Service marketers must understand the four characteristics of services: intangibility, inseparability, variability, and perishability.
Intangibility
A major characteristic of services; they cannot be seen, tasted, felt, heard, or smelled before they are bought.
Hospitality and travel industry products are experiential only, and we do not know the quality of the product until after we have experienced it. A restaurant customer will not know how good the meal is until after he or she has consumed it. Likewise, a family planning a vacation will not know if the destination for their vacation and the choice of their resort was a good one until they have had their vacation experience.
One implication of experiential products is that we take away only the memories of our experiences. Marriott Vacation Clubs International realizes this and has made a deliberate effort to create memorable guest experiences. Marriott realizes that a white-water rafting trip can create memories that a family visiting their Mountainside Resort in Utah will talk about for years. The fun the family experienced while white-water rafting, along with their other experiences at the resort, will make them want to return. As a result, the staff at the Mountainside Resort know they must promote the activities of the destination as well as the resort. Other resorts create memories. It might be champagne and music on the beach at sunset or the special and unexpected attention that an employee provides for a guest. The goal is to create experiences that result in positive experiences.
Because guests will not know the service they will receive until after they receive it, service marketers should take steps to provide their prospective customers with evidence that will help them evaluate the service. This process is called providing tangible evidence. Promotional material, employees’ appearance, and the service firm’s physical environment all help tangible service. Hospitality companies today include virtual tours and pictures on their Web site. They also take advantage of Facebook, Instagram, and other social media to share photos and videos.
A banquet salesperson for a fine restaurant can make the product tangible by taking pastry samples on morning sales calls. This creates goodwill and provides the prospective client with some knowledge about the restaurant’s food quality. The salesperson might also bring a photo album showing photographs of banquet setups, plate presentations for different entrees, and testimonial letters from past clients. For persons having dinner as part of their wedding reception, some hotels prepare the meal for the bride’s family before the wedding day. Thus the bride actually gets to experience the food before the reception so there are no surprises.
Take note:
Physical Evidence
Physical evidence that is not managed properly can hurt a business. Negative messages communicated by poorly managed physical evidence include signs that continue to advertise a holiday special two weeks after the holiday has passed, signs with missing letters or burned-out lights, parking lots and grounds that are unkempt and full of trash, and employees in dirty uniforms at messy workstations. Such signs send negative messages to customers. Restaurant managers are trained to do a pre-opening inspection of the restaurant. One of the things they look for is that all light bulbs are working. A little thing like a burned-out bulb can give a guest sitting near it the impression that the restaurant does not pay attention to detail. Our customers notice details; this is why a consistent message from industry leaders is that managers must pay attention to detail.
Inseparability
A major characteristic of services; they are produced and consumed at the same time and cannot be separated from their providers.
Physical goods are produced, then stored, later sold, and still later consumed. In contrast, hospitality products are first sold and then produced and consumed at the same time. In most hospitality services, both the service provider and the customer must be present for the transaction to occur. Inseparability means both the employee and the customer are often part of the product. The food in a restaurant may be outstanding, but if the employee serving the food to the customer has a poor attitude or provides inattentive service, customers
will not be satisfied with their experience.
A couple may have chosen a restaurant because it is quiet and romantic, but if other customers include a group of loud and boisterous conventioneers seated in the same room, these customers will spoil the couple’s experience. Managers must manage their customers so they do not create dissatisfaction for others.
Another implication of inseparability is that customers and employees must understand the service-delivery system because they are co-producing the service. Customers must understand the menu items in a restaurant so that they get the dish they expect. This means hospitality and travel organizations have to train customers just as they train employees. A hotel at the Newark Airport is popular with international tourists who have just arrived from overseas. Many of these guests pay in cash or with travelers’ checks because they do not use credit cards. On more than one occasion, the front-desk clerk has been observed answering the phone of an upset guest who claims the movie system does not work. The clerk must explain that the guest did not establish credit because cash was paid for his or her room. He or she informs guests that they must come to the front desk and pay for the movie before it can be activated. Guests obviously become upset about receiving this information. The hotel could avoid this problem and improve customer relations by asking guests at arrival time if they would like to make a deposit for anything they might charge, such as in-room movies.
Casinos know they must train customers on how to play certain table games such as blackjack or craps. Casinos provide booklets on how to play the games and also offer free lessons in the casino. This enables the guest to enjoy the casino resort and creates new customers for the casino.
