ASSIGNMENT 2 – Services Marketing Mix Assessment Why is this assignment relevant

Question

ASSIGNMENT 2 – Services Marketing Mix Assessment

Why is this assignment relevant? Services are deeds, processes, and performances provided or coproduced by one entity or person for another entity or person. Services constitute a dominant part of the economy and are one of the few business systems that are difficult to outsource. In the United States, 80% of the labor force is derived from the service industries (2013 estimate). A majority of the new job growth is in the service sector today. This sector includes accounting management consulting, education services, engineering services, environmental services, health care, research, architectural services, hotel and restaurant management, charitable services, and many others.

Moreover, even product-dominant firms are now developing a service-related orientation toward marketing in order to maximize customer lifetime value. What sets services apart from other products is the fact that they are highly intangible offerings. They are high in credence and experience characteristics and are more difficult to evaluate than physical goods that are dominated by tangible attributes.

All of us are familiar with firms that market services from the time we bought our first ice-cream cone. Service firms have a marketing mix that is significantly different from that utilized by firms that cater to addressing unmet needs in the pure goods realm, such that they are important to understand from a marketing standpoint. In this project you are going to address the three marketing mix elements of a service firm that are different from a physical goods firm, namely, People, Physical Evidence, and Process.

Group Project Overview

Each pair of students will identify a services firm and conduct a marketing mix evaluation of this firm. The analysis will be done from the perspective of IMPROVING the current level of service at the firm that you have selected to work on. To this extent, you will do the following: 1) Visit the firm in person, 2) Experience the service, 3) Talk to the service provider/s to understand what they currently do with regard to the seven Ps of services marketing, 4) Identify some issues that the service firm can IMPROVE upon, and 5) Provide a summary of your assessment of the firm on the ‘people,’ ‘physical evidence,’ ‘process’ aspects of services marketing.

Company and Product Overview

Firm: Provide a description of the services firm. Talk about what type of service they provide in detail. Who is their customer? Describe demographics and psychographics. Does the firm do any customer research that is focused on their improving its service and/or understanding customer expectations? How often does top management interact with the customers? How concerned are they about service quality? What kind of efforts do they invest (or activities do they engage in) into gaining new customers? How do they think they are doing currently with respect to meeting customer expectations?

Product: What is the product (the physical component of the service – e.g., food in a restaurant)? What are its attributes? What are the emotional and rational benefits delivered to the customer? Who is the firm’s competition? Is there any seasonality attached to demand for the service? How and why?

People: Identify and discuss all human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment. Further, find out what the company’s recruitment policy is – what qualifications so they look for? What kind of personality should their ideal employee have? Do they have a training program for their employees? Do they pay employees by industry standards? Do they provide incentives or motivate their employees in any other way to perform well at their jobs? How often does senior management contact employees and ask for their feedback on various issues relating to the firm.

Physical Evidence: Describe the internal environment (e.g., interior of the restaurant) in which the service is delivered. Describe the exterior environment surrounding the service space (e.g., parking space, entrance, external branding etc.). Describe the physical space where the firm and customer interact to consumer the service. What are the tangible components that facilitate performance or delivery of the service. Does the design (or layout) of the service space meet employee needs and customer needs? Does the space and the equipment/furniture arranged in a manner to facilitate fast, and error-free service? Why? Why not? Are there things about how the physical service space is designed (or laid out) that could use improvement? How often is the service space cleaned? Does it look attractive to customers? What can be done to improve the area?

Process: What are the actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems. Is the process developed in a manner to deliver effective service? Do the employees understand the design? What are some standards in place for employees to follow (e.g., all customers to be seated within two minutes of entering restaurant), with regard to service delivery? Do the customers know what these standards are? How? Why or why not?

Explanation / Answer

Name of the Firm: Hilton Hotels and Resorts

Services Provided: Hilton Hotels provide so many luxory services like Luxury Lodging, Boarding, Multi Cuisine Food, Swimming Pool, Meeting Rooms, Babysitting Service, Laundry, Safety Deposit Box, Fitness and Recreation services other usual services along with extra privileges for potential and special customers.

Of course they do not provide some regular services like Accessible business center or concierge desk, guest rooms with mobility features, parking spaces for cars in the self-parking facility and Van-accessible parking in the self-parking facility.

An overview in the perspective of Marketing Mix:

Firm: Hilton operates hotels and other related services in accommodation, entertainment areas and gambling. Hilton Hotels offers mainly accommodation services through their hotels, resorts, apartment hotels etc. Their core revenue is generated through selling hotel rooms to customers. And there are also other range of services and products that contribute to the level of revenue stream such as restaurants, bars, smaller shops, spa, laundry services, travel desk, business centre, banquet halls etc. Among these products and services the core one is rooms divisions which brings most of the revenues. also they assist consumers in consumption of core products along with facilitating products such as customer services, bars and restaurants, and online reservation facilities.

Price:

Most of the businesses divide Pricing strategies into four broad categories within theframework of Pricing Strategy Matrix;

Economy: Economy pricing strategy involves selling of products with basic features and characteristics to the consumers with low budgets.

Penetration : Penetration pricing strategy involves offering high quality products and services with low prices than the competitors in order to increase the market share.

Skimming : A quiet opposite pricing strategy to penetration cause products and services are offered in a higher price levels than the competition. The main reason behind this is, skimming pricing strategy can make associate products or services with exclusiveness and also of high quality.

Premium pricing strategies : Premium pricing strategy involves charging high level prices for products and services that are perceived to have excellent quality and additional characteristics and features.

From the above classifications, the type of pricing strategy adopted by Hilton Hotels & Resorts is Premium. Hilton hotels offers five star and four star rooms only and the company is able to charge its customers at premium levels because beyond the core product, Hilton do ‘sells’ a set of intangible benefits like a sense of Achievement, Highstatus and Luxury.

Promotion :

Hilton Hotels & Resorts utilizes various components of promotion mix like advertising,public relations, personal selling, and sales promotion. Their new advertisement slogan of Hilton Hotels & Resorts is ‘Stay Hilton. Go Everywhere’ . This is aimed to communicate the marketing message of the hotel to be pictured as a large global brand and to maintain a high level of quality in all of its hotels.

People:

There are various group of people who play a vital role for the success of Hilton Hotels & Resorts. Effective people can be divided into three categories: customers, employees and suppliers.

Customers represent an important group of people obvious reasons. Generally hotel firms target people those are want to eat outside, a wide range of customers from leisure to business travellers, etc. The biggest challenge involved in the hospitality marketing is satisfying the customers of different mind-set . Cause these customers’ needs and wants will be changed over times.

The another classified group of people, Employees are those who can have tremendous impact on service outcome and consequently on the level of profitability for Hilton Hotels

& Resorts through their performances. For this they provide training to their employees if

required.

Physical Evidence:

Physical evidence is the tangibility of Hilton Hotels & Resorts services and their physical

outcome which is generated from consumption of the service. To be specific physical

evidence for Hilton Hotels & Resorts are       

luxurious interior and exterior design,

Attitude of hotel workforce towards customers and service provision

and inclusion of tangible goods within the service.

Process:

Hilton Hotels & Resorts Process element of marketing mix is according to its selected

business strategy. The company aims to maintain the process of service provision for a

premium levels in a luxurious manner. Generally most of the hotels run their businesses

24/7, unlike banks or schools because the accommodation services need to be provided

around the year and 24 hours in a day. To remain competitive the marketing process used

by the hotel is very important. Hilton Hotels & Resorts marketing process begin from

deciding what to be and what to offer to whom. Creating awareness and stimulating the

demand among the consumers are the key marketing process to achieve the competitive advantage.

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