QSTH PRELIMS REVIEWER The Different Relationship between

Customer and Service Provider

Service Provider Present
GUESTOLOGY - Service Provider Not
• originated by Bruce Laval of the Present
Walt Disney Company Hospitality, Medical,
• Guests are studied scientifically Professional
• increase guest satisfaction - Electric, Internet, Phone
•organization’s strategy, staff, and Utilities, ATM, Vending
systems are aligned to meet or Machines
exceed the customer’s - Customer Present
expectations regarding the three
aspects of the guest experience
• Guest Experience: service product, Lawn Service, Jewelry
service setting (service environment Repair
or services cape) and service - On-line Stores, Travel
delivery Service , Answering
• Guestology forces the organization Services, Technical Help
to start everything Lines
•create and sustain an organization - Customer Not Present
that can effectively meet the
customer’s expectations
The Nature of Services
• Service- the intangible part of a 1. Services are partly or wholly
transaction Intangible
- done for us • It is impossible to assess the
- can be provided directly to product’s quality or value accurately
the customer, or for the • Every guest experience is unique
customer • Hospitality organizations cannot
- can be provided by a person keep an inventory
or via technology • Organizations make the intangible
tangible

2. Services are consumed at the

moment or during the
period of production or delivery
• The customer can take home the
memory of the experience but
not the service itself
• Organizational systems must be
carefully designed to ensure that
the service is consistently produced
so that each guest has a
high-quality experience that both
meets expectations and is their strategy, staff, and
nearly equal to that experienced by systems to provide each guest with a
every other guest seamless three-part guest
• The experience must at least equal experience, each part of which will
that which the same guest at least meet the guest’s
had in previous visits expectations and the sum total of
• Hospitality organizations must which ideally will make the guest say
concentrate on employee or at least think “WOW”
empowerment using goal setting skills ✓ SERVICE DELIVERY SYSTEM- consists
and creating service of inanimate technology part
standard (organization and information
systems, process techniques) and
3. Services usually require interaction the people part
between the service provider and
the guest GUEST EXPERIENCE =
• This interaction can be short or SERVICE PRODUCT+ SERVICE
long, face to face, over the phone SETTING + SERVICE DELIVERY
on the web, or by e-mail, or texting SYSTEM
• When interaction is face to face,
customers and employees must be • No two guest experiences are alike
taught how to coproduce the • Even if the incidents and
experience in some systematic occurrences were exactly the
way same, each guest ‘s experience
• When the experience happens at would be unique because
the moment of its consumption, the the wants, needs, tastes,
n the organization needs to plan on preferences, capabilities and
how to ensure that new, untrained, expectations the guest brings to the
inexperienced, and experience are
unknowledgeable customers get uniquely his and may change from
the same service experience quality day to day
and value that the returning and • Add in the intangibility of service,
experienced ones get and the uniqueness of
• Accommodating the variability in each guest experience cannot be
guest differences is done questioned
through careful research and
thoughtful planning
COMPONENTS OF THE GUEST
✓ It is the sum total of the EXPERIENCE
experiences that the guest has 1.The Service Product
with the service provider on a given • “service package” or “service
occasion or set of product mix”
occasions • The reason why the guest comes to
✓ How hospitality organizations use the organization in the first place
• The basic product can be relatively • While all aspects of the service
tangible, like a hotel room, or delivery system are
relatively intangible like a rock important, the people interacting
concert with guests are by far the
• Most service products have both most able to make a difference in
tangible and intangible how customers feel
elements and can range from mostly about the value and quality of the
product with little service to mostly experience
service with little if any product • Customer contact employees
2.The Service Setting make the difference in
• It also refers to the environment in both how angry the customers are
which the experience takes place with a failure in the
• The term services cape, the service experience and how happy
landscape within which service they are when everything
is experienced, has been used to went right
describe the physical aspects of the • They can be the most important
setting that contribute to the guest’s component and the most
overall physical feel of the challenging to manage
experience • It is the frontliners who determine
• This can include the building both the value and quality
exterior, decorations inside of the experience for the guest
the restaurant, background music, • The feeling that the guest takes
table and menu design away from the guest experience is
3.The Service Delivery System largely derived from what happens
• It includes the human components during the encounters or
and the physical interactions between the guest and
production processes (kitchen the employee, and the less
facilities or sophisticated tangible the service product, the
amplification system), plus the more important the server
