1. 1
Service Characteristics of
Hospitality and Tourism Marketing
.
COMPILED BY,
P.SURESH,
LECTURER,
IHM,GWALIOR.

2. 2
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

3. 3
Key Concepts
 Service Culture
 Intangibility
 Inseparability
 Variability
 Perishability
 Internal marketing
 Interactive marketing
 Managing differentiation
 Managing service quality
 Tangibilizing the service
product
 Trade dress
 Physical evidence
 Point of encounter
 Managing perceived risk
 Managing capacity and
demand
 Managing consistency

4. 4
The Service Culture
Service Culture: A culture that supports customer
service through policies, procedures, reward systems,
and actions.
Service culture can be implemented:
Through employee communication
Through company policies
Through personal actions
Empowers employees to solve customer problems.
 Has to start with top management and flow down.
Organization’s culture must support and reward
customer need attention.
“Ritz Carlton’s “Gold Standards”

5. 5
IntangibilityIntangibility
InseparabilityInseparability
VariabilityVariability
PerishabilityPerishability
Can’t be seen, tasted, felt, heard,
or smelled before purchase.
Can’t be separated from service
providers.
Quality depends on who provides
them and when, where and how.
Can’t be stored for later sale or use.
Characteristics of Service Marketing

6. 6
Intangibility
• Services can not be seen, tasted, felt, heard, or smelled.
• Tangible evidences reduce uncertainty
• High risk associated with services.
• Lack of tangibility after the experience
• Companies should create memorable guest experiences
• Tangibles provide signals as to the quality of the intangible
service.
– Exterior and Interior design
– Uniforms of employees
“Someone who purchase a service may go away
empty-handed, but do not go away empty-headed”
- Robert Lewis

7. 7
Tangible and Intangible
Products/Services
PurePure
tangibletangible
good; nogood; no
serviceservice
TangibleTangible
goods withgoods with
somesome
servicesservices
Hybrid:Hybrid:
equal partequal part
goods andgoods and
serviceservice
MajorMajor
serviceservice
withwith
minorminor
goodgood
PurePure
service;service;
no tangibleno tangible
goodgood
Milk Computer
& Warranty
Meal at
Restaurant
Legal
Advice
Hair
Styling

8. 8
Inseparability
 Customer-contact employees are part of the product
 Other customers become part of service
 The employee becomes part of service
 The customer and the employee interact with the
service delivery system.
 Customers and employees must understand the
service delivery system.
Select, hire and train customers.
Select and train contact employees
Empower employees

9. 9
Variability
• Services are highly variable
• Services are produced and consumed
simultaneously.
• Service consistency depends on the service
provider’s skill.
• Fluctuating demand makes it difficult to deliver
consistent quality.
• Lack of consistency a major source of customer
disappointment.
• Guest expectations are different.
• Train contact and non-contact employee
“Quality can not be controlled; must be produced”

10. 10
Perishability
Lack of ability to inventory
 Lack of ability to inventory – services can not be stored
 Capacity and demand must be successfully managed
 If services are to maximize revenue, they must manage
capacity and demand.
 Change customer use pattern (Hourly, daily, seasonally)
 Cross-train employees
 Involve customer in the service delivery system

11. 11
 Service firms use marketing to position themselves
strongly in chosen target markets.
 In a service business the customer and frontline
service employee interact to create service
 Service providers must work to interact effectively
with customers to create superior value.
 Successful service companies focus their attention on
both their employees and customers.
Management Strategies for
Service Business

12. 12
External marketing = company and customers
Internal marketing = company and employees
Interactive marketing = employees and customers
Management Strategies for
Service Business

13. 13
Internal Marketing
Internal Marketing:
The task of trainingtraining and motivatingmotivating employees to
provide good customer service.
* Customer contact employees
* Supportive employees
• Employees are a critical part of the product and
marketing mix
• There is a need for “internal” and as well as
“external” marketing.

14. 14
Interactive Marketing
Interactive Marketing:
Perceived service quality depends heavily on the quality
of the buyer-seller interactionbuyer-seller interaction during the service
encounter.
• Service quality depends on both the service deliverer
and the quality of the delivery
• The customer judges service quality not just on
technical qualitytechnical quality (the quality of the food) but also its
functional qualityfunctional quality (the service provided in the
restaurant).

15. 15
Management Strategies for Service
Business
1. Managing differentiation
 Need to develop a differentiated offer, delivery
and image.
 Offer innovative features
 Airlines offer in-flight movie, advance seating,
frequent flyer award programs
 QSR offers fast delivery services
 Differentiate service delivery through:
 People
 Physical environment
 Process

16. 16
Management Strategies for
Service Business
2. Managing service quality
 Delivering consistently higher quality than its
competitors
 The key is to exceed the customer’s service quality
expectations
 Identify the expectations of target customers
 Empower frontline employees
 Develop a set of common virtues for service quality
 Set high service-quality standards.
 Watch service performance closely (own and
competitors).
“Promise only what you can deliver and deliver more than you promise”

17. 17
Management Strategies for
Service Business
3. Tangibilizing the service product
• Promotional material,
• Employees’ appearance, and
uniforms.
• Physical environment
• Building exteriors
• Equipment
• Furniture and fixture
• Signs

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Management Strategies for
Service Business
4. Managing the Physical Surroundings
 Physical evidence that is not managed
properly can hurt a business.
 Poorly managed physical evidence sends
negative messages to customers.
 Physical surroundings should be designed to
reinforce the product’s position (organization
image) in the customer’s mind.

19. 19
A Fishy Sign Story
NOW HIRING CLOSERS

20. 20
A Fishy Sign Story
NOW HIRING CLOSERS
Oops!! The C dropped off.
NOW HIRING LOSERS

21. 21
Management Strategies for
Service Business
5. Managing Employees as Part of the Product
 In H&T employees are critical part of the
product and marketing mix
 Human resources and marketing departments
must work together
 The management should formulate policies
that support positive relations between
employees and guests.
 Must manage service at the “points of
encounter” (R.Nykiel)

22. 22
Management Strategies for
Service Business
6. Managing Perceived Risk
 Customers experience some anxiety before they
purchase hospitality and tourism services
 A salesperson must reduce client fear and gain the
client’s confidence.
 FAM trips and sampling help alleviate anxiety
 Hotels provide, rooms, food, beverage, and
entertainment at no cost to the prospective client.
 Customer loyalty increases for companies that have
provided a consistent product in the past.

23. 23
Management Strategies for
Service Business
7. Managing Capacity and Demand
 Hospitality and tourism companies must adjust
their operating systems to enable them to operate
at maximum capacity.
 Complaints tend to increase when companies are
operating at full or near to full capacity;
companies must remember that their goal is to
create satisfied customers.

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Management Strategies for
Service Business
8. Managing Consistency
 Consistency is one of the key
factor in the success of a service
business.
 Basically, this means that
customers receive the service they
expect without unwanted
surprises.
 Many factors work against
consistency
 % 100 satisfaction guarantee
Product consistency
Price consistency
Procedure consistency
Service consistency
Taste consistency
Time consistency
Brand consistency

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Management Strategies for
Service Business
9. Managing the Customer Relationship (CRM)
 CRM is a managerial philosophy and practice
 It combines marketing, business strategy, and
information technology to better understand the
customers, to custom-developed products for key
customers
 CRM focuses on managing revenue opportunities from
customers, retaining customers, and enjoying a stream
of income from them over their lifetime.
 Managing “Switching Costs”

26. THANK YOU ALL
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