Student ID 15005

KENSINGTON COLLEGE OF BUSINESS

Module: CONDEPORARY ISSUES IN HOSPITALITY MANAGEMENT

Course MBA (Hospitality)

Student ID :15005 Submitted to Kevin ohara Submitted on 9th december 2011

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Student ID 15005

Contents
TASK 1 ............................................................................................................................................... 3 INTRODUCTION ......................................................................................................................... 3 CUSTOMER SATISFACTION ..................................................................................................... 3 CUSTOMER LOYALTY .............................................................................................................. 5

TASK 2 ............................................................................................................................................... 7 INTRODUCTION ......................................................................................................................... 7 ORGANISATIONAL CORPORATE CULTURE .......................................................................... 7 REFERENCES ............................................................................................................................ 10

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TASK 1

INTRODUCTION Hospitality industry is one of the most attracting and growing industries during the last few years. There is a huge level of competition in the hospitality industry due to the presence of some huge players. For maintaining a safe place in the industry and to grow in the market the organization has to provide better service to the customers. In a hotel industry and all service based industries the customer satisfaction and the loyalty plays an important role in the growth of the firms. A management approach based on the customer satisfaction can enhance the loyalty and increasing a positive image on the mind of the customers. The hospitality industry is a service based industry depending on building long term relationship and they have to maintain loyalty to remain successful in the market. The customers have a wide variety of choices to choose from and therefore the organization has to be competitive to attract the customers. In this assignment the importance of the customer satisfaction and the loyalty are discussed with respect to the hospitality industry. CUSTOMER SATISFACTION Customer satisfaction is a management philosophy by meeting the customer needs and wants through knowing the expectations of the customers (Gronoos, 1990). Most of the organizations exist due to the presence of the customers (Valdani,2009).For service industry the customer satisfaction depends on the quality of the service provided (Shemwell 1998).The customer satisfaction is the out comers expectation from the product. If the customer gets the expected value from the transaction or service the customers will be satisfied (Blanchard&Galloway, 1994; Henkard,1990).For achieving the customer

satisfaction the organization have to recognize the customer needs and satisfy them and this will help them to make profits(Barsky &Nash,2003).The most important factor which positively affect the organization is that satisfied customers are like revenue source to the organizations. If the customers are satisfied they will be loyal to the organizations and it will

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help in the retention of the customers. The attraction of the new customers is a very difficult task than the retention. So in a service industry customer satisfaction is very important. Now a days one of the hard challenges for the service industry like the hospitality industry is to sustain the satisfaction of the customers. The customer satisfaction helps the organization to effectively build a strong relationship with the customer (Yen & Su, 2004).For a service industry like airlines and the hospitality industry long term relationship between the customers are very important. If the customers are satisfied with the organization relationship they will return to th organization next time too(Choi&Chu,2001).Most of the hospitality firms are increasing their service quality aspect to make the customers satisfied(Jones,2007). The customers are the king in the market. They are the supreme power holders in the market.The product have to satisfy the customer needs to make them repurchase the product again. In the service industries like the hospitality and the airline industry the customer holds an important role. The service industry is mainly a huge competitive sector and the customers have a huge number of alternatives to choose from. Therefore the organization has to provide better quality service to make the customers satisfied. Once the customers are satisfied the organization can retain them easily. Generally in the service industry the quality acts as a main determinant in the satisfaction level. The hotels, restaurants, airlines are providing tremendous effort to increase their service quality. Mainly the satisfaction can be determined by analyzing the subjective and the objective factors. The needs and the emotions of the customers are linked with the subjective matters while product and service features are attached with the objective features.Accoding o Atkinson 1988 the customer satisfaction on the hotels depends upon the cleanliness, the security factor and the staff behavior at work. But according to Knutson (1988) the comfort, the hotel location, cleanliness, safety, employee interaction are vital in the satisfaction of the customers. So basically the activities linked with the service quality are influenced by the customer satisfaction. The hotels need to provide better service to the customers to make them retain with the hotels. The revenue of the organizations will depend upon the satisfaction level of the customers. Once the customers are satisfied they will repeat the purchase again and this will add revenue to the organization. In a hotel perspective the customers will have to come back again for adding value to the organization and to increase the profit of the hotel. If the customers satisfied with the hotel service they will frequently visit the hotel to experience the service. So the maintaining of the customer satisfaction is very important. The hotel can know the
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satisfaction level of the customers by using the guest comment cards(Horsnell,1988).The customers are supplied with the comment cards and the hotel can evaluate their service and the satisfaction aspect with the help of the guest commend cards.

