Unique Characteristics Of Services In Hospitality Sector

Five Inherent Characteristics of Services

Question:

Write an essay about the unique characteristics of hotel services marketing and discuss how a hotel manager can differentiate his/her hotel from competitors's by addressing the challenges presented to hotel customers by the inherent and unique characteristics of services.

The essay discusses the five inherent and unique characteristics of services, taking into account the sales and marketing in the hospitality sector, specifically focusing on hotels. The five inherent characteristics of services are namely intangibility, perish ability, variability or heterogeneity, inseparability and benefits without ownership. For studying the implications of these characteristics, the essay takes Novotel Rotorua Lakeside as the study enterprise. Located in Tutanekai Street, Rotorua 3010, New Zealand, this hotel is a renowned one in the Novotel Group of Hotel, a global hospitality chain providing luxury, comfort and convenience to their clients all over the world. The hotel is a 4.5 star mid-scale one, with an average rating of 4.1 stars (Compared among several rating sites). Known for its indoor pools, lakeside view, complimentary access to geothermal pools, scrumptious breakfast buffet and lake-view terrace bar, the hotel garners considerable attentions from comfort seeking travellers. Tourists and businesspersons avail their services from all over the world for family vacations as well as corporate visits. However, Rotorua being a tourist attraction, Novotel faces stiff competitions from Hotel Sudima, Hotel Millennium, Hotel Holiday inn, Hotel Rydges, Hotel Copthorone, which are situated, closed to one another (Rotoruanz.com, 2017). The essay tries to show how the manager of Novotel can judiciously use these characteristics of services to take his hotel way ahead of its competitors. The discussion analyse the unique characteristic of services, followed by three ways in which each of these characteristics affect the consumers and the corresponding strategies taken by the management to rule out the challenges in order to gain an edge over its immediate competitors.

Service sector, by its inherent nature, is strikingly different from commodity sector, due to the presence of several unique characteristics of services, like intangibility, heterogeneity; perish ability, inseparability and non-ownership. The essay discusses the unique characteristics of the service marketing in the hospitality sector and the profitable service marketing strategies that can be taken in this sector, keeping in mind the problems faced by the customers availing these services due to these features. The essay focuses on Novotel Rotorua Lakeside, New Zealand, a luxury hotel of the global hospitality chain, Novotel, situated in Rotorua, one of the renowned tourist attractions of New Zealand. It tries to analyse the challenges by the problems faced by the customers like confusion about quality of services, different prices at different periods and varying quality of staffs. It also tries to recommend strategies like proper promotional activities, introduction of lucrative packages and training and grooming of hotel staffs, respectively that can be taken by the management of the hotel to stay ahead of its competitors.

Analysis of Characteristics: Novotel Rotorua Lakeside

Many scholars have defined the term service differently over time. According to Palmer, service can be essentially the production of an intangible substance or an intangible element of a tangible commodity, which satisfies the customers after being exchanged in lieu of producers with some forms of compensation. Shostack, however, argues about the presence of pure goods and services. According to him, pure goods and pure services form two extreme sides of a spectrum, the entities in between the spectrum, varies with respect to intangibility (Chang & Polonsky, 2012, pp. 107-118). Berry, sheds light on the term of service quality, defining quality of service as providing it correctly in the very first chance, with zero defects such that it exceeds the expectations of the customers. Cumulatively, service can be defined as the provision of some intangible benefits to the ones in need of it.

Service, by nature has some unique characteristics (Wirtz, 2012). Kotler argues that services are intangible in nature, as they have no tangible substance in them, which implies services bought cannot be seen, tasted or felt. According to him, services are also inseparable and heterogeneous, as they are impossible to be detached from the provider and vary in quality with the providers (Kotler, 2012). By inseparability, it is meant that they cannot be separated physically from the provider of service, throughout the period of availing the service (Lovelock, 2015). The quality of services does not remain the same and varies according to the nature of that particular service provider who is providing the service at that period. Therefore, the quality of services are hugely circumstantial and not homogenous (Bowie, 2016). Kotler defines services to be perishable, which means services, unlike products, cannot be stored or kept in inventory for future use. It has to be availed at the point of time it is scheduled to be provided (Kotler, 2012). Raymond states that the fifth characteristic of services is benefit without ownership, which implies unlike goods, customers cannot own any service, they can only avail or access the use of the service for the time being (Prud’homme & Raymond, 2013, pp. 116-126)

