Transcript III 10

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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Internal Marketing
Foreword:
“In a service organization if you are not serving
the customer, you had better be serving
someone who is.”
-Jan Carlzon
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Hospitality is present when something happens
for you. It is absent when something happens
to you.
-Danny Meyer
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
OBJECTIVES
After reading this chapter, you should be able to:
• Understand why internal marketing is an
important part of a marketing program.
• Explain what a service culture is and why it is
important to have a company where everyone
is focused on serving the customer.
• Describe the three step process involved in
implementing an internal marketing program.
• Explain why the management of nonroutine
transactions can create the image of being an
excellent service provider.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
Internal Marketing
Dear Mr. Marriott,
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See this feature on page 267 of your textbook.
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Internal Marketing
Introduction
• Marketing in the hospitality and travel industries
must be embraced by all employees.
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– it cannot be left to the marketing or sales department
• Marketing must be part of the philosophy of the
organization, and the marketing function should be
carried out by all line employees.
• In service industries, the line employees carry out a
majority of the marketing function.
• Internal marketing involves marketing to the firm’s
internal customers, its employees.
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Internal Marketing
Introduction
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Figure 10-1 The relationship between the marketing function and the marketing department. From
Christian Gronroos, “Designing a Long Range Marketing Strategy for Services,” Long Range
Planning (April 1980): 40.
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Internal Marketing
Description
• A study by the American Society for Quality Control
found when consumers were asked what quality in
services meant, a majority of responses cited contact
skills such as courtesy, attitude & helpfulness.
• Because employees are an important part of our
product, we must make sure they are excited about
our product and care about their customers.
• The importance of employees & internal marketing is
supported by a study finding it to be one of the top
three determinates of a company’s financial
performance.
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Internal Marketing
Description
• A key ingredient in almost all service companies
is some innovative arrangement or formula for
mobilizing and focusing human energy.
• A moment of truth occurs when employee and
customer have contact.
III
– when this occurs, what happens is no longer directly
influenced by the company
• Skill, motivation & tools employed by the firm’s
representative and the expectations & behavior of
the client together create the service delivery process.
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Internal Marketing
Description
• The hospitality industry is unique in that employees
are part of the product.
• People usually think of marketing as efforts directed
externally toward the marketplace.
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– a hotel or restaurant’s first marketing efforts should be
directed internally to employees
• Managers must make sure that employees know their
products and believe they are a good value, or it will
be impossible for the guests to become excited.
– all managers must understand marketing & its customer
orientation
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Internal Marketing
Description
• External marketing brings customers, but does little
good if employees do not perform to the guest’s
expectations.
• Product differentiation often derives from the people
who deliver the service.
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– the employees’ delivery of service brings customers back
• A study by the National Restaurant Association
found the most important issue facing food-service
managers was employees.
– As Christine Andrews, of Hostmark Hospitality, states, “If
your people don’t perform, your property won’t perform.”
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The Internal Marketing Process
Introduction
• The internal marketing concept evolved as marketers
formalized procedures for marketing to employees.
III
– the objective of internal marketing is to enable employees
to deliver satisfying products to the guest
• It ensures employees at all levels of the organization
experience the business & understand its various
activities and campaigns in an environment that
supports customer consciousness.
• Internal marketing uses a marketing perspective to
manage the firm’s employees.
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The Internal Marketing Process
Establishment of a Service Culture
• An internal marketing program flows out of a service
culture.
III
– a service marketing program is doomed to failure if its
organizational culture doesn’t support serving customers
• An internal marketing program requires a strong
commitment from management.
• A major barrier to most internal marketing programs
is middle management.
– managers have been trained to watch costs, increase profits
– reward systems are based on achieving certain cost levels
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The Internal Marketing Process
Establishment of a Service Culture
• If management expects employee attitudes to be
positive toward customers, management must have
a positive attitude toward the customer & employees.
• Too often, organizations hire trainers to come in for
a day to get their customer-contact employees excited
about providing high-quality customer service.
• The effect is usually short lived because the
organizations do little to support the customercontact employees
– managers tell receptionists to be helpful & friendly, yet
often the receptionists are understaffed
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The Internal Marketing Process
Establishment of a Service Culture
• Management must develop a service culture: a
culture that supports customer service through
policies, procedures, reward systems, and actions.
• An organizational culture is the pattern of shared
values & beliefs giving members of an organization
meaning, providing them with rules for behavior in
the organization.
