The Government of the Russian Federation The Federal State … › data › 2016 › 03 › 30 ›...

National Research University - Higher School of Economics

Establishing a customer-centric hotel business [Master Education Program 38.04.02 “Management”]

The Government of the Russian Federation

The Federal State Autonomous Institution of Higher Education

"National Research University - Higher School of Economics"

Faculty of Business and Management

Marketing of Firm Department

ESTABLISHING A CUSTOMER-CENTRIC HOTEL BUSINESS

Master Education Program “Experience Economy: Hospitality and Tourism Management”

(38.04.02 “Management”)

Author(s):

Panteleeva Elena, Associate Professor, +7 495 772 8592, [email protected]

Andrey Boyko, General manager of hotel of Corporate University of Sberbank,

[email protected]

Approved by the meeting of the Marketing of Firm Department «___» September 2015

Head of the Marketing of Firm Department ___________________[O.K. Oyner]

Recommended by the section of Academic Council «___»____________ 201

Chairman ________________________________ [N.L.Titova]

Approved by the Academic Council of the Faculty «___»_____________201

Academic Secretary ________________________ [O.N. Balaeva]

Moscow, 2015

http://www.hse.ru/text/image/4011945.html

mailto:[email protected]

mailto:[email protected]



This document may not be reproduced or redistributed by other Departments of the University

without permission of the Authors.

Course Summary

In a fast-changing business environment companies need to rethink their business models and redefine

their relationships with their customers. Since customer is the main source of companies’ revenue

every hotel should position their customers at a center of its business. This means hotels should

understand their customers’ needs and preferences and be able to offer them not only new, high quality

services but also staging memorable experiences.

This course will cover few basic aspects of customer-centric approach. First, we will discover the

phenomena of customer-centricity and consider how this approach is realized by hotel industry

players. Second, we will address the issues how to gain customer understanding and use this

information and knowledge in a development of customer-centric strategy. Third, we will discuss how

hotels might create a customer-centric culture and motivate their employees to be truly customer-

oriented. Special attention will be paid to an assessment of different outcomes of the implementation

of customer-centric approach in hotel industry.

Area of Application and Regulatory References

This Course Program establishes minimum requirements for skills and knowledge of the

student and determines the content and the forms of educational activities and reporting.

The Course Program is designed for lectures, teaching assistants and students of Master

Program “Experience Economy: Hospitality and Tourism Management” (38.04.02 «Management»)

within the Course “Establishing a customer-centric hotel business”.

The Course Program has been developed in accordance with:

NRU HSE Curriculum;

Education Program [Master Education Program “Experience Economy: Hospitality and

Tourism Management” (38.04.02 «Management») ];

University Academic Plan of the Education Program (for 2015-2016 academic year)

Course Goals

The main goal of this course is to develop a complex representation of basic principles of

customer-centricity in hotel industry and provide students with a ‘tool box’ applicable for the

implementation of customer-centric approach in hotel business.

To facilitate an achievement of this main goal we set a number of sub-goals as follows:

To know the basic principles of customer-centricity;

To understand the specifics of hotel business;

To understand the new rules of value creation and to identify the main factors influencing

customer-firm interactions in hotel business;

To realize the main changes in customer behavior;

To be able to analyze an interactions between a hotel and their customers in every touch point;

To realize the roles employees play in customer-centric organizations;

To evaluate hotels’ customer-centric organization maturity;

To identify the outcomes of the implementation of customer-centric approach in hotel industry.




Students' Competencies to be Developed by the Course

The student is supposed to:

• Know the essence of fundamental theoretical concepts of customer–centricity and customer

loyalty;

• Be able to develop customer value for the target segments;

• Be able to assess the companies against a customer-centric maturity model;

• Gain skills of customer experience mapping in hotel industry.