organizational and becomes in defining the quality and
informational systems and value of the guest experience
techniques that help deliver • They make the “WOW”
the service to the guest • SERVICE ENCOUNTER- refer to the
• Many parts of the service delivery person-to-person interaction
system must necessarily be open to or series of interactions between the
consumers who can avail themselves guest and the person
of the services directly and delivering the service
coproduce the experience ✓ Although both parties are usually
• The services produce by the people, many interactions or
service delivery system are situations between organization and
intangible memories of experiences guest which are now
that exist only in guests’ ✓ The heart of a service is the
minds encounter between the server
and the customer. It is here where been properly managed and a
emotions meet economics in real guest may be lost for good
time and where most customers
judge the quality of service
✓ An encounter is the period of time GUEST EXPECTATIONS
during which the organization and • Guests arrive with a set of
the guest interact. The length of a expectations as to what that
typical service encounter will vary chosen restaurant or hotel can and
from one service provider or should do, how it should
organizational type to another do it, how the people providing the
✓ Service encounters or interactions service should behave,
and especially certain how the physical setting should
critical moments within them, are appear, etc.
obviously of crucial • First-time guests build a mindset of
importance to the guest’s evaluation expectations based on
of service quality advertising, familiar brand names,
promotional devices, their
• MOMENTS OF TRUTH previous experiences with other
✓ Refer to the key moments during hospitality organizations,
these interactions, and to some brief their own imaginations, and stories
encounters or interactions and experiences of people
themselves they know who have already been
✓ Coined by Jan Carlzon, President guests
of SAS • The responsibility for bringing new
✓ Example: even if the plane ride, or infrequent guests to the
organization usually lies with
hotel room is the best of
Marketing Department– its’ ability
your life, a rude or careless service
to make promises about what
person can wreck your
expectations will be met
guest experience in a moment. If
• People’s past experiences with an
that happens all of the
organization provide the
organization’s efforts and
primary basis for their expectations
expenditures are wasted.
regarding future experiences. This
✓ At the moment of truth, a server or
sets a high standard to meet.
other organizational
• The responsibility for getting repeat
representative is typically present
business rests on the service
and attempting to provide
providers’ ability to meet and
service. But it would also include
maybe exceed both the promises
interactions with inanimate
that marketing made and prior
objects as potential moments of
experiences of repeat guests.
truth. Example: guest’s first
• The key to delighting guests is to
impression of a hotel room is
consistently over-deliver
negative, a crucial moment has not
• Most hospitality organizations
provide their guests with
accurate information ahead of time = quality was negative
so these guests come to ✓ SATISFIED = quality is average or
the experience with expectations above average
that the organization can ✓ DISSATISFIED = quality is below
meet or exceed average
• MEETING EXPECTATIONS- the major
responsibility of fulfilling expectations • VALUE
lies with the operations side of the ✓ value of the guest experience is
organization. equal to the quality of the
• If what guests experience falls short experience as calculated divided by
of what they have been led to all the costs incurred
expect or have learned to expect, by the guest to obtain the
they will be unhappy experience
• The challenge to hospitality ✓ If the quality and cost of the
organizations is to anticipate guest experience are about the same, the
expectations as accurately as value of the experience would be
possible and then meet or normal or as expected. The
exceed them guest would be satisfied by this fair
• If the organization cannot meet value but not “wowed”
certain types of expectations, it ✓ Low quality and low cot, and high
should not say it can; it should not
quality and high cost, satisfy the
promise more than what it
guest about the same, because they
can deliver
match the guest’s
• Do not provide more hospitality
expectations
than guests want
✓ Organizations add value to their
guests’ experience by providing
additional features and amenities
without increasing the costs to
QUALITY, VALUE AND COST
guests
• QUALITY
✓ The quality of the entire guest
• COSTS
experience or of any part of it is
✓ Inlcude tangible and intangible,
defined as the difference between
financial and nonfinancial costs
the quality that the guest
✓ They make up the total burden on
expects and the quality that the
the guest who chooses a
guest gets
given experience
✓ If the two are the same = quality is
✓ COST OF QUALITY – used as a
average or as expected
reminder not of how much it
✓ You got what you expected, you
costs the organization to provide
are satisfied
service quality at a high level but of
✓ If you got more than you expected
how little it costs compared to the
= quality was positive
cost of not providing quality
✓ If you got less than you expected ✓ If the organization thinks about the
cost of fixing errors, lost A Lower Price
customers; the cost of quality is low “We will not be undersold!”
