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It also refers to all activity related to the short-term movement of people to locations away from where they usually reside.
It primarily involves addressing customer satisfaction and catering the needs of guests.
Sectors under Tourism
Sectors under Hospitality
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A thing
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An activity
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it is used
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it is experienced
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ownership is transferred
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ownership is not transferred
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Value is transferred
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value is co-created
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Standardized and easily repeatable
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personalized and more difficult to repeat
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any activity of benefit that one part can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.”
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an act of courtesy not only providing what the customer want but giving them beyond their expectations.
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WHO SAID : “A service is any activity of benefit that one part can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.”
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Although most of the time service providers are only limited with the provision of basic services and products, they must be mindful of what everything the customer needs.
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Service providers must be attentive to address everything that the customer needs including the less obvious needs such as showing empathy when talking and listening to them because if the service provider does not meet the customer expectation/satisfaction level, they will look for other competitive products/services.
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Concept of Service (6)
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Concept of Service
it is the most basic of all customer needs. It is usually associated with being greeted politely and with courtesy.
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Concept of Service
One of the basic needs which customers are looking for.
The service provider should put oneself in the customer’s shoes and act to fulfill their need.
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Concept of Service
The need to be treated fairly is high up on most customer’s list of needs.
There should be no bias in the provision of service given to a customer.
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Concept of Service
Control represents the customer’s need to feel as if they have an impact on the way things turn out.
This brings confidence in the customer’s mind.
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Concept of Service
Customers need to feel that other avenues to getting what they want are available.
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Concept of Service
Customers needs to be educated and informed about the products, policies, and procedures they encounter when dealing with your company.
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Characteristics of Service Marketing (4)
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Characteristics of Service Marketing--- Services cannot be seen, tasted, felt, heard, or smelled before purchase
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Characteristics of Service Marketing--- Services cannot be separated from their providers
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Characteristics of Service Marketing--- Quality or services depends on who provides them and when, where, and how
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Characteristics of Service Marketing--- Services cannot be stored for later sale or use
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Characteristics of Service Marketing--- Buyers look for tangible evidence that will provide information and confidence about the service.
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Characteristics of Service Marketing --- Customer-contact employees are part of the product and must understand the service-delivery system.
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Characteristics of Service Marketing --- Product consistency depends on the provider’s skills and performance at the time of the exchange.
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Characteristics of Service Marketing --- If service providers are to maximize revenue, they must manage capacity/demand coz they can’t forward unsold inventory.
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How to reduce variability and create consistency?
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Who coined McDonalization of Society (1993)
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what year did McDonalization coined?
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a phenomenon that occurs when society, its institutions, and its organizations are adapted to have the same characteristics that are found in fast-food chains.
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These include efficiency, calculability, predictability and standardization, and control.
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Service Management Concepts
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Five Links on Service-Profit Chain
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Service-Profit Chain --- superior employee selection and training, quality work environment, strong support for those dealing with customers;
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Service-Profit Chain --- more satisfied, loyal, and hard-working employees;
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Service-Profit Chain --- more effective and efficient customer value creation and service-delivery
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Service-Profit Chain --- satisfied customer remain loyal, repeat purchases, and refer other customers;
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Service-Profit Chain--- superior service firm performance
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Three Types of Marketing in Service Industries
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The transaction is between the marketer and the customer wherein external marketing represents the promises which the organization makes to its customers with regard to the products and services they offer.
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Marketing is an interaction between the buyer and the seller at a particular point of time (point of encounter).
In a customer-oriented market as the customer directs the market it is very important to know what are the preferences, likes and dislikes, to provide the right kind of products and services.
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Internal marketing is the promotion of a company's objectives, products and services to employees within the organization. The purpose is to increase employee engagement with the company's goals and foster brand advocacy.
Employees who are enthusiastic about their company and its offerings are likely to share that enthusiasm with their social networks. As a result, internal marketing can be an effective part of external branding and marketing efforts.
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Types of Marketing in Service Industries --- company to customers
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Types of Marketing in Service Industries --- company to employees
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Types of Marketing in Service Industries --- Employees to Customers
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Management Strategies for Service Businesses
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Management Strategies for Service Businesses--- 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;
Differentiation through branding
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Management Strategies for Service Businesses ---Quality is measured by how well customer expectations are met;
Exceed customers’ service-quality expectations
Expectations based on past experiences, word-of-mouth, and service firm advertising
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Management Strategies for Service Businesses --- Train current employees better or hire new ones who will work harder or more skillfully.
They can increase the quantity of their service by giving up some quality – adding the equipment and standardizing production (McDonalds assembly-line approach; industrialize the service)
Harness the power of technology – power to save time and costs, also potential to make service workers more productive.
But, mindful and careful not to take the “service” out of service.
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Management Strategies for Service Businesses --- Resolving customer complaints is a critical component of customer retention -- good service recovery can turn angry customers into loyal ones.
To have an effective complaint resolution, managers must empower frontline service employees – authority, responsibility, and incentives that they need to recognize, care about, and tend to customer needs.
