Chapter 13
Terminology:
Brand Image
Corporate Responsibility
Customer Intelligence
Expected Customer Turnover
Fam Trips
Generations
Internal Marketing
Market Segmentation
Marketing
Relationship Marketing
Reputation Management
Unexpected Customer Turnover
Word-of-Mouth
4 Ps of Marketing
266 Chapter 13 Marketing and Establishing an Image for Service
Introduction to Service Marketing
MARKETING AND CUSTOMER SERVICE
Marketing and customer service work in tandem. Th e following are excerpts from marketing
literature:
“Place the customers fi rst.”
“Without our customers we have nothing.”
“Th e purpose of a company is to serve the customer.”
“Th e purpose of a company is to create and maintain satisfi ed customers.”
“Reward the employees. Th ey will take care of the customers.”
“Establish an organizational culture that cares for the customers.”
“Develop a service culture.”
“Customer service is in the hands of the frontline workers.”
Most of these marketing quotes involve quality customer service. Marketing embraces
customer service because neither can exist alone. Marketing and customer service go hand
in hand. Th ey are part of a larger system of business processes.
MARKETING DEFINED
Before we go further, let ’s examine what marketing is. Marketing is the coordination
of the exchange of goods and services in an eff ort to fulfi ll the wants and needs of the
customers. Th is involves a deliberate control of advertising and brand management.
Now, let ’s take this defi nition apart to better understand it. Marketing is:
the coordination
Coordination means that it does not just happen spontaneously. It is a deliberate
process. It is analyzed and planned and executed with intention.
of the exchange of goods and services
Th e exchange is open to include the many distribution channels such as in person,
through a website, or through a distributor such as a travel agent. Goods
and services embrace hospitality in that there is typically both a tangible and
intangible component to what is provided.
in an eff ort to fulfi ll the wants and needs of the customers.
Th is is a hallmark of customer service. Marketing aims to fulfi ll the wants and
needs of its customers.
Th is involves deliberate control of advertising and brand management.
Th e term deliberate means that it is by design and on purpose. It is something
intentionally orchestrated, or controlled, by the business.
Marketing
The coordination
of the exchange of
goods and service in
an effort to fulfi ll the
wants and needs of
the customers. This
involves deliberate
control of advertising
and brand
management.
Introduction to Service Marketing 267
Advertising is the actual act of getting the message out to the customer. It may be
passive (remember us) or active (buy now). It can involve many forms such as print,
e-mail, direct mail, phone, website, or a third party.
Brand management is maintaining the brand image. It is the end product of marketing.
Brand image is what your business stands for and what it means to others. It is
what the customers think when the name of your business is mentioned. It is an ongoing
process that involves every aspect of the business. It is represented in the uniforms,
the signage, the greetings used, and so on. Brand management is key! It is important
that your customers believe that you deliver quality service.
CHANGES IN MARKETING
Much of what occurs in the hospitality industry occurs off -line. For example, you cannot
dine online. What is changing is the way that we interact with our guests. Th e
service provider can:
■ determine guest expectations.
■ sell the product, encouraging new and return guests.
■ refer others, off er promotions with last-minute deals, or just soft sell.
And the customers can:
■ receive services like concierge, reservations, and advance purchase.
■ make complaints in the public sector.
■ form initial ideas regarding quality.
In the past, customer care and personal service were closely related. Consumers
had few choices because of a lack of communication, transportation, and technology.
Customers were treated as regulars, and they appreciated the comfort of being known.
Th e world was, in a sense, small.
More recently, there have been many changes in the way businesses market to the
public. Th e world has become much larger and more knowledgeable. Smart phones
are ubiquitous. Consumers can access information using numerous methods, purchase
from anywhere, and drive or travel much farther than ever before. As a result, customers
now have much more knowledge and freedom of choices than ever before. Newer
technologies like voice-activated applications (e.g., Apple ’s Siri) and map-activated
applications are also changing how hospitality markets provide guest service.
Th e number of online travel agencies (OTAs) has also dramatically increased.
Th ey are used in browsing, reservations, concierge, shopping, and travel planning. In
the past ten years, the percentage of hotel rooms booked on these third-party, OTA
sites has increased from 1 percent to about 9 percent. Trip Advisor and Booking.com
receive millions of hits each month.
According to Smith Travel Research and Market Matrix, 89 percent of respondents
claimed to be infl uenced by the online reviews, making these very important to
hoteliers. Never before have the expectations of guests been so heavily infl uenced by
other guests. In fact, they rated guest experience factors (past experience, recommendations,
and online reviews) at 51 percent, making it the biggest predictor of purchase.
