MODULE 2: THE HOSPITALITY SERVICE STRATEGY

LEARNING OUTCOMES
• Differentiate making products and serving guests
• Recognize the importance of the guest experience
• Learn generic strategies for positioning products and services

MODULE CONTENT

THE BASICS OF WOW! THE GUEST KNOWS BEST

Guestology: What is it?

Guestology is a term originated by Bruce Laval of the Walt Disney Company. Customer-guestsare,to the
extent possible, studied scientifically (the---ology- in guestology). Guest’s behaviors within the hospitality
organization are carefully observed. Their wants, needs, capabilities and expectations regarding the
hospitality guest experience are determined.
Guestology means...
simply that all the organization’s employees must treat customers like guests and manage the organization
from the guest’s point of view.
Importance of Guestology
The practice of guestology makes it possible to increase guest satisfaction, which leads to more repeat visits,
which in turn drives revenue up.
The organization’s strategy, staff and systems are aligned to meet or exceed the customer’s expectations
regarding the three aspects of the guest experience: service product, service setting, and service delivery.
These aspects or elements are carefully woven together to give guests what they want and expect, plus a
little bit more. “It all starts with the guest” is not just an inspirational slogan; in the service-centered hospitality
organization, it is the truth and everybody accepts and lives up to it.

Meeting Customer Expectations

A guestologist seeks to understand and plan for the expectations of an organization’s targeted customer
before they ever enter the service setting, so that everything is ready for each guest to have a successful
and enjoyable experience.

Service
Service is an intangible part of transaction relationship that create value between a provider organization and
its customer, client, or guest. More simply, a service is something that is done for us.

•Services can be provided directly for the customer

•Services can be provided for the customer
•Services can be provided by a person
•Services can be provided via technology

THE GUEST EXPERIENCE

It is the sum total of the experiences that the guest has with the service provider on a given occasion or set
of occasions. Components of the Guest experience:

Guest experience = service product + service setting + service delivery system

The service product
The service product, sometimes called the service package or service/product mix, is why the customer,
client, or guest comes to the organization in the first place. The basic product can be relatively tangible (hotel
room) or relatively intangible (rock concert). Most service products have both tangible and intangible elements
and can range from mostly product with little service to mostly service with little if any product.

The service setting

The second setting of the guest experience is the setting or environment in which the experience takes place.
The term servicescape, the landscape within which service is experienced, has been used to describe the
physical aspects of the setting that contribute to the guest’s overall physical feel of the experience.

The service delivery system

It includes the human components and the physical production processes plus the organizational and
information system and techniques that help deliver the service to the customer.With all aspects of the service
delivery system, the people interacting with customers or guests are by far the most able to make a difference
in how customers feel about the value and quality of the experience.

Service encounters
The service encounter is often used to refer to the person-to-person interactions between the customer and
the person delivering the service. Although both parties are usually people, the many situations or interactions
between organization and guest which are now automated-ATM, check-in kiosks and online transactions
being familiar examples---may also be considered service encounters.

The Nature of Service

1.Services are partly or wholly intangible.
2.Services are consumed at the moment or during the period of production and delivery
3.Services usually require interaction between the service provider and the customer, client or guest.
MEETING GUEST EXPECTATIONS THROUGH PLANNING

Three Generic Strategies

1. A Lower Price- The low-price provider tries to design and provide pretty much the same service that the
competition sells, but a lower price. Management’s focus is on maximizing operational or production
efficiencies to minimize the organization’s cost. The low-price provider tries to offer the service at a price so
low that competitors cannot offer the same service and value at a lower price without losing money.
2. A Differentiated Product- Differentiating one’s product in the marketplace results from creating in the
customer’s mind desirable differences, either real or driven by marketing and advertising, between the
product and other available at about the same price.
The Brand Image is a major way to differentiate one’s service from those of competitors is through the
creation of a strong brand image. A brand represents a promise to guests of what the quality and value of
experiences associated with that brand will offer them, every time and every place they see the brand.
3. A Special Niche. An organization can try to find a particular market niche or gap. It can focus on a
specific part of the total market by offering a special appeal---like quality, value, location, or exceptional
service---to attract customers in that market.

