Topic 1: Intro to Services Marketing

Target concept: who do we want to come through the door

● Functional view of marketing: focusing on market strategy, brand management, analytics
● Managerial view of marketing: the process of discovering the target market
○ 1. Who are our customers?
○ 2. What are their needs and wants?
○ 3. How can we satisfy their needs and wants better than the competition?
● Organizational view of marketing

Topic 2: The Role of Marketing in the Hospitality Firm

Readings:
● Modern marketing: What it is, what it isn’t, and how to do it, March 2020, McKinsey;
about mindsets (ROI mindset, unifier mindset, customer-centric mindset)
● Services Marketing Plan Template (from eCornell)

Topic 3: Key Frameworks for Services Marketing

Characteristics of Services
1. Intangibility – cannot be sensed or touched
2. Inseparability – customer is in the service factory
3. Heterogeneity – services are delivered by different people
4. Perishability – not able to inventory. What is not used today is a lost revenue
opportunity

Countering
1. Intangibility
a. Physical cues (dress code, room design)
b. Imagery (brand symbols, slogans)
c. Co-branding
2. Inseparability
a. Communicate how consumer can co-produce
b. Self-service and showing the consumer how to
3. Heterogeneity
a. Reward system for proper service
4. Perishability
a. Revenue management or yield management
b. Queue management

Readings
● Domino’s Process Strategy- "We used to be a pizza company that sells online,
and we needed to become an e-commerce company that sells pizza."
 ● WSJ People Strategy- “Teaching Hotels: Why you might want to stay in one” about
Statler
● People Strategy video- Ritz Carlton, the delay, with Sylvie and Ian and the
creepy concert

Topic 4: Market Analysis for Services

Situation Analysis – looking at all the forces that affect the company
- Micro – company, competitors, suppliers, and customers
- Macro – broader, economy, demographic, tech, political
Summarized in SWOT
Identify competitors
- Direct – similar product, price, and customer
- Indirect – similar benefit from the customer's point of view
- Competitor myopia – getting burned by ignoring indirect competitors

Competitive structure
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Macro forces
- Demographic
o Age, ethnicity, gender
o Change in family structure
- Sociocultural
o New clothing styles, dance craze
o Trends in music, movies, fashion, health & beauty
- Technology
o New tech, rate of new tech being implemented
- Natural environment
o Environmental practices, being more green
o Global warming and social responsibility
- Political and legal
o Laws existing/pending
o Import tariffs and taxes

Readings
● McKinsey, reimagining marketing, marketing in the new normal (post-covid
marketing trends)
● The Event Industry Is Being Confronted by Its Napster Moment, Skift
○ “Zoom is the napster disrupting the event industry,” will things go back to normal post-pandemic
○ Zoom as an industry disruptor
 ● The group trip for people who hate group trips, WSJ, trying to make group travel
feel luxurious and less like “group travel”
○ Smaller groups, targeting active 50-70 y/os
● NPR How china transformed the luxury goods market
○ Brands have changed to cater to the growing Chinese middle class (33%
of money spent on luxury goods comes from China, going up)
● McKinsey, How millennials and gen z are shaping the future of US retail
○ They care much more about company values; will buy luxury products but
want those products to set them apart from others-- care more about
promoting own individuality rather than conforming; process of buying
online rather than in one place, marketing has become about joining the
conversation with consumers rather than directing it -- goal is to create an
authentic connection with gen z consumers; cancel culture-- brands must
align with the standards they promote or they will become “exposed” and
reputationally damaged

Topic 5: Buyer Behavior for Services (Consumer Behavior)

Cultural – the most basic influence on behavior

- Foods, brands – i.e. in hotels the Chinese want tea and coffee making equipment to
make noodles. They prefer a buffet because of the language barrier

Sub-cultural
- Lifestyle, age
- Social class – upper, lower, middle. Money, profession, work
o Tend to show a consistency in consumer behavior based on group norms

Micro-groups
- Professional groups, membership groups

Means-end Chain
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Consumer Decision-making Process
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Personal factors
- Age, occupation (status, role), economic, self-identity, personality,
- Maslow's hierarchy of needs

Consumer’s Needs, Wants, and Demands

- Needs – we can’t live without. Self-esteem, food, love, and belonging
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 - Demands – wants backed by buying power. Sports car – if you have the buying
power, can you afford it

Readings
● HBR clueing in customers (mayo clinic)
● Paper by Kwortnik, the role of positive emotions in experiential decisions

Topic 6: Consumer Insight Methods

Services Marketing information systems – existing data sources, marketing

environment, research studies. Uses all these are inputs into the system.

