7/4/2020

“To understand service quality and make quality

management effective, we need profound
Chapter 11 knowledge about the details and activities
connected with the emergence of a service.
This presupposes interest in service design and
Building service production.”
Customer -Evert Gummesson
Loyalty
through
Quality
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Chapter Objectives Chapter Objectives

• Define customer value and customer • Know tactics for resolving customer
satisfaction complaints and understand the importance of
resolving complaints
• Understand the difference between customer
satisfaction and customer loyalty • Define quality and discuss the importance of
the benefits of quality
• Discuss attracting new users and retaining
current customers by developing relationship • Implement capacity and demand
marketing management tactics
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

1
 7/4/2020

Customer Delivered Value Customer Delivered Value

• Customer-delivered value is the difference
between total customer value and total
customer cost of a marketing offer

• Customer satisfaction depends on the

product’s performance relative to a buyer’s
expectations

• Companies must be customer centered and

deliver superior value to target customers
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Customer Satisfaction Customer Satisfaction vs.

Customer Loyalty
• Buying decisions based on judgments formed • Customer satisfaction measures how well a
about the value of marketing offers customer’s expectations are met

• Customer expectations based on past buying • Customer loyalty measures how likely
experiences customers are to return and their willingness
to perform partner shipping activities for the
• Today’s most successful companies raising organization
expectations and delivering performance to
match • Customer satisfaction is a requisite for loyalty
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

2
 7/4/2020

Relationship Marketing Benefits of Customer Loyalty

• Creating, maintaining, and enhancing • Continued patronage
strong relationships with customers
– Basic • Reduced marketing costs
– Reactive
– Accountable • Decreased price sensitivity
– Proactive
– Partnership • Partnership activities

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Resolving Customer
Cost of Lost Customers
Complaints
• Companies must define and measure
retention rate • A critical part of customer retention

• Company must identify causes of customer

defection and determine which can be • 82% of customers are likely to return if a
reduced or eliminated complaint is handled quickly, as opposed to
9% if it is not
• Reducing customer defections by only 5
percent can result in improved profits of over
25 percent • Most customers do not complain

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

3
 7/4/2020

Quality Quality
• Quality has emerged as an important area in
• Technical quality refers to what the
hospitality customer is left with after the customer –
employee interactions have been completed
• Product features enhance customer
satisfaction and adds to the cost of a product • Functional quality is the process of
delivering the service or product

• Freedom from deficiencies increases • Societal (ethical quality) means firms must
customer satisfaction consider ethical responsibilities when
developing products

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Managing the Perceived Service

Quality Benefits of Quality Service
• Customer Retention

• Avoidance of Price Competition

• Retention of Good Employees

• Reduction of Costs
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

4
 7/4/2020

Managing Capacity Managing Capacity

1. Involve the customer in the service delivery 5. Schedule downtime during periods of low
system capacity

2. Cross-train employees 6. Extend service hours

3. Use part-time employees 7. Use technology

4. Rent or share extra facilities and equipment 8. Change the Configuration of the Service

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Revenue Management Managing Demand

• Revenue management is a 1. Use price to create or reduce demand

methodological approach to allocating a
perishable and fixed inventory to the 2. Use reservations
most profitable customers
3. Overbook

4. Use queuing

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

5
 7/4/2020

Managing Demand Class Discussion

5. Shift demand
The Five-Gap Model
of Service Quality
6. Change the salesperson’s assignment

7. Create promotional events Question: Describe ways in which you as

a Manager could use the five-gap model
of service quality

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

The Five- Close Gap 1

Gap
Model of 1. Talking to customers
Service 2. Talking to customer contact employees
Quality
3. Marketing information systems –
customer surveys – analysis by
segment – focus groups
4. Reducing levels of management

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

6
 7/4/2020

Close Gap 2 Close Gap 3

1. Management Commitment – 1. Training
resources, internal marketing, reward 2. Internal marketing, pride
systems 3. Teamwork
2. Use of hard and soft technology 4. Reward systems
3. Shift demand 5. Service quality audits
4. Is meeting customer expectations
financially feasible?

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

Close Gap 4 Best Practices

1. Know the capabilities of the firm • Service Guarantees by Hampton Inns
2. Good communications within the firm
3. Internal marketing – teamwork – Unconditional guarantees

– Specific guarantees

– Implicit guarantees

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens

7
 7/4/2020

Key Terms Key Terms

• Customer centered
• Product features
• Customer-delivered value
• Revenue management
• Expected service
• Societal (ethical) quality
• Freedom from deficiencies
• Technical quality
• Functional quality
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens Upper Saddle River, NJ 07458 Kotler,
Kotler, Bowen,
Bowen,andandMakens
Makens