• A strong culture helps organizations in two ways
– it directs behavior
– it gives employees a sense of purpose & makes them feel
good about their company
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The Internal Marketing Process
Establishment of a Service Culture
• Culture serves as glue to hold an organization
together, and when an organization has a strong
culture, the organization & employees act as one.
• A strong service culture influences employees to act
in customer-oriented ways and is the first step toward
developing a customer-oriented organization.
• Developing a customer-oriented organization
requires a commitment from management of both
time and financial resources.
– management must be committed to these changes, they do
not result from a memorandum sent by the CEO
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The Internal Marketing Process
Establishment of a Service Culture
• In some companies, including Hyatt, McDonald’s,
and Hertz, management spends time working
alongside customer-contact employees serving
customers.
III
– this makes it clear management doesn’t want to lose touch
with operations and cares about employees & customers
• A service culture & internal marketing program can’t
be developed without the support of management.
• Organizations cannot expect their employees to
develop a customer-oriented attitude if it is not
visibly supported by company management.
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The Internal Marketing Process
Weak Culture
• In firms that have weak corporate cultures, there are
few or no common values and norms.
III
– employees are often bound by policies & regulations that
may make no sense from a customer service perspective
• Employees become insecure about making decisions
outside the rules and regulations.
• Because there are no established values, employees
do not know how the company wants them to act.
– they spend time trying to figure out how to behave
• When they come up with a solution, they must get a
supervisor’s permission before applying it.
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The Internal Marketing Process
Weak Culture
• Supervisors, in turn, may feel the need to pass the
responsibility upward.
III
– during the decision process, the guest is kept waiting
• In a company with a strong service culture,
employees know what to do, and they do it.
– customers receive a quick response to their questions
& quick solutions to their problems
• When you come into contact with an organization
that has a strong service culture, you recognize it
right away.
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The Internal Marketing Process
Turning the Organizational Structure Upside Down
• Conventional organizational
structure is triangular.
III
– In a hotel the chief
executive officer (CEO)
& chief operating (COO)
officer are at the peak
– The general manager is
next level, followed by
department heads,
supervisors, line
employees & customers
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Figure 10-2
Turning the organizational structure upside down.
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The Internal Marketing Process
Turning the Organizational Structure Upside Down
• The problem with a conventional organizational
structure is that everyone is working for their boss.
III
– everyone is concerned with satisfying people above
them and very little attention is paid to the customer
• When a company has a service culture, the
organizational chart is turned upside down.
– customers are now at the top of the organization,
and corporate management is at the bottom
• In this type of organization, everyone is working to
serve the customer.
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The Internal Marketing Process
Turning the Organizational Structure Upside Down
• In a hotel with a conventional organizational
structure, if any employee makes a mistake, they
hope their supervisor never finds out about it.
III
– they may even try to cover it up because they know if
their supervisor finds out, they may be reprimanded
• When you turn the organization upside down,
everyone works to serve the guest.
• When you have a conventional organizational
structure, everyone works to please the boss.
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The Internal Marketing Process
Nonroutine Transactions
• An advantage of a strong culture is that it prepares
employees to handle nonroutine transactions.
III
– a guest transaction that is unique & usually experienced
for the first time by employees
• The number of possible nonroutine transactions is so
great that they can’t be covered in a training manual.
• A service culture provides employees with the right
attitude, knowledge, communication skills, and
authority to deal with nonroutine transactions.
– ability to handle nonroutine transactions separates
excellent hospitality companies from mediocre ones
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The Internal Marketing Process
Nonroutine Transactions
• Management must be willing to give employees the
authority to make decisions that will solve guests’
problems.
• Management should exhibit confidence in their
ability to hire and train employees by trusting the
employees’ ability to make decisions.
• Simon Cooper, former president of Delta Hotels &
Resorts, now president of Ritz-Carlton, believes a
degree of trust makes employees far better workers.
– trusted employees solve guest problems more effectively
and create fewer causes for guests to complain
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The Internal Marketing Process
Nonroutine Transactions
• The issue of nonroutine transactions will become
increasingly important in the future.
• Hospitality firms are now using technology to serve
routine customer transactions, and self-confident
guests will take advantage of technology designed
to enhance and hasten guest service.
III
– the uncertain guest or guests with problems will wish to
deal with an employee
• Employees will take a greater role in answering
questions and solving guests’ problems.
– they must be prepared to handle nonroutine transactions
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The Internal Marketing Process
Creating Jobs that Attract Good People
• Managers must use the principles of marketing to
attract & retain employees.