Second was location, and third was price.
Brand Image
The end product of
marketing. It is what
your business stands
for and is evident in
every aspect of your
business.
268 Chapter 13 Marketing and Establishing an Image for Service
EVERYONE HAS CUSTOMER SERVICE
Th ese days, everyone is dedicated to customer service. Th ey boast of personalized guest
service, whether or not they actually deliver it. It is written in their mission statements,
in their training manuals, on business cards, and on the walls behind the counter. Why
then, isn ’t everyone actually delivering quality customer service? Why does service suffer
miserably? Do customers or staff even believe the statements? Unfortunately, the
answer is usually no. Customers don ’t typically believe quotes that boast quality service
because they are overused and often don ’t deliver what is promised.
The Four Steps of Marketing for
Quality Guest Service
Th is section discusses the process of marketing as it relates to customer service. It is
divided into four steps that fl ow from one to another as the concepts of marketing
are applied to a service business. Each section is further divided, delving into details
within each of the four steps. We begin with a presentation of the four steps because it
is important to keep in mind the big picture (see Figure 13.1 ). Th is will help to better
place the details into their proper context.
1. Analysis and Identifi cation of Needs.
2. Establishment of a Marketing Plan.
3. Implementation of Controls to Position.
4. Follow-up—Service after the Sale.
1.
Analysis and
Identification of
Needs
2.
Establishment of
Marketing Plan
3.
Implementation of
Controls to
Position
4.
Follow-up
after the Sale
FIGURE 13.1 The Four Steps of Marketing for Quality Guest Service.
STEP 1: ANALYSIS AND IDENTIFICATION OF
WANTS AND NEEDS
What defi nes a buyer ’s choice of brand, type, amount, timing, and expectations? By
answering the questions in the following sections, you will begin to piece together a
picture that will answer this question (see Figure 13.2 ).
1.1 DEFINE THE PROFILE
Establishing a profi le requires answering questions to help defi ne the market and competition.
Th e following list of questions begins the classifi cation and establishment of a
profi le.
The Four Steps of Marketing for Quality Guest Service 269
■ What business are you in? Th is may seem obvious, but it establishes a
foundation.
■ What are you known for?
■ Who is your competition?
■ What is the competition known for?
Answering these questions will produce a profi le and an initial list of competitors.
Th e next section begins to rank the competition by providing a list of the
best-in-class.
1 . 2 DEFINE BEST-IN-CLASS
Th e following list can be used as a ranking to strive for, and a benchmark for adapting
best-practice methods. Th ese questions begin the ranking of competitors for your
industry.
■ Who fi rst comes to mind when your industry is mentioned?
■ Who is the best at quality service?
■ Who has the overall best product?
■ Who has the nicest property?
■ Who has the nicest options or amenities?
■ Who leads in innovation?
■ Who leads in market share?
Learn what the competition is doing. Go visit them. Talk to others. Read journals
and reviews. Take note of what the best-in-class are doing to excel in areas and processes.
Ask why they are successful.
FIGURE 13.2 Four Sub-Steps within Step 1 of Marketing for Quality Service: Analysis and
Identifi cation of Wants and Needs.
1.1
Define
Profile
1.2
Define
Best-in-Class
1.3
Define
Customers
1.4
Research
Customer
Information
270 Chapter 13 Marketing and Establishing an Image for Service
1.3 DEFINE THE CUSTOMERS
After the best in-class has been established you must also defi ne the customers. So,
what defi nes a customer? Customers can be explained in, or divided into, groups. Th e
information is referred to as customer intelligence and the divisions are called market
segmentation. Th ey could be internal or external. Th ey could be potential, actual, or
former. Th e following chart illustrates this point.
Market Segmentation.
Customers
Internal
External
Potential
Current
Former
Employees
Customer Intelligence
Th e process of gathering information regarding your customers. Th is includes
a history of use, demographics, and psychographics in an eff ort to understand
former, future, and current customers. Used in marketing, strategic planning,
and training.
Market Segmentation
Th e process of dividing the market into groups. Th is is typically done demographically;
however, numerous ways exist.
❍ What do the customers want?
❍ What do the customers expect?
❍ How do customers defi ne value?
❍ Is there such a thing as an average customer? (Note: we are still assuming
that all customers are unique and deserve respect and attention, but there
can be certain averages.)
❍ What is the average lifespan of a customer?
❍ Is the customer relationship one-time or continued?
❍ Where do new customers come from?
❍ Why did former customers leave? Customers leave for a variety of reasons.