The Course develops the following competencies:

Competencies

NC/NR

U-HSE

Code

Descriptors - the learning

outcomes (the indicators of

achievement)

Teaching forms and

methods of that contribute

to the development of a

competence

Capability to suggest the

conceptual models, to

invent and experiment the

tools needed to implement

the managerial

professional activity

SK-M2

2.1. Know the basic principles of

customer-centricity and able to

fine-tune them to hotel-specific

conditions

2.2. Able to adapt studied models

and instruments to practical

situations and tasks in a hotel

market context

Lectures, discussion of

articles, group project, self-

study

Capability to analyze and

evaluate the research

information, to find a way

to get the information that

is needed and capability to

work in unpredictable

environment

SK-M6

6.1. Know different methods of

analysis of internal

(organizational culture, employee

experience, etc) and external

(customer behavior, trends in

macro environment, etc)

environment

6.2. Understand the range of

application and limitations of the

studied analytical instruments

6.3. Display an ability to use

studied analytical instruments in

practical (including unpredictable)

situations

Lectures, group project,

case studies, STR report

analysis, self-study

Ability to set up and

manage a multi-way

communication including

cross cultural interaction

SK-M7 7.1. Know how to organize

crossfunctional interactions in a

hotel in order to enhance

customer-centricity

7.2. Know how to keep hotels’

employees engaged and motivated


case studies

Ability to determine and

convey the prime business

targets in professional and

social activities

SLK-

M3

11.1. Able to identify hotels’

business targets

11.2. Know KPIs of customer-

centricity

11.3. Understand the links

between customer-centric

activities and business

performance

Lectures, seminars, self-

study

‘Quality’ of creative ideas, SLK- Based on the information about an Group project, case studies




Competencies

NC/NR

U-HSE

Code

Descriptors - the learning

outcomes (the indicators of

achievement)

Teaching forms and

methods of that contribute

to the development of a

competence

Capability to suggest the

conceptual models, to

invent and experiment the

tools needed to implement

the managerial

professional activity

SK-M2

2.1. Know the basic principles of

customer-centricity and able to

fine-tune them to hotel-specific

conditions

2.2. Able to adapt studied models

and instruments to practical

situations and tasks in a hotel

market context

Lectures, discussion of

articles, group project, self-

study

Capability to analyze and

evaluate the research

information, to find a way

to get the information that

is needed and capability to

work in unpredictable

environment

SK-M6

6.1. Know different methods of

analysis of internal

(organizational culture, employee

experience, etc) and external

(customer behavior, trends in

macro environment, etc)

environment

6.2. Understand the range of

application and limitations of the

studied analytical instruments

6.3. Display an ability to use

studied analytical instruments in

practical (including unpredictable)

situations


case studies, STR report

analysis, self-study

thoughts, reasons given

during discussions and

project preparation

M8 object (particular hotel or hotel

chain) is able to give

recommendations how to improve

customer experience and enhance

customer loyalty

Ability to present the

results of the study in the

form of a report, article or

report

IC-М

3.1_3.2_

4.2

14.1. Able to collect and organize

in a proper way the results of a

study and present them (written

report and presentation)

Group project

Ability to plan and

execute projects and

activities aimed at

organizational strategy

implementation

IC- М

1.2-1.3_

7.3 (М)

22.1. Develop customer-centric

strategy for particular hotel

22.2. Organize step-by-step

execution of the group project

Lectures, group project

Ability to identify data

needed for making

managerial and

entrepreneurial decisions;

ability to gather and

analyze information

IC- М

4.1_4.3_

7.4(М)_

7.5 (М)

26.1. Know basic types of data

needed to develop customer-

centric strategy

26.2. Identify sources of

information for decision-making

process

26.3. Demonstrate skills of

gathering, analyzing and properly

interpreting an information for the

course assignments

Lectures, course

assignments




How the Course Fits in with the Curriculum

The present Course is Compulsory for the master students studying at the Master Program

“Experience Economy: Hospitality and Tourism Management”. It requires the knowledge and core

competencies acquired by studying prerequisite courses, including Services Management and

Management Strategies: Strategic Management and Marketing in Hospitality Industry and Tourism.

