Marketing in Hospitality

Service Characteristics in Hospitality and Tourism Marketing

• Chapter 2 discusses service characteristics in hospitality and tourism marketing.
• Identifies the relationship between service culture, tourism and hospitality characteristics, and the service-profit chain.
• Focuses on the context of tourism and hospitality service marketing and quality.

The Service Culture

• It focuses on serving and satisfying the customer.
• The creation must start from top management and flow down.

Characteristics of Service Marketing

• Tourism and hospitality is part of this industry.
• Implementation requires a different approach.
• Services cannot be seen, tasted, felt, heard, or smelled before purchase, which is Intangibility.
• Services cannot be separated from their providers, called Inseparability.
• Quality of services depends on who provides them and when, where, and how; Variability.
• Services cannot be stored for later sale or use; Perishability.

Intangibility

• Services are intangible, meaning they cannot be experienced, heard, seen, smelled, tasted, or touched prior to being purchased.
• Marketing intangibles presents difficulties.
• Mismanaged physical evidence can harm any business and be a source of miscommunication.

Perishability

• Unlike manufactured products, services cannot be stored in warehouses.
• Difficulty for hospitality companies lies in managing the capacity or the inventory with an unstable demand pattern.
• The main guarantee is that the price at peak demand times is set to provide the highest return to the company.
• In low season, increasing sales by developing attractive promotions is the aim.

Variability

• Service quality depends on when, where, and by whom they are provided.
• Synchronized production and consumption of services make it tough to maintain uniformity, especially during peak periods.
• Location, time, topography, season, environment, amenities, events, and service providers may trigger this.
• Every service performance is a distinctive event.
• Human interaction cannot be identical.

Service-Profit Chain

• It links service firm profits with employee and customer satisfaction.
• Chain consists of five links:
  • Internal service quality.
  • Satisfied and productive service employees.
  • Greater service values.
  • Satisfied and loyal customers.
  • Healthy service profits and growth.

Three Types of Marketing in Service Industries

• Internal marketing means the service firm must effectively train and motivate customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction.
• External marketing is traditional business marketing showing customers how the services provided benefit them, which includes advertising, websites, and social media efforts.
• Interactive marketing is a service firm recognizing that perceived service quality depends heavily on the quality of the buyer-seller interaction.

Management Strategies for Service Businesses

• Managing Differentiation: A solution to price competition is to develop a differentiated offering.
• Managing Service Quality: Hospitality product quality is measured by how well customer expectations are met.
• Managing Service Productivity: Service firms are under great pressure to increase productivity while containing costs through cross-training employees and harnessing technology.
• Resolving Customer Complaints: Addressing customer complaints is a critical aspect of customer retention.
• Managing Employees as Part of the Product: Human resources and marketing must collaborate closely with training and motivation of customer-contact and support staff as vital internal marketing tasks.
• Managing Perceived Risk: Loyalty increases towards companies providing consistent products due to the high risk perceived when purchasing hospitality products.
• Managing Capacity and Demand: Service must adjust their operating system to enable business to operate at a maximum capacity.
• The ultimate goal is to create satisfied customers.

Delivering Service Quality

• Tourism and hospitality industry quality is defined as the reliable delivery of products and guest services based on anticipated standards.
• Managing tourism organizations has grown more important due to high industry competition, globalization, and fewer obstacles.

Measuring Service Quality

• SERVQUAL Technique compares customer perceptions of quality against customer expectations.
• The SERVQUAL model's five service dimensions:
  • Reliability: Delivering promised quality and service levels consistently and accurately.
  • Assurance: Employees' knowledge, politeness, and ability to create trust and confidence.
  • Tangibles: Organization's physical facilities, websites, equipment, and employee appearance.
  • Empathy: Caring and individualized attention provided by the organization's employees to its customers.
  • Responsiveness: Willingness of employees to help customers and offer speedy service.
• When the five dimensions are constantly satisfied, a company is well-directed to be customer-oriented.
• Tools like Customer Relationship Management (CRM) are used to select customers and continue relationships to grow their lifetime value.
• Touch points where this relationship can be maintained:
  • When potential guests visit a website and share their email.
  • When a reservation is made and personal details are acquired.
  • During in-person service meetings.
  • Through welcome notes, personalized menus, etc.
  • Via background messages with clean facilities and pleasant ambiance.
  • With follow-up newsletters.
  • Via interactions on social media.
• This is measured by, mystery shopping, post service ratings, follow up surveys like google forms and social media monitoring.