Internal marketing data

- Inexpensive, readily available
- Comment cards, product registration memberships
- May not be in the right form to answer the question

Marketing Intelligence
- Shop competition/websites/marketing materials
- Reviews/bloggers, site inspections

Secondary data sources

- Reports, STR reports
- Magazines, report journals, trade associations

Market Research Process

- Collect data, define research problem & marketing objective, research plan,
implementing the research plan, interpreting and reporting the findings

Primary Research
- Focus groups & surveys
- Observations
- Mystery shopping

Descriptive research
- Surveys – post transaction satisfaction survey

LENS Model
- Customer – secondary needs – primary needs
- Service – supporting services – core services
How are these aligned?
Marketing intelligence – using outside sources that may be for something else

Observational research methods

- Content analysis
o Helps get an idea of the “whys for buys”
o You can see repetition and a pattern then you’re capturing meaning threaded
across your consumer
- Sentiment analysis – good or bad reviews
- Qualitative Research
o Identify the topics or codes people refer to that drive the conversation/analysis
o Look at textual data and develop a sensitivity to it

Market oriented ethnography

- Observation, social snooping, focus groups, and metaphor solicitation
- Looking for patterns that reveal important insights
- Become a part of the group and be a participant

Topic 8: Market Selection and Goal Setting

Process view of service marketing
STP – Segmenting, Targeting, and Process

Segment the market

- Identify the basis, develop profiles, develop measuring of attractiveness, select target
markets, and ensure they are compatible

4 Main Ways (market segmentation bases)

 - Geographic – international vs domestic, regional differences
- Demographic – diving into age, gender, income, occupation, etc.
- Psychographic – pattern of lifestyle, activities, interests, and opinions
- Behavioral – based on consumer actions/behaviors i.e. weddings

Questions to ask about the segment (requirements for effective segmentation)

- Is the segment measurable? Substantial? Accessible? Actionable? Coherent?
Differentiable?
- Growth & competition? Price-sensitive?
Marketing Plans
- AIDA (Awareness, Interest, Desire, and Action)
o Objectives are goals that have actionable criteria
o SMART – specific, measurable, attainable, relevant, and time specific

Topic 9: Service Experience and Service as Theatre

During major “plot points” think about what is the brand promise? What is the narrative? How do
we use the 3 P’s in this delivery? How do we want the consumer to feel?

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Service as Theatre Flow
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- Helps the service find out ways to be different

Topic 10: Service Product Development and Blueprinting

New product development process

Service blueprinting (customer journey mapping)

 - Visual way to see the plot points and to see where changes or improvements can be
made for the process
- Have intended customer experience above plot points

Product Lifecycle
- Development - no profit
- Introduction - launch to market, decreasing profits
- Growth - sales take off, profits appear, and competitors enter
- Maturity - sales and profits stabilize
- Decline - supplanted by new tech or competitors

New service development process

- Has to be objective, precise, measurable, and methodological
- Front-end planning (business strategy development and review)
- What strategies will guide the new or modified service development project?
- Idea generation and screening - customers, competitors, internal
- Concept development and evaluation
- Business analysis
(What is design thinking, lens-customer concept)

Readings:
● Service blueprinting, a practical technique for service innovation, california management
review, berkeley
● Marriott innovation lab, inside the secret laboratory where marriott is cooking up the
hotel of the future, fast company
Topic 11: Servicescape
- Soundscape
- Environmental dimensions

What about Social Dimensions?

- People rely on the service environment for clues about meaning; these clues are also
part of the intended (and unintended) experience
- Space and tangibles offer mechanic clues and people (service agents and other
customers) offer humanic clues that affect guests’ cognitions, emotions, and behaviors.