Course Schedule

№ Topic

Total

amount

of hours

Classroom

activities

Lectur

es

Semin

ars

Self-Study

1 Introduction: Customer centricity as a path to

growth in a hotel industry

34 4 - 30

2 Customer-centric strategy 52 4 6 42

3 Customer-centric culture and internal

marketing

16 2 4 10

4 How to attract and retain customers: modern

practices in hotel industry

40 6 8 26

TOTAL 144 16 20 108

Forms and Types of Testing

Type of

testing

Form of

testing Parameters

Current

(week)

Homework

assignment

Group project included oral presentations and written project

materials (10 pages)

In-class

discussions

Articles discussion, assignments on group project, mini-cases

Final Quiz 80-min. test

** Parameters specify the format of the testing (written, oral, test, computer test, and so on),

timing, volume, deadlines, time devoted to self-study, etc.]

Grading Criteria

The grade scale for single assessment as well as for the final grade complies to regular Higher

School of Economics grade system and is as follows:

1 Failed

2 Failed

3 Failed

4 Pass standing




5 Pass standing

6 Good

7 Good

8 Excellent

9 Excellent

10 Excellent

are determined as follows: Grading criteria for group projects

The depth and quality of an analysis;

Correct use of theoretical ‘instruments’ for practical purposes (for particular object);

Creativity and ability to display ‘out of the box’ thinking;

The level of each team member involvement.

The Course Content

Part 1. Introduction: Customer centricity as a path to growth in a hotel industry

Overview of the travel and tourism industry. Hotel industry trends. Hotels classification (supply side).

Sources of growth in the hotel industry. Customers as a main source of revenues for hotels. Changing

role of customers in value creation. Main trends in customer-hotel interactions. ‘Macdonaldization’ of

hotel services, experience economy and customer experience as a new battlefield in the hotel business.

What is customer centricity? Key definitions: market orientation, customer orientation, customer

centricity. Basic principles of customer-centricity. From product-centric to customer-centric business.

Main components of customer-centric business. How to build a customer-centric company? Three V’s

model: valued customer, valued proposition, valued network. Customer-centric marketing strategy.

Customer-centric maturity model.

Assignments:

1. In-class article discussion: Pine II B. Joseph, Gilmore, James H. (1998), Welcome to the experience

economy. Harvard Business Review, Jul-Aug. P.97-105.

2. Group project, part 1

Readings:

1. Abbey J.R. Hospitality Sales and Marketing. American Hotel & Lodging Educational Institute.

5th Ed. 2008.

2. Fisk P. Customer genius… Becoming a customer-centric business. Capstone. 2009.

3. Galbraith J.R. Designing the Customer-Centric Organization: A Guide to Strategy, Structure

and Process. Jossey-Bass. 2007.

4. Hudson S., Hudson L. Customer Service in Tourism and Hospitality. Goodfellow Publishers,

2012.

5. Kotler P.R., Bowen J.T. Marketing for hospitality and tourism. Prentice Hall, 2013.

6. Kumar N. Marketing as strategy: Understanding the CEOs agenda for driving growth and

innovation. Harvard Business Press. 2004.

7. Pine II B. Joseph, Gilmore, James H. The Experience Economy: Work is theatre and every

business stage. Harvard Business School Press. 2011.




8. Pine II B. Joseph, Gilmore, James H. (1998), Welcome to the experience economy. Harvard

Business Review, Jul-Aug. P.97-105.

9. Sheth J.N., Sisodia R.S., Sharma A. (2000), The antecedents and consequences of customer-

centric marketing. Journal of the Academy of Marketing Science. Vol.28. No.1. P.55-66.

10. The journey toward greater customer centricity. Ernst&Young. 2013. http://www.ey.com/Publication/vwLUAssets/The_journey_toward_greater_customer_centricit

y_-_US/$FILE/Customer_Centricity_Paper_29_April_Final_US.pdf

Part 2. Customer-centric strategy

Understanding customer. Global trends in consumer behavior. What hotels should know about their

customers? Factors influencing customer behavior in a hotel industry. Customer expectations and

factors influencing them. Marketing research in hotel industry. How to gather customer insights.

STP. STP process. Hotel market segmentation (demand side): end users and travel intermediaries.

Demographic, geographic, behavioral, psychographic segmentation, benefit and need segmentation,

combined methods of segmentation. Current user characteristics. Identifying target customers. Hotel

positioning.

Assignment:

1. STR report analysis


Readings:


5th Ed. 2008.