• They must research and develop an understanding
of their employees’ needs
III
– just as they examine the needs of customers
• Marketers can use marketing research techniques to
segment the employee market, choosing the best
segments for the firm and developing a marketing
mix to attract those segments.
– for employees, the mix is the job, pay, benefits, location,
transportation, parking, hours, and intangible rewards
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The Internal Marketing Process
Creating Jobs that Attract Good People
• Customers look for different attributes when buying
a product; employees look for different benefits.
• Advertising should be developed with prospective
employees in mind, building a positive image of the
firm for present and future employees and customers.
• Employees choose employers and leave them the
same way that guests select certain hotels and then
decide to switch.
III
– it is expensive to lose both guests and employees
• A reduction in turnover can result in hundreds of
thousands of dollars in savings.
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The Internal Marketing Process
The Hiring Process
• The service product, in part, is the attitude employees
display as they deliver the service experience.
• It is unlikely the service provider can teach the
service attitude that all their customer-contact
employees need.
III
– service organizations must hire for attitude, train for skills
• Finding employees who are good at creating a
service experience is a vital goal & major hiring
criterion of service organizations.
• Careful selection can have a positive effect on the
employees that are hired because they feel special.
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The Internal Marketing Process
The Hiring Process
• In times of low unemployment, companies may
need to look at nontraditional labor sources to find
employees with a good attitude.
• The Hospitality Industry Diversity Institute
developed a program to help companies attract
minorities.
III
– the program suggests using community resources such as
churches & ethnic newspapers for recruiting employees
• Selection methods that identify customer-oriented
candidates must be used as part of the hiring process.
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The Internal Marketing Process
The Hiring Process
• Employee attitude, appearance, and willingness to
handle the guest’s requests help form a first
impression of a hotel or a restaurant.
• It is often hard to differentiate the tangible part of
the product of competing companies.
III
– product differentiation often derives from the people who
deliver the service
• In the hospitality industry, most marketing activity
is carried out by employees outside the marketing
department, not the marketing staff.
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The Internal Marketing Process
The Hiring Process
• A hotel’s marketing program brings guests to the
hotel, the staff must turn the first-time guest into a
repeat customer.
• For these reasons, an effective internal marketing
program demands close cooperation between
marketing and human resources management.
• Hiring and training, traditionally the responsibility
of human resources management, are key areas in
any internal marketing program.
– a marketing-like approach to human resources
management starts with hiring the right employees
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The Internal Marketing Process
Teamwork
• Employees who are not customer oriented often try
to pass responsibility for serving customers to others.
• In companies that practice internal marketing, if one
employee makes an error, other employees try to
cover it before the guest notices.
III
– guests do not have to understand the hotel’s organization
and business to ensure their needs are met
• In restaurants with a service culture, staff members
cover for each other.
– employees who see that a guest needs something will
serve the guest, even though it may not be their table
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The Internal Marketing Process
Teamwork
• Organizations that lack teamwork create an
uncomfortable environment for the guest.
• The first employee contacted should take care of the
customer’s request & pass it along to the appropriate
person, referred to as ownership of the problem.
• Customers should not have to learn the hotel or
restaurant’s organizational chart and shouldn’t have
to redirect a request for service to another employee.
• Hiring procedures need to identify those employees
who are team players.
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The Internal Marketing Process
The Importance of Initial Training
• Too often, employees know nothing about the hotel
they work for or its products and other items of
interest to guests.
• If employees are not enthusiastic about the company
they work for and the products they sell, it will be
difficult to create enthusiastic customers.
• If we hire right employees and provide good training,
we will be well on the way to having enthusiastic
employees create repeat guests.
• When we spend a great deal of time & effort
selecting employees, we want to keep them.
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The Internal Marketing Process
The Importance of Initial Training
• Suggestions on how to make an employee feel
welcome during their first week:
III
– ask the employee to arrive at a time when someone has
time to greet them
– make the team aware they are coming so everyone can
welcome them
– use bulletin boards or even marquees to say “Welcome
Robert!”
– give them a basic tour and introduce them to as many
people as possible
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The Internal Marketing Process
The Importance of Initial Training
• Within week one:
– make sure they participate in an organized orientation
– provide them with a partner/mentor during those first
tenuous days
– have a skills training program for them to participate in
– tailor training to the level of expertise they bring
III
• The company’s history, current businesses, and its
mission statement and vision are important for
employees to know.
