Service Management in Hospitality and Tourism - Case Study Example

Service Management in Hospitality and Tourism Student’s Name: Course Code: Lecture’s Name: Date of Submission: Service management in hospitality and tourism Extended market mix and SWOT analysis have been widely adopted in many organizations. These tools are important in the service management theory of hospitality and tourism organizations. The tools have been adopted particularly by small, medium and as well as large organizations and help them in establishing their current situation as well as planning so as to achieve sales objectives. Extended marketing mix The concept market mix model theory was first developed by Borden Neil in the mid of the 20th century, 1949, he used it in writing and teaching. The Concept was first published in a peer reviewed journal in 1964, the Journal of Advertising Research, where he described this concept and its evolution. He refers to the marketing mix as a marketing executive mixer of ingredients. He thought that if the marketing executive was a mixer of ingredients, what he was making could be called a marketing mix. Jerome McCarthy later developed Borden’s idea to four P’s of marketing (place, price, product and promotion) in 1960. The idea was later expounded by Benard Booms and Mary Bitner to 7P’s that is the extended marketing mix. The extension was made to include people (to recognize the importance of the human element in marketing aspects), process (to reflect the difference between services and physical products) and physical presence (Borden 4). There exist different market forces that affect each product or service, implying that one set of marketing mixes would not be enough in all scenarios. In order to get different mixes, the marketing personnel needs to make a list of the forces affecting their service or product (Palade 241). The list made should contain important elements that make up different marketing programs and the forces that the marketing manager has to adjust his search to in order to find the perfect mix. A marketing mix model should fulfil four generic functions; product, price, distribution and communication (Waterschoot 1995:435-437). In pursuing optimization in marketing a service, the mix of product, price, distribution and communication elements can then be joined into marketing programs that an institution may use so as to gear the product or service towards attaining a specified level and type of reaction from its target market (Waterschoot and Bulte, 1992:88). Therefore, even if a marketer cannot decide the demand with certainty, he can influence it to a greater or lesser extent depending on the kind of marketing mix that he develops (Palade 240). SWOT Analysis SWOT analysis matrix development and first use could be traced in the 1960’s and 70’s by Humphrey Albert. He developed the SWOT matrix from data of top United States companies at the time. A SWOT matrix analyses the internal and external environment of an organization. It looks at the strengths, weaknesses, opportunities and threats (SWOT) that are relevant to firm in a venture. This tool allows users to look at the direction a company or organization may wish to move towards in the future (Mintu 44). It forms a basis of planning and decision making in conjunction with other tools. By specifying clear objectives and identifying internal and external factors that are either helpful or not, a short and simple SWOT analysis is a useful resource which may be incorporated into an organizations planning model (Tuckwell 49; Kotler and Keller 124). SWOT analysis elements could be explained as follows; i. Strengths- Internal attributes which are helpful to the organization to achieving its objective, ii. Weaknesses – Internal attributes that are harmful to the organization to achieving its objective, iii. Opportunities – External factors that help the organization achieve its objective and iv. Threats - External factors that are harmful to the organization to achieving its objective. Therefore, the aim of any SWOT analysis is to identify the key internal and external factors that are that either enhances or limits the achievement of an organization’s objective. This implies that the internal environment is comprised of strengths and weaknesses while external environment includes opportunities and threats. The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The internal of a service organization may include 7P's of the extended marketing mix as well as finance capabilities among others while the external environment may include macroeconomic matters, legislation, socio-cultural changes and technological change as well as changes in the marketplace or competitive position (Mintu 44). In most instances SWOT analysis model is usually presented as a matrix thus its alternative name, the SWOT matrix (Mudie and Pirrie 58). An example of a SWOT matrix of a service organization would be presented as follows; Table 1: A sample internal and external factors of a service organization Internal Explanation Strategy Implications Strengths Reviews the business’ current strengths such as a good brand, or strong customer performance, or numerous branches Can develop the strengths, perhaps in the way they promote the product, or wish to develop new products (Hilton Hotel have a strong brand name that makes launching of products easier) Weaknesses Reviews the business’ current weaknesses such poor response times to requests for information Can implement strategies to eradicate these weaknesses e.g. resources acquired in advance put into a better warehousing system to reduce carrying costs? External Opportunities Reviews the business’ future opportunities e.g. new technology making it easier to market the Hotel Can use strategies to take advantage of the potential opportunities e.g. developing new products to meet the potential increased demand Threats Reviews the business’ future threats, mostly from increased competition from other firms or from changes in the economic situation. Can employ strategies toward solving these problems, e.g. setting lower prices or increasing promotion SWOT matrix is a powerful and useful tool for organizations in environmental Scanning where internal appraisals of the organizations are to be undertaken this needs to include an assessment of the present situation as well as a portfolio of products/ services and an analysis of the product/ service life cycle (Mercer 60). SWOT can be applied in analysis of existing strategies; this