THC 6 Tourism and Hospitality Marketing PDF

 Chapter 2 HOSPITALITY SERVICE MARKETING Objectives: At the end of the chapter, the student should be able to: ⚫ Explain the meaning of service marketing; ⚫ Enumerate and describe the concept of service; ⚫ Know t...

 Chapter 2 HOSPITALITY SERVICE MARKETING Objectives: At the end of the chapter, the student should be able to: ⚫ Explain the meaning of service marketing; ⚫ Enumerate and describe the concept of service; ⚫ Know the differences of goods to services; ⚫ Define hospitality marketing and its importance and; ⚫ Know the importance of marketing in the hospitality industry 2.1 The Concept of Service Service is an act of courtesy not only providing what the customers want but giving them beyond their expectations. 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. Service providers must be attentive to address everything that the customer needs including their less obvious needs such as showing empathy when talking and listening to them because if the service provider does not meet the customer's expectations and satisfaction level, they will look for other competitive products or services. Service providers must be attentive to address everything that the customer needs including their less obvious needs such as showing empathy when talking and listening to them because if the service provider does not meet the customer’s expectations and satisfaction level, they will look for other competitive products or services. 1. Friendliness It is the most basic of all customer needs. It is usually associated with being greeted politely and with courtesy. 2. Understanding and Empathy Empathy is one of the basic needs which customers are looking for. The service provider should put oneself in the customers’ shoes and act to fulfill their need. 3. Fairness The need to be treated fairly is high up on most customer’s list of needs. There should not be bias in the provision of service given to a customer.  4. Control 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. 5. Options and Alternatives Customers need to feel that other avenues to getting what they want are available 6. Information Customers need to be educated and informed about the products, policies, and procedures they encounter when dealing with your company. Growth of Service Sector The following can be noted as some of the implications of such changes in the service operations: 1. Growing demand for many services; 2. Greater competition 3. Innovation through the application of new and improved technologies; 4. Evolution of customer needs and behavior; and 5. Introduction of better marketing strategies. Reasons for the Growth of Service Sector 1. Higher percentage of working women 2. Greater complexity of new products 3. Greater life expectancy 4. Increasing complexity of life 5. Greater concern for ecology 2.2 Services Marketing Service is concerned with creating brand awareness and inducing trial before sale. It also aims at demonstrating benefits and building brand awareness most effectively after the sale. It is the process of researching and promoting nonphysical goods known as services. Functional Difference Between Goods and Services GOODS SERVICES Can be precisely defined Defined generally, not precisely. Can be measured objectively. Can be measured subjectively. Are manufactured. Are delivered. Production and distribution are two Production and distribution happen separate functions. at the same time. Cost-based pricing Limited cost-based pricing.  Months to years of time interval Consumption is simultaneous or between production and shortly after production. consumption. Consistent delivery in case of Variable delivery of service. goods. Zero shelf life – Immediate Days to years of shelf life. Distribution Customer perception about goods Customers have to consume a is standardized. service to evaluate it. Hospitality Marketing Hospitality marketing is centered on thinking about business in terms of customer needs and satisfaction. hospitality marketing takes a look at how different sectors of the hospitality industry (e.g., accommodations, restaurants, travel, and tourism) develop marketing strategies to promote their products or services, resulting in an increase in revenue (REVFINE 2022). 2.3 Hospitality Marketing Orientation 1. Supplier Provider Orientation 2. Sales Orientation 3. Promotional Orientation 4. Marketing Orientation 1. Supplier Provider Orientation – In a situation where the market demand is higher or there is a scarcity of resources, particularly in the lodging sector, the provider orientation is a better option. In the provider orientation approach, the hospitality industry focuses on internal operations, activities and procedures, and guests are expected to adjust to the hospitality offerings instead of the offerings being adjusted to the guests. 2. Sales Orientation - This orientation or philosophy believes in cut- throat competition and concentrates on forceful sales through competitive pricing. Here, the service provider does not bother about the profits. This concepts also has the limitation of standardization of products and services. 3. Promotional Orientation - This orientation has given importance to the promotional activities. Here, the service provider feels that forceful selling does not work unless promotional activities like advertising, personal selling, sales promotion, public relations, etc. 4. Marketing Orientation - The marketing orientation or the customer orientation focusses on the needs and wants of the guests in hospitality services. Here before the services are provided to the guests, proper survey is conducted to collect information regarding the preferences and tastes. 