CUSTOMER LOYALTY The customer loyalty is one o the major facilitators for increasing the customer satisfaction. The customer loyalty happens when the customer consumes the product again and will recommend the product again and will recommend the product or the service to the other without nay benefits. The main benefit of the organization is mainly the retention of the customers and to increase the market share. The loyal customers stay with the organization. The loyal customers will use the product gain and they cannot be swayed by the competitors low price. The loyal customers are not always satisfied and the satisfied customers are not always being loyal. Sometimes the customers may loyal to the organization only due to the high switching coat and the lack of real substitutes while other customers may be loyal because of the satisfaction level. According to Dube &Reneghan (1999.p.79) managing customer value by creating quality and service that customers can see now is considered a critical component of companies strategic marketing. Customer value is what builds loyalty. In service industry like hospitality the loyalty usually means satisfaction but the satisfaction is not loyalty. For example in a hotel the customer (guest) may be satisfied with the service and the stay because the service meets his expectation. But this does not mean that the customer will come again or recommend the service to the others (Bowen&Shoemaker, 1998).Therefore the customer loyalty has to be enhanced to make the customers reuse the service again. Generally the customers who are loyal bring more value than the satisfied customers. The loyal customers are resistant to the change in the service provider, make an identity with the brand and will give a strong preference to the brand than the competitors(Butcher,Sparks&OCallaghan,2001).This will be a huge beneficial to the hotel industry to increase the profit and the occupancy rate. In a hospitality industry for building the loyalty the management need to have a clear knowledge of the customer value drivers and have to build effective programmes to enhance the loyalty of the customers. For example if the value driven attributes of a customer is price then the hotel have to give some types of stimulation to make the customers remain loyal to the organization. One of the potential ways to increase the loyalty is by the introduction of
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the loyalty cards. The loyalty cards will at as a point card where the customer will get points for the services they used. Based on the points in the card the customer will get discounts and offers form the organization. This loyalty programme will help to build relationship with the customer which in turn enhances the profit. If the quality of the service is the main attribute to the customer then the loyalty can be increased by providing efficient service quality. Wong & Sohal had identified a strong relationship with the service quality and the customer loyalty concept. The service quality concept will make the customers to remain loyal and will recommend service to other customers too. The customer awareness has been enhanced in the recent years due to the globalization, market saturation and the information technology development. So the long term success of the organization cannot be achieved mainly through the price and the quality aspects. Therefore the companies have to effectively build the customer loyalty by building the long term relationship (Reichheld, 1993).If the hotels keep the customers loyal they will not move to other hotels for the stay and the service. The loyalty makes the customers to be remain with the organization. Rather than search for the alternatives. The image and the brand of the hotel will influence the loyalty of the customers (Belk, 1988).The brand personalities influence the customer view towards the brand and enhance the loyalty (Aaker,1999). Most of the international hotels try to attract the customers and to make the customers satisfied and remain loyal adopt certain marketing strategies. For example the Hilton group is using the slogan Customers is the king and Our focus is customer satisfaction for increasing the loyalty and the satisfaction aspect. The customers will feel a sense of belongingness and will feel that the organization considers them as important. This will enhances the satisfaction and the loyalty of the customers towards the Hilton hotel. The hotels can know the target customers which they have to focus using the help of the Information technology. The hotel data base and the user system can give the hotel enough information about the key customers of the hotels. By this aspect the hotels can provide discounts and offers to enhance the loyalty of the customers. The IT also plays a major role in the satisfaction and the loyalty concept of the customers. The convergence of the IT and other media will make the hotels to build an effective relationship with the customers (Cline 1999).Some of the example of the IT services are website, email, call center, reservation system etc.The hotel can also record the information about the guest satisfaction with the help of electronic devices (interactive TV, pay per view
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system).These information will help the organization to build the loyalty programmes. The greater customer choice aspect has an influence on the satisfaction and the loyalty. The hotels have to be more careful in their service and other aspects because the hospitality industry is highly competitive in nature. Customer loyalty and satisfaction are very important in the hospitality industry. From the above stated examples and description it is very clear that most of the hotels are trying to increase the satisfaction and the loyalty of the customers. The profitability, the growth in the hospitality industry, exposure to market all can be increase if the customers are satisfied and be loyal to the hotel. There is a huge level of competition in the hotel industry so it is very vital for the hotel to remain competitive.