The Marketing Environment

• Chapter 2 discusses The Marketing Environment
• It analyzes and evaluates the impact of macro and micro environmental factors on marketing strategies and decision-making within a competitive market context.
• It consists of external forces that directly and indirectly influence an organization's acquisition of inputs and creation of outputs.

Examining and Responding

• Marketing environment consists of external forces that directly and indirectly influence an organization's acquisition of inputs.
• Inputs are materials, human, financial, raw etc.
• Considers creation of outputs (goods, services, or ideas).
• Environmental scanning involves marketers engaging in scanning and analysis to monitor changes in the this,
• Environmental scanning involves observation, secondary sources, business trade, government etc.
• Companies gain an edge over competitors, and gives them an edge.
• Analyzing the environment helps assess the performance of current marketing efforts and develop future strategies. Marketing environment includes the micro and macro environments
• It consists of actors and forces outside marketing that affect a company's ability to build and maintain successful relationships with its target customers.

The Micro Environment

• Involves factors of resource availability and usage that impacts individuals and businesses.
• Six microeconomic business factors affect almost any business:
  • Customers: May be an individual or household.
    • They may purchase a product for use in the production of other products, or to purchase a product for resale at a profit.
• The microenvironment consists of the company, customers, general public, competitions, market intermediaries.
• There are five type of general customer markets; Consumer markets, Business Market, Resellers, Gouvenment Market, International Markets.

Micro Environmental Actors

• Employees produce, sell, or service the goods that drive the business.
• Suppliers provide the resources required.
• Marketing Intermediaries advise, influence, and handles bookings for customers.
• Public can exert considerable influence on a hospitality business.
• The company consists of factors which affects it ability to serve it customers.

The Macro Environment

• General environment within the economy influences working performance, decision making and strategy of all business groups simultaneously.
• Outside forces not under firms control but have a power to impact on functions.
• Environmental factors affect hospitality an tourism.

Macro Environmental Actors

• Political made up of laws, government agencies and pressure groups
• Government regulations affect many industries by tariffs quotas for export and imports.
• Legal aims protecting customer, from unfair practices, or low quality practices
• An economic enviroment could have wage inflation, price inflation,
• Cross domestic product per capita is a economic element to customer purchasing power.
• Factors inclue exchange rate of tourism.
• Natural enviroment consists of marketing activities and nature to be responsible for protecting the environmental.
• Technology involves hospitality computerized and internet.
• Cutural enviroment includies instution and other influences that affect our society basic values,
• Demographics are human population data, location, race, occupation, gender.

New Competitors

• Difficult to predict, but has a huge effect on business.
• Requires need to be ahead of the game
• New businesses must provide needs every tourist.

Competitors

• Strong affecting for competition, and strategies within industry
• Several factors contibue including the no. of competitors and industry growth.
• Barriers to entry are difficult to costly that companies leave the industry.
• If the supplier provides a unique product or service it isn't easy to switch to.
• A buyer is the more more power.
• There are two aspets, adaptong technology and changing customer profiles.
• Economies ofscale, access to distribution etc
• The number of suppliers, uniqueness.

The Company's Macroenvironment

• Demogrpahy, The global economy, Natural, Technology Political envirmont and culture.
• It includes the population studies, size and gender.
• Is not enought to have people, you must have buying power.

Evaluate your knowledge of marketing in the hospitality industry. Questions cover environmental analysis, customer markets, internal marketing, and differentiation strategies. Explore the roles of HR and marketing in service businesses.