2.4 Importance of Hospitality Marketing Hospitality marketing encompasses a wide range of activities related to travel. The hospitality industry is a service-oriented business providing food and accommodation to travelers. The hospitality business is gaining its momentum as it is increasingly becoming important to the economic well-being of the society. The development in the field of hospitality business ushers changes in technology, socioeconomic environment, life styles, and rising guest expectations. Characteristics of Service Marketing Services have a number of unique characteristics that make them different from product. Some of the most commonly accepted characteristics are: 1. Intangibility a. Can't be seen, tasted, felt, heard, or smell before purchase.  b. Teaching is an intangible service. The following intangible characteristics of service, which make them distinct from products: a. A service cannot be touched. b. Precise standardization is not possible. c. There is no ownership transfer. d. A service cannot be patented. e. Production and consumption are inseparable. f. There are no inventories of the service. 2. Inseparability a. Can't be separated from service providers b. Example: Visiting a restaurant, when you order your meal, the waiting and delivery of the meal, the service provided by the waiter, etc., are all a part of the service production process and so inseparable; the staff in a restaurant is a part of the process as well as the quality of food provided. 3. Heterogeneity a. This refers to the multifaceted different experience that may be had goods from services. from a single type of service. It is considered as a factor to distinguish. b. Focuses on making a company's service being attractive and unique in comparison to those of its competitors. c. For example, the unique ideas of Manila Sheraton Hotel, the hotel introduced bubble pods last December, claiming it as first in the Philippines. The idea is pretty much self-explanatory, you can eat lunch or dinner inside an area protected by a plastic bubble. 4. Perishability a. This is not a stack a fixed assets and it is not possible to store services in inventories. b. Can't be stored for later sale or use. 5. Ownership a. Ownership remains with the service provider. b. In case of purchase of a product, the customer becomes the owner of the product, but in case of a service there is no ownership or title passes from the service provider to the customer. Types of Marketing in Service Industries 1. External Marketing a. The transaction between the marketer and the customer b. External marketing represents the promises which the organization makes to its customers with regard to the products and services they offer. c. Organizations promise to its customers the various offerings and how they deliver it. These communications affect the expectations of the customers to a larger extent. Promises are made through various forms of promotional tools such as advertisements. 2. Interactive Marketing a. Marketing is an interaction between the buyer and the seller at particular point of time. 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 product or services. 3. Internal Marketing  a. Internal marketing is a very significant aspect of service marketing. The marketing process that enables the marketer to deliver promises to the customer is called internal marketing. b. The service firm must select the right man for the right job and develop them as customer-oriented employees. c. Internal marketing extremely important for the success of any business, where the employers have to effectively sell internal product (job) to the internal customer (employees). 2.5 Strategies to Manage Hospitality Service Businesses 1. Managing the employees is a significant aspect of the service delivery. 2. Training and motivating employees to provide good customer service is internal. Marketing point of encounter is any point at which the employee encounters the customer. 3. Familiarization trips encourage clients to experience the enterprise in a low risk situation. Whenever there are new or fresh customer in case of a service. He or she should be familiarized and educated about the use of some of the tools or equipment while service is being provided. 4. The services provided by the organization should be more or less consistent Theatre, as most of the services be provided correctly but they should be delivered in the same way every time. 5. Total Quality Management system should be used to ensure consistent services. Managing Customer Expectations and Perceptions of Hospitality Services One should understand that it is highly difficult for any company or service firm to meet all expectations of all customers. Expectations of every customer are changing and increasing. A firm should look to the determinants of expectations and check the firm's capabilities. Hence, the service provider should set an optimum level of service expectation for its customer as very high expectation can lead to a highly dissatisfied customer. Hotel Customer and Principal Expectations Type of Service Type of Customer Principal Expectations Hotel Guest Provide clean room. Provide secure room. Treat me like a guest. Every hospitality marketer should start looking at the market point of view of the customer. Here, he has to look at the problems or needs which the guest is trying to solve or fulfil. Hospitality marketing should, first and foremost, try to solve customer's problems. 