Variability
A major characteristic of services; their quality may vary greatly, depending on who provides them and when, where, and how they are provided.
Services are highly variable. Their quality depends on who provides them and when and where they are provided. There are several causes of service variability. Services are produced and consumed simultaneously, which limits quality control. Fluctuating demand makes it difficult to deliver consistent products during periods of peak demand. The high degree of contact between the service provider and the guest means that product consistency depends on the service provider’s skills and performance at the time of the exchange. A guest can receive excellent service one day and mediocre service from the same person the next day. In the case of mediocre service, the service person may not have felt well or perhaps experienced an emotional problem. Lack of communication and heterogeneity of guest expectations also lead to service variability. A restaurant customer ordering a medium steak may expect it to be cooked all the way through, whereas the person working on the broiler may define medium as having a warm pink center. The guest will be disappointed when he or she cuts into the steak and sees pink meat. Restaurants have solved this by developing common definitions of steak doneness and communicating them to the employees and customers. Sometimes the communication to the customer is verbal, and sometimes it is printed on the menu. Customers usually return to a restaurant because they enjoyed their last experience. When the product they receive is different and does not meet their expectations on the next visit, they often do not return. Variability or lack of consistency in the product is a major cause of customer disappointment in the hospitality industry.
When variability is absent, we have consistency, which is one of the key factors in the success of a service business. Consistency means that customers receive the expected product without unwanted surprises. In the hotel industry, this means that a wake-up call requested for 7 a.m. always occurs as planned and that a meeting planner can count on the hotel to deliver coffee ordered for a 3 p.m. meeting break, which will be ready and waiting when the group breaks at that time. In the restaurant business, consistency means that the shrimp scampi will taste the same way it tasted two weeks ago, towels will always be available in the bathrooms, and the brand of vodka specified last week will be in stock next month. Consistency is one of the major reasons for the worldwide success of McDonald’s.
Here are three steps hospitality firms can take to reduce variability and create consistency:
1. Invest in good hiring and training procedures. Recruiting the right employees and providing them with excellent training is crucial, regardless of whether employees are highly skilled professionals or low-skilled workers. Better- trained personnel exhibit six characteristics: Competence—they possess the required skill and knowledge. Courtesy—they are friendly, respectful, and considerate. Credibility—they are trustworthy. Reliability—they perform the service consistently and accurately. Responsiveness—they respond quickly to customers’ requests and problems. Communication—they make an effort to understand the customer and communicate clearly. Excellent hospitality and travel companies such as Marriott and Southwest Airlines spend a great deal of time and effort making sure they hire the right employees. But their attention to employees does not end there. They also invest in their employees by providing ongoing training.
2. Standardize the service-performance process throughout the organization.
Diagramming the service-delivery system in a service blueprint can simultaneously map out the service process, the points of customer contact, and the evidence of service from the customer’s point of view. The guest’s experience includes a series of steps he or she must enact while receiving the service. Behind the scenes, the service provider must skillfully help the guest move from one step to the next. By visually representing the service, a service blueprint can help one understand the process and see potential design flaws. Service blueprints include a line of interaction, line of visibility, and line of internal support. The line of interaction represents the guest’s contact with employees. The line of visibility represents those areas that will be visible to the guest and provide tangible evidence of the service. The line of internal interaction represents internal support systems that are required to service the guest.
3. Monitor customer satisfaction. Use suggestion and complaint systems, customer surveys, and comparison shopping. Hospitality companies have the advantage of knowing their customers. Companies also have the e-mail addresses of those who purchase from their Web sites. This makes it easy to send a customer satisfaction survey after a guest has stayed in a hotel or used its service. Travel intermediaries, such as Travelocity.com, contact guests to see how satisfied they were with a hotel they booked on their site. They realize if a customer had a bad experience they may not use their service again, even though they cannot control the service and quality of the hotels they represent. They try to create a consistent experience and set customer expectations by using a star rating system and publishing customer comments. Firms can also develop customer information databases and systems to permit more personalized, customized service, especially online.
Perishability
A major characteristic of services; they cannot be stored for later use.
Services cannot be stored. A 100-room hotel that sells only 60 rooms on a particular night cannot inventory the 40 unused rooms and then sell 140 rooms the next night. Revenue lost from not selling those 40 rooms is gone forever. Because of service perishability, airlines and some hotels charge guests holding guaranteed reservations when they fail to arrive. Restaurants are also starting to charge a fee to customers who do not show up for a reservation. They, too, realize that if someone does not show up for a reservation, the opportunity to sell that seat may be lost.