When a customer complain, management should be grateful because it gives them change to resolve and gain customer’s repeat business.
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Management Strategies for Service Businesses --- Employees are critical part of the product and marketing mix.
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
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any point at which the employee encounters the customer
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Management Strategies for Service Businesses --- Customer in hospitality/tourism industry experience anxiety due to inability to experience the product beforehand
Familiarization trips encourage clients to experience the enterprise in a low- risk situation
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.
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Management Strategies for Service Businesses --- Managers have two major options for matching capacity with demand: Change capacity or change demand
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responsible for matching capacity with demand on a long-term basis; unit managers are responsible for matching capacity with fluctuations in short-term demand.
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Capacity Management Techniques
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allow the customer to serve as the company’s employees. The adoption of SSTs that increase customer satisfaction represents one of the biggest opportunities for the travel and hospitality industry.
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Capacity Management Techniques --- getting the customer involved in service operations expands the number of people that one employee can serve, thus increasing the capacity of the operation.
Self-serving technologies (SSTs) allow the customer to serve as the company’s employees. The adoption of SSTs that increase customer satisfaction represents one of the biggest opportunities for the travel and hospitality industry.
Example: Self-service soft drink dispenser.
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Capacity Management Techniques --- when managers cross-train their employees, they can shift employees to increase the capacity.
However, such low staffing levels mean that the restaurant may have a difficult time serving especially if they arrive at about the same time.
Having front-desk staff and banquet staff trained in a la carte service means the restaurant manager has a group of employees that can be called on if demand for the restaurant on any particular night exceeds the capacity of two service people.
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Capacity Management Techniques --- it is use to expand capacity during an unusually busy day or meal period or during the busy months of the year for seasonal business.
They reduced their staff during the slower seasons and either reduce staff further or close during the low season.
They can also be called on an on-call basis.
Part-time employees give an organization the flexibility to adjust the number of employees to the level required to meet demand.
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Capacity Management Techniques --- business do not have to be constrained by space limitations or equipment limitations.
During a three-day meeting in a hotel, hotel management may offer outside experiences (outside dinner or dinner cruise) because function hall is booked on the second night.
Catering firms often purchase only the amount of equipment they use regularly. For busy period, they rent equipment.
Renting, sharing, moving groups to outside facilities can increase capacity to accommodate short-term demands.
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Capacity Management Techniques --- Businesses in seasonal resorts have periods of high and low demand.
The actions we have discussed so far enable a business to increase capacity to meet peak demand.
One way to decrease capacity to match the lower demand is to schedule repairs and maintenance during the low season.
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Capacity Management Techniques --- To take advantage of the peak season, restaurant managers must accomplish two things: a) they must adjust their operating systems to enable the business to operate at maximum capacity; b) they must remember that their goal is to create satisfied customers.
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Capacity Management Techniques --- Change of service: Attractive buffet – festive atmosphere, impression of variety/value, and expedite food preparation.
Restaurant and entertainment facilities can increase capacity by extending their hours and expanding their hours of operations.
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Managers have two major options for matching capacity with demand: Change capacity or change demand
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a planning methodology used to forecast, plan for and manage the demand for products and services.
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Demand Management Techniques
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Demand Management Techniques --- pricing is one method used to manage demand.
Special discounts after 5:00pm and lower prices during off-season and offer weekend specials;
During peak seasons, prices offered exceed the normal average – even with higher prices, demands remain sufficient to fill the capacity.
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Demand Management Techniques --- this is used to monitor demand. When it appears, they will have more demand than capacity, managers can save capacity for the more profitable segments.
Reservations can also limit demand by allowing managers to refuse any further reservations when capacity meets demand.
To maximize capacity, restaurants accept reservations for seating at designated times.
In cases where demand is greater than capacity, guests can asked to prepay or make a (non-refundable) deposit.
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Demand Management Techniques --- occurs when a customers book more rooms than the actual number available in a hotel. The hotel allows this to happen, anticipating that some will cancel.
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Demand Management Techniques --- pricing method using price as a means of matching demand with capacity.
With the help of computer programs, managers are using price, reservation history, and overbooking practices to develop a sophisticated approach to demand management.
It involves the use of performance data and analytics, which serve to help hotel owners to more accurately predict demand and other consumer behaviours. This, in turn, allows them to make more sensible decisions regarding pricing and distribution, in order to maximise revenue and, therefore, profit.
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Demand Management Techniques --- when capacity exceeds demand and guests are willing to wait, and sometimes guests make the decision to wait or they have no other choice, queues form.
Good Management of the queue can make the wait more tolerable for the guest. Always overestimate the wait.
In general, the higher the level of service, the longer the guest is willing to wait.
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Demand Management Techniques --- If the date is flexible, the manager shifts the date to a period when the hotel is not projected to sell out and needs the business.
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Demand Management Techniques --- during slow periods, creative promotions can be an effective way of building business.
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David Maister, a service expert, provides the following tips for the management of a waiting line:
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