Service Quality and Successful Operational Management of Marriott Company - Case Study Example

INTRODUCTION Service quality and successful operational management are the key steps to the success of an organization. Service quality is not just setting quality standards but achieving those goals and then further maintaining and retaining those standards are more important for a company to remain competitive in the market. A company also has to keep a track of its operations, implement new strategies, introduce new technologies but most importantly managing those operations is a critical yet significant for the company. Similarly Marriott has applied these two success elements in building and maintained a prestigious brand name and goodwill. Marriott Hotel Empire which started as a small company in 1927 in Washington D.C. by John Marriot of Utah. But due to its consistent efforts, today this company is serving in 67 countries and has about 3150 lodging properties. Different operation strategies, marketing strategies, maintenance of quality, employee empowerment and customer satisfaction are the key points that have enabled the success of this organization. Marriot has adopted a rigorous marketing policy, where this company is catering almost all market segments, i.e. it is not only allocating the high class but also deals with business class and the lower class. According to the research conducted in 2008, this company had built its strong network with its suppliers, customers and employees. it has also build a strong sense of teamwork among employees, maintained a positive and supportive management style. They believe customers as their guests and due to this they have enforced strict quality measures and strict quality control on all its hotels and motels. Kandampully et al. (2001) reported in his book that J.W. Marriott himself stated a philosophy in treating employees in the following statement, i.e. “take care of your employee and they will take care of you”. OPERATIONS Every company whether it belongs to a manufacturing industry or a service sector has to carry out daily operations and transactions. Due to this operational management is extremely important OPERATIONAL MANAGEMENT Not just Marriott but there are basic ten main tasks or critical decisions that every company, manager and an employee has to undertake in order to effectively manage operations. In the book by Henzer & Render (2006) mentioned the operations management ten strategic decisions, such as; service and product design, quality management, process and capacity design, location, layout design, human resource and job design, supply chain management, inventory management, material requirement planning and JIT (just in time), intermediate and short term scheduling and maintenance. Designing services is challenging, due to this before any action is taken a company should involve customers both in designing of the services and delivery of the service. The company should provide customized services because this would not only enhance customers’ participation but would create interest in the final product (pp.178). Quality management is defined as sustaining and maintaining a consistent quality over a period of time. Due to this, to continuously earn revenues and profits, Marriott has to adopt quality control measures and maintain its service quality in terms of food quality, room services, employers’ attitude towards customers, etc. ‘Degree of customization’ and ‘degree of labor’ are the two major factors that help in building an effective and efficient process design. According to the service process matrix Marriott comes under the service shop, i.e. it involves high degree of customization but low degree of labor. Thus, Marriott should personalized its services, take feed back from its customers and train its labor to solve problems of customers promptly. Customization is also giving rise to technology in the hospitality industry. Hotel management can track a maid’s time through security system, customers can use their own personal credit cards to unlock the doors, mini bars are equipped with sensors and a computer can automatically adjust the air-conditioning and heating after the customer has checkout. So Marriott to become more competitive and efficient should focus on bringing such technological innovations in its system. So due to this Marriott has renovated its digital Front Door and introduces new dishes in the menu, as Chef Laurent Tourondel Served the BLT Burgers. Selecting the location or site is an important strategic decision in the hospitality industry. The effectiveness of this decision is dependant on variables such as competitors, demand generators, demographic variables (unemployment rate and population), market awareness and physical characteristics (easy access to the site)(pp.323-324). Marriott whenever opens a new hotel or motel in a new location determine all these aspects. Determining these aspects involve cost but its worth losing billing of dollars. Layout decisions also carry important weight age for the hospitality industry because it establishes the company’s competitive priorities and helps to meet competitive