2. Bowie D., Buttle F. Hospitality Marketing. Principles and practice. Routledge. 2nd Ed. 2011.

3. Experience Radar 2012: Customer insights for the US hospitality industry. PwC.

http://www.pwc.com/us/en/advisory/customer/publications/experience-radar-hospitality-us-

2012.jhtml


2012.


6. Nykiel R.A. Marketing in the Hospitality Industry. Educational Institute. 5th Ed. 2012.

7. https://www.strglobal.com/

Part 3. Customer-centric culture and internal marketing (IM)

Organizational and service culture. Internal marketing concept. Internal marketing mix. Employee

experience. How employees can ensure customer satisfaction. Employee engagement. Operational

setting for IM. Link between internal marketing and business performance. IM best practice in hotel

industry.

Assignments:

1. In-class article discussion: Berry L.L., The Employee as Customer // Journal of Retail Banking.

1981. Vol.3. No.1. P.33-40.


Readings:

1. Ahmed P. K., Rafiq M. Internal Marketing: Tools and Concepts for Customer-Focused Manage-

ment. Butterworth-Heinemann, 2002.

2. Berry L.L., The Employee as Customer // Journal of Retail Banking. 1981. Vol.3. No.1. P.33-

40.

3. Davidson M. Internal marketing (ch.17) in Handbook of hospitality marketing management /

Oh H., Pizam A. Elsevier Ltd. 2008.


2012.


http://www.ey.com/Publication/vwLUAssets/The_journey_toward_greater_customer_centricity_-_US/$FILE/Customer_Centricity_Paper_29_April_Final_US.pdf

http://www.ey.com/Publication/vwLUAssets/The_journey_toward_greater_customer_centricity_-_US/$FILE/Customer_Centricity_Paper_29_April_Final_US.pdf

http://www.pwc.com/us/en/advisory/customer/publications/experience-radar-hospitality-us-2012.jhtml


https://www.strglobal.com/



5. Kasavana M.L. Managing Front Office Operations. American Hotel & Lodging Educational

Institute. 9th Ed. 2013.


Part 4. How to attract and retain customers: modern practices in hotel industry

Offensive and defensive marketing. Customer service: definition, standards, personalization, 10-step

customer service process. Guest service check-list. Managing hotel reputation: brand promises,

integrated marketing communications. Servicescape and e-servicescape. Customer-centric pricing.

Customer satisfaction and loyalty. Hotel rewards programs. Customer loyalty and profitability.

Customer experience: why it matters in a hotel industry? Customer experience mapping. Customer

experience management (CEM): implications for a hotel industry. Do hotels need CEM? Models of

total customer experience (TCE). Customer role in delivering service. Value co-creation: the benefits

for hotels and their clients. Co-creation best practice in hotel industry. Social media: definition and

basic characteristics. Social media classifications. Social media as a new model of customer-firm

interaction in the hotel industry.

Assignments:

1. In-class discussion of mini-case studies “Co-creation in hotels”.


Readings:

1. Berry L., Carbone L.P. (2007). Build loyalty through experience management, www.asq.org

2. Cross R.G., Dixit A. (2005). Customer-centric pricing: The surprising secret of profitability. //

Business Horizons, 48. P.483-491.




5. Kumar V., Rajan B. (2009). Profitable customer management: Measuring and maximizing

customer lifetime value, Management Accounting Quarterly. Spring. Vol.10. No.3. P.1-18.

6. Nykiel R.A. Marketing in the Hospitality Industry. Educational Institute. 5th Ed. 2012.

7. Thompson R.G. Hooked on customers: The five habits of legendary customer-centric

companies. CreateSpace Independent Publishing Platform. 2014.

8. Williams, D. (2010). Social co-creation, Forrester Research, July 9,

http://www.forrester.com/rb/Research/social_co-creation/q/id/57129/t/2

Educational Technologies

The theoretical underpinning will be provided to ensure that the major learning goals will be

met through a combination of lectures, facilitated discussions of articles and case studies and group

presentations. Case study materials and group project activities are used to assist students to apply

theoretical frameworks to practical situations.

