1. Chapter 2 Service Characteristics of Hospitality and Tourism Marketing

2. “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
©2006 Pearson Education, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

3. 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 Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

4. 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 Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

6. Management Strategies for 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 Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

7. 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
©2006 Pearson Education, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

9. 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
©2006 Pearson Education, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

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

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

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

14. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

16. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

17. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

18. Managing Capacity and Demand
Due to perishability, 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

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

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

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

23. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

24. 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 Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

25. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

27. 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, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

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

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

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