indeed and the cost of not -tries to design and provide pretty
providing quality is enormous much the same service that the
✓ GOALS of benchmark competition sells, but at a lower
organizations: price.
1. Exceed expectations to deliver -Management’s focus is on
wow to the level of guest maximizing operational or
delight production efficiencies to minimize
2. Prevent failures the organization’s costs.
- offer the service at a price so low
that competitors cannot offer the
THREE GENERIC STRATEGIES same service and value at a lower
“Price, quality, speed—pick any price without losing money.
two.” The implication is that no
organization can do it all, so no Companies employing the low-price
customer should expect it all; the strategy must recognize that if they
organization must determine reduce prices to customers by
the basis on which it hopes to reducing their own costs, the
compete. McDonald’s gives you deterioration in the guest experience
speed and price; the Four Seasons that results may decrease the value
Restaurant gives you quality. In of the experience to guests and
addition to price, quality, and drive them to competitors.
speed, the organization could
compete on variety, convenience,
friendliness, no-frills, uniqueness, A Differentiated Product
helpfulness, or some other basis. All hospitality organizations practice
product differentiation to an extent;
Michael Porter, an organization all want to be perceived as offering
usually employs one or more a service product—the guest
of three different generic strategies. experience itself—that is different in
a. First, it can aim to be the low-cost ways their customers find favorable.
producer and low-price provider in Many try to attract guests by
its industry, area, or market segment. emphasizing these differences rather
b. Second, it can differentiate its than by offering low prices.
product or service from those of its
competitors. Differentiating one’s product in the
c. Third, it can fill a particular market marketplace results from creating in
niche or need. Successful hospitality the customer’s mind desirable
organizations establish a strategy differences, either real or driven by
that may include one or more of marketing and advertising, between
these generic strategies and stick that product and others available at
with it. about the same price.
The Brand Image the experience provided is and how,
A major way to differentiate one’s by focusing on that one market
service from those of competitors is segment, it uniquely meets
through the creation of a strong their particular needs.
brand image. -The most common strategy is to try
-represents a promise to guests of to differentiate its product or
what the quality and value of service from similar products or
experiences associated with that services.
brand will offer them, every time and -The organization that concentrates
every place they on filling niches is often a market
see the brand. innovator seeking to
-A strong brand promise reduces meet an unfulfilled customer need,
customer uncertainty about the perhaps a need that customers
hospitality experience that the don’t recognize until they see
organization offers and, the product that will fulfill it: a high-
consequently, creates a brand priced luxury airline for rich people, a
preference and sandwich wraps for drivers eating
increases customer loyalty. dashboard cuisine, the W hotel for
-it can provide some contemporary luxury travelers, or any
protection against cost cutting or other of the thousands of innovative
other competitive strategies that products and services brought to the
can get guests to switch to marketplace each year.
other competing products.
-also extend the company’s reach Combining Strategies
into new markets. Because services The strategies just discussed are not
are mostly intangible—with no dress, mutually exclusive.
guitar, or minivan to touch and -An organization can seek to
try out before buying—brands are differentiate its product from all
particularly important in both adding others in the market (Strategy 2)
value to the guest experience and -by positioning the product in
differentiating it from competing people’s minds as the best value for
services. the lowest cost (Strategy 1).