- Key: service environments are meaning media, especially environments in which

customers spend extended periods of time.
Reading: approaches for understanding servicescape effects

Topic 12: Service Branding

Service branding - associations of the brand, the emotions and feelings the consumer
experiences

Brand Sponsorship Decisions

- Create own brand - company has total control, needs a lot of resources
- Private label - produce for a retailer, not the company’s own branding
- License - pay to use the existing brand name of a reputable brand. Obtain the meaning
associated with said brand
 - Co-branding - company uses their own brand and then attaches it to a well known
brand

Brand building strategies

- Line extension - extended into product category where it already has a presence
- Brand extension - new product category
- Multi-branding - new brand name in the same category (hotels)
- New branding - new brand in a new product category
Reading: Kwortnik chapter, building and managing your brand
Topic 13: Integrated Marketing Communications for Services
(IMC)

Critical Success Factors

- Target messages, meaningful connections, relevant content, minimal clutter, measuring
success, integrated marketing communications strategy
- Communicate brand promise with “one voice”
(customer purchase funnel, challenge: consistent messaging across channels, traditional mix,
new media mix, MECCAS model)
Countering Intangibility
- Use narratives to demonstrate the service experience
- Create a vivid mental picture of service value or quality
- Use interactive imagery to enhance comprehension
- Emphasize tangibles that are part of the service
- Use facts or figures to underscore service quality
- Use symbols to tap culture meanings
- Feature service employees

Readings:
● Cornell hospitality quarterly, advertising strategies for hospitality
● Iese insight, experiential advertising: selling experiences to connect with consumers
● Funnel juggling article

Examples: Ritz carlton One Voice

IMC Starts with Target Customer

● Migos x tasty

Topic 14: Content Marketing

 ● Telling the story of the brand that aren't perceived as selling
○ Company blogs, and webinars made it more prevalent
● CMI - strategic marketing approach focused on creating and distributing valuable
relativent and consistent content to attack and retain an audience and drive profitable
customer action
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50(;%'"'9#07(%!'
● Needs to have clear objective and a strategy
○ Ex: research papers (serious) lip sync videos featuring employees (silly)
● Thought leadership
● Effective content marketing is when users chose to engage with it and receive more of it

POEM, guided by an IMC strategy (paid, owned, earned)

Content marketing and social media

- Key to content marketing are social media platforms for distribution to target markets -
facebook, instagram, twitter, linkedin - the “earned” and “paid” channels
- Plus “owned media such as the brand website or company blog can serve as publishing
channels for creating, disseminating, and curating rich content
- Effective content might be informative, interesting, entertaining, or some combination,
and it might be brand-created or user-generated content
Branded Content Marketing
- Pictures/ images (high impact imagery relevant to the brand, often not of the product)
- Text posts on social media
- Videos (6-7 seconds to 30-plus minutes)
- Articles posted to the brand.com website, articles written for collaborator websites
- Blogs, branded tools, case studies, research reports and white papers, checklists, digital
magazines, experiential events, enewsletters, games (gamificaiton), infographics, live
sessions, online presentations, podcasts, webinars/webcasts, memes
Content marketing across the funnel

Readings:
● What is content marketing- forbes
● Content marketing guide- hubspot
● Forms of content marketing used in social media by Kwortnik (articles, blogs, case
studies, branded tools, checklists, digital magazines, experiential events, enewsletters,
games, infographics, live sessions, memes, online presentations, pictures/images,
podcasts, ratings and reviews, research reports and white papers, text posts on social
media, videos, webinars/webcasts)

Social media
 ● brand advocated share there (Facebook)
● Impact on search
○ M0#%':04&47%'*'9052&2;%(:'"//%+&%)'5%"#+,'#"-$2-.5'
● Facebook is about building brand community
○ Ongoing communication
○ Native advertising
● Twitter is more in the moment
○ Immediate service recovery is required
● Different platforms
● Influencer marketing
○ Monitor who they are in the target market, and manage a relationship with them
and customer
■ Give them content to give to customers
○ Not waisted reach
● Connections between firm and customers are relevant