Students' Guidelines

Group project “Lifestyle hotels: How to be customer-centric”:

This is a crosscutting project combining all the themes of the course. It requires from students

both analytical and creative capabilities. The assignment (including the list of lifestyle hotel chains)

and all necessary materials are provided by the teacher at the beginning of the course but the choice of

a particular hotel should be made by groups themselves (for instance, they may choose W Saint-

Petersburg within W hotel chain).

The group will be divided on mini-groups containing 4-5 students, and every mini-group will

receive a particular hotel chain as an object for the further study. After that they should choose a hotel.


http://www.asq.org/




The project itself consists of 4 parts in accordance with the course structure. After completion

of every part of the course students should present the results of their study containing the answers to

the questions provided by the instructor. Sample questions for the preparation of the project’s ‘building

blocks’:

1. Who are the valued customers of the hotel (strategic segments)?

2. Value proposition of the hotel

3. Compare value proposition of the internal and external brand. Do they match each other?

4. Which internal marketing instruments the hotel use to retain their employees? How it

motivates their employees?

5. How hotel enhances the service culture?

6. Develop a static TCE model for the hotel. Give explanations about every touchpoint.

7. Based on TCE model give recommendations on customer experience improvement.

8. Etc.

Every mini-group is expected to spend an effort to complete this project all within the course

schedule.

Methods and Materials for Current Testing and Attestation

Current Testing Assignments

Current testing for “Establishing a customer-centric hotel business” course includes mini-case

studies, STR report study, article discussions, and homework assignment (group project).

1. Sample questions for the in-class article discussion (“Welcome to the experience

economy”):

What is the experience economy? Why is it so important for the hotel industry?

What is the most profitable stage of economic progression? Why?

How hotels can use the basic principles of the ‘experience economy’ to improve their

value propositions?

2. Study STR hotels's level of service classification (Luxury, Upper Upscale, Upscale, Upper

Midscale, Midscale, Economy) and split the hotels of one group in accordance to their main

target markets.

3. Mini-case studies “Co-creation in hotels”: the group will be divided on mini-groups, and

each of them will receive a mini-case. Students should prepare a 5-min presentation

containing the description of project’s goals, stages of the project, an analysis of

participants’ roles and motivations and main outcomes.

Questions for Assessment of Quality of the Course Acquisition

1. Hotel classifications;

2. Hotel industry trends and their impact on hotels’ value proposition;

3. How experience economy differs from previous stages of economic development?

4. Changing role of customers in value creation;

5. ‘Macdonaldization’ of services: how hotels use this trend?

6. Customer-centricity: definition and key principles;

7. What are the main ‘building blocks’ of the customer-centric company?

8. Organizational problems in customer-centric hotel business;

9. 3 V’s model;

10. Customer-centricity maturity model;

11. Main techniques for gathering customer insights and their characteristics;

12. Modern definition of internal marketing;

13. Roles employees play in a customer-centric organization;

14. How to engage hotel’s employees and motivate them to be customer-oriented?

15. How customer experience influences customer loyalty and company value?




16. How hotels can measure customer satisfaction and loyalty?

17. Customer role in delivering service in the hotel industry;

18. Types of value co-creation in the hotel industry;

19. How hotels might use social media to attract and retain customers?

Grading Procedures

The Diploma Certificate contains the Course final grade, which is calculated by the following

formula:

ОCourse = k1·Оintermediate + k2·Оfinal ,

Where k1=0,7; k2=0,3 respectively,

Оintermediate - is a grade for individual participation during the course, which is calculated by the

following formula:

Оintermediate = k1·О1 + k2·О2,

О1 – is a grade for participation in mini-case studies and in-class articles discussion;

О2 - is a grade for participation in the group project;

О3 - is a grade for an essay;

k1=0,4; k2=0,6 respectively.

Teaching Methods and Information Provision

Core Textbook

Kotler P.R., Bowen J.T. Marketing for hospitality and tourism. Prentice Hall, 2013. [Russian version

might be used]

Required Reading


5th Ed. 2008.

2. Berry L.L., The Employee as Customer // Journal of Retail Banking. 1981. Vol.3. No.1. P.33-

40.

