Hospitality Services

1. HOSPITALITY SERVICEs

2. 1. HOSPITALITY SERVICE CHARACTERISTICS Intangibility People as part of the product Demands Patterns Perishability Channels of Distribution

3. INTANGIBILITY Products is experienced Products includes both goods and services Guest are purchasing the performance It is harder to evaluate quality of services than products.

4. PEOPLE AS PART OF THE PRODUCTS Employees are part of the products Services are less standardized than products Quality control is more challenging for services than for products Guest are directly involved in all service transactions

5. DEMANDS PATTERNS Demands levels have peaks and valleys Marketing mix is used to manage demands

6. PERISHABILITY Unused capacity is wasted There is no way to build an inventory Capacity management is crucial

7. CHANNELS OF DISTRIBUTION Channels of distribution increase in importance Franchising is a form of distribution.

8. 2. Hospitality service marketing system Three Overlapping service Systems The hospitality services, from guest’s perspectives, comprises three overlapping service systems (Lovelock 1996) Only a small portion of these systems is under the direct control of marketing; most are under the supervision of operations

9. HOSPITALITY SERVICE MARKETING SYSTEM

10. HOSPITALITY SERVICE MARKETING SYSTEM The service delivery system is concerned with where, when and how the service products is delivered to guest. The hospitality operating system is where the works gets done for the guest. The communication system includes planned marketing communications, such as advertising, promotion, and public relations and operational communication such as billing statements and reservation confirmation.

11. 3. SERVICE QUALITY Quality , experts agree, “is whatever the customer says it is , and the quality of the particular products or service is whatever the customer perceives it to be” ( Buzzel and Gale 1987)

12. Quality dimensions : technical and interpersonal Technical dimension : Did things go right? Was the hot food hot? The reservation in order? The room cleaned? Interpersonal dimension : Was the server friendly? Did service staff go the extra mile to be helpful? Did the guests feel welcome? The technical dimension represents what the customer receives; the interpersonal dimension stands for how the customer receives the services.

13. MEASURING SERVICE QUALITY Results of research on service quality and customer satisfaction have indicated that consumers use five criteria to assess service quality (Berry, Zeithma and Parasuraman 1992): Tangibles The appearance of physical facilities, equipment, personnel and communication materials. Reliability The ability to perform the promised service dependably and accurately. Responsiveness The willingness and courtesy of employees and their ability to convey trust and confidence Assurance The knowledge and courtesy of employees and their ability to convey trust and confidence Empathy The provision of caring, individualized attention to customers

14. Service quality gaps Causes of service failure Misunderstanding What management understands customers wants is difference from what customer really wants Communication Management has a correct understanding of customer preferences, but these are not translated properly into service quality specifications Performance Adequate service standards are set but not properly carried out by the organization and its employee Overpromising Marketing communications promise more than the firm can deliver Expectations The service experience is, for whatever reason, inconsistent with the customer’s expectation

15. 4. Service quality control and the zero-defect goal In hospitality services, there are no rejects, just unhappy customers. Because a “defect” is an event that happens to a guest, there is no way to do recall. Under these circumstances, the argument for a zero defect standard is compelling, but maybe unrealistic; The facts is that in services, no matter how rigorous the procedures and employee training or how advances the technology, zero defects is an unattainable goal. Unlike manufaturers that can adjust inputs and machinery until products are uniformly perfects, service companies cannot escape variations. Factors like the weather and the customers themselves are beyond a company’s control. ( Labovitz and Chang 1987)

16. The cost of quality The significant reduction of service defects appears to be an expensive projects. Yet, there are good reasons to believe that improving quality will actually reduce costs. Costs of quality can be divided into the good, the bad and the ugly ( Labovitz and Chang 1987)

17. The good costs Cost involved in problem prevention, such as good hiring practices, quality-oriented training and supervision and compensation related to quality performance. These costs represents a long-term investment rather than short term, temporary fix.

18. The bad costs Costs of inspection and correction, including supervisory personnel’s time, increased food and beverages costs due to replacement, decreased operational efficiency due to time spent on corrective actions and additional training and employee turnover costs.

19. The ugly costs Costs of service defects. The failure of preventive activities and inspection and correction actions will allow substandard performance to be delivered, which results in unsatisfied guest. When the guest complain, at least the operation gets a second chance to correct its mistakes and try to compensate the guest before his or her departure. If the guest leaves the property unsatisfied with the problem unresolved, there are three very expensive ugly costs of service defects: lost customers, efforts to attract new customers and bad word of mouth

20. Enlisting the customer in quality control 1. Guarantees It makes the company ascertain its customers’ definition of good services (reduces misunderstanding gap) It sets clear performance standards (reduce communication gap) It generates reliable data through customer compensation when performances poor. Such data can be used for system redesign or training program development It forces a company o examine its service-delivery systems for possible weak points in the corporation or in individuals units in order to reduce the guarantee program cost. It builds customer loyalty, sales and market share. The financial commitment from management makes a strong statement about its emphasis on customer satisfaction

21. A good service guarantee characteristics Unconditional Easy to understand Meaningful Easy to invoke Easy to collect

22. Enlisting the customer in quality control 2. Customer feedback Customer complaints can also be solicited through the use of toll-free telephone numbers and Internet Web sites, which encourage people to report problems by making it easy to do so.

23. 5. Managing demand through queuing Unoccupied waits feel longer than occupied waits Preprocess waits feel longer than in-process waits Anxiety makes waits seem longer Uncertain waits seem longer than explained waits Unfair waits seem longer than equitable waits The more valuable the service, the longer people will wait Solo waits feel longer than group waits.

24. Internal marketing Internal marketing is a philosophy for managing personnel and a systematic way of developing and enhancing a service culture. The focus is on how to develop customer-conscious employees. The objectives are: Attract and retain good employee Ensure that the employee are motivated fro customer-orientated and service-minded performance and therefore successfully fulfill their duties as “part-time marketer.”

25. Employee recruitment and retention According to Southwest Airlines CEO Kelleher “If you don’t have a good attitude, we don’t want you no matter how skilled you are. We can change skills levels through training. We can’t change attitudes” ( Teasley and Robinson 1998) Careful employee selection, therefore, is critical to successful service oriented operations.

26. Service culture A corporate culture can be sensed as an internal climate within organization. A corporate culture is a powerful communication tools for “nurturing a service culture that will shape the employee behavior more effectively than rules and regulations can.” A service culture exist when there is an appreciation for good service and when giving good service to internal and external customers is considered a natural way of life and one of the most important measurement in the organization. Management in a service culture usually take scare of its internal customer – employees-first, which leads to higher job satisfactions.

27. Discussion questions What are the characteristics of service? What impact do they have on operations? How can service quality be measured? What common gaps occur in service? How can they be avoided? What are the limitations of a zero-defects goal? What are its uses? Is quality free? Why? What are the uses of a guarantees program? What makes a guarantee program successful? What are the implications of managing demand through queuing in service operations? What is internal marketing? What kind of corporate culture is appropriate to a service organization?