SERVICE QUALITY MANAGEMENT THC3

1. Guestology:

• Definition: The scientific study of guest behavior in hospitality organizations.

2. Guest Profiling:

• Definition: Understanding and categorizing guests to tailor experiences.

3. Serving Internal Customers:

• Definition: Employees should receive the same respect and care as external customers.

4. Understanding the Guest:

• Definition: Guest-focused organizations design personalized experiences based on guest needs and expectations.

5. Guest Experience:

• Definition: The sum of all experiences a guest has with a service provider on a given occasion.

  Formula:
  Guest Experience = Service Product + Service Setting + Service Delivery System

6. Components of Guest Experience:

• Service Product: Tangibles and intangibles involved in the service.

• Service Setting: The physical environment where the experience occurs.

• Service Delivery: Human and physical components of service, plus organizational and informational systems.

7. The Nature of Services:

• Services are often intangible.

• Services are consumed at the moment of production or delivery.

• Requires interaction between service provider and guest.

Guest-Focused Orientation of Benchmark Firms:

8. Quality:

• Definition: The difference between expected and delivered service quality.

  • Formula:
    Qe = Qed - Qee

  • If delivered quality equals expected quality, quality is as expected.

9. Value:

• Definition: The perceived quality of the experience relative to the cost incurred by the guest.

  • Formula:
    Ve = Qe / All Costs Incurred by Guest

10. Cost:

• Definition: Tangible and intangible costs a guest incurs to receive the service.

Characteristics of Hospitality Industry:

11. Product-Service Mix:

• Definition: A blend of tangible products and intangible services.

12. Two-Way Communication:

• Definition: Both customer and staff must engage in the service process.

13. Relationship Building:

• Definition: Long-term relationships with customers lead to repeat business and positive word-of-mouth.

14. Diversity Culture:

• Definition: Hospitality staff interact with people from diverse backgrounds.

15. Labor Intensive:

• Definition: Requires a large workforce to deliver exceptional customer experiences.

Characteristics of Tourism Industry:

16. Perishability:

• Definition: Tourism products can’t be stored and are lost if not booked.

17. People-Oriented:

• Definition: Tourism quality depends on interactions between staff and customers.

18. Inconsistency:

• Definition: Experiences in tourism can vary due to factors like mood or situation.

19. Investment and Immobility:

• Definition: Tourism businesses require large investments in assets that can't be easily moved.

20. Inseparability:

• Definition: Tourism products are sold, produced, and consumed simultaneously.

21. Intangibility:

• Definition: Tourism experiences can’t be touched or stored physically.

22. Inflexibility:

• Definition: Tourism products have limited flexibility for sudden demand changes.

Three Generic Strategies:

1. Lower Price:

• Definition: Offering a similar service to competitors at a lower price by focusing on cost reduction and efficiency improvements.

• Note: Cutting costs too much can hurt the guest experience and push customers to competitors.

• Example: Low-price providers may still offer good service but add value through efficiency rather than higher-quality products or more staff.

2. Differentiated Product:

• Definition: Focuses on making the guest experience unique rather than competing on price.

• How: Emphasizes unique features, either through real differences or clever marketing.

• Brand Image:

  • Definition: A brand promises guests a consistent quality and value of experience every time they encounter the brand.

  • Note: A strong brand name can help extend a company’s reach into new markets.

3. Special Niche:

• Definition: Targeting a specific market niche by offering unique qualities like better service, value, or location.

• How: Innovates to meet unmet needs, which can be identified through market research, demographic trends, or a combination of intuition and analysis.

Looking Around (Environmental Assessment):

• Definition: Involves identifying opportunities and threats to understand future business impacts.

• Purpose: Helps managers identify key factors that will influence guest satisfaction in the long term.

• Note: While guests may not always know what will satisfy them in the future, experts aim to uncover the aspects of experiences that will meet their needs.

Looking Within (Internal Assessment):

• Definition: Involves evaluating the organization’s strengths and weaknesses to understand its core competencies.

• Purpose: Helps determine what the organization does well, where it struggles, and how its strengths and weaknesses align with future goals.

Potential Changes:

1. Changing Demographics:

• Veterans:

  • Values: Hard work, loyalty, security, commitment.

  • Preferences: User-friendly facilities, affordable restaurants, and avoiding the internet for travel info.

• Baby Boomers:

  • Values: Hard work, personal sacrifice.

  • Preferences: Health/wellness, medical tourism, adventure travel, and family-friendly restaurants with upscale dining.

• Generation X:

  • Values: Work-life balance, family life.

  • Preferences: Unique experiences, amusement parks, beaches, and value-conscious travel.

• Generation Y:

  • Values: Optimism, self-confidence, and instant gratification.

  • Preferences: Tech-savvy, looking for unique travel experiences, and less loyal to hotel brands.

2. Changing Technology:

• Impact: The computing power of smartphones and laptops allows travelers to find recommendations, take virtual tours, and book travel easily.