TASK 2

INTRODUCTION The organizational culture is one of the important contributors for increasing the service quality (Kloot and Martin,2007).The corporate culture plays a very significant role in an organization and it can affect the organization positively and negatively. The employees performance often depends upon the culture of the organization (Yung,2007). As an operations manager one of the main aim is to expand the hotels to the international market. For building a global presence a strong brand name and a good workforce is neded.Only motivated and dedicated work force and provide increase performance to the hotels so that organization can competitive in the global market. Once the employees are motivated they will increase their service quality. The customers will be satisfied if the service quality aspect of the hotel is increased. A strong corporate culture can make only the employees enthusiastic and motivated. In the Task two of this assignment iam going to evaluate the importance and the effectiveness of the culture in the hospitality industry. I will also provide a suitable corporate culture for my hotel as an operation head ORGANISATIONAL CORPORATE CULTURE The corporate culture refers to the values, attitudes and beliefs of employees in an organization (Hill and Tones, 2001).The corporate culture will build the employees perception towards the job. The organizational culture will build the employees perceptions towards the job. The organizational culture motivates the employees to contribute towards the
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job and the organization will reward them (Chatman, 1989).The corporate culture will have an influence on the organizational commitment. The corporate culture will affect the employees desire to continue the employment (Mowday &McDade, 1979).The employee performance and the motivation can be maintained by adopting a strong corporate culture. The motivated employee will provide better customer care to the customers.Organisation culture will make the employees a sense of belongingness to the organization and can increase the commitment. Most of the service organizations like the hospitality organizations are shifting their main focus towards the service quality aspect (Zeithaml, Berry and Parasuraman, 1988).The increase in the service quality will make the hotels to differentiate from the competitors. So the cultures of the organization have to build around the service culture perspective (Gounaris,2003).If the hotel is having a good service culture the employees will be motivated and they will give better service to the customers(Gronroos 2007).The supportive service culture in an organization motivates and encourages the

employees to provide better service to the customers which in turn increases the customer loyalty and the satisfaction(Henkett and Schlesinger,1994).The culture will also affect the employees attitude towards the work. The attitudes of the employees like the commitment and the satisfaction are very important in providing good service quality (Payne and Webber 2006).

If we examine the corporate culture of international hotels in the hospitality industry it is very clear that the hotels performance and the success lies in the corporate culture. Here iam explaining the corporate culture in two leading hotel groups in the UK like Marriott hotel and the Elite hotel. The Marriott is one of the leading hotels in the UK hospitality industry. The main corporate culture in the Marriott hotel is to provide Superior service.The Marriott culture is build on core values and principles to provide better superior service to the customers. The Marriott strong core value is the belief that the people are number one.If you take care of Marriott people, they will take care of the Marriott hotels. The Marriott culture is built on Good old fashion dedication to hard work and fun while doing it (T.W Marriott and Brown 1997).The Elite Hotel groups is one of the leading Europe hotel groups. The corporate culture of the Elite hotels is making them different from the competitors and the reason for their success. One of the main aspect in the Elite is that they only employees of high quality. The culture of the Elite hotel is built around the employees and the customers. The customers are treated as the kings and better efficient customer services are provided.
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The service quality is the main culture they want to possess in the long run of the company. The employees are free to express their opinion to the management and this made a strong relation with the management. The Elite hotels believe in the capabilities of the employees by providing creative and professional development. One of the employees of Elite hotels opinion towards the organization culture is like this "Very good and accepted corporate hierarchy. Of course, it exists, but it is very "flat". (...) Without strong pressure "from the top", everything functions pretty. From these two organisations it is very clear that their culture is built around the customer service quality and the employee focus orientated. The hospitality organisations like the Marriott and the Elite believe that once the culture is suitable to the employees they can increase the service quality aspect. For my hotels the best way for me to make the hotels a global presence is by adopting a strong culture within the organisation. The corporate culture plays a vital role in the organisation success. For my organisation the cultural norms and values will be built around the service quality concept. The service quality is one of the main aspects in the hospitality industry. If the culture is built round the service quality aspect the customers will be satisfied and loyal. My hotels will be built around strong cultural norms so that the employees of my hotels will be motivated and satisfied. The culture will be employee friendly ensuring the maximum contribution of the employees towards the hotel success. The strong customerservice oriented service culture will increase the hotel performance in the global market. The employee satisfaction has to be highlighted and encouraged because the satisfaction of the employees increases the service quality of the hotel. If the employee does not have any further development in the hotel they will be demotivated and it will affect the hotels performance. A corporate culture focused on service culture will be best suitable for my hotel groups. My hotels mission statement will be to provide excellent customer service to the guests by satisfying their needs and wants. By providing a disciplined approach, the service quality is enhanced to the customers. My hotels corporate culture will help to retain my workforce in the hotels. The employees are the main assets of an organisation and they have to be motivated to perform better. In a service industry the quality of the service is very important and only employees can provide better service quality to the customers. The best way for me to adopt the culture that exists in the Elite hotel groups. The culture of the Elite hotel is built around the employees and the customers. The customers are treated as the kings and better efficient customer services are provided. The service quality is the main culture they want to possess in the long run of the company. The employees are free to express their
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opinion to the management and this made a strong relation with the management. This will help me to effectively make my hotels to prosper in the global market.