-This combination of strategies
A Special Niche requires the organization to use both
-It can focus on a specific part of the effective marketing techniques that
total market by offering a special reach this best-value, lowest-cost
appeal—like quality, value, market segment and operating
location, or exceptional service—to efficiencies that allow it to make
attract customers in that market money at the low price. Successful
segment. theme parks seek to apply this
- The organization seeks to build a combination by advertising a park
top-of-mind awareness within visit as a high-value, low-cost, family-
customers in its targeted market as entertainment experience while
to how unique
keeping their costs, especially labor Looking Around
costs, low. The environmental assessment, or
the long look around defines the
Reinventing the Industry strategic premises.
Picking and following a strategy is an
important decision for any hospitality premises are the beliefs of the
manager seeking to find the best managers assessing all long-term
match of the company’s mission with aspects of the external environment
present and emerging uncertainties. and trying to use them to discover
A strategy might be to get cheaper, what forces will impact their business
or better, or faster. These are in the future and especially what
all reactive operational strategies customers will want in that future
that most organizations could adopt environment.
as circumstances change.
Looking Within
Providing Superior Service Quality The internal assessment, or the
and Value searching look defines the
These three generic strategies— organization’s core competencies
competing on price, finding a niche, and considers the organization’s
and differentiating—may each work strong and weak points in terms of its
for a while, but they also have ability to compete in the future. I
potential shortcomings. -it is here that the organization
-Many successful service determines what it does well, what it
organizations have found that the does not do well, and how its
best way to succeed in the long strengths and weaknesses pair with
term is to differentiate on the basis of what it wants to accomplish.
superlative service quality and
value. Provide better service and
value than the competition does,
and they can’t beat you.

THE HOSPITALITY PLANNING CYCLE

the process has two basic steps:
-assessment (external and internal)
and figuring out what to do on the
basis of that assessment.
-external assessment leads to the
generation of strategic premises
about the future environment.
-internal assessment leads to a
redefinition or reaffirmation of
organizational core competencies.
The Necessity for Planning ENVIRONMENTAL ASSESSMENT
-There is an old saying FACTORS
that those who fail to plan, plan to THE ECONOMY- what do we project
fail. economic growth
-Every hospitality organization needs SOCIETY AND DEMOGRAPHICS- how
a road map to unite will shifts in social attitudes/values
and focus the efforts of the ECOLOGY- are there forseeable
organization’s members and get natural or man-made caused
them prepared for the future that disasters ahead?
the organizational planners predict. POLITICS-what sort of government
-The planning process should never policy
stop because the world in which any TECHNOLOGY- where is it going?
organization operates never stops What new products
changing. NEW ENTRANTS- Who will our new
competitors
ASSESSING THE ENVIRONMENT BARGAINING POWER OF SUPPLIERS-
-the hospitality planning process how stable, big and reliable
begins with a long look around SUBSTITUTE PRODUCTS OR SERVICES-
the environment. are alternative to our service
-three categories of factors that product likely?
should be included in an RIVALRY AMONG EXISTING FIRMS- is
environmental assessment: those in market growth slowing or is
the overall environment, the industry competition becoming fierce?
environment, and the company’s BARGAINING POWERS OF BUYERS-
operating environment. how big are buyers?
-Forecasting techniques
range from the heavily quantitative
tools, which are objective, to the THE OPERATING ENVIRONMENT
highly qualitative tools, COMPETITIVE POSITION- What moves
which are subjective. are competitors expected to make
-quantitative forecasting tools CUSTOMER PROFILES AND MARKET
include the powerful tools of CHANGES- which customer needs
statistical forecasting. are not being met by our or
-qualitative forecasting tools include competitors existing products?
scenario building, the Delphi SUPPLIER RELATIONSHIPS- should we
technique, and expect cost increases because of
pure creative guesswork. dwindling supplies?
