TOURISM & HOSPITALITY MARKETING L2:  The underlying concept of the societal

SERVICE CHARACTERISTICS OF HOSPITALITY marketing approach is responsibility.

AND TOURISM MARKETING  There is growing faction of corporate
America that is recognizing the
Five Marketing Management Philosophies: necessity to operate in an
- to identify the needs and wants of the consumers environmentally and ethically
- develop solutions that will satisfy the needs responsible manner.
1. Manufacturing Concept (Production Concept)  Company’s profit goal + customer’s
 This concept holds that customers will interest + the well-being of society.
favor products simply because they
are affordable, encouraging Integrated Marketing Plan & Program:
management to focus on creating  The company’s marketing strategy outlines
efficiencies in production and which customers the company will serve and
distribution. how it will create value for these customers.
 This approach often leads to neglect  Next, the marketer develops an integrated
of the customers. marketing program that will deliver the
 Disadvantage: Low quality products intended value to target customers.
2. Product Concept  The marketing program consists of the firm’s
 The concept holds that customers marketing mix, the set of marketing tools the
prefer existing products and product firm uses to implement its marketing strategy.
forms, and the job of management is
to develop good versions of these Building Customer Relationships:
products.  Customer relationship management: the
 Without environmental scanning and overall process of building and maintaining
trend analysis, the company will miss profitable customer relationships by delivering
crucial changes in the market’s superior customer value and satisfaction. It
perceptions and expectations. Indeed, deals with all aspects of acquiring, keeping,
the customer will always know what and growing customers.
s/he needs, but not necessarily how  Customer Value: the customer’s evaluation of
the product or service can fulfill the the difference between all the benefits and all
need. the costs of a market offering relative to those
 This is the business of the marketer. of competing offers.
 Focuses on the quality of the product  Customer satisfaction depends on the
3. Selling Concept product’s perceived performance relative to a
 This concept holds that the consumer buyer’s expectations.
will respond only to the efforts of the Capturing Value from the Customers: By current
company to market and sell the and future sales, market share, and profits. By creating
products. superior customer value, the firm creates highly
 Focus of the company is to sell, sell, satisfied customers who stay loyal and buy more.
and sell.
 The missing element in this approach Customer Loyalty and Retention:
is the customer and his or her  The aim of customer relationship management
satisfaction with the product or is to create not just customer satisfaction, but
service. customer delight. This means that companies
 Rather than find the true cause for a must aim high in building customer
slowing of business, firms often relationships.
advertise to reverse a sales decline or  Companies are realizing that losing a
fill gaps created by overcapacity. customer means losing more than a single
 Focuses on influencing consumers sale. It means losing customer lifetime value.
and advertising.
4. Marketing Concept Growing Share of Customer:
 This concept holds that achieving  Share of customer is defined as the share the
organizational goals depends on company gets of customers purchasing in their
determining the needs and wants of product categories. (Thus, banks want to
target markets and delivering the increase “share of wallet.”)
desired satisfaction more effectively  Share of customer, or share of wallet as it is
and efficiently than competitors. often called, is simply a measure of how much
 The concept of relationship marketing of the customer’s business you have versus
is clearly prevalent in this approach. how much you could have if you had it all.
 The company makes its profits by  Business owners need to reprioritize their
creating and maintaining customer customers by how much they could buy, not
satisfaction. just how much they do buy.
 It will require a lot of effort with your
customers. Market Share VS. Customer Share:
5. Societal Marketing Concept
  Market Share: provide the same services & expectations. “Promise only what you can
focus more effort on getting new customers deliver and deliver more than you promise!”
than selling to your existing customers.  Tangiblizing the service product means taking
 Customer Share: provide products or services elements outside of the service itself to
that your customers need and are buying from manifest the quality of service.
other businesses that are related to your o Trade Dress – This is the distinctive
products and services. nature of a hospitality industry’s total
visual image and overall appearance.
Building Customer Equity: o Employee Uniform and Costumes –
Companies want not only to create profitable Uniforms have a legitimate and useful
customers, but to “own” them for life, capture their role in differentiating one hospitality
customer lifetime value, and earn a greater share of form from another and for instilling
their purchases. pride in the employees.
 Customer equity is the total combined o Managing the Physical Surroundings –
customer lifetime values of all the company’s The front-desk staff in a luxury hotel
current and potential customers. should dress in professional apparel.
o Managing Employees is part of the
Service Culture: focuses on serving the customer and product. Employees who are happy at
satisfying their needs. Creation of a service culture their job, do a better job and create
must begin with top management and flow down. happy customers.
o Managing Capacity and Demand –
Service Marketing Characteristics: From the perishable nature of
o Inseparable services, managing capacity and
o Variable demand becomes a more important
o Perishable aspect of managing. Services must
o Substitutable adjust their operating systems to
o Intangible enable the business to operate at
o High-involvement product maximum capacity.
 A service transaction is merely a promise for a
meal, or the use of a room. This creates a Manage Capacity & Demand
heightened level of anxiety in buyers, hence Capacity Management:
credible references such as word of mouth or o Involve the customer in the service
impartial publicity work to enhance the image delivery system
of the service provider. o Cross-train employees
 The customer is part of the service. Here, the o Use part-time employees
implication is that not only the customer, but o Schedule downtime during periods of
also other customers are present during the low demand
process. Customers and employees must o Change the service delivery system
understand the service delivery system, Demand Management:
 Here are the three steps hospitality firms can o Use price to create or reduce demand
take to consistency and customer satisfaction: o Use reservations
o Invest in good hiring and training o Overbook/use queuing
procedures o Create promotional events
o Standardize the service-performance
process throughout the organization  Managing Consistency – Consistency means
o Monitor customer satisfaction that customers will receive the expected
product or level of service without unwanted
Management Strategies for Service Business surprises.
 Positioning strongly in chosen target market:  Managing the Customer Relationship– CRM is
strong position can increase service a managerial philosophy and practice that
effectiveness combines marketing, business strategy and
 Effective interaction between customers and information technology to better understand
employees: customers judge service quality on customers.
both the service deliverer and the quality of the
delivery. Recommendations for Improving Service Quality:
 Managing differentiation: The solution to 1. Listening – understand what the customer
price competition is to develop a differentiated really wants by learning about their
offer, delivery, and image. They can perceptions and expectations.
differentiate their service delivery through 2. Reliability – the single most important
people, the physical environment, and the dimension of service quality.
process. 3. Basic service – service companies must
 Managing service quality: Service firm can deliver the basics or do what they are
differentiate itself by delivering consistently supposed to do.
higher quality than its competitors do. The key 4. Service design – develop a holistic view of the
is to exceed the customer’s service-quality service while managing the details.
5. Recovery – service companies should
encourage customers to air their complaints
6. Surprising customers – exceeding customer
expectations
7. Fair play – companies must make special
efforts to be fair to customers and employees
8. Teamwork – enables companies to deliver
service with care and attentiveness by
improving employee motivation and
capabilities
9. Employee research – marketers should
conduct research with employees to reveal
why service problems occur and what
companies must do to solve these problems
10. Servant leadership – quality service comes
from inspired leadership throughout the
organizations