Chapter Two Marketing Services

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 2 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods Intangibility The attributes of services that cannot be grasped by any of the five senses Aspects of a service that are difficult to grasp prior to purchase Purchase is based on consumer expectations

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 3 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods Tangibility Spectrum Tangible Dominant Intangible Dominant Salt Soft Drinks Detergents Automobiles Cosmetics Advertising Agencies Airlines Investment Management Consulting Teaching Fast-food Outlets Fast-food Outlets

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 4 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 5 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 6 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods Perishablility If not sold by a particular time, the opportunity to sell it again is gone forever Complicated by fixed capacity Unique to the hospitality industry

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 7 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods Heterogeneity Delivery of services is inconsistent due to employee variance and varying needs of customers “Moment of truth” when the service product meets service delivery and consistency is key Customers are also varied and have different wants and needs The use of self-service technologies in an attempt to standardize service

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 8 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods Simultaneous production and consumption Services are consumed at the same time they are purchased Thus management is marketing in the hospitality industry Always the possibility of a new experience with each purchase

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 9 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Services Versus Goods The Hospitality Product The combination of goods, services, environment and experience that the consumer buys Differences between services and manufactured goods

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 10 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw The Hospitality Product Defines how the service should theoretically work “Plan your work”

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 11 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw The Hospitality Product Exhibit 2-9; The Hospitality Product model

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 12 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw The Hospitality Product Physical product The tangible component of service Service environment The physical environment in which the service is delivered Surrounding area Layout Signs and symbols Service Product The core performance or service purchased by the patron Service delivery What happens when the customer actually consumes the service

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 13 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw The Hospitality Product

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 14 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Service Quality and Service Gaps Premise: The customer’s evaluation of a service purchase (e.g., their satisfaction) is determined by how well the purchase experience compares to their expectations of the purchase experience Zone of tolerance is the range where customers are still satisfied Can use the SERVQUAL model

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 15 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Service Quality and Service Gaps Evaluations of services are based on expectations because the characteristics of services: intangibility, heterogeneity, and simultaneous production and consumption make it almost impossible for consumers to evaluate services in the same way they evaluate goods: that is, before they buy the product

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 16 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Gap Model of Service Quality Performance > Expectation Performance = Expectation Performance < Expectation 

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 17 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Possible Levels of Customer Expectations

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 18 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Service Quality and Service Gaps Gap 1 Gap between services expected by the customer and management’s perceptions of customers’ expectations Gap 2 Gap between management’s perceptions of customer expectations and service quality specifications Gap 3 Gap between service quality specifications and service delivery Gap 4 Gap between the service delivered and the service promised Gap 5 Gap between the perceived service and the actual service

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 19 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Service Quality and Service Gaps Exhibit 2-10; The SERVQUAL Model

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 20 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Service Quality and Service Gaps Dimensions of service quality The key is to incorporate the words into the service experience to remind the customer that they are receiving great service The acronym R.A.T.E.R. Reliability Assurance Tangibility Empathy Responsiveness

© 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 21 Marketing Essentials in Hospitality and Tourism: Foundations and Practices by Shoemaker & Shaw Class Discussion Spend 10 minutes designing a room service script for employees that uses each part of the RATER System