of 27
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Chapter 11:
Building Customer Loyalty
Through Quality
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Figure 11-1
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Traditional Marketing
Orientation to single sales
Discontinuous customer contact
Focus on product features
Short time scale
Little emphasis on customer service
Limited commitment to meetingcustomer expectations
Quality is the concern of the
production staff
Relationship marketing
Orientation to customer retention
Continuous customer contact
Focus on customer value
Long time scale
High customer service emphasis
High commitment to meetingcustomer expectations
Quality is concern of all staff
Relationship Marketing Compared With
Traditional Marketing
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Customer Delivered Value
CustomerDelivered ValueEquals
Minus
Total customer Value
Total customer
cost
(Products, services,
personnel, and image
values)
(Monetary, time, energy,and psychic costs)
(Profit to theconsumer)
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
CustomerSatisfaction
Customer Satisfaction with a
purchase depends on the
products performance relative to
a buyers expectations.
If performance exceeds or meetsexpectations the customer is
highly satisfied or delighted.
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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 customerspread positive word of mouth and perform
other partnership activities
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Five Levels of Relationships
Basic
Reactive
Accountable
Proactive
Partnership
The company sells the product but does not follow-up
The company sells the product and encourages thecustomer to call when the have problems orquestions.
The companys representative checks on customerafter the sales and the event to make sure thingswere satisfactory and to get feedback.
The salesperson or others in the company phonecustomers from time to time to seek suggestions.
The company works continuously with the customerto discover ways to develop better value.
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Three Customer Value-
Binding Approaches
Financial benefitsFinancial benefits
Social benefits
Social benefits
Structural tiesStructural ties
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Establishing a Relationship
Marketing Program Identify the key customers meriting
relationship management
Assign a skilled relationship manager toeach customer
Develop a clear job description for
relationship managers
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Internal Costs
Rework (back of the house)
Facility Downtime
Loss of Morale
High employee turnover
Loss of employee marketing
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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 theircomplaint
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Managing the
Perceived
Service QualitySource: Christian Gronroos
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Benefits of Service Quality
Retaining customers
Avoidance of price
competition Retention of good
employees
Reduction of costs
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Developing a Service Quality
Program1. Supply strong leadership
2. Integrate marketing throughout the
organization
3. Understand the customer
4. Understand the business
5. Apply operational fundamentals
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Developing a Service Quality
Program6. Leverage the freedom factor
7. Use appropriate technology
8. Practice good human resourcemanagement
9. Set standards, measure performance,
and establish incentives10.Feed back the results to the
employees
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Managing Capacity
Involve customers in the deliverysystem
Cross-train employees
Use part - time employees
Rent or share facilities and equipment
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Managing Capacity
Schedule downtime during periods of
low demand
Extend service hours
Use technology
Use price
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Managing Demand
Use price to increase or reduce Use reservations
Overbook
Use queuing
Shift demand
Change salespersons assignment
Create promotional events
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Waiting Time
Unoccupied times feels longer than
occupied time
Unfair waits are longer than equitablewaits
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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.
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens 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?
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458
Close Gap 3
1. Training
2. Internal marketing, pride
3. Teamwork
4. Reward systems
5. Service quality audits
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Marketing for Hospitality and Tourism, 3e 2003 Pearson Education, Inc.Philip Kotler John Bowen James Makens 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