CREDITORS- will we have enough
credit to finance growth?
LABOR MARKET- will we have enough
employees, with the right skills
Changing Demographics Assessing AMERICAN HOTEL AND LODGING
future demographic trends and their ASSOCIATION ENVIRONMENTAL
effects may require both qualitative GUIDELINES
and quantitative forecasts. 1. Environmental committee
2. environmental performance
Changing Technology 3.incandescent lamps
Dramatic changes in 4.digital thermostats
technology will continue to have a 5.towel and/or linen reuse
major influence on both 6.2.5 gallons per minute
organizations and the industry. showerheads
-Today, anyone with a smartphone 7.1.6 gallons toilets
can search for the lowest airfare to a 8. recycling program
destination, make a plane 9. recycling program for hazardous
reservation, book a hotel room, materials
reserve a rental car, get 10.energy star
recommendations on a destination 11.office paper products
from other travelers, or even take a
virtual tour of a hotel, theme park, or
destination, all at the same time they Changing Economic Forces
are talking. Many environmental factors already
-Hotels, restaurants, and other guest covered have an economic aspect.
service organizations will find new -Economics is such an important
ways to substitute technology for issue, however, that it deserves
people, to reduce their special discussion.
dependence on this expensive and -The organization must consider the
increasingly scarce resource. At the effects of governmental economic
same time, these same organizations policies on its suppliers of capital, the
will need to find ways to maintain the ability of its customers to buy the
high level of personal contact that service, its own cost structure, and
defines a positive guest experience. direct and indirect competitors’
ability to compete.
Changing Social Expectations
“Dashboard cuisine” with its use of Changing Competitors
wraps did not exist as a food-service An organization has existing
category until recently. competitors, potential competitors,
-Changing social trends led to this and indirect competitors
new category as very busy that offer customers a substitute or
families sought a way to find food alternative service.
that they could eat in their cars -These competitors can be local,
without making a mess. national, or even international.
-Existing competitors have an
established position in your market
niche.
-Potential competitors are those who Strategic Premises
are likely to enter your market area. are educated guesses. The
The sign may be up, the building organization’s planners may guess
begun, and the “buy one, get one wrong; even if they guess right, they
free” coupons distributed to mark may devise the wrong strategy. But
the existence of a potential not to guess at all means reacting
competitor to your restaurant. day to day to whatever seems to be
-The alternative or substitute going on, without a plan or a focus
providers include anyone who sells for organizational activities.
food.
Dave Thomas’ 5 trends
Changes in Other Relevant Groups Dave Thomas, founder of Wendy’s,
Resource Suppliers 1. People wanted choices. they
When Red Lobster adds a new wanted something
seafood item to its menu, it must first new.
check to be sure that demand for it 2. People were fed up with poor
doesn’t exhaust the world’s supply of quality. He saw a big interest in
that item. Because Red Lobster has things that were fresh and
so many restaurants, adding or natural.
removing a menu item can have a 3. People were trying to adjust to a
major impact on the supply of that newer, more complicated way of
product. life. Older people were
Capital Suppliers looking for relief from the many
A second major interested group is social and political changes
the suppliers of capital. As the occurring during the 1960s, and
capital market has become more young people were looking for
global and the availability of changes that they could handle.
electronic transfers makes Thomas notes, “In a funny way,
movement of capital easier the old-fashioned decor and the
and quicker, Tiffany lamps provided a novelty for
the young adults and
nostalgia for the older generation at
Surprises the same time.”
The final external issue to address in 4. People were on the move. Any
this long look around at the business had to accommodate this
environment is the restless mobility.
potential for surprise 5. People were ready for an upscale
hamburger place. He felt that many
The Impact of Change on Strategic people had grown up
Premises predicting the number loving hamburgers but were not
available in ten years is a satisfied with the product generally
straightforward calculation. Some available at fast-food outlets.
other factors are simple but
unpredictable.