Combining Strategies
An organization can seek differentiate its product from all others in the market (Strategy 2) by positioning
the product in people’s minds as the best value for the lowest cost (Strategy 2)

The Hospitality Planning Cycle

The organization gathers as much as information as it can on what its present customer’s want, need, and
do, tries to imagine what kinds of experiences their future guests will find satisfying, and then plans ways to
deliver them. The way to reach these outcomes is through the strategic planning process. The process has
two basic steps: assessment (external and internal) and figuring out what to do on the basis of the
assessment. The external assessment of environmental opportunities and threats leads to the generation of
strategic premises about the future environment. The internal assessment of organizational strengths and
weaknesses leads to a redefinition or reaffirmation of organizational core competencies.
Environmental Assessment Vision Statement Internal Assessment
(“A look around”) (A searching look within”)

Strategic Premises Mission Statement Core Competencies

Service strategy

Service –Product Strategy Service-Setting Strategy Delivery-System Strategy

Action Plans
(with Performance Measures)

Management Employee Hiring/ Capacity Financial/ Marketing

Performance Training/Retention Utilization Plan Budgeting Plan
Plan Plan Plan

THE HOSPITALITY PLANNING PROCESS

Looking Around

The environmental assessment, or the look around for opportunities and threats, in turn defines the strategic
premises. These premises are the beliefs of the managers assessing all long-term aspects of the external
environment and trying to use them to discover what forces will impact their business in the future and especially
what customers will want in that future environment.

Look Within

The internal assessment or the searching look within for strengths and weaknesses, defines the organization’s
core competencies and considers the organization’s strong and weak points in terms of its ability to compete in the
future. It is here that the organization determines what it does well, what does not do well, and how its strengths and
weaknesses pair with what it wants to accomplish. \

SETTING THE SCENE FOR THE GUEST EXPERIENCE

Why is the environment important?

 Hospitality managers must pay attention to the environment for several major reasons. It influences guest
expectations, creates and maintains the mood and has positive effects on employees. Finally, the environment serves
several functional purposes as part of t service itself.

1. Guest expectations- The environment influences the guest expectations even before the service is delivered. If the
outside of the restaurant is dirty, guests will enter with negative expectations.

2. Guest mood-The environment sets and maintains the mood after the guest begins the guest experience. One way
to do is to maintain the consistency between what the guest expects to see and what the guest actually sees.

3. Employee satisfaction- The third contribution of the service setting to the guest experience is its effect on a group
of people who do not use the service: the employees who coproduce it. Although the environment is designed
primarily to enhance the guest’s experience, insofar as possible it should be supportive of and compatible with the
employee’s experience as well. Nobody wants to work in a dangerous or dirty environment. Employees spend a lot
more time in the service setting than guests do, and well-designed environment can promote employee satisfaction,
which some argue is highly correlated with guest satisfaction.

4. Functional value of the setting-the guest relies on the hospitality organization to create an environment that is safe
and easy to use and understand. Environmental features must be such that the guest can easily and safely enter
experience and then leave without getting lost, hurt or disoriented.

HOW THE SERVICE ENVIRONMENT AFFECTS THE GUEST

Environment “Servicescape” Individual Moderators Responses Outcomes

Ambient conditions in the environment—the ergonomic factors such as temperature, humidity, air quality, smells,
sounds, physical comfort and light---affect the nature of the guest experience.

Use of space-it refers to how the equipment and furnishings are arranged in the hospitality service setting, the size
and shape of those objects, their accessibility to the customers, and the spatial relationships among them.

Functional congruence refers to how well something with a functional purpose fits into the environment in which it
serves that purpose. The functioning of the equipment , layout of the physical landscape, design of building and the
design of the service environment must be congruent with what the guest expects to find in that environment.