3. Bowie D., Buttle F. Hospitality Marketing. Principles and practice. Routledge. 2nd Ed. 2011.

4. Cross R.G., Dixit A. (2005). Customer-centric pricing: The surprising secret of profitability. //

Business Horizons, 48. P.483-491.


2012.

6. Galbraith J.R. Designing the Customer-Centric Organization: A Guide to Strategy, Structure

and Process. Jossey-Bass. 2007.



8. Kumar N. Marketing as strategy: Understanding the CEOs agenda for driving growth and

innovation. Harvard Business Press. 2004.




9. Kumar V., Rajan B. (2009). Profitable customer management: Measuring and maximizing

customer lifetime value, Management Accounting Quarterly. Spring. Vol.10. No.3. P.1-18.

10. Nykiel R.A. Marketing in the Hospitality Industry. Educational Institute. 5th

Ed. 2012.

11. Pine II B. Joseph, Gilmore, James H. The Experience Economy: Work is theatre and every

business stage. Harvard Business School Press. 2nd Ed. 2011.

12. Sheth J.N., Sisodia R.S., Sharma A. The antecedents and consequences of customer-centric

marketing. // Journal of the Academy of Marketing Science. Vol.28. No.1. 2000.

Supplementary Reading

1. Ahmed P. K., Rafiq M. Internal Marketing: Tools and Concepts for Customer-Focused Manage-

ment. Butterworth-Heinemann, 2002.

2. Bean J., Van Tyne S. The customer experience revolution: How companies like Apple, Amazon

and Starbucks have changed business forever. Raphel Marketing. 2011.

3. Fisk P. Customer genius… Becoming a customer-centric business. Capstone. 2009.

4. Handbook of hospitality marketing management / Oh H., Pizam A. Elsevier Ltd. 2008.

5. Kopelman R.E., et al. Interpreting the success of Zappos.com, Four Seasons, and Nordstrom:

Customer centricity is but one-third of the job. // Global Business and Organizational

Excellence. Sept/Oct. 2012.

6. Thompson R.G. Hooked on customers: The five habits of legendary customer-centric

companies. CreateSpace Independent Publishing Platform. 2014.

Internet Resources

1. Experience Radar 2012: Customer insights for the US hospitality industry. PwC.

http://www.pwc.com/us/en/advisory/customer/publications/experience-radar-hospitality-us-

2012.jhtml

2. https://www.strglobal.com/

3. Williams, D. (2010). Social co-creation, Forrester Research, July 9,


Academic Integrity

13.1 Each student in this course is expected to abide by the Higher School of Economics’ Academic

Honesty Policy. Any work submitted by a student in this course for academic credit will be the

student's own work. For this course, collaboration is allowed in the process of group projects

preparation.

13.2 You are encouraged to study together and to discuss information and concepts covered in lecture

and the sections with other students. You can give "consulting" help to or receive "consulting"

help from such students. However, this permissible cooperation should never involve one student

having possession of a copy of all or part of work done by someone else, in the form of an e-

mail, an e-mail attachment file, a diskette, or a hard copy. Should copying occur, both the student

who copied work from another student and the student who gave material to be copied will both

automatically receive a zero for the assignment. Penalty for violation of this Policy can also be

extended to include failure of the course and University disciplinary action.

13.3 During final quiz, you must do your own work. Talking or discussion is not permitted during the

examination, nor may you compare papers, copy from others, or collaborate in any way. Any

collaborative behavior during the examination will result in failure of the test, and may lead to

failure of the course and University disciplinary action.




https://www.strglobal.com/




Accommodations for Students with Disabilities

The Higher School of Economics is committed to ensuring equal academic opportunities and

inclusion for students with disabilities based on the principles of independent living, accessible

universal design, and diversity. I am available to discuss appropriate academic accommodations

that may be required for student with disabilities. Requests for academic accommodations are to

be made during the first three weeks of the semester, except for unusual circumstances. Students

are encouraged to register with Disability Services Center to verify their eligibility for

appropriate accommodations.

The authors of the program ____________________________________/Prof. Elena Panteleeva/

__________________________________________/Andrey Boyko/


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