determines the relevance from the results of an internal and or external appraisal and may include gap analysis. SWOT analysis could be important in strategic planning by defining strategic issues (Tuckwell 51) that is key factors in the development of a corporate plan which needs to be addressed by an organization (Chapman 1). Strategies of an organization may still be changed if need be if a SWOT analysis would dictate so. In addition, SWOT matrix could be crucial in establishing critical success factors towards the achievement of objectives and strategy implementation. Further, SWOT analysis is a powerful tool for monitoring organization’s progress by mapping against plans and taking corrective action which may mean amending objectives/strategies (Palade 238; JRC European Commission 1). Critical analysis of the marketing mix and SWOT analysis concepts Despite the importance of the marketing mix concept in service management, the marketing mix concept has been accused of being only relevant to micro issues, as it takes the stance of only one exchange party, instead of the society as a whole. It is argued that SWOT analysis focus is one sided and thus could suffer from imbalance issues. However, this criticism could not be reasonable as the concept applies to any exchange situation (Waterschoot 1995:445). Another common criticism marketing mix is that the approach can actually lead to unprofitable decisions since the decisions are not based on financial objectives of an organization thus those objectives would be increasing shareholder value. This school of thought critiques are of the view that marketing mix approach should be aligned with the shareholders’ value. However, marketing mix concept aids differentiation which boosts an organization’s brand and eventually its sales thus boosting shareholders’ value (Tuckwell 48). A different school of thought argues that the marketing mix concept which is the 4Ps was only focused on the product marketing side while ignoring the marketing problems for institutions that provide services, for instance the hospitality and tourism sector (Mercer 49). A further criticism is on the consideration of the people’s P in service organization. Some say that the P for people is not needed, as they provide the service that is at the same time the product of the company (Waterschoot, 2000:194). This approach could be reasonable however for tourism the P for people is particularly important. For instance, DoubleTree by Hilton Hotel Esplanade Darwin its product is hospitality, but the people working in customer support are definitely important and cannot be ignored (Hilton 1). The promotion P has been criticized for not matching the generic function which it is expected to the communication part. This has necessitated promotion to become a host for both promotion and communication instruments (Waterschoot 2000, p. 194). SWOT analysis or matrix tends to persuade companies to compile lists rather than think about what is actually important in achieving objectives of an organization. From this perspective SWOT analysis is seen as just a list rather than an enforceable framework in improving the performance of the organization by identifying the weak and strong areas that could be capitalized on (Mercer 61). SWOT analysis tool is a weak tool since it offers no suggestions for solving disagreements in the framework and the organization as a whole. Therefore, SWOT analysis is an inadequate tool in itself in making concrete decision thus need for further analysis (Berk et al. 30; Chapman 1). SWOT analysis is a short term instrument. Therefore, it could be misleading the direction an organization should take in terms of its long-term objectives. However, it is still a useful tool that can assist an organization in remedying business situations in a timely manner (Mintu 45). SWOT analysis is also criticized on the basis that it doesn’t show any prioritization in identifying the internal and external factors. It is an obvious case that some factors could have bigger implications compared to others. It also presents the resulting lists uncritically. Although this criticism may be reasonable, the personnel of an organization would be useful in prioritizing these factors in terms of their importance (JRC European Commission 1; Mercer 73). Works cited Berk, A., Harald, J. van Heerde, C and Mela, F. ‘The Long-term Effect of Marketing Strategy on Brand Performance’, 2006, Journal of Marketing Research. Viewed on 30th April 2013 from http://wms-soros.mngt.waikato.ac.nz/nr/personal/harald%20van%20heerde/doc/The%20Long-term%20Effect%20of%20Marketing%20Strategy%20on%20Brand%20Performance.pdf Borden Neil H. The Concept of the Marketing Mix, Journal of Advertising Research, Classics, volume II, September 1984, page 7-12. Print. Chapman, A. SWOT analysis. 2007. Viewed on April 29th 2013, from http://www.businessballs.com/swotanalysisfreetemplate.htm Hilton. At a glance. 2013. Viewed on 29th April 2013 http://doubletree3.hilton.com/en/hotels/northern-territory/doubletree-by-hilton-hotel-esplanade-darwin-DRWEDDI/index.html?WT.srch=1 JRC European Commission. SWOT (strengths weaknesses opportunities and threats) analysis. 2007. Viewed on April 29th 2013, from http://forlearn.jrc.es/guide/2_design/meth_swot-analysis.htm Kotler, P. and Keller, K. Marketing Management 12e, New Jersey, Pearson Prentice Hall, 2006. Print. Mercer, D. Marketing, Black Well Publishers, Oxford UK, 2001. Print. Mintu, A. Comedydriving.com1 - Online Defensive Driving: A Teaching Case, Journal of Business Case Studies vol.5, no.6, 2009, 41-46. Print. Mudie, P and Pirrie, A. Service Marketing Management, third edition, Great Britain, Elsevier, 2006. Print. Palade, A. Analysis of Marketing Mix on Cosmetics Products Case Study: Avon Company, Econpapers, vol. 11, issue 4, 2011, p. 233-244. Print. Tuckwell, K. J. Strategic planning principles. Integrated marketing communications: Strategic plan-ning perspectives (2nd ed., pp. 47-51). Toronto: Pearson Education Canada, 2007. Print. Waterschoot Walter van and Bulte Christophe van den. The 4P Classification of the Marketing Mix Revisited, 1992.The Journal of Marketing, vol. 56, No. 4, p. 83-93. Waterschoot, W. ‘The Marketing Mix as a Creator of Differentiation’, in Blois Keith, The Oxford Textbook of Marketing, New York, Oxford University Press, 2000. Print. Waterschoot, W. ‘The Marketing Mix’, 1995, in Baker Michael J, Companion Encyclopedia of Marketing, Great Britain, TJ Press (Padstow), 433-448. Read More