Chapter 2

Service
Characteristics
of Hospitality
and Tourism
Marketing

2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Managers do not control the quality of the product
when the product is a service . . . .
The quality of the service is in a precarious state
it is in the hands of the service workers who
produce and deliver it.

-Karl Albrecht

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Chapter Objectives
Describe a service culture

Identify four service characteristics that affect

the marketing of a hospitality or travel
product.

Explain marketing strategies that are useful in

the hospitality and travel industries

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 The Service Culture
The service culture focuses on serving
and satisfying the customer

Empowers employees to solve

customer problems

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
 Characteristics of Service
Marketing

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Management Strategies for
Service Businesses
Service companies must increase their
competitive differentiation, service
quality, and productivity

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Service-Profit Chain
Five Links:
Healthy service profits and growth

Satisfied and loyal customers

Greater service values

Satisfied and productive service employees

Internal service quality

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Three Types of Marketing in
Service Industries

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Internal and Interactive
Marketing
Internal marketing means the service
firm must effectively train and motivate
customer contact employees

Interactive marketing means the

perceived service quality depends
heavily upon the buyer-seller
interaction during the service
encounter
PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Differentiation

Solution to price competition

Differentiation through people, physical

environment, and processes

Differentiation through branding

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Service Quality

Exceed customers service-quality

expectations

Expectations based on past

experiences, word-of-mouth, and
service firm advertising

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Common Virtues Regarding
Service Quality
1. Customer obsessed

2. History of top management commitment to

quality

3. High service quality standards set

4. Monitor performance closely

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Tangibilizing the Product
Providing evidence of the service

Promotional Material

Physical Environment

Employee appearance

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing the Physical
Surroundings
Improperly managed physical evidence
can hurt a business

Surroundings should reinforce company

positioning in customers mind

Organizational Image is how customers

perceive your organization
PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Employees as
Part of the Product
Employees are critical

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

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Perceived Risk
Alleviate customer anxiety due to
inability to experience the product
beforehand

Familiarization trips encourage clients to

experience the enterprise in a low-risk
situation

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Capacity and
Demand
Due to perishability, managers must
maximize service capacity and quality
during times of high and low demand

Customer complaints increase when

service firms operate above 80%
capacity
PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing Consistency
No surprises!
Not only should services be provided
correctly, but they should be done the
same way every time
Beware fluctuating demand and
unintentional company policies that
may affect consistency

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Managing the Customer
Relationship CRM
Combines marketing, business strategy and
information technology to better understand
the customers

Develop unique, lasting relationships with

customers

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Service Failure

Problems will inevitably occur

Keep the customer informed

Provide service recovery options

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Contact Personnel
Contact personnel have a direct impact
on the satisfaction of customers

Characteristic of inseparability of
customer and employee during service
delivery system

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens
 Best Practices
Why are these hospitality and tourism
organizations are called service
leaders?
Marriott
Four Seasons
Universal Studio
British Airways

PearsonPearson
2006 Education,
Education,
Inc. Inc. Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism
edition
Upper Saddle River, NJ 07458 Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens