Transcript Chapter 11

Chapter 11:
Building Customer Loyalty
Through Quality
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Figure 11-1
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Relationship Marketing Compared With
Traditional Marketing
Relationship marketing
Traditional Marketing
Orientation to customer retention
Orientation to single sales
Continuous customer contact
Discontinuous customer contact
Focus on customer value
Focus on product features
Long time scale
Short time scale
High customer service emphasis
Little emphasis on customer service
High commitment to meeting
customer expectations
Limited commitment to meeting
customer expectations
Quality is concern of all staff
Quality is the concern of the
production staff
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Customer Delivered Value
Total customer Value
Minus
Equals
Total customer
cost
Customer
Delivered Value
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
(Products, services,
personnel, and image
values)
(Monetary, time, energy,
and psychic costs)
(“Profit” to the
consumer)
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Customer Satisfaction
Customer Satisfaction with a
purchase depends on the
product’s performance relative to
a buyer’s expectations.
If performance exceeds or meets
expectations the customer is
highly satisfied or delighted.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Customer Satisfaction Versus
Customer Loyalty
• Customer satisfaction – How well
expectations are met
• Customer Loyalty
– Behavior – Do customers come back or
intend to come back
– Emotional Attachment – Do customer
spread positive word of mouth and perform
other partnership activities
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Five Levels of Relationships
• Basic
•
The company sells the product but does not follow-up
•
The company sells the product and encourages the
customer to call when the have problems or
questions.
•
The company’s representative checks on customer
after the sales and the event to make sure things
were satisfactory and to get feedback.
• Proactive
•
The salesperson or others in the company phone
customers from time to time to seek suggestions.
• Partnership
•
The company works continuously with the customer
to discover ways to develop better value.
• Reactive
• Accountable
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Three Customer ValueBinding Approaches
Financial benefits
Social benefits
Structural ties
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Establishing a Relationship
Marketing Program
• Identify the key customers meriting
relationship management
• Assign a skilled relationship manager to
each customer
• Develop a clear job description for
relationship managers
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Establishing a Relationship
Marketing Program
• Have each relationship manager
develop annual and long-range
customer relationship plans
• Appoint an overall manager to
supervise the relationship managers
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Internal Costs
•
•
•
•
•
Rework (back of the house)
Facility Downtime
Loss of Morale
High employee turnover
Loss of employee marketing
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Complaint resolution
• Approximate percentages that will
purchase again if they have a complaint
– 82% if resolved quickly
– 50% if resolved
– 15% if not resolved
– 9% if they don't communicate their
complaint
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Managers and employees should treat
complaining customers as the most
important customer - and listen to their
complaints
• Complaints and problems create
opportunities to develop loyalty
• Knowing customer value gives us an
idea of how far we want to got fix the
problem
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Managing the
Perceived
Service Quality
Source: Christian Gronroos
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Benefits of Service Quality
• Retaining customers
• Avoidance of price
competition
• Retention of good
employees
• Reduction of costs
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Developing a Service Quality
Program
1. Supply strong leadership
2. Integrate marketing throughout the
organization
3. Understand the customer
4. Understand the business
5. Apply operational fundamentals
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Developing a Service Quality
Program
6. Leverage the freedom factor
7. Use appropriate technology
8. Practice good human resource
management
9. Set standards, measure performance,
and establish incentives
10. Feed back the results to the
employees
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Managing Capacity
• Involve customers in the delivery
system
• Cross-train employees
• Use part - time employees
• Rent or share facilities and equipment
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Managing Capacity
• Schedule downtime during periods of
low demand
• Extend service hours
• Use technology
• Use price
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Customers as Employees
• Reservations
• Check - out
• Check-in
• Salad bar
• Honor bar - concierge
floor
• Macaroni Grill - wine
• Fast food - beverages
• Cook Steak
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Managing Demand
•
•
•
•
•
•
•
Use price to increase or reduce
Use reservations
Overbook
Use queuing
Shift demand
Change salesperson’s assignment
Create promotional events
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Waiting Time
• Unoccupied times feels longer than
occupied time
• Unfair waits are longer than equitable
waits
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Chapter 11: Figure
11-3: Conceptual
model of service
quality - the gap
analysis model.
Source: Leonard l.
Berry, A.
Parasuraman, and
Valarie A.
Zeithaml.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Close Gap 1 by;
1. Talking to customers
2. Talking to customer contact employees
3. Marketing information systems-customer surveys-- analysis by
segment-- focus groups
4. Reducing levels of management
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Close Gap 2
1. Management Commitment-- resources,
internal marketing, reward systems
2. Use of hard and soft technology
3. Shift demand
4. Is meeting customer expectations
financially feasible?
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Close Gap 3
1. Training
2. Internal marketing, pride
3. Teamwork
4. Reward systems
5. Service quality audits
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
Close Gap 4
1. Know the capabilities of the firm
2. Good communications within the firm
3. Internal marketing-- teamwork
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458