Some relocate and others change lifestyles. Th ese reasons are known as
expected customer turnover , which is part of the nature of sales—when they
leave for natural reasons beyond the control of the business. What a business
can control is the unexpected customer turnover , or, loss of business due to
a fault of the business. Th is could be from poor service, inferior products, or a
number of other controllable aspects.
Customer
Intelligence
The process of
g athering information
regarding your
customers— including
history of use,
demographics, and
psychographics—
in an effort to
understand former,
future, and current
customers. Used in
marketing, strategic
planning, and
training.
Market
Segmentation
The process of dividing
the market into
groups. This is typically
done demographically;
however, numerous
other ways exist.
Expected Customer
Turnover When
customers leave
for reasons beyond
the control of the
business.
Unexpected
Customer Turnover
When customers
leave for reasons
within the control of
the business.
The Four Steps of Marketing for Quality Guest Service 271
❍ Why did potential customers choose to never patronize your business?
Customers could be turned off by a telephone conversation without even
patronizing your establishment. Th ey can be turned off by something that
they heard from someone else. Th ey can be turned off by an advertisement
that they saw—perhaps it was an image or what your establishment is perceived
to be like.
❍ Who accepts responsibility for your current and potential customers?
Decision to Purchase
Have you ever wondered what makes a person buy something? What are
the customer ’s other choices? Is the decision based on price? Is it based on the
number of stars the product received? Is it based on the product? Is it based on
location, convenience, or lack of alternative choices? Or, is it based on service?
Service quality is one of the main reasons consumers purchase items, but it isn ’t
the only reason. It is part of the overall message they receive. People are motivated
to purchase for a variety of reasons. We must gauge customer interest in
a product or service. We assess this with individuals and as a demographic segment.
Every customer is slightly diff erent, and some reasons overlap.
Reasons That Motivate Customers to Purchase a Product or Service.
Price
Individuality Convenience
Service Rating
Generations
Generations are a common way to segment the U.S. market. People are
divided according to the year they were born. Four of the most common and
relevant generations are the Baby Boomers, Generation Xers, Generation Ys,
and Generation Zs.
Baby Boomers, 1946–1964, 77 million
Th e Baby Boomer generation was the biggest generation the United States
had ever seen. Consequently, the shift in demand for goods and services has
increased as their age demanded it. Th ey are now nearing or at retirement age.
Th ey have grown up, raised children, and started careers and are now experiencing
“empty-nest syndrome”. Th ey are now earning more money than they
Generations
Common divisions of
the U.S. market: Baby
Boomers, Generation
Xers, Generation Ys,
and Generation Zs.
272 Chapter 13 Marketing and Establishing an Image for Service
have ever made in their lives. Th ey are cautious, but also beginning to branch
out to spend and experience technology in their empty nest age. Consequently,
they present a new challenge. Th ey are beginning to spend their money for new
and diff erent reasons. Providing service to them is a unique blend of appreciation,
quality, and price. Th ey know a quality product, great service, and a reasonable
price and they are fully aware of how to fi nd an alternative if they don ’t
receive these.
Generation X, 1965–1974, 45 million
Generation X was originally given the name X because it was deemed worthless.
It turned out they, like every other generation, was just misunderstood.
Th ey have given us the X-Games and the 1980s. Th ey are now in their familyformation
years and steadily climbing in their careers. Consequently, they are
now patronizing hospitality with a diff erent set of values. Finally set free from
the Baby Boomers, they are the core of the market. Providing quality service
to them is a challenge. Th ey have always been held to a high standard and they
hold others to that same standard.
Generation Y (also known as echo boomers), 1977–1994, 72 million
Generation Y is the fi rst generation to grow up with good economic times and
dual-income households. Consequently, they have eaten diff erently from any
generation before them. Th ey grew up consuming food from a box, from a can,
from the freezer, or from a restaurant. Th ere was little time for a home-cooked
meal, as other generations have experienced. We now have the fi rst generation
that does not know how to cook.
Th eir lifestyle and eating habits will forever be diff erent from those of the preceding
generations as a result. Add in the proliferation of television shows dedicated
to appreciating food, wine, travel, gambling, and events and you have a
very diff erent customer. Th eir lifestyle is conducive to eating, traveling, and
enjoying hospitality as a leisure, a necessity, and a way of life. Th is has produced
a very diff erent, unique blend of customer characteristics. Th is new type of customer
has a little bit of knowledge about many things that interest them. Th eir
patronage is not as often a special celebration but a pastime and a way of life.