requirements. Further an effective decision will help in achieving differentiation, low cost or response. If Marriott make decision in its layout operations then it will be able to improve employee morale, and provide safer working conditions, improve customer/client relationship improve the flow of information and introduce flexibility (pp. 342). Human resource decisions are equally important, because they help in managing employees and job are designed in an effective and efficient way. According to Decenzo N Robbins (2005) Employees should be treated as their customers and they should be highly motivated and satisfied in their respective jobs. An employee should be given training and development, employees’ rights should be exercised in the organization, employee benefits, rewards and compensation should be given to him and a safe and healthy environment should be maintained within the organization. Because it is stated, that a motivated employee is much more productive than an unsatisfied employee. Further, Mudie et al. (2006) stated in its book that managing people in an effective way is equally important and companies should be very careful in the recruiting, orientation and socialization process of the employees. Level of commitment and satisfaction should also be increased among the workers. So companies make efforts in managing their people. The managers are making everyday decisions to manage their workforce and they are also providing different types of incentive programs to its employees to enhance their productivity. Marriott has established a separate human resource department where all necessary actions regarding the employee and labor force are carried out. One sub-department deals with the recruiting, training and selecting valid prospects. While another sub-department, solves employees’ complaints and issues. Companies also have to make effective decision regarding the supply chain management, they have to determine the suppliers, credit and cash transfer, fulfill orders and maximize value for the ultimate consumer. Marriott has to cater to all the ten strategic decisions and to some extent this company has achieved successful operational management. SERVICE QUALITY Schiffman & Kanuk (2004) mentioned in his book that Quality of the service is when the customers’ expectation about the service is met, i.e. the perceived expectation should be equal to the general service delivered. Quality of a good can easily be evaluated but service quality is highly difficult in terms of entertainers and consumers. Service quality is difficult to evaluate because they are intangible, perishable, variable and they are produced and consumed simultaneously. The service quality may also not remain same, because services are not stored they are prompt actions taken by employers and employees in regard to the customers demand. E.g. Marriott have a lot of times failed to maintain the same quality standards, because Marriott is an international brand and customers’ expectations are reasonably high from them. When Marriott provides an excellent service then that service becomes the key service for the customer next time he avails the service and the customer becomes highly satisfied and becomes delighted. But if next time Marriott does not provide the excellent service then that highly satisfied customer becomes dissatisfied and there are quite chances of his brand switching. Even though it is very difficult in evaluating the service quality but still Lovelock et el. (2007) mentioned some of the generic dimensions that help the customers in assessing it. Credibility, security, access, communication, understanding the customer, tangibles, reliability, responsiveness, competence and courtesy are the ten basic dimensions that customers use in evaluating service quality. The first element in evaluating service quality is the ‘Credibility of the company and its services’. Every company’s image, repute and good will are highly important for the customers. If Marriott has not created repute in its customer services or in maintaining food standards then its potential, former and existing customers would be reluctant to avail the services. Thus, repute of the company is a very important factor. Secondly, security of customer in respect to its life, property and possessions is equally important. Marriot had to face severe problems while assuring the security issue in Pakistan after the bomb blast in Marriott Islamabad. This whole scene is described in the NEWS in 2008, due to this they faced a lot of financial loss because customers were repentant to visit and avail Marriott’s services. Marriott has also faced security issues previously as well. Lovelock et el. (2007) defines the third element accessibility to the location. Customer should not only have easy access to the service provider but there should be easy access to customer representative, manager or any other supervisor who could entertain the customer’s complaint. If the customer in Marriott is not satisfied with the laundry, or the room services, then his problems should be easily solved, i.e. he should not face problems in allocating the supervisor and quick actions should be