• Challenge: Use technology to enhance the guest experience while replacing labor in ways that go unnoticed by guests.

3. Changing Social Expectations:

• Example: Innovations like "Dashboard cuisine" catering to busy families needing food easy to eat in cars.

4. Changing Economic Forces:

• Impact: Economic policies affect capital suppliers, customers' purchasing power, and competitors.

• Note: Hospitality businesses are highly sensitive to economic downturns, as travel and tourism decline during tough economic times.

5. Changing Competitors:

• Existing Competitors: Businesses already established in the market (e.g., nearby restaurants).

• Potential Competitors: New businesses that might enter the market soon.

• Substitute Providers: Businesses selling similar products that meet the same needs (e.g., fast food or takeaway options).

Service Strategy:

• Definition: Helps organizations decide what types of services to offer and which markets to target.

• Goal: To make strategic decisions that drive long-term growth and success by defining the market’s key drivers, crafting the service product, creating the service environment, and designing systems to reach the target market.

Action Plans:

• Definition: Clear plans outlining who the organization wants to serve, what it wants to offer, where the market is, and how to achieve goals.

• Purpose: These plans specify how the organization will operate, the actions needed in the next period (usually a year), and how progress will be tracked with feedback.

Service Quality:

• Definition: Guests expect high-quality, value-for-money services.

• Perceived Service Quality: The gap between customer expectations and perceptions.

  • Note: A smaller gap indicates better service and greater customer satisfaction.

Dimensions of Service Quality:

1. Reliability:

   • Definition: Performing the promised service consistently and accurately.

2. Responsiveness:

   • Definition: The willingness to help customers and provide prompt service.

3. Assurance:

   • Definition: The knowledge, competence, and credibility of employees.

4. Empathy:

   • Definition: Providing caring and individualized attention to customers.

5. Tangibles:

   • Definition: The physical aspects like facilities, equipment, appearance of staff, and communication materials.

Quality in the Service Package:

• Budget Hotel Example:

  1. Support Facility: Infrastructure or support services provided.

  2. Facilitating Goods: Tangible items that assist in service delivery (e.g., toiletries).

  3. Explicit Services: The core services offered (e.g., room cleaning).

  4. Implicit Services: Additional benefits (e.g., ambiance, customer care).

Quality Methods:

1. Taguchi Method:

   • Definition: Ensures consistent performance with a focus on quality through meeting specifications. Poor quality costs are calculated as the square of the deviation from the target.

2. Poka-Yoke:

   • Definition: Error-proofing method to prevent mistakes by both employees and customers (e.g., using frames at check-ins or noting eye color for hotel staff).

3. Quality Function Deployment (QFD):

   • Definition: Translates customer satisfaction into measurable service/product design specifications.

   • Steps:

     1. Establish the aim of the project.

     2. Determine customer expectations.

     3. Describe the service elements.

     4. Create the roof of the house.

     5. Develop the body of the matrix.

     6. Weight the service elements.

     7. Assess competition.

4. Benchmarking:

   • Definition: Comparing company performance to industry leaders known for being "best in class."

5. Walk-Through Audit:

   • Definition: A customer-focused survey that tracks the entire service experience, identifying areas for improvement through feedback on every interaction.

Achieving Service Quality:

1. Cost of Quality:

   • Definition: The costs related to ensuring service quality.

   • Types:

     • Prevention Cost: Cost to prevent issues.

     • Detection Cost: Cost of identifying issues.

     • Internal Failure: Cost of correcting issues before reaching the customer.

     • External Failure: Cost of fixing issues after customer impact.

   • Juran's Formula: $1 invested in prevention = $100 in detection = $10,000 in failure cost.

2. Service Process Control:

   • Customer View:

     • Unconditional, easy to understand, meaningful, easy to invoke, easy to collect.

   • Management View:

     • Focuses on customers, sets clear standards, guarantees feedback, promotes understanding, and builds customer loyalty.

   • Word-of-Mouth: Most businesses hear from only a small fraction of dissatisfied customers, and resolving issues quickly helps retain customers.

3. Unconditional Service Guarantee:

   • Service Recovery:

     • Case-by-case: Resolves complaints individually, but may seem unfair.

     • Systematic Response: Follows a set protocol and offers ongoing updates.

     • Early Intervention: Fixes problems before customers are impacted.

     • Substitute Service: Allows competitors to step in, risking customer loss.

4. Inspection:

   • Types:

     • Opinion Surveys: Gather customer feedback about service quality.

     • 100% Inspection: Every unit is checked (risk of fatigue error).

     • First Article Inspection: Done after process setup.

     • Destructive Testing: Testing that destroys the product.

     • Acceptance Sampling: Checking a random sample from a lot; if the sample meets quality standards, the lot passes.

5. Process Focus:

   • Definition: Ensuring processes meet customer requirements or specifications.