ASSESSING THE ORGANIZATION -It depicts what the organization
ITSELF: hopes to become, not what the
THE INTERNAL AUDIT The hospitality organization needs to do to get
organization cannot plan with any there.
confidence until it admits its -The vision statement is used to unite
weaknesses and identifies its and inspire employees to achieve
central strengths, frequently termed the common ideal and to define for
its core competencies. external stakeholders what the
organization is all about.
-Core Competencies Hamel and -For example, “McDonald’s vision is
Prahalad is helpful: An organization’s to be the world’s best quick service
core competence is the bundle of restaurant experience.
skills and technologies that gives the Being the best means providing
organization an important difference outstanding quality, service,
in providing customer benefits and cleanliness, and value, so that we
perceived value. make every customer in every
Ford’s core competence is the ability restaurant smile.”
to make cars.
Marriott is the ability to manage The Mission Statement articulates the
excellent lodging facilities. organization’s purpose, the reason
Southwest’s have efficient operations for which it was founded and for
while maintaining superior customer which it continues to exist.
service. - defines the path to the vision, given
the strategic premises and the
-Internal Assets includes an organization’s core competencies.
assessment of all the organization’s - guide to defining the how, what,
internal assets. Each who, and where for the
organization has a reputation, a pool organization’s overall
of human capital (its employees), service strategy that in turn drives the
managerial capabilities, design of the service product,
material resources, and competitive service environment, and
advantages based on its service delivery system.
technology. It also possesses - guide managers as they allocate
patents, brand names, copyrights, resources, focuses
and customer loyalty, all of which organizational marketing efforts, and
help define its core competencies. defines for all employees how they
should deal with guests
Vision and Mission Statements and customers.
The Vision Statement articulates -A typical mission statement will
what the organization hopes to look include at a minimum the following
like and be like in the future. three elements:
-it creates a picture toward which (1) What you do (What is the product
the organization aspires; it provides or service you are providing to the
inspiration for the journey ahead. customer?),
(2) Who you do it for (Who is the Key Action-Plan Areas
targeted customer?), The measures ensure that the right
(3) How or where you do it (Where is actions are taken, the right
the product or service going to be goals are achieved, and the
provided to the employees can see how well they’re
targeted customers? Place, niche or doing as they work toward
market segment?) achieving the goals of the action
plans. Good plans are accompanied
DEVELOPING THE SERVICE STRATEGY by good measures of
Asking Customers What They Want achievement so that everyone
Usually, the best way to know what knows how the plans are working.
your customers want or expect is to
ask them Types of Capacity Utilization Action
Plans
The Excellent Service Strategy The Design Day
Berry’s Four Components of Excellent -The idea of a design day is to
Service decide which day of the year to
1. The excellent strategy emphasizes consider when determining the
quality. design capacity of an attraction or
2. An excellent service strategy facility.
emphasizes value.
3. An excellent service strategy is Yield Management A capacity-
that it focuses the entire management concept that has
organizational effort on gained substantial favor in the
service. airline, lodging, restaurant, spa,
4. The service strategy should foster cruise line, and convention industries
among employees a sense of is yield management (YM)
genuine achievement. —managing the sale of units of
capacity to maximize the profitability
of that capacity. Also called
Supporting Strategies: Service revenue management,
Product, Environment, and - involves selling the right capacity to
Delivery System the right customer at the
Once the service strategy has been most advantageous price, to
defined, it provides the basis for maximize both capacity use and
ensuring that the revenue.
customers’ key drivers are -allow the hospitality organization to
addressed, charge different rates to different
ACTION PLANS represent the people (or groups)
leadership’s decisions on how to based on (1) when reservations are
best implement the service strategy made and (2) the capacity
in specific terms that will motivate projected to be available at any
and guide the rest of the given time.
organization’s members
THE UNCERTAIN FUTURE Good plans
attempt to bring rationality and
stability to the organization’s
operations and efforts,
but organizations seldom operate in
purely rational or stable situations.

INVOLVING EMPLOYEES IN PLANNING

What do you think is the importance
of involving the employees in
planning?