made in solving the issue. Because it is stated that it is five times more costly to attract a new customer than retaining the existing customer. Communication should be certain between the customer and the service provider. There should be no language barriers or any kind of hurdles between the two. The customer should easily communicate and explain his opinion to the customer. In case in hospitality industry, esp hotel industry should have facility of a translator as well. Who could explain the facilities to the customer, inform him about different deals and packages and provide him with all the necessary information he wants to derive. In Marriott generally, a receptionist is accompanied with another man who provides somewhat similar facilities to its customers. Customers are an organization’s biggest asset, thus understanding them is a crucial but this is the most important task for the managers. Understanding customers and their needs is really important. Marriot should use a customer- driven operation system in meeting and exceeding customer needs. This operation system is mentioned by Robbins & Coulter (2006) in his book Management. He further states that successful organizations should continuously keep a track about their customers, maintain close and frequent contact, provide services in such a way that even competitors cannot duplicate it and then finally managers should determine ways to satisfy customers’ current, anticipated and even unanticipated needs. Marriott also values its customers’ a lot and tries to accommodate the needs of their potential customers. But it should focus on implementing the customer-driven operation system to enhance sales, revenues market share in different parts of the world. Etzel et al. (2007) in his book has a slightly different concept and he divides the service quality in to two main attributes. Firstly he believes that quality is determined by producer or seller but customer defines the quality standards. Secondly, quality of the service is evaluated by comparing the perceptions of the customers to the expectation of the service. While assessing the service quality, there is no assurance that that the expectations of the customers are realistic neither there is any guarantee that the customer’s perception is based on a single experience or more. Due to this, organizations or managers themselves should help customers prepare expectations, measure the expectation level and then finally make efforts in maintaining consistent service quality either at or above the expectation level. The success of Marriott can be accessed on the fact that they have maintained their service quality due to this they are operating successfully in the global market. A company’s service quality and operations are likely dependant on three main factors; employees, customers and profits. To maintain a strong relationship between these three factors Kotler’s (1989) mentioned a Service-Profit Chain in his Book. According to this chain, the firm links the profits of the firm with the employees and the customer satisfaction. The company pays a strong attention to both the employees and the customers. This chain basically consists of five elements, i.e. internal service quality, satisfied and productive service employees, greater service value, satisfied and loyal customers and healthy service profits and growths. All these five elements link each other and thus a company achieves service profits and high growth. Kusluvan (2003) also mentioned the importance of service profit chain in his book. He believes that service profit chain is model that links the employees attitudes and behaviors and it results in the organizations success. This model defines a strong relationship between profitability/ revenue growth, customer loyalty, customer satisfaction, external service value, employee retention/productivity, employee satisfaction and internal service quality. Firstly internal service quality is developed, which is created on the basis of employee rewards and recognition, job design (job specification is developed), employee selection, recruitment and its development (training), and tools for serving customers are given importance. When the company is satisfied with the internal service quality then employee are satisfied, either by retention or increase in their productivity. Further then external service quality is formed; this service quality is based on the concepts, expectations of the customers. Further when potential customers are identified then services are designed to meet the demands and needs of the customers so that customers satisfaction can be attained. This is the most crucial moment for the service industry because if the customer expectations are met then only customer loyalty can be attained. Customer loyalty requires time as the organization and managers need to retain their customers by making repeated business transactions. Finally when customers are loyal they are termed as delighted and in this position the company is in the position to earn profitability and enjoy increase in revenue and sales. Heskett et. Al (1997) stated that there are three major relationships, i.e. firstly