These inherent features characterize the hospitality sector (hotels, in this case). Hospitality as a service is intangible, in the sense that before staying in a hotel, an individual cannot know about the quality of services that hotel will provide and the level of overall satisfaction he or she will have while staying. In the current digitized markets, with a number of hotel reviewing sites available, a person may get some idea of the services provided by a specific hotel from overall customer reviews   (Bowie, 2016). However, reviews being highly individual specific, cannot give a strong idea about the hotel. Hotel services are also inseparable, as both the parties are present during the entire time span in which the service is being availed. The customers availing hotel services cannot separate the services from the service providers (Horner & Swarbrooke, 2016). When an individual avail services of a hotel, he grades the services received largely in terms of the grooming, behaviour, warmth and availability of the hotel staffs. As a result, the overall customer satisfaction from the service is hugely judged not only based on the service itself but also of the nature of the service provider (Prud’homme & Raymond, 2013, pp. 116-126). The quality of service highly depends on the person who is providing it at that point of time and varies, as a result, depending on the nature of the provider. A receptionist of a hotel may be more cordial to the customers. Hotel services are therefore heterogeneous. Hospitality services are obviously perishable (Lovelock, 2015). An individual, booking a hotel room for a particular duration, has to avail the service of that hotel within that duration specifically. Unlike material buys, he cannot keep the services in store for future use. Hotel services cannot be stored in inventory like most other services. One cannot own the services of a hotel, as he can own the products he buys from market (Line & Runyan, 2012, pp. 477-488). If a person books a hotel room for a particular duration, he or she can only access or use the room for that period; the individual loses access to that room as soon as the service period ends. Therefore, like the above four characteristics, non-ownership is also another attribute of the hospitality services (Wirtz, 2012).

Management Strategies to Gain Edge Over Competitors

The chosen enterprise, Novotel Rotorua Lakeside, as a part of the hospitality industry, is no exception to the above service characteristics. The clients of this hotel also face challenges attributed to these characteristics, few significant of which are discussed below with the possible counter-strategies, which the manager of the hotel can take, in order to stay ahead of its competitors and earn greater revenue (Novotel.com., 2017).

Intangibility in services can affect customers in several ways:

The potential customers cannot get a clear concept about how good the services of the hotel will actually be (Mok, 2013).

A variety of rooms and room types being available, the customer often gets confused regarding what type of room he or she should avail to maximize personal satisfaction, as choices vary from person to person according to personal needs (Prud’homme & Raymond, 2013, pp. 116-126).

In presence of stiff competition, customers may often fall in trap of paid reviews of its competitors, highlighting their own services and thereby shadowing Novotel.

A few strategies can be undertaken by the Manager of Novotel in order to counter the problems faced by the clients of this hotel, thereby giving the hotel an edge over its competitors:

To give the potential clients, an idea about the properties of services offered by them, the manager can implement usages of tangible cues; the lobby ambience and well-groomed and well-dressed employees (N. Torres & Kline, 2013, pp. 642-659) can impress clients visiting the hotel for the first time. Stationeries (Pen and writing pads) with the name of the hotel embossed on them can also be kept for the clients to use.

To clear the confusion of the customers, regarding what type of room should be availed by them, the manager can form a customer helpdesk with enquiry staffs specially trained to provide customized service to individual clients in finding them the most appropriate set of services according to their needs. The hotel can also launch a telephonic customer-care service cell to attend to the queries of the potential clients (Martínez-Ros & Orfila-Sintes, 2012, pp. 686-694).

To counter the third problem of image building, the manager can take promotional strategies like distribution of attractive promotional brochures, with service package details lucratively displayed, hoardings and advertisements. A dedicated hotel website can also be developed for promoting the hotel and displaying the arenas in which the hotel enjoys superiority over its competitors (Li, Ye, & Law, 2013, pp. 784-802).

Conclusion

Inseparability in services can also cause several challenges for the customers:

Non-polite behaviour of one particular hotel staff at a point of time, which may influence the customer to make an overall negative opinion about the hotel, may dissatisfy a customer (Lu, Ye, & Law, 2014, p. 15(1).1).