Some hotels will often sell hotel rooms at a very low rate rather than let them go unsold. Because of inseparability, this can cause problems. Oftentimes, the discounted rate brings in a different type of customer that is not compatible with the hotel’s normal customer.
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What Is Seasonality?
Seasonality is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. Any predictable fluctuation or pattern that recurs or repeats over a one-year period is said to be seasonal [1].
Understanding Seasonality
Seasonality refers to periodic fluctuations in certain business areas and cycles that occur regularly based on a particular season. A season may refer to a calendar season. Companies that understand the seasonality of their businesses can predict and time inventories, staffing, and other decisions to coincide with the expected seasonality of the associated activities, thereby reducing costs and increasing revenue [1].
Substitution
The concept of substitution has its roots in economics and occurs if (and only if) x is a substitute for y, then y is a substitute for x (Newman 2008). Substitution in tourism follows when a particular product or service can be replaced by another comparable one. For example, rail service between Paris and London offers a close substitute to air and sea travel between the two cities. [2]
Tourists have alternative options and regard different destinations, either national or international, as partial substitutes (Forsyth et al. 2014). For example, in the central European skiing market, Switzerland, Austria, and France are to some extent substitutes, and changes in relative prices will cause demand patterns to change (Tribe 2011). This effect is known as the substitution effect, which is the extent to which tourists will change from one destination, product, or service to another when the price of the former rises, ceteris paribus. If there are close substitutes for a given destination, product, or service, its demand will be more elastic. [2]
For example, if two substitute products have a high cross elasticity of demand (Hertz and Avis), then neither car rental firm can raise its price much without losing customers to the other (Baumol and Blinder 2011). Therefore, companies will try to reduce the degree of substitutability by differentiation at various levels to avoid pure price competition. Substitution in tourism can take several forms and to some extent, all products or services compete for the tourists’ limited income and time (Tribe 2011). The same principle can be applied to wages and the demand for leisure. [2]
The substitution effect of a wage increase is the resulting incentive to work more because of the higher relative reward to labor, while the income effect of a rise in wages is the resulting rise of worker’s purchasing power that enables them to afford more leisure (Baumol and Blinder 2011). The net effect depends on the personal preferences of the individual for income or for leisure (Stabler et al. 2010). [2]
Reference:
This is one of the best books in marketing for the hospitality and tourism course to buy it on www.amazon.com here.
Marketing for Hospitality and Tourism (7th Edition) 7th Edition
by Philip Kotler (Author), John T. Bowen (Author), James Makens Ph.D. (Author), Seyhmus Baloglu (Author)
Marketing for Hospitality and Tourism (2017) Kotler, P.; Bowen, John T.; Makens, J; Baloglu, S.; Pearson Education Limited, EdinburghGate, England
[1] W. Kenton, "Seasonality," 27 May 2019. [Online]. Available: https://www.investopedia.com/terms/s/seasonality.asp#:~:text=Seasonality%20is%20a%20characteristic%20of,is%20said%20to%20be%20seasonal.. [Accessed 03 September 2020].
[2] R. v. d. Veen, "Encyclopedia of Tourism," 24 September 2015. [Online]. Available: https://link.springer.com/referenceworkentry/10.1007%2F978-3-319-01669-6_341-1#:~:text=Substitution%20in%20tourism%20follows%20when,replaced%20by%20another%20comparable%20one.&text=If%20there%20are%20close%20substitutes,demand%20will%20be%20more%20elastic. [Accessed 04 September 2020].
Additional References:
Baumol, W., and A. Blinder 2011 Microeconomics: Principles and Policy. Mason: South-Western Cengage Learning.
Forsyth, P., L.Dwyer, R. Spurr, and T. Pham 2014 The Impacts of Australia’s Departure Tax: Tourism versus the Economy? Tourism Management 40:126-136.
Newman, P. 2008 Substitutes and Complements. In The New Palgrave Dictionary of Economics, S. Durlauf and L. Blume, eds., online reference (no page). London: Palgrave Macmillan.
Tribe, J. 2011 The Economics of Recreation, Leisure and Tourism. Oxford: Elsevier.
Stabler, M., A. Papatheodorou, and M. Sinclair 2010 The Economics of Tourism. London: Routledge.
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