profit and customer loyalty, second employee loyalty and customer loyalty and thirdly, employee satisfaction and customer satisfaction. He further stated that all these three relations are mutually enforcing, i.e. satisfied customers lead to satisfied employees. Further, this chain is a tool that links together all the aspects of marketing, human resource management and operations. Human resource management is linked in this chain in the early phase, i.e. in defining the internal service quality and satisfying the employees at the maximum .Due to this different strategic plan are made to attract the labor force by providing them incentives and rewards to increase their productivity. All the HR related factors and activities are carried within this hemisphere while in the next phase, i.e. External Service quality marketing managers are involved. The marketers would use different marketing strategies such as promotional, pricing, distribution and product uniqueness in firstly attracting the potential customer and then maintaining building a strong network with them so customer remain satisfied. Marketing managers also carry out certain important promotional strategies; Arens (2004) stated that service industries use the print, paper, electronic and digital media to attract the customers. They use newspapers, magazines, journals, television, radio and variety of other promotional strategies to attract and also maintain them. Behind this all is the operational manager who has to allocate resources to all these because the basic operations have to be caries out by him. So basically when supply chain management uses the efforts of all the three managers, i.e. operational, HR and marketing manager. But the main efforts is the operational managers who carries out all the transactions in the most effective and efficient way. RECOMENDATIONS Some of the major issues that are mentioned in the report above are the unsatisfied old labor force in regard to the new technological innovations, customers faces problems with the room service, customer representatives attitude towards the customer is not very encouraging. Apart from this Marriott is facing serious competition by its competitors as seem to imitate the innovative ideas of this hospitality company. Due to this, the company should focus on training the employees in regard to customer loyalty. Further, they should introduce new innovative technology but that technology should be user friendly so that the old experienced employees do not feel affiliated with the new technological advancements. They should also build a strong network with the customers and motivate employees to treat the customers as guests. REFERENCES Lovelock. Christopher, Wirtz. Jochen and Chatterjee. Jayanta. Service Marketing: People Technology, Strategy. Pearson Education, 2007 Schiffman. Leon G. and Kanuk Leslie Lazar. Consumer Behavior. 2004 Arens. William F. Advertising McGraw Hill. 2004 Heizer. Jay and Render Barry. Operation Management. Prentice Hall. 2001 Etzel. Micheal J, Walker. Bruce J and Stanton. William J. Marketing. Marketing McGraw Hill 2007. DeCenzo. David A. and Robbins P. Stephen. Fundamentals of Human Resource Management. Wiley. 2006 Robbins. Stephen P and Coulter. Mary Managmenent. Prentice Hall. 2006. Kotler. Principles of Marketing. Pearson Education India, 1989. Kusluvan. Salih. Managing Employee Attitudes and Behaviors in the Tourism and and the Hospitality Industry. Nova Publishers, 2003. Heskett. L James, Sasser. W.Earl and Schlesinger. Leonard A. The Service Profit Chain: How Leading Companies Link Profit And Growth To Loyalty, Satisfaction, And Value. Free PRESS, 1997. Peter Mudie and Angela Pirrie, Service Marketing Management. Butterworth-Heinemann.2006. Marco. Meg, Fake/ Altered Customer Satisfaction: Marriott. Consumerist. 2007. http://consumerist.com/2007/03/fakedaltered-customer-satisfaction-suveys-marriott.html Hill. Nick. Marriott international named for tenth time one of the “100 best companies for working mothers”. 2000. http://investor.shareholder.com/mar/releasedetail.cfm?ReleaseID=38220 Marriott International, Inc. Marriott International Inc.’s Sales Force One: New Sales Force Strategy for Competitive Advantage. 2009. http://www.icmrindia.org/casestudies/catalogue/Marketing/MKTG210.htm Marriott International, Inc. Renovating Our Digital Front Door, 2009. http://www.blogs.marriott.com/operations/default.asp?item=2605804 Marriott International, Inc. Chef Laurent Tourondel Serves Up BLT Burgers. 2009. http://www.blogs.marriott.com/operations/default.asp?item=2437940 Marriott Hotels Stresses the Spirit to serve: Firm among best big companies to work in for U.K. 2008, Volume: 16, Issue: 5, Pg. 26-28. Emerald Group Publishing Limited. http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkhtml&contentId=1733357 Marriot International Inc. Marriott international to Introduce its Upscale Marriott Brand to Vietnam in Resort Destination of Nha Trang. 2009. Hotel News Industry http://www.hotelnewsresource.com/article42650.html Death Toll Climbs in Pakistan. 2008. The News http://worldnews.about.com/b/2008/09/21/death-toll-climbs-in-pakistan-marriott-bombing.htm Read More