The services provided by the hotel, being highly customer, location and time specific, centralized and mass production is a difficult task.

Potential customers may be influenced by other customers who have already availed their services, which may have both positive and negative effects on the potential customers and on the reputation and business of the hotel as a whole (Li, Ye, & Law, 2013, pp. 784-802).

Management of the hotel can take several steps to counter these challenges:

The issue of employee behaviour with the customers can be controlled and turned in favour of the hotel, by proper training of the hotel staffs and grooming them to maintain a professional and warm attitude towards their clients (Gummesson & Grönroos, 2012, pp. 479-497). A supervision committee and a complain cell can also be maintained where customers can easily approach in case of any unfavourable incidents and which can ensure abrupt and strict actions in case of such incidents, thereby building a good impression of the organization in the market  (Lub, 2012, pp. 553-573)

Centralized mass production, in this sector can be difficult, but the Manager can try to implement this as far as possible. Maintaining uniformity in its services can be a challenge, but properly trained, diligent and “dedicated to serve” employees can help in achieving the target maintaining parity. Centralized mass production of the possible services can be done by using multi-site locations, which can help in increasing the competence of the hotel (Zhang & Mao, 2012).  

To reduce the risk of negative influence of unsatisfied customers on the potential ones, public contact personnel should be hired and should be proactive in creating new client relationships and maintain the old ones (N. Torres & Kline, 2013).

A bad review from one customer can hamper the company reputation as well as future business prospects substantially and therefore, keeping a dynamic customer review portal, regular and efficient monitoring of the portal and addressing any negative customer feedback with swift and dedication can portray a positive image of the hotel in front of its clients. A happy and loyal client base in its turn can create more business possibilities for the hotel in future, thereby increasing its future revenue (Martínez-Ros & Orfila-Sintes, 2012, pp. 686-694).

The services provided by the hotel are highly variable in nature, with variations coming based on seasons, locations, customers, demographics and in general demand structure of the place where it is located. This heterogeneous feature of hospitality services provided by the Novotel, may lead to some challenging situations to be faced by the customers (Horner & Swarbrooke, 2016):

The price levels of their services and their availability may vary hugely from peak seasons to lean seasons due to a high demand for their services in the peak seasons (mostly holidays and vacation seasons) and low demand in the lean ones.

Customer preferences, in hospitality sector, are also varied and very much individual specific. Therefore, a service, which can be welcoming for one customer, can be not so favoured or liked by other customers (Lub, 2012, pp. 553-573).

The services provided by the hotel may also vary depending upon seasons or employees currently present. For example, a customer may not find food of his preferred cuisine due to unavailability of chef trained to produce that particular cuisine, causing disappointment for the customer. In addition, the quality of food served may vary from time to time, as these services are heterogeneous (Zhang & Mao, 2012, pp. 113-131)

To maintain a smooth, rising revenue all throughout the year, the manager needs to take strategies such that the hotel remains in demand all throughout the year and not only in peak seasons (Ariffin & Maghzi, 2012, pp. 191-198). 

He may introduce new season specific services, which can only be available in Novotel, thereby creating demands in off seasons. In lean seasons, he can design special packages with attractive discounts and other benefits, which may attract a large clientele (Yoo & Bai, 2013, pp. 166-177).

The second problem of individualistic customer preferences can be tackled by offering customized services, giving customers liberty to choose from a number of options. The manager can assign an employee specific to a customer (especially high profile ones) who will look after the comfort and preferences of that client, thereby creating a positive impression (Lub, 2012, pp. 553-573).

To rule out the possibility of unavailability of services, a thorough market research can be conducted to get a view of what different clients usually seek in a good hotel and then designing their services based on the finding. In case of demand of a service, which is temporarily unavailable, finding out easy and feasible alternatives by the hotel authorities can impress the customer and contribute to the good will of the hotel (Zhou, Ye, Pearce, & Wu, 2014, pp. 1-10).

The above discussion shows the possible challenges that a customer can face while availing the services of a hotel, which in the long run can create negative impressions of the hotel, thereby hampering its reputation and lowering its revenue. Keeping these challenges in mind, several strategies are also developed and discussed in the essay. The manager of Novotel Rotorua Lakeside (the study enterprise for this assignment) can implement these strategies to tackle the challenges faced by the customers, thereby creating a positive impression for his hotel, which may help Novotel to stay ahead of its competitors and earn a bigger clientele and greater revenues in future.