Generation Z (also known as Millennials), 1995–Present
Generation Zs are our youngest segment. Th ey fully embrace technology and
have a heavy infl uence on their parents. Th ey have less discretionary income
because of their age, but they spend a higher percentage of it. Th ey have grown
up in an age of technology and communication. Marketing and providing services
to them is much diff erent from any generation before them. Th ey have
always been accustomed to technology and have much higher expectations of
speed of service and communication responses. Like other generations, they
really don ’t care about “how it used to be” because they only know how it is
today. Th is, again, changes the landscape of expectations and service.
The Four Steps of Marketing for Quality Guest Service 273
1.4 RESEARCH CUSTOMER INFORMATION
Now that you know the best-in-class and the profi le of the customer, it is important to
look at it from the customers ’ point of view. What do they see, hear, and experience?
A secret shopper is a great way to monitor procedures, but there is much else to be
researched. Begin by asking:
■ What are the sources of customer information?
■ How are you represented?
■ Who is the face of your business?
Th e face of your business is often the frontline employees. It also may be suppliers,
marketing intermediaries, websites, blogs, reviews, or advertisements. All of these
need to be monitored and managed to be in line with your brand image.
■ What does the customer see and experience?
■ Analyze the service process. Try to see the organization through the
customers ’ eyes.
■ Are customers taken care of at each step? (In the bed and breakfast segment,
the innkeeper spends nights sleeping in each of the diff erent vacant rooms.)
Management Information System (MIS)
An MIS is more than a computer. It is everything in a system of people,
equipment, and procedures to collect and interpret information in an eff ort
to make the best management decisions. Th is includes comment cards,
surveys, focus groups, company records, property operation systems, and
information.
Property Operation Systems (POS)
All POSs are part of the MIS. Th ey may also be referred to as propertymanagement
systems (PMSs). Nearly every business has a system. Several
great brands are on the market to help manage information. PosiTouch,
Micros, Fidelio, Squirrel, and Aloha are just a few of the most popular systems
available. All serve as cash registers, schedule reservations, and keep track of
inventory. Newer features permit staff scheduling and projections. All of this
information can be used in the research-collection process.
STEP 2: ESTABLISHMENT OF
A MARKETING PLAN
Step 2 consists of the four steps of establishing a marketing plan. Realizing the possibilities,
selecting a goal, segmenting a market, and selecting a strategy are standard
steps within this process. Th is is illustrated in Figure 13.3.
274 Chapter 13 Marketing and Establishing an Image for Service
2.1 REALIZATION OF POSSIBILITIES
Th e fi rst step is to open your mind and brainstorm. Be creative. Open up to unlimited
possibilities. Enlist the help of others. Benchmark other businesses to see what is out
there.
2.2 SELECT A GOAL OR OBJECTIVE
Th en, begin to narrow it down. Tools could assist in narrowing the options. Th ink
about your answers to these prior questions:
■ What business are you in?
■ What does your brand stand for?
■ What is your selling point?
2.3 SEGMENT YOUR MARKET
You ’ve began to profi le your market. Now it is time to put these profi les into action,
deciding which will be most appropriate. Consider the following questions in determining
which you want to go after:
■ Which market do you currently serve?
■ Which market does the competitor serve?
■ Which market is most profi table?
■ Which market is emerging?
2.4 SELECT A STRATEGY
Next select a strategy that would fi t your needs. It will be the vehicle to transport you
to meet your objective.
2.1
Realization of
Possibilities
2.2
Select Goal
2.3
Segment
Market
2.4
Select
Strategy
FIGURE 13.3 Four Sub-Steps within Step 2 of Marketing for Quality Service: Establishment of a
Marketing Plan.
The Four Steps of Marketing for Quality Guest Service 275
Options
■ Are you changing the:
❍ Product?
❍ Service?
❍ Reputation?
❍ Overall package?
■ Are you going to concentrate on just making sales?
■ Are you to earn profi ts through:
❍ Volume?
❍ Price?
❍ Increased sales per customer?
After the Direction of the Strategy Is Determined You Must
■ Establish a timeline.
■ Dictate resources.
■ Support your brand.
All of these decisions impact customer service.
Corporate Responsibility
Corporate responsibility is the idea that a company upholds values and ethical
standards to be a good steward to its community and environment. It is a form of
self-policing that ensures proper conduct of actions and, therefore, benefi ts its stakeholders.
Marriott International is a hotel company that is very committed to corporate
responsibility. Their business values ensure that they are good stewards to their
customers, employees, investors, communities, and environment. They are not in it just
for the profi ts. They are in it for the benefi t of all, and their words are backed up with
actions.
They have created a Global Green Council that works on reducing emissions,
water conservation, and pushing for environmental climate conservation policies.
