. and Makens . Bowen. Bowen.

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