Service Characteristics of Travel and Tourism Marketing

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Service Characteristics of Travel and Tourism
Marketing

• Objective discussing four distinguishing
  characteristics of services and several things
  management of service firms and in particular
  travel and tourism firms can do to increase the
  effectiveness of their business.

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Services Marketing

• Service industries are quite varies governmental
  services - courts, hospitals, police, fire
  departments, postal services, schools etc
  private nonprofit organizations - museums,
  colleges, hospitals etc business organizations -
  airlines, hotels, restaurants, advertising, real
  estate etc.

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Satisfying the Customers

• The aim of the service organizations is also
  serving and satisfying the customer.
• The belief that customer comes first is
  reinforced in Four Seasons Hotels where employees
  who go to extraordinary efforts to satisfy the
  customer are entitled to be the Employee of the
  Year, story of Ron Dyment, doorman in Toronto.

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Nature and Characteristics of Services

• There are four distinguishing characteristics of
  services. They are
• Intangibility
• Inseparability
• Variability
• Perishability

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Service Intangibility

• means that unlike physical products, services
  cannot be seen, tasted, felt, heard or smelled
  before they are bought.
• Buyers look for signals or tangible evidences
  like the place, people, price, equipment and
  information about the service in order to reduce
  uncertainty caused by intangibility before they
  pay the price. E.g. the cleanliness of the
  restaurant, employee uniforms of the hotel,
  Heublein vs Smirnoff.

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Service Inseparability

• means that services cannot be separated from
  their both (1) providers and (2) other customers.
• If a service employee provides the service, then
  the employee is part of the service. E.g. the
  food in the restaurant may be outstanding, but if
  the service person is rude, customers will
  downrate the overall service of the restaurant.
• the other customers affect the service outcome as
  well. E.g. a couple may choose a restaurant but
  if a group of loud customers is seated next to
  them, the couple will be disappointed.

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Service Variability

• means that the quality of services depends on who
  provides them, plus, when, where, and how they
  are provided. E.g. within a given hotel chain,
  one reception desk agent may be cheerful and
  efficient one day but would be unpleasant and
  slow the other day.
• Service providers service quality depends on his
  energy and his frame of mind at the time of each
  customer encounter.
• Fluctuating demand makes it difficult to deliver
  consistent services during periods of peak
  demand.
• Variability or lack of consistency is the major
  cause of customer disappointment in the industry.

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Service Perishability

• means that services cannot be stored for later
  sale or use. E.g. if a 100 room hotel can sell
  only 40 rooms today, selling the remaining 60 is
  gone forever.
• If service providers are to maximize revenue,
  they must manage capacity and demand. E.g. hotels
  charge lower rates in the off-season to attract
  more guests restaurants hire part-time employees
  to serve during peak periods tour operators and
  airline companies have last-minute sales.
• Service perishability is a serious problem when
  demand fluctuates.

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Marketing Strategies forService Firms

• Services are different form tangible products,
  that is why, additional marketing approaches are
  needed to market services.
• In service businesses, the customer and
  front-line service employees interact. Service
  providers must interact effectively with
  customers to satisfy them. That is why, companies
  take care of their employees to make profit.
  Because they believe that only

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• satisfied and productive service employees can
  create satisfied and loyal customers.
• Internal marketing means that the service firm
  must effectively train and motivate its
  customer-contact employees to provide customer
  satisfaction.
• Interactive marketing means that service quality
  depends on the quality of the buyer-seller
  interaction during the service encounter.
• In order to increase the profit margin, there are
  three major marketing tasks for service companies

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Managing Service Differentiation

• Differentiated offer, delivery and image are the
  keys for the solution to price competition.
• The offer can provide innovative features like
  e.g. in-flight movies, advance seating,
  frequent-flyer award programs in an airlines.
  British Airways offers a sleeping compartment and
  hot showers.

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• The delivery can be differentiated by having
  better customer-contact people, developing
  a superior physical environment, or by designing
  a superior deliver process like e.g. home banking
  can be provided as a better way to deliver
  banking services.
• The image can differentiate the service company
  through symbols and branding.

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Managing Service Quality

• A service firm can also differentiate itself by
  delivering consistently higher quality than its
  competitors do.
• Service quality will always vary, depending on
  the interactions between employees and customers.
  A company cannot always prevent service problems
  but can recover them. A good service recovery can
  turn angry customers into loyal ones. Companies
  empower front-line

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• service employees (giving authority to do
  whatever it takes to keep customers happy) to
  recover problems.
• Good service companies also communicate their
  qualities to employees and provide performance
  feedback.

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Managing Service Productivity

• Service productivity can be increased by
• training the employees better or hiring new and
  better employees
• industrializing the service with equipment and
  standardized production as in McDonalds
• using technology to save time and money
• Trying to increase the productivity would reduce
  quality and diminish customer service. That is
  why, some service providers accept to have lower
  productivity levels.

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Particular Characteristics of Travel and Tourism
Services

• In particular, travel and tourism products have
  the
• following special characteritics
• Seasonality and demand fluctuations
• High fixed costs of service operations
• Interdependence of tourism products

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Seasonality and demand fluctuations

• As far as most leisure tourism markets are
  concerned, demand fluctuates greatly between
  seasons of the year. As a result, the
  occupancies in many tourism businesses increases
  to 90 to 100 per cent in the high season but
  drops to 30 per cent or less in the low season.
  In addition, seasonal closure of many leisure
  tourism businesses is common as well. These
  demand variations in tourism is more important
  because of perishability. That is why,
  generating demand when there is less demand, is
  always the major preoccupation for marketing
  managers.

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High fixed costs of service operations

• In the travel and tourism industry, it is
  generally the case that the operations have high
  fixed costs and relatively low variable costs.
  This fact focus all service operators attention
  on the need to generate extra demand. Since most
  large scale businesses are obliged to operate on
  a very narrow margin between total cost and total
  revenue because of intense competition, plus or
  minus one percentage point in average load
  factors makes the difference between profit or
  loss.

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Interdependence of tourism products

• The fortunes of all tourism organizations in a
  destination are linked. Since a vacationer
  chooses attractions at a destination together
  with the products of accommodation, transport,
  catering etc., all organizations should function
  in coordination. Partnership

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• Marketing in tourism is shaped and determined by
  two important factors
• the operating characteristics of supplying
  industries
• the nature of demand for tourism

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Useful Links and Sources

• Kotler, P. Bowen, J. and Makens, J. (1999).
  Marketing for Hospitality and Tourism (2nd ed.).
  Prentice Hall. NJ.
• Kotler, P. and Armstrong, G. (2006) Principles of
  Marketing (11th ed.). Prentice Hall. NJ.
• Middleton, V.T.C. (2004) Marketing in Travel and
  Tourism (3rd ed). Elsevier. Oxford.
• http//www.hotelsmag.com
• http//www.tourism.bilkent.edu.tr/eda