In the community, they are heavily involved in volunteerism. They mounted a major
relief effort after 9-11 and Hurricane Katrina. They donated $34.6 million to charitable
contributions in 2010.
This idea of social responsibility shines through in their brand image and makes a
difference in how they serve the customers. Customers notice and investors appreciate
the lengths to which Marriott goes to respect the communities and resources that have
made them so successful. The employees feel good about being on a team that cares
about the community in which they work and live.
Corporate
Responsibility
The idea that a company
upholds values
and ethical standards
to be a good steward
to its community and
environment.
Service Insight
276 Chapter 13 Marketing and Establishing an Image for Service
Place Promotion Product Price
FIGURE 13.4 Step 3 of Marketing for Quality Service: Implementation of Controls to
Position—The 4 Ps.
PLACE
Place includes the atmosphere, the environment, and the all of the surroundings. It
involves the capacity, the décor, the amenities, and the physical appearance. Place is
like a headache or hiccups. Most people don ’t think about it until there is an issue.
Th ese are the physical attributes that make up the entire guest experience. Even smell
has recently become a big consideration.
PROMOTION
Th e promotional mix is a combination of advertising, public relations, and promotions.
Th ey include word of mouth, television, newspaper, familiarization (fam) trips,
and online presence, including social media and publications. All need to be controlled.
Monitoring and improving this is called “reputation management”.
Word-of-Mouth :
Opinions expressed by the general public
regarding your business. Th is may have a very
powerful infl uence on customers and is often
diffi cult to control or quantify.
Fam Trips
Short for familiarization trips. Typically used
by hotels. Invited, all-expense paid trips given
to people who will purchase or infl uence the
purchase of future sales.
Word-of-Mouth
Opinions expressed
by the general public
regarding your business.
This may have
a very powerful infl uence
on customers
and is often diffi cult
to control or quantify.
Fam Trips
Short for familiarization
trips. Typically
used by hotels.
They are invited, allexpense
paid trips
given to people who
will purchase or infl uence
the purchase of
future sales.
Service Capacity
Is more really more? Does service suffer and do
complaints rise signifi cantly when a facility is at
over 80 percent of capacity? Yes. You will ultimately
only do as much as you can effectively manage.
Meaning, you won ’t sustain a capacity higher than
you can effectively deliver. Customers will become
dissatisfi ed and will leave until your business level
drops and you can reasonably service them.
Service Insight
STEP 3: IMPLEMENTATION OF CONTROLS TO
POSITION—THE 4 PS
Now that you have selected a goal and a strategy, it is time to implement the controls.
Th ese were established in the previous section, but here is where the actual changes
are made. Strategies come to life and begin to take hold as they are transferred from
paper to practice. A great way to begin is by considering Th e 4 Ps of Marketing (see
Figure 13.4 ). Th ese are common to any marketing plan—place, promotion, product,
and price. Occasionally, there are one or two more Ps included (such as “people”), and
on rare occasion, a P is omitted, but the four are the core as they relate to marketing
and serving the customer. Each of these should be considered and controlled in the
overall plan.
4 Ps of Marketing
Categories common
to any marketing plan:
place, promotion,
product, and price.
The Four Steps of Marketing for Quality Guest Service 277
Reputation Management
Th e science of monitoring and consistently improving or maintaining your
assessment among the public and outside constituencies. Th is often involves
surveys and entire brand management.
Chipotle App
A great example of a channel, or method of service delivery, is an ordering app
off ered by Chipotle, making it quick and easy to order from them. It locates
the nearest Chipotle, places your order, and pays without logging in to a computer
or waiting in line. To continue with its presence, Chipotle also held a
“build your own video” contest for its fans. Th e contest and videos went viral
and helped to boast about its alternative way of doing business.
Social Buying
Groupon, Living Social, Tippr, BuyWithMe all feature a new trend in social
media referred to as social shopping . By off ering group discounts, and asking for
money up front, small companies are bringing new customers quickly to their
door. Most deals last about a day. Th e business is cut a check after the deal has
ended.
❍ Pros: Customers try your product and you gain exposure and generate quick
cash. Also, buyers pre-pay and not all of them use their coupons.
❍ Cons: You are selling your product at a highly discounted rate (perhaps 50
percent), which could lead to brand erosion and loss of luxury brand status;
also, it is diffi cult to achieve high profi t margins on the products.
Reputation
Management
The science of
monitoring and consistently
improving
or maintaining your
assessment among
the public and outside
constituencies.
This often involves
surveys and entire
brand management.