– they must be encouraged to feel proud of their new
employer, and desire to contribute to the company’s
success must be instilled in them
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The Internal Marketing Process
Continuous Training
• Two principal characteristics have been identified in
companies leading their industry in customer service:
III
– they emphasize cross-training
– they insist everybody share certain training experiences
• Most hotel training programs for college grads rotate
new employees through all departments in the hotel.
– this gives the trainees insight into the importance of each
department and how they work together to provide service
• Embassy Suites Hotels goes a step further, providing
employees an opportunity to increase their wages
based on the number of positions they master.
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The Internal Marketing Process
Continuous Training
• Companies must make sure that their employees are
familiar with all the products the organization sells.
III
– a restaurant service person in a hotel should be able to
give directions to the hotel’s health club
• Often, employees do not have knowledge of products
in their own areas because they have never been
given the opportunity to sample them.
• In well-managed restaurants, employees know the
menu and are trained to direct guests to menu
selections that will best suit their taste.
– and instructed in how to sell the choices on the menu
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The Internal Marketing Process
Continuous Training
• Product training is a continuous learning process and
should be part of a company’s employee training.
• This results in the circular effect of creating satisfied,
proud employees who in turn create satisfied guests.
III
– a study of effect demonstrated that “as employees’ job
satisfaction, job involvement, and job security improve,
their customer focus also improves.”
• Development of a good training program can start
organizations on an upward spiral.
– a research study found that service quality is related
inversely to staff turnover
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The Internal Marketing Process
Continuous Training
• Some firms ask why they should spend money
training employees if they are just going to leave,
which can turn into a self-fulfilling prophecy.
III
– employees are not properly trained and thus are not
capable of delivering quality service
– unable to deliver good service, they feel uncomfortable
in their jobs and quit
• Unfortunately, this reinforces employer beliefs that
they should not spend money training employees.
– not investing in employee training programs leads to a
cycle of high employee turnover & guest dissatisfaction
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The Internal Marketing Process
Managing Emotional Labor
• Just as we try to understand the customer needs, we
need to understand the needs of our employees.
III
– one of these needs is the ability to manage their emotions
• Friendliness, courtesy, empathy, and responsiveness
all require huge amounts of emotional labor.
– emotional labor has been defined as necessary involvement
of the provider’s emotions in the delivery of the service
• The display of emotions can strongly influence the
customer’s perception of service quality.
– managers must hire employees who can cope with the
stress caused by dealing with customers
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The Internal Marketing Process
Managing Emotional Labor
• Common techniques used to manage emotional labor
include monitoring overtime, avoiding double shifts,
encouraging work breaks, and support from fellow
workers and managers.
• A big cause of emotional stress is long hours.
III
– employees often find it hard to manage their emotions
after working for ten hours straight
• We have all observed or experienced service people
who were rude or uncaring after a long shift.
– when employees are overworked emotionally, service
suffers
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The Internal Marketing Process
Implementation of a Reward and Recognition System
• To sustain a service culture, policies must create a
system that rewards and recognizes employees &
managers that provide good customer service.
III
– employees must receive feedback on how they are doing
to perform effectively
• An internal marketing program includes service
standards and methods of measuring how well the
organization is meeting these standards.
• If you want customer-oriented employees, seek out
ways to catch them serving the customer
– and reward and recognize them for making the effort
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The Internal Marketing Process
Implementation of a Reward and Recognition System
• Reward systems in the hospitality & travel industry
used to be based on meeting financial objectives.
III
– such as achieving a certain labor cost or food cost or
increasing revenue
• Well-managed companies are now giving rewards
based on customer satisfaction.
• If companies want to have customer-oriented
employees, they must reward them for servicing
the customer.
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The Internal Marketing Process
Dissemination of Marketing Information to Employees
• Often, the most effective way of communicating with
customers is through customer-contact employees.
• Employees often have opportunities to solve guest
problems before these problems become irritants.
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– to do this, they need information
• Unfortunately, many companies leave customercontact employees out of the communication cycle.
• Marketing tell managers & supervisors about
upcoming events, ad campaigns and new promotions.
– but some managers may feel employees do not need to
know this information
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The Internal Marketing Process
Dissemination of Marketing Information to Employees
• All staff should be informed about promotions.
– they should hear about promotions & new products from
management, not from ads meant for external customers
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• Management must understand that employees are
watching them for cues about expected behavior.
– if the general manager picks a piece of paper up off the
floor, other employees will start doing the same
• A manager who talks about the importance of
working together as a team can reinforce the desire
for teamwork through personal actions.