Signs, symbols and artifacts- is the component that communicate to the guest. Signs serve different purposes: to
name the business, to describe the product or service and to give direction. Signs are explicit representations of
information that the organization thinks guest might want, need, or expect to find. Signs are used to convey messages
through the use of symbols, often language itself. Some signs contain not words but other symbols, such as
representational icons that can replace any specific language. Artifacts are physical objects that represent something
beyond their functional use. Theme restaurants use artifacts extensively to help convey the theme.

Other people- the environment has other people in it: employees, other guests, or perhaps even audio-animatronics
creations that guests come to think of as real people. Guests often want to see other guests.

Servicescape- temperature, smells, sounds, lights, signs, physical structures, furnishings, green space, open space,
other people- although no guest ever singles out or even notices all the elements within the environment, they do
combine to create an overall, unified impression of that environment. Servicescape is the overall perception or whole
picture that the guest draws from countless individual factors.

Factors that Moderate Individual Responses

Mood-Some customers arrive in a happy mood while others are angry or upset.

Personality-some people like to be alone while others love to be around crowds.

Expectations-some people have been there and done that before and have certain expectations of what the
environment should be like while others are first timers and find everything fascinating.

Demographic-some older people have a hard time walking longer distances while most young adults don’t mind and
mat prefer it. Some parents don’t like to get wet on a ride while most teens think it’s great.

Responding to servicecsape

Physiological Responses
• The senses- servicescape affects the guest senses. Most physiological responses to such ambient conditions
as temperature, humidity, air quality, smells, sounds and light.
• Information processing-capabilities of the brain.

Cognitive Responses-the cognitive impact of an experience depends on the knowledge the guest bring to the
experience. Guests enter every experience with a set of expectations based on what they have seen, heard about, and
done before. The human tendency is to seek points of similarity between what we have done, seen, or experienced
before and what we encounter in the new situation.

Emotional Response-customer may react emotionally to the servicescape. Emotional responses have two distinct
elements of interest to the hospitality organization. The first is the degree of arousal and the second is the amount or
degree of pleasure/displeasure.

DEVELOPING THE HOSPITALITY CULTURE: EVERYONE SERVES

Culture
An organization’s culture is a way of behaving, thinking, and acting that is learned and shared by the organization’s
members. A more formal definition: the shared philosophies, ideologies, values, assumptions, beliefs, attitudes, and
norms that knit a community of different people together.

The Importance of Culture

The organization’s strategy must be connected to its culture. No matter how brilliant and well thought out a strategy
is, it will fail if it doesn’t fit with the organization’s cultural values and beliefs.

Beliefs, Values and Norms

Culture-driven organization seek to define the beliefs, values, and norms of the organization through what their
managers do, say and write as well as by who they reward, recognize and promote.
 Beliefs form the ideological core of the culture. Beliefs define the relationships between causes and effects for the
organizational members. A belief is how the people in organization make sense of their relationships with the external
world and its influence on the internal organization. Ex: If the people in an organization assume that the market place
rewards those organizations that provide good service and punishes those that don’t, the importance of providing good
customer service becomes a cultural belief. It’s something that everyone believes in.

Values are preferences for certain behaviors or certain outcomes over others. Values define for the members what
is right and wrong, preferred and not preferred desirable behavior and undesirable behavior. Obviously, values can be
strong influence on employee behavior within an organizational culture. If management sends a clear signal to all
employees that providing good customer service is an important value to the organization, then the employees know
they should adopt this value. Consequently, they are more likely to behave in ways that ensure that the customer has
a good service experience.

Norms are standards of behavior that define how people are expected to act while part of the organization. The
typical organization has an intricate set of norms. Some are immediately obvious, and some require the advice and
counsel of veteran employees who have learned the norms overtime by watching what works and what doesn’t work,
what gets rewarded and what gets punished. Most outstanding hospitality organizations have norms of greeting a guest
warmly, smiling and making eye contact to show interest in the guest.