Community Involvement
Does it matter if a company is involved in the community? The community believes
so. Most respondents surveyed think it is a good idea, but would they patronize an
establishment because it is involved in the community? Would they boycott a company
because it doesn ’t help the community? Do companies do it for the employees, the
core belief, the image, or the marketing? Sure, it is a good idea, and the most successful
companies engage in community activities, but the opinions about the motives
are mixed. Estimates also vary greatly between demographics, type of businesses, and
communities.
Service Insight
PRODUCT
Earlier we analyzed our product; now it is time to control it. Everything the customer
experiences and consumes constitutes a product. Th is includes service. Draw on
those fi ndings and consider everything that goes into the product, both tangible and
intangible.
278 Chapter 13 Marketing and Establishing an Image for Service
MLB.TV App
Major League Baseball (MLB) off ers subscriptions to MLB.TV with an iPhone
app. Th is allows smartphone users access to live video and local audio coverage.
It also has video archives, game standings, and other statistics. MLB.TV was
awarded Best Mobile Video and Best iPad Branded App at the 2010 MOBI
Awards. MLB also makes versions of the app for Android and BlackBerry users.
PRICE
Price is often an indicator of quality. Prices change and customers notice. Price must be
in line with all of the other Ps. Numerous pricing strategies exist, such as the following:
■ Comparative pricing
■ Mark-up pricing
■ Desired profi t pricing
■ What the market will tolerate pricing
■ Market skimming pricing
Th e customer will always consider price as a factor. It must be determined how
much they will consider it. Based on this assessment, pricing adjustments can be made.
Th e 4 Ps help to set the expected level of service. Below is a chart illustrating three
hospitality companies as they adjust each of the Ps.
The Four Ps and Expectations Related to Hospitality Organizations
Four Ps Universal Studios Carnival Cruise Lines Holiday Inn Express
Product Hotels, amusements,
dining, shopping
Leisure cruise ship,
accommodations destination,
activities
Hotel, business center,
amenities, meetings
Price ~$120/person/day ~$1,000/person/trip ~$125/room/night
Place Orlando, Florida
Hollywood,
California
Ports, ocean, destinations National
Promotion TV, radio, print,
Internet, social media
TV, print, Internet, social media TV, Print, Internet
Expectations Entertainment Fun cruise Business stay, reasonable
accommodations at price
PEOPLE
People are sometimes referred to as the fi fth P, although purists maintain that people
would fi t in under another of the Ps. No matter where it falls, the human resource
function is key. All should be considered in hiring, promoting teamwork, satisfaction,
The Four Steps of Marketing for Quality Guest Service 279
training, and development. Your employees make the diff erence. Everything can be
controlled, with the exception of the human element. Humans must be cultivated and
managed because what they are capable of is often beyond belief. Your strategy should
prepare and adjust for new customer situations and also take into account the physical
and emotional labor involved.
Additional Th oughts
■ Do employees treat customers as if this is the last time they will ever see them?
■ Are dissatisfi ed customers treated as problems or opportunities?
■ Do your employees believe that yours is a great company?
■ Every organization claims to strive for customer service. However, just saying
the term without backing it up is insincere and will be noticed.
■ Treat your frontline workers as well as you want them to treat customers.
■ Give customers a reason for returning in the future.
Internal Marketing
Internal marketing is the idea of marketing to the employees—conveying
information regarding the company to them. It is publicizing the accomplishments
of the employees. It provides them with news regarding the company.
It may be directed to their department and to the company as a whole.
It allows them to feel part of a team and realize their important role as a
member.
Remember that employees are either directly involved with the customer or
serving someone else who is directly involved with the customer. Th ey are the
window to the company. Many intrinsic points are conveyed through your
employees:
❍ Company image
❍ Corporate culture
❍ Hiring criteria
❍ Training
❍ Effi ciency
❍ Concern for guests
❍ Concern for employees
❍ Empowerment
To convey these points, you might use an employee newsletter, preshift meetings,
in-service meetings, or meetings with management. To orchestrate internal marketing
to the employees, steps to follow involve motivating, involving, reminding, and maintaining
the communication to the employees.
Internal Marketing
The idea of marketing
to the employees by
conveying information
regarding the company
to them, as well
as publicizing their
accomplishments.
Allows employees to
realize their important
role as a team
member.
The Four Steps to Orchestrating Internal Marketing to Employees.
Motivating Involving Reminding Maintaining
280 Chapter 13 Marketing and Establishing an Image for Service
Motivating
■ Getting them interested
■ Getting buy-in
■ Showing value
■ Providing incentives
■ Presenting incentives
Involving
■ Letting them know their roles
■ Showing them how to perform their roles
Reminding
■ Th is cannot be a one-time event.
■ Be aware that over-reminding is just as bad as underdoing it.