By adopting a good corporate culture will also make the hotels to build a strong basement for customer satisfaction and the concept. So the culture of my hotels will be more based on the service quality and employee focused. If the culture is more focused on employees it will increase the service efficiency and customer satisfaction. By this corporate culture my employees in the hotel will be more motivated, customers will be satisfied and this will result in the increase in the performance of the hotels in the international market.

REFERENCES Aaker, D.A., 1991. Managing Brand Equity. Free Press, New York, NY, pp: 19-32 Atkinson, A. (1988). Answering the eternal question: what does the customer want? The Cornell Hotel and Restaurant Administration Quarterly, 29(2): 12-14 Blanchard R.F., & Galloway R.L. (1994). Quality in retail banking. International Journal of Service IndustryManagement, 5 (4): 523.

Barsky J. & Nash L. (2003). Customer satisfaction: Applying concepts to industry- wide measures. The Cornell Hotel and Restaurant Administration Quarterly, 44 (4): 173-183 Bowen, J. T., & Shoemaker, S. (1998). Loyalty: A strategic commitment. Cornell Hotel and Restaurant Administration Quarterly, 39, 1225.

Butcher, K., Sparks, B., & OCallaghan, F. (2001). Evaluative and relational influences on service loyalty. International Journal of Service Industry Management, 12(4),310327.

Choi, T. Y., & Chu, R. (2001). Determinants of hotel guests' satisfaction and repeat patronage in the Hong Kong hotel industry. International Journal of Hospitality Management, 20: 277297

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Cline, R. S. (1999). Hospitality 2000the technology: Building customer relationships. Journal of Vacation Marketing, 5(4), 376386. Grnroos, C. (1990). Service management and marketing: managing the moments of truth in service competition. USA: Lexington Books Gounaris, S., Stathakopoulos, V., Athanassopoulos, A., 2003. Antecedents to perceived

service quality: an exploratory study in the banking industry. International Journal of Bank Marketing 21 (4), 168-190. Heskett, J., Schlesinger, L., 1994. Putting the service-profit chain to work. Harvard business review 72 (2), 164-174 Hill, C.W.L. and, Jones, G.R. (2001). Strategic Management 5th Ed. Houghton Mifflin, MeansBusiness, Inc.

Jones, M.A., and Suh, J. 2000. Transaction-specific satisfaction and overall satisfaction: an empirical analysis. Journal of Services Marketing, 14, 147-159 Payne, S., Webber, S., 2006. Effects of service provider attitudes and employment status on citizenship behaviors and customers' attitudes and loyalty behavior. Journal of Applied Psychology 91 (2), 365-378.

Shemwell, D.J., Yavas, U., & Bilgin, Z. (1998). Customer-service provider relationship: An empirical test of amodel of service quality, satisfaction and relationship-oriented outcome. International Journal of Service management

Yen A., & Su L. (2004). Customer satisfaction measurement practice in Taiwan hotels. Hospitality Management 23: 397408 Zeithaml, V., Berry, L., Parasuraman, A., 1998. The behavioral consequences of service quality. The Journal of Marketing 60 (2), 31-46.

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