Social Discovery
● New product or service through ads targets or through influencers
○ Influencer tells us about clothing, food, etc.
● Ex: Treat house
○ Organic Crispy rice treats
○ Work with influencers posting about them
■ Gave them food coupons
● Influencer - large following of engaged people
○ Thousands of people seeing
○ Tagging friends
○ Finding out about clients

User Generated
● Conversation between firm or customer
● Posting about brands
● Consumer generated content
○ Can manage it through on brand
○ Ex: upload pictures of brand experience of service and use a hashtag,
○ Ex: Contests
○ Memes
User reviews
• Discussion boards
• Influencers*
• User blogs
• User photos and videos
• User stories
• Referral Programs
*Influencer content can be UGS or brand guided.
Topic 15: Experiential Marketing

Experiential marketing is Brand Activation

- Designed to directly engage buyers by inviting and encouraging them to participate in a
brand experience
- Pros
- Brand activation, lead generation, high engagement, and social buzz
- Cons
- Costly, requires strong analytics and data-driven culture, connecting the event to
outcomes (leads, sales)
Readings:
- Single grain, what is experiential marketing (creating a meaningful connection
between a company and its customers)
- The shelf, using experiential marketing to drive sales

Experiential branding
● Connecting people with brands emotionally, physically, and digital
● Creating experiences that resonate with the audience and deliver emotional connections

Making connections
● Need to be engineered
○ Engineering desire
■ Understand the audience
● Research of profiles
■ Take the demographics and create an experience
● Understand what they care about or need
■ execution

Experience Mapping
● Think, feel, know, and do
● Pulling in key stakeholder input, or data from surveys or different sources
○ Apply
● Predetermined how we want them to feel about the brand, what they know about it, and
what they want us to do
● Turned into a brief for people to design

Camp Jeep Successful Example

● Designed to get the audience in the vehicle
● Engineering and designing
● Got to see everything in motion, see how it performed as well as staff who can
communicate and share about the cars
● Huge return on investment
Ex: Salesforce software company’s dream force
● Live event
● 5 million people remote
● Break down those people attending and convey the brand through them
● Every eliminate is well crafted- olympics of the conference world
○ Momentum + amazing team crafting it

Role of Data
● More metrics that allow us to measure
● Stakeholders are looking at the data - no brainers
● Ensure giving personalized to the user

Types of Data
● Capturing information during a registration process
● Registration systems, RFID
● Where they spend time, how much are time are they spending
● Make it real-time

Action DATA
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Experiential Activation: Marriott X Coachella

Goal:
• Drive social media and PR buzz among millennial travelers by designing 8 Instagram-worthy, hotel- room tents on- site and part of all the action at Coachella.
Activation Elements:
• 8 furnished “hotel rooms”
• Brand- inspired amenities & programming
• Influencer marketing and hosting
• Branded photo opportunities

Topic 16: People Strategy and Internal Marketing

Service Encounters “Moment of truth”
- Where promises are kept or broken
- Build trust, reinforce quality, build brand identity, and increase loyalty
- Can determine customer satisfaction
- The service profit chain

Service Employees
- Are the service
- Are the organization in the customer’s eyes
- AreThe brand and marketers
Strategies for Managing Emotional Labor
- Screen for emotional labor abilities
- Provide a realistic job preview to allow employees to self select
- Simulate customer-contact encounters
- Teach emotion management
- Surfacing acting vs deep acting
- Role play to avoid mood transfer
- Mood-manage the servicescape
- Allow employees to vent and give employees a break (lol)
- Put management on the front line; hand off difficult customers to management

Brand Promise
- The brand promise is the experiential takeaway from the service - how the service
transforms customers’ needs and wants into a satisfying experience
The services marketing triangle
Strategies
- Treat employees like internal customers
- Recognize and reward employees for their effect on reputation
- Feature employees as brand ambassadors
- Teach employees about their brand roles
- Feature staff and back-of-house “sneak peaks” in social media

Readings:
-Selling the brand inside- HBR (making employees feel the power of the brand)
-service scripting and authenticity insights into the hospitality industry, SHA CHR (how to make
a script seem authentic)
● Customers can tell

Topic 17: Service Demand Management and Pricing

Fundamentally:price causes demand, not the other way around - though we use demand
estimates at difference prices points as an input to pricing analytics, such as breakeven analysis
and yield management (anderson would say otherwise tho)