■ Remember that employees are intelligent individuals.
Maintaining
■ Follow-up is key.
■ Check to ensure they are getting the true message.
■ Maintain consistency.
Service Expectations
How else are expectations and services changing? With social media, also known
as Web 2.0. The following is a list of the most popular sites that are changing the
landscape:
■ Facebook check-in and Four Square: Geolocation via mobile device
■ Blogs (sharing experiences)
■ Forums (seeking, sharing, and answering questions)
■ Social networks (referrals, connecting)
■ Twitter (discount and dialogue)
■ Second Life (which partially designed the new Aloft Hotel concept by its virtual
residents)
■ YouTube (make your own video, add or comment, viral videos)
■ Trip Advisor (online reviews)
■ Urbanspoon, Orbitz, Expedia (online reservations and reviews)
■ Yelp (restaurant reviews)
■ AAA (travel ratings)
■ Twitter (with the ability to hashtag an event or a concierge with questions)
Service Insight
Chapter Review Questions 281
STEP 4: FOLLOW-UP—SERVICE AFTER THE SALE
Often, the relationship is begun well before the sale, but the after-sale period is crucial.
Service does not stop with the sale or transaction. A few will move on, but for
many it should be the beginning of the relationship. You should make sure the customers
feel good about their decisions and work on building a long-term relationship
with them. Th is is commonly called relationship marketing .
POSTPURCHASE BEHAVIOR OF THE CUSTOMERS
Transactional Customers
Transactional customers are one-time patrons. Th is isn ’t always bad. Th ey could be
traveling through, changing life segments, or be looking for other great experiences.
Customers who are pleased may speak well of your establishment. Th e main
thing is to make sure they aren ’t displeased. Surveys and tools can assist with this.
Tourist Traps are businesses that take advantage of
transactional customers. Th e business knows that it
will be a one-time purchase, and looks good on the
outside. Prices are often high and service and quality
is often greatly lacking.
Relationship Customers
Returning customers are the key to businesses.
It is estimated that it costs three times more to
attract a new customer than it does to retain
a return customer. Relationship management
is crucial. Loyal customers speak well of the
business, require less customer training, and
are more forgiving. Technology has facilitated
the customer connection a great deal.
Websites, e-mails, tweets, and fan pages all
help to build and maintain a relationship.
CHAPTER REVIEW QUESTIONS
1. What is the difference between expected and unexpected turnover?
2. What signals do managers give off that create an organizational culture?
3. List and briefl y describe the four steps of the marketing process.
4. List and briefl y describe the 4 Ps of marketing, relating them to customer service.
5. How has marketing changed in recent times?
6. Why is a return customer preferable to a transactional customer?
7. How do marketing and customer service relate to each other?
8. Predict the outcome of the high-tech high-touch dilemma in 15 years.
9. What is internal marketing and how can it help a business?
10. Which generation are you from? Outline fi ve tips that you could give a business owner to
best accommodate your generation.
Relationship
Marketing
The process of fostering
and cultivating a
long-lasting relationship
with your current
customers. Can be
in person or through
the use of electronic
media.
High-Tech High-Touch Dilemma
There is an issue in practice and literature referred
to as the high-tech high-touch dilemma. As technology
progresses, the need for service workers has
been reduced by automated services such as online
reservations and self-check-in. Customers and technology
drive service automation to advance. Speed
of service is increased and costs are reduced. As
this is done, personalized service is being replaced
by machines and technology. At what point is it too
much? At what point are we losing the customer contact
that is so desired in hospitality? There are many
different points of view and the dilemma continues.
Service Insight
282 Chapter 13 Marketing and Establishing an Image for Service
CASE STUDIES
Profi ling Burgers
Bobby ’s Burger Palace is yet another creation by the famous Bobby Flay. It features artisancrafted
burgers that are diffi cult to beat. Its no-frills layout and open design promote a barebones
approach to consuming the ultimate burger. It features the best grade of beef and
other ingredients in combinations that are sure to please. It also offers a full bar with plenty
of cheer and competent service.
Red Robin is another chain that has also seen recent growth. A bit larger in volume,
Red Robin has undergone a marketing blitz to promote its slogan “Red Robin—Yummmmm.”
Also offering full-service, it looks more like a typical casual restaurant, although it specializes
almost exclusively in burgers. It also has a bar and offers drink specials.
Wendy ’s is a well-known burger restaurant. It features counter service and drive-through.
It makes fresh burgers to order and boasts that it never freezes its meat. Wendy ’s offers a
sit-down area and is priced much lower than the competition. On its menu it also features
salads, wraps, and other dishes in addition to the typical burger.
