Chapter 1 Introduction to customer service Hudson &

Chapter 1 Introduction to customer service Hudson & Hudson. Customer Service for Hospitality & Tourism Topics Covered o Customer service defined o A history of customer service o The role of customer service Unique characteristics of services Services marketing triangle The services marketing mix o The importance of customer service in the tourism and hospitality sector At Your Service Spotlight: Walt Disney a legacy of customer service Disneyland is a work of love. We didnt go into Disneyland just with

the idea of making money. o Walts personal philosophy (values, morals, religious beliefs, creative goals, innate psychographic awareness) o The company still holds true to his basic beliefs and has diversified to incorporate cruises, TV channels, film studios and a training institute o Commitment to customers - a focus on the guest experience rather than traditional business efficiencies o Imagineering o what ifs o positive alternative to saying no o Guestology o Disney Institute Customer service o Many attempts have been made to define customer service o The definition used in this book is as follows: Customer service is the practice of delivering products and services to both internal and external customers via the efforts of employees or through the provision of an appropriate servicescape. o It acknowledges that customer service is more that

interaction between employees and customers o It also relates to the physical infrastructure or the hospitality servicescape History of customer service o 1800s Craftsman economy o Business owners also frontline employees o Customized orders o 20th century mass production o Less individualized service o Post WWII demand: Power of suppliers surpasses that of consumers o 1970s: Western manufacturers compete with Asia o 1990sL Suppliers more selective o Present day: Shift to service economy Reasons companies may not provide excellent customer service include. o Companies wrongly believe they are providing service

excellence o Organizations dont understand the significance of customer service o Companies dont know how to deliver consistent, high quality customer service on an on-going basis Snapshot: Customer service at the Augusta Masters In the race for excellence, there is no finishing line. Many key features of professional golf tournaments introduced in Augusta o Focus on serving Patrons and was the first in many areas: Bleachers, rope galleries, closed circuit TV, on-course scoreboards Picnicking grounds, plenty of lavatories Great value food Still the competition by which others are judged 3,500 staff employed every year They look for a special kind of person Cliffords principles are guiding philosophy Role of customer service

Models to assist in services marketing and management decisions at the strategic and implementation levels: o Four unique characteristics of services o The services marketing triangle o The marketing mix for services Unique characteristics of services Characteristic Description 1) Intangibility Service products cannot be tasted, felt, seen, heard, or smelled. Prior to boarding a plane, airline passengers have nothing but an airline ticket and a promise of safe delivery to their destination. To reduce uncertainty caused by service intangibility, buyers look for tangible evidence that will provide information and confidence about the service. 2) Inseparability For many services, the product cannot be created or delivered without the

customers presence. The food in a restaurant may be outstanding, but if the server has a poor attitude or provides inattentive service, customers will not enjoy the overall restaurant experience. In the same way, other customers can affect the experience in service settings. 3) Heterogeneity Service delivery quality depends on who provides the services. The same person can deliver differing levels of service, displaying a marked difference in tolerance and friendliness as the day wears on. Lack of consistency is a major factor in customer dissatisfaction. 4) Perishability Services cannot be stored. Empty airline seats, hotel rooms, daily ski passes, restaurant coversall these services cannot be sold the next day. If services are to maximize revenue, they must manage capacity and demand since they cannot carry forward unsold inventory. The services marketing triangle Company

Internal Marketing Enabling Promises External Marketing Making Promises Service Providers Customers Interactive Marketing Keeping Promises Expanded Marketing Mix for Services Product Place Promotion Price

1) Physical good features 1) Channel type 1) Promotion blend 1) Flexibility 2) Quality level 2) Exposure 2) Salespeople 2) Price level 3) Accessories 3) Intermediaries - Number

3) Terms 4) Packaging 4) Outlet locations - Selection 4) Differentiation 5) Warranties 5) Transportation - Training 5) Discounts 6) Product lines 6) Storage

- Incentives 6) Allowances 7) Branding 7) Managing channels 3) Advertising - Targets - Media types - Types of ads - Copy thrust 4) Sales promotion - Publicity Additional 3 Ps of Services Marketing Product Place

Promotion Price 1) Physical good features 1) Channel type 1) Promotion blend 1) Flexibility 2) Quality level 2) Exposure 2) Salespeople 2) Price level 3) Accessories

3) Intermediaries - Number 3) Terms 4) Packaging 4) Outlet locations - Selection 4) Differentiation 5) Warranties 5) Transportation - Training 5) Discounts

6) Product lines 6) Storage - Incentives 6) Allowances 7) Branding 7) Managing channels 3) Advertising - Targets - Media types - Types of ads - Copy thrust 4) Sales promotion - Publicity Tourism and hospitality market

.activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited (UNWTO) o Demand for a wide range of travel and hospitality products o Total market now serviced by the worlds largest industry International arrivals: 50 million in 1950 to 1.18 billion in 2015 (UNWTO, 2016). International tourism represents 7% of total world exports and 30% of services exports. In 2015, the total export value from international tourism amounted to $1.4 trillion, with the sector being responsible for 10% of the worlds GDP, and accounting for one in 11 jobs. Western markets o Mature hospitality and tourism markets Severe competition Low product differentiation Limited promotional cost

Customer service increasingly important as market differentiator o Actual customer satisfaction Heightened customer expectations Lagging satisfaction rates for tourism and hospitality Customer service superstars 1) The Ritz-Carlton Hotels and Luxury hotel; renowned for its personalized service and famous (and generous) employee empowerment policy; has its own Leadership Centre often used by other Resorts companies for development and training; motto, We are Ladies and Gentlemen Serving Ladies and Gentlemen has impact internally and externally. 2) Harrahs Entertainment Gaming/Entertainment; CEO is co-author of the service profit chain; uses leading edge database system to do surgical marketing; belief that business should be grown by investing heavily to focus the firm on the customer rather than investing on the tangible assets of the firm only. 3) The Walt Disney Company

Entertainment; in addition to its reputation as the provider of family entertainment and fun, Disney is known for many customer-focused approaches such as guestology and the imagineers. 4) Four Seasons Luxury hotel; embodies a true home away from home experience with exceptional personal service; ranked number two in recent Business Week survey of best customer service. 5) Club Med Resorts; the carefree, all-inclusive holiday package company, in search of the alchemy of happiness, has been able to make necessary adjustments along with demographics of customer base. 4) Southwest Airlines Airline; innovation of the low cost carrierhas continually run contrary to most of the airline industry through its customer-service culture; considers itself a customer service business which just happens to provide transportation.

4) Singapore Airlines Airline; at the premium end of the market, Singapore Airlines has consistently outperformed its competitors throughout its three-and-a-half decade long history. It has sustained its competitive advantage by effectively implementing a dual strategy: differentiation through service excellence and innovation, together with simultaneous cost leadership. Asian markets Knowing our guests and their preferences helps us to understand their needs, and in turn, we are able to anticipate their requests before they even ask for assistance - The Ritz-Carlton director of sales and marketing o High levels of service in tourism and hospitality o Customer satisfaction study in Singapore o Satisfaction index across eight economic sectors, 102 organizations. o Top five spots: The Ritz-Carlton, Singapore Airlines, Swissotel The Stamford, Shangri-La and Grand Hyatt Case Study: The Lopesan Group,

Gran Canaria, Spain Theres no second chance for a first impression o Five-star hotels, beach, restaurants, shopping malls, golf course o African-themed: Jungle foliage, calls, scents o 40 % repeat customers o Attention to detail Cocktails at check-in Televisions on guests language channel Staff track personal preferences Complementary drinks and fruit o Investments in staff training o Well-compensated, career opportunities

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