2.6 Hospitality Service Encounter Hospitality Service Encounter Hospitality service encounter is referred to as interaction between the hospitality service provider and guests. The success or failure of such an encounter depends on factors like attitudes, skills, expectations, desires, and personalities. The guests come with a whole lot of expectations about the quality of service and the service provider brings human resource, training, and other resources along with management expectations. At the time of checking into a hotel, the following service encounters might take place: 1. Arrival of guest at the entrance: The guest encounters difficulty in finding the hotel as there is no sign board on the main road, no parking space, etc. 2. Greeting: No one greets the guest at the entrance and he/she finds it difficult to get a seat.  3. Reception: The front office personnel is helpful and welcoming and gives a briefing about the hotel and room. 4. Luggage handling: No bellboys are present to unload the luggage or they are very slow in moving luggage after unloading to the room. 5. Trip to room: The bellboy gives a brief description about the hotel and the guest has to carry the luggage up a flight of stairs and along a passage. 6. Entry into the room: The guest finds the room well prepared and pleasant, and the bellboy explains about the operational control system in the room. The service provider must identify the critical components of each of the encounter. The Six S's of Service Encounter The hospitality provider must ask question on: 1. Specification-Describing what, when, where, and how service is provided. 2. Staff - Who the service staff are, what skills the staff have, what training they have undergone, how committed the service personnel, etc. 3. Space - Where the service happens, appropriateness of the space for service, adequacy of the space etc. 4. Systems - Information adequacy, coordination between various departments. 5. Support - What kind of financial, human, and other support-reward systems, technology, employee training, supervision, etc. 6. Style - Attitude, emphasis on quality by the service provider. 2.7 Determinants of Service Quality 1. Reliability A hospitality customer looks for consistency in performance and dependability. The service provider should try to keep the promises made from the very beginning. 2. Responsiveness This is another factor which influences the customer expectation. The service provider should have willing and ready employees to provide service. Promptness in service is a crucial factor which influences the customer perception. 3. Competence The employees should possess the required skills and knowledge to perform the service. 4. Access Easy accessibility and approacahblity of the contact personnel is another significant factor which influences the customer expectation. It means the service is easily accessible by telephone, lines are not buy and the customer is not put on hold. 5. Courtesy The service contact personnel should ne polite, respectful, considerate, and friendly. 6. Communication An open system of communication is very important in hospitality services. The service provider should inform the customer using the language they understand and listen to the customers actively. 7. Credibility Trustworthiness, credibility, and honesty of the service personnel are other factors which the hospitality customer looks from hospitality encounter. The service provider should keep in mind the interests of the customer and the company reputation while delivering the service. 8. Security Every hospitality customer is concerned is concerned about physical safety, financial security, and confidentiality. The service provider should make sure that the customer is made comfortable during their stay. 9. Understanding – Knowing the The hospitality service provider should Customer be shrewd salesman making all the efforts to understand the customer’s needs so that he can deliver personalized services as per the specific requirements of the guesrts.  10. Tangibles Since most of the hospitality products and services are intangible in nature, service provider should include necessary physical evidence of the service to make it more tangible in nature. 2.8 Some of the Areas/Processes that May Add Value 1. Hotel-wide 2. Enhance customer loyalty 3. Reduce employee attrition 4. Productivity/Efficiency improvement 5. Improve work-life balance 6. Reduce billing errors/losses 7. Developing better performance measures/metrics 8. Increased revenue 9. Reduce cost 10. Capture “voice of customer” data Front Office Operations and Sales and Marketing 1. Reduce wait-time during peak check-in time 2. Reduce wait-time during peak check-out time 3. Eliminate billing errors and improve capacity 4. Reduce “no shows” 5. Increased occupancy 6. Utilize optimally of the current product mix to increase revenue 7. Reduce/Eliminate loss calls (operator’s area) 8. Maintain accuracy of information Food and Beverage Service Production 1. Maintain optimal inventory 2. Minimize wastage/pilferage 3. Standardized output of food and beverage 4. Reduce the time from order to service 5. Utilize optimally the current product mix to increase revenue Accommodation Operation – Housekeeping 1. Reduce the turnaround time of making/turning down a room 2. Standardization of cleanliness across areas 3. Purchase/Stores 4. Reduce inventory surplus 5. Cost Benefit Analysis between cost of inventory and cost of storage of products where prices vary seasonally. 6. Standardize the operating procedure of issuance to various departments 7. Reduce the turnaround time of issuance to various departments Human Resources Personnel 1. Maintain accuracy of payroll 2. Have a good system of documentation management 3. Reduce turnaround time of recruitment 4. Increase the employee satisfaction rate