Market Demand
● Interest for a product as well as the buying power for it
Demand Management Challenge: Variability and Uncertainty
- Fixed capacity
- Fixed number of chairs
- Need to smooth demand
- Seasonal variation
- vacation periods= high demand, off seasons= low demand, shoulder seasons=
promotions
- Time-period variation
- Ex: Dining hours
- Market differences
- Business customers during the week vs. leisure customers during the weekend
- Varied utilization and value across product offerings
- NHD'#%50#&5'12&,',2.,'4&2(2="&20-'0/'900('"-)'"+&2;2&2%5'*'/"!2(2%5'
- Ex: Senior citizens come during shoulder periods

Demand Management for Services

- Right customers at the right price, given our capacity
- Identifying sources of market demand including cross-channels and costs
- Forecasting demand
- Planning for demand variation
- Recognizing supply constraints
- Smoothing demand to sync with supply
- Optimizing supply-demand variation with efficient levers
Tactics
- Revenue management
- Dynamic pricing based on demand
- Based on data
- Price is the lever for smoothing demand
- channel management
- Inventory allocation
- Contracts
- price adjustments
- Seasonal discounts at resorts
- Early bird hours
- Promotions
- Short turn incentives
- Valentines day specials
- Packages
- Earinging points
- Rebates
- reservations/appointments
- Monitor demand
- Advance purchase of tickets
- Queueing
- Waits to smooth demand
- How long will customer wait
- overbooking
- Airlines

Queuing Tips
 - Better to overestimate a wait
- Unoccupied time feels longer (entertainment helps)
- Unfair waits feel longer (seating parties arriving later because they fit the table)
- Uncertain waits feel longer (certainty reduces anxiety) and permits other activity

The 4 Ps: Price

- Accounting: price determines profits above costs
- Service: price is often a signal of quality
- Customer Value: price is a key element of the value calculation
- Promotion: price changes can provide promotional incentives - but can also be risky

Psychological pricing
- Reference pricing
- Anchor pricing
- Pricing rounding (left digit)

Competition-based Pricing (Going-rate)

- Gas stations
- Hotels in the same category
(pricing approaches, cost-plus pricing)

(prospect theory applied to services, value-based pricing)

(differing consumer perceptions of price- value and associated pricing tactics)

Readings:
-perceived fairness of yield management, sheyrl kimes, cornell hospitality quarterly
-the waiting game, the psychology of time and its effects on service design (making waiting in
lines a more positive experience) - rottman magazine

Price gouging
During a state of emergency, it is illegal for businesses to raise prices by more than 10 percent what they were
beforehand.

Topic 18: Service Expectations and Perceptions

Set the bar high?

 - When customers are transient and or the product is low involvement
- When the product is high in experience or credence characteristics i.e. objective
measures of performance evaluation are lacking - so customers use other factors to
make judgement of disconfirmation and satisfaction

Factors influencing customer satisfaction

- Expectations
- Perceived service quality
- Perceived service attributes or features
- Other customers
- Consumer emotions
- Attributes for product/services success or failure
- Equity or fairness evaluations
- Trust
- Commercial friendships

Customer Evaluation & Satisfaction

● Not just about performance of the product
○ Need to understand what the consumer expected before purchase
● Satisfaction
○ Expectations were met
● Disasifcation
○ Disconcerted or disconfirmed
● Zone of tolerance
○ What would be acceptable or desirable vs. what is adequate
○ Ex: Fast Food meals
■ getting their meal within 5 minutes of order time (acceptable)
■ Getting their meal after 10 minutes (adequate)
■ 3 minutes (desired)
● Satisfaction is about managing expectations
○ Making sure marketers are not over promising
○ Being better than what a company can deliver
○ Not meeting expectations will be voiced with dissatisfaction through a plethora of
media channels

Customer Satisfaction and Loyalty

● Not just service satisfaction, but what did the customer expect
● A judgement on how the service performed relative to what did i expect going in
● Expectations are brought to co create value
● How did the company do on delivering on my expectations and how was performance
relative to what i expected
● Loyal customers are customers we want to pursue
○ Speak positively about brand or service organization
○ Emotional attachment
 ○ Psychological commitment
● Are the loyal customers the most profitable? Or should we look to other target markets?
(five dimensions of service quality RATER)