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© 2010 Pearson Higher Education, Inc.
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The Internal Marketing Process
Dissemination of Marketing Information to Employees
• Ongoing communication between management and
employees is essential—not just group meetings but
regular individual meetings between the employee
and management.
• Managers should meet with customer-contact
employees to gain customer need insights.
III
– and determine how the company can make it easier for the
employee to serve the customer
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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See this feature on page 282 of your textbook.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
The Internal Marketing Process
Dissemination of Marketing Information to Employees
• Hotels can use technology and training to provide
employees with product knowledge.
III
– information can be readily accessible to employees, who
should then be trained in the hotel’s products & services
• Employees should receive information on new
products and product changes, marketing campaigns,
and changes in the service delivery process.
• All action steps in the marketing plan should include
internal marketing.
– when a company introduces a new media campaign, the
plan should include actions to inform employees
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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The Internal Marketing Process
Dissemination of Marketing Information to Employees
• The first time most employees see company ads is
in the media in which the advertisement is placed.
• Before the advertisements appear in the media, the
company should share the ad with its employees.
III
– managers should also explain the objective of the
campaign and the implications
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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The Internal Marketing Process
Employee Involvement in Product Selection
• Employees should be informed of & involved in the
selection of the uniforms they wear everyday.
III
– selection is often left to designers & managers with little
input from the service worker
• Employee dress contributes greatly to the guest’s
encounter with customer-contact employees.
– uniforms also become part of the atmospherics of a
hospitality operation or travel operation
• In cases where uniforms are lacking, guests may
become frustrated because they have difficulty
identifying employees when they need help.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
The Internal Marketing Process
Employee Involvement in Product Selection
• Uniforms have the ability to create attitudes about an
employee’s job.
III
– employees dressing in formal wear state they feel &
behave differently once they put on their uniform
– putting on the costume can mean putting on a role and
shedding other roles
• Employees’ dress can direct employees’ behavior to
be more consistent with the goals and standards of
behavior established by the organization.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
The Internal Marketing Process
Employee Involvement in Product Selection
• A study of resort employees found a significant
relationship between employees’ perceptions of their
uniforms and their overall job attitude.
III
– the higher the employee’s perception of the uniform,
the more positive their rating of overall job attitude
• Management often looks for uniforms that represent
the property, acting as a marketing tool—enhancing
the image of the organization.
– uniforms should be functional & accepted by employees
• It is paramount to allow employee involvement in
uniform choices regarding both function & image.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
KEY TERMS
• Cast members. A term used for employees. It
implies that employees are part of a team that is
performing for their guests.
• Crosstraining. Training employees to do two or
more jobs within the organization.
• Emotional labor. The necessary involvement of the
service provider’s emotions in the delivery of the
service.
• Empowerment. When a firm empowers employees,
it moves the authority and responsibility to make
decisions to the line employees from the supervisor.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
KEY TERMS
• Internal marketing. Marketing by a service firm to
train effectively and motivate its customer contact
employees and all the supporting service people to
work as a team to provide customer satisfaction.
• Moment of truth. Occurs when an employee and
a customer have contact.
• Organizational culture. The pattern of shared
values and beliefs that gives members of an
organization meaning and provides them with
the rules for behavior in that organization.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
KEY TERMS
• Service culture. A system of values and beliefs
in an organization that reinforces the idea that
providing the customer with quality service is
the principal concern of the business.
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
EXPERIENTIAL EXERCISES
Try This !
• Visit a hospitality or travel company, and ask some
questions about their products.
III
– at a restaurant you may ask about the hours they are open
and about menu items.
– at a hotel, ask about their rooms or restaurants
• Have enough dialogue with the employees to be able
to judge the customer orientation of the employees.
• Write your findings supporting how the employees
demonstrated they had a customer orientation and
ideas you have on how they could have been more
customer oriented.
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
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INTERNET EXERCISES
Try This !
Support for this exercise can be found on the Web
site for Marketing for Hospitality and Tourism,
www.prenhall.com/kotler
• Explain the advantages and disadvantages of
having a “live chat” option or other option to
have a live dialogue with an employee on a Web
site.
III
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Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
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© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458
END
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CHAPTER END
Marketing for Hospitality and Tourism, Fifth Edition
By Philip Kotler, John Bowen and James Makens
10
© 2010 Pearson Higher Education, Inc.
Pearson Prentice Hall - Upper Saddle River, NJ 07458