1. Describe the profi le and classify each of these restaurants.
2. Identify the brand image of each of these restaurants.
3. In your opinion, who is most successful at conveying their image?
4. Which concept is the most appealing to you? Explain.
An Old Lodge
The Log Lodge is a huge, old log lodge located in the Catskill Mountains. It features a view of
a private lake, mountains, and a vast array of wildlife. It is absolutely peaceful and is located
less than 2 hours from New York City. The Log Lodge is also known for being a past host of
such celebrities as Rodney Dangerfi eld and Frank Sinatra. It has enjoyed a loyal clientele
from New Jersey, New York, and Connecticut for many years, but this is beginning to change.
More recently, the progressing age of the clientele is making it diffi cult for them to travel and
be comforted by the lodge because of their deteriorating health. Nowadays, it features lesserknown
acts and is lesser attended in its Grand Ballroom and has become a sleepy, tired old
lodge. The owners are considering attracting a newer, younger demographic to the Log Lodge,
but do not have the capital to make major renovations or take out major newspaper advertisements.
They aren ’t even sure what they could offer the younger demographic. They also
fear that the area is becoming depressed and that crowds no longer want to travel to the
Catskills. They aren ’t sure which direction to take.
1. Are the owners correct in wanting to attract a younger crowd?
2. What constraints are preventing the owners from targeting a new demographic?
3. List the positive aspects of the Log Lodge.
4. What options do the owners have with their limited budget and all the other
constrictions?
Exercises 283
Benny ’s Restaurant
Benny graduated from a culinary program in high school and worked for several small restaurants
for years. He had always dreamed of opening his own restaurant. Now was his chance.
He didn ’t have much of a plan, but had much desire and passion and knew that he could
make it work. He loved the art of cuisine. He recalled reading a quote in a food magazine
that stated, “If you build a simple restaurant, and prepare a truly great dish, they will come in
great numbers.” Essentially, if you prepare it, they will come. Benny was rather idealistic and
his personality and passion were quite appealing. He believed in the power of cuisine as a
motivator for business. He watched several shows on television and was sure that he was as
good as, if not better than, the chefs he saw.
Benny fi nally got his break when a local, old bakery went out of business. It was the fi rst
place that Benny found for which he could afford the rent. He immediately placed a security
deposit on it and began to make his dream a reality. He couldn ’t sleep for over a week.
He spent every spare moment at the restaurant. He loved it. He decided that he would open
as soon as he possibly could. This meant that he would have to go without a few things, but
he was sure that he could manage.
He couldn ’t think of a great name, so he called it Benny ’s. He wasn ’t sure of a precise
cuisine so he decided that he would use a chalk board as he had seen at other establishments.
He had two servers to start, his girlfriend and her brother. He would fi nd the rest as
needed. Then, he decided to open.
1. How successful do you think Benny will be with his initial opening?
2. Assess Benny ’s marketing from the standpoint of the 4 Ps.
3. From a marketing standpoint, what advice would you offer Benny?
EXERCISES
Exercise 1: Advertisement Review
Directions:
■ Research hospitality-related journals and choose an advertisement.
■ Attach the advertisement to the back of your assignment. Answer the following
questions.
Audience: What generation were they targeting?
Tactic : Was it an impulse (purchase now) or passive (remember us) advertisement?
Brand : What image did the advertisement portray?
Success : Do you believe it is a successful advertisement? Explain.
CASE STUDIES continued
284 Chapter 13 Marketing and Establishing an Image for Service
Exercise 2: The 4 Ps
Directions: Invent a hospitality business of your choice and relate it to the 4 Ps plus People
in the chart below:
Name of Establishment :
Type of Establishment :
Ps Description
Place
Promotion
Product
Price
People
Exercise 3: Analysis and Identifi cation of Customers
Directions: Choose a hospitality company within the segment of your choice and answer the
following questions relating to the analysis and identifi cation of customer wants and
needs.
Defi ne the Profi le
■ What business is it in?
■ What are they known for?
■ Who is their competition?
■ What is the competition known for?
Defi ne Best-in-Class
■ Who fi rst comes to mind when your industry is mentioned?
■ Who is the best at quality service?
■ Who has the overall best product?
■ Who has the nicest property?
■ Who has the nicest options or amenities?
■ Who leads in innovation?
■ Who leads in market share?
Defi ne the Customers
■ What do the customers want?
■ What do the customers expect?
■ How do customers defi ne value?
■ Are customers one-time or continued?
■ Where do new customers come from?
■ Why do some potential customers choose never to patronize the business?
EXERCISES continued
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