Readings:
-cleveland clinic- HBR, how they had the highest patient-satisfaction surveys

Topic 19: Service Failure and Recovery

Why a Good Guarantee Works

- Forces company to focus on customer
- Sets clear standard for the organization
- Generates feedback and a recovery opportunity
- Encourages company to understand why it failed
- Builds “marketing muscle” by reducing customers’ sense of risk

Effective Service Guarantees

- Unconditional - no strings attached
- Meaningful - guarantee elements of the service that are important to the customer.
Payout should cover full the customers’ dissatisfaction
- Easy to understand and communicate - customers know what to expect and
employees know what to do
 - Easy to invoke and collect - no hoops or red tape in the way of access or collecting on
the guarantee

Complaints
● Consumer involvement influences behavior
○ More personally relevant
○ Ex: new clothing item vs. gallon of milk
■ More involvement with the item = more likely to complain about clothing
● Being upset
● Higher socioeconomic status
○ Relationship between education and socioeconomic status
○ People with higher education know they can complain (the power)
● Blame company for problem
● Being treated unfairly or unjustly
○ What they received- promoted to function?
○ Interaction -Sales action fair?
○ Processes?
● Leads to overcompensation
○ Ex: bottle of wine
● Want to avoid “service terrrorism”
○ Complaining on yelp, amazon, etc.

Readings:
-consumer complaint behavior (this is actually a kwortnik ecornell video)... how the internet
made it easier for consumers to complain, consumers are more likely to complain if the product
was personally relevant to them and/or if they are upset. Less apt to complain if they feel
ambivalent, more likely to complain if higher socioeconomic status (linked to higher education
levels). More likely to complain if they blame company for the problem. They complain if they
believe they were treated unfairly. Service terrorists.

-a consultant’s take on how to respond to negative reviews, brightlocal blog, (ten steps- you
must respond, resolve issue, get second opinion, look at positive with negative, consider the
type of reviewer you’re dealing with, take debate offline, ask for a do-over, get more positive
reviews to push down negative reviews, monitor reviews closely)

Topic 20: Service Relationships and Loyalty

Relationship Marketing
- Focuses on keeping current customers and building relationships/partnerships with them
- Focus less on attraction and more on retention and enhancement of customer
relationships

(brand commitment and purchasing patterns)

Loyal Customers
- Behavioral Commitment
- Patronizes primarily one provider
- Increasingly patronizes more from one provider
- Provides constructive feedback/suggestions
- Says good things about the provider
- Psychological commitment
- Wouldn't consider terminating the relationship
- Has an emotional attachment
- Has a positive attitude about the provider
(service loyalty determinants)

Benefits to Customers of Loyalty

- Getting good value
- Confidence, social, and special-treatment benefits
- Contribute to sense of trust, well-being, quality of life and other psychological
benefits
- Avoidance of change and switching costs
- Simplified decision making
- Social support and friendship
- Special deals

Benefits of the Organization of Customer Loyalty

- Loyal customers tend to spend more over time
- On average costs of relationship maintenance are lower than new customer costs
- Lifetime value of a customer can be very high
- Employee retention is more likely with a stable customer base

Customer Equity
● Not just the financial transactions
● Focuses on relationship
○ Emotional commitment
● Recognizes exchange of value and how that value is co-created by the customer and
service provider
● Estimate the value of our customers
 ● Return on Marketing Investment (ROMI)
(new strategic marketing focus: customer equity, the 80/20 customer pyramid)
(segmenting customers based on commitment and profitability--butterflies, true friends,
barnacles, strangers)
Readings:
-mismanagement of customer loyalty, hbr, why the best customers are not always the most
loyal ones; judge customers based on their behaviors rather than loyalty; more loyal customers
don’t necessarily always spend more and can be more costly to serve over time
-on hold for 45 minutes, WSJ, about how “secret customer scores” aka CLV (customer lifetime
value) scores, impact the treatment a consumer receives from retailers, wireless carriers,
others. Higher scores correlated with better service.