References

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Gummesson, E., & Grönroos, C. (2012). The emergence of the new service marketing: Nordic School perspectives. Journal of Service Management , 23(4), 479-497.

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Li, H., Ye, Q., & Law, R. (2013). Determinants of customer satisfaction in the hotel industry: an application of online review analysis. Asia Pacific Journal of Tourism Research , 18(7), 784-802.

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Lu, Q., Ye, Q., & Law, R. (2014). Moderating effects of product heterogeneity between online word-of-mouth and hotel sales. Journal of Electronic Commerce Research , 15(1), 1.

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Zhou, L., Ye, S., Pearce, P. L., & Wu, M. Y. (2014). Refreshing hotel satisfaction studies by reconfiguring customer review data. International Journal of Hospitality Management (38), 1-10

Ariffin, A. A. M., &Maghzi, A. (2012). A preliminary study on customer expectations of hotel hospitality: Influences of personal and hotel factors.International Journal of Hospitality Management, 31(1), 191-198.

Bowie, D., Buttle, F., Brookes, M., &Mariussen, A. (2016). Hospitality marketing.Taylor & Francis.

Chang, Y. W., &Polonsky, M. J. (2012). The influence of multiple types of service convenience on behavioral intentions: The mediating role of consumer satisfaction in a Taiwanese leisure setting. International journal of hospitality management, 31(1), 107-118.

Gummesson, E., &Grönroos, C. (2012). The emergence of the new service marketing: Nordic School perspectives. Journal of Service Management,23(4), 479-497.

Horner, S., &Swarbrooke, J. (2016). Consumer behaviour in tourism.Routledge.

Kotler, P. (2012). Kotler on marketing. Simon and Schuster.

Li, H., Ye, Q., & Law, R. (2013). Determinants of customer satisfaction in the hotel industry: an application of online review analysis. Asia Pacific Journal of Tourism Research, 18(7), 784-802.

Line, N. D., &Runyan, R. C. (2012). Hospitality marketing research: Recent trends and future directions. International Journal of Hospitality Management,31(2), 477-488.

Lovelock, C., & Patterson, P. (2015). Services marketing.Pearson Australia.

Lu, Q., Ye, Q., & Law, R. (2014).Moderating effects of product heterogeneity between online word-of-mouth and hotel sales. Journal of Electronic Commerce Research, 15(1), 1.

Lub, X., NijeBijvank, M., MatthijsBal, P., Blomme, R., &Schalk, R. (2012). Different or alike?Exploring the psychological contract and commitment of different generations of hospitality workers. International Journal of Contemporary Hospitality Management, 24(4), 553-573.

Martínez-Ros, E., &Orfila-Sintes, F. (2012). Training plans, manager's characteristics and innovation in the accommodation industry. International Journal of Hospitality Management, 31(3), 686-694.

Mok, C., Sparks, B., &Kadampully, J. (2013). Service quality management in hospitality, tourism, and leisure.Routledge.

Novotel.com. (2017). NovotelRotorua Lakeside. [online] Available at: https://www.novotel.com/gb/hotel-1874-novotel-rotorua-lakeside/index.shtml [Accessed 13 Aug. 2017].

Prud’homme, B., & Raymond, L. (2013). Sustainable development practices in the hospitality industry: An empirical study of their impact on customer satisfaction and intentions. International Journal of Hospitality Management,34, 116-126.

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Wirtz, J. (2012). Essentials of services marketing. FT Press.

Yoo, M., &Bai, B. (2013). Customer loyalty marketing research: A comparative approach between hospitality and business journals.International Journal of Hospitality Management, 33, 166-177.

Zhang, J. J., & Mao, Z. (2012). Image of all hotel scales on travel blogs: Its impact on customer loyalty. Journal of Hospitality Marketing & Management,21(2), 113-131.

Zhou, L., Ye, S., Pearce, P. L., & Wu, M. Y. (2014). Refreshing hotel satisfaction studies by reconfiguring customer review data. International Journal of Hospitality Management, 38, 1-10.