Perception of Service Quality between marketing managers in the BH Hotel Industry

1、1 vesna babi-hodovi, ph. d., associate professor eldin mehi, mr. sc., senior teaching assistant amra kramo, b.sc., teaching assistant school of economics and business, sarajevo perception of service quality between marketing managers in the bh hotel industry summary the paper attempts to investigate

2、 the perception of marketing managers about the use of services marketing and the relative value of service quality through the offer of varied hotel services in hotel industry of bosnia and herzegovina. questionnaires were mailed to the marketing managers of registered hotels in b the typical consu

3、mer was growing increasingly less tolerant of poor services and mediocre goods. marketers competed with one another mostly through the offering of various room amenities, intended to impress customers. lodging operators at all market levels (budget, middle-priced and luxury) competed by seeking to e

4、xceed one anothers luxurious amenities and extravagant experiences. in many instances, marketing in this manner became so spendthrift that consumers actual needs were satiated and budgets spent on room amenities were wasted. at the same time, after the aggression on bosnia and herzegovina, investors

5、 and builders of lodging properties erected more and more hotels and motels through heavy debt, financing without fear of market saturation or economic turbulences. demand for hotel rooms increased steadily throughout the late 1990s and the beginning of 21 century. by 2005, the industry (bosnian as

6、well as international) found itself in a state of oversupply. as a new tourist destination, bosnia and herzegovina, faces three considerable challenges stemming from the following factors: competition from similar or already established resorts; an economic system that has not traditionally emphasiz

7、ed service quality and an unstable political environment (post-war and dayton agreement consequences). consumers, experiencing the initial effects of economic crisis and problems on world market, are becoming more price-conscious and starting to limit overall levels of travel. on the other side, num

8、ber of visitors, coming from different international organizations and companies, has started to decline. average occupancy rates, which had reached more then 60 % before the war (thanks to the fact we had less hotels and other lodging properties) fell more than twice. sarajevo, as the most visiting

9、 one, reported 16% occupancy of the hotels during 2006. with increasing competition, the key to hotels survival is its ability to cater hotel services to the changing needs and lifestyles of ever-demanding customers. such needs include greater access to amenities, comfortable rooms, fast check-in/ch

10、eck-out, courteous treatment, high speed internet/fax access, and reasonable prices. unless hotel management continuously improves the service standard, in such a way that it meets changing customer needs, a hotel would lose its competitive advantage. under such conditions, hoteliers and tourism ins

11、titutions should seek effective means of monitoring and evaluating whether or not bosnia and herzegovina is delivering the quality and range of services, activities and experiences necessary to satisfy the visitors. 1. demand and supply market changes growing segmentation between potential visitors

12、and costumers is very important for the hotel and other organization supply. several new lodging products, developed during the 1980s and 1990s at the world hotels market and during last 10 years in bosnia and herzegovina, seek to satisfy specific groups of consumers by customizing services (the ext

13、ended-stay, all-suite property serves the long-term business travelers). the needs of these travelers differ from those of general consumer travelers and even the average business traveler. the extended-stay business traveler is a relatively small segment of the market which is predicted to grow.1 i

14、n contrast, the 3 general business traveler, most often traveling on account, is the largest group of travelers that operators in the european and consequently bosnian hotel industry will seek to satisfy during last years. some of the survey shows that the location of a property (proximity to travel

15、ers business transactions) is most important to the business traveler.2 secondly, value for cost of room, as defined by such things as on- premise parking, good food and room service, overall cleanliness and good service, in- room bathrobes, hairdryers and mini bars, was reported as most important t

16、o the business traveler. in efforts to sell value to such customers, the industrys leaders also have begun to further differentiate their services. the industry also has responded to the needs of the business traveler by creating on-site business centers that offer fax, secretarial, copy and mail se

17、rvices at minimal charges. other lodging properties targeted exclusively at the business traveler have installed such conveniences as an in- room computer port with modem and fax, and specialized message services.3 the business traveler is just one group of consumers that lodging operators will have

18、 to target in the 1990s and beyond in order to stimulate demand. other segments include children, families, group travelers, foreign travelers, senior citizens and couples. a study of relevant literature confirms that customer vary in terms of their profitability.4 costumers contribute to a firm bas

19、ed on the revenue they generate over the time, relative to the costs of acquiring and serving them. the pattern of revenue could be quite different for any two customers, depending on the nature of the customers priorities and spending patterns and a firms pricing strategies.5 kaplan and narayanan n

20、oted that understanding customers profitability is especially valuable for service companies that offer a full line of services to distinct customer groups.6 they argued that customer-profitability information is more important in the lodging industry than is a product or department profitability, b

21、ecause the costs of providing a service in the lodging industry are usually determined by the customers behavior. in their efforts to target different consumer groups, hotel marketers are differentiating their types of services to meet the individual needs of different types of guests. some of the h

22、otels had implemented a program called family friendly, which provides safer rooms for kids, free diapers and playpens. the others have directed promotions and marketing toward the leisure travel segment, a group of consumers who take their free time very seriously and are seeking to fill it with th

23、e most value for their money. resort marketing is also based on leisure concepts and is very often directed toward the increasing aging population.7 1 marcella m., yucelt, u. (1995) perception of service quality in the u.s. lodging industry, journal of hospitality their target market is a demanding

24、group of upscale consumers, as various industry executives, meeting and corporate travel planners and other affluent travelers. operations in this segment of the market are founded on value-addition. affluent travelers, paying a premium room price, expect a great deal of value for the price that the

25、y pay. in the luxury market, the expansion of the line of services offered is difficult due to the fact that luxury properties traditionally offer an unlimited level of very personalized impeccable services. as a result, efforts to further appeal to and satisfy the affluent consumer are based on the

26、 improvement of service quality and the installment of service quality standards. but other hotels have to try to create adequate supply for other segments of visitors and consumers; specifically at the location has no such type of accommodation. on the other side they have to prepare hotel services

27、 level which will be acceptable for similar highly requested visitors. specific group will be repeat customers, specifically because of different type of business occasions they are traveling for. that is the reason, lodging operators have helped to create target those group of customers by implemen

28、ting many forms of reward bonus programs for repeat customers. as a market segment, the repeat customer group consists of experienced consumers whose lifestyles or occupations require them to travel far more than the average consumer. such an individual finds the rewarded frequent-guest programs, of

29、fered by such companies as marriott and hyatt, very attractive. in return, these reward programs allow these companies to further strengthen their relationships with most favored guests and ensure increased repeat business and referrals. finally, since hotels are offering intangible and perishable p

30、ersonal service encounters, managing those services must be a paramount concern of any hotel business. intangibility and perishability, as well as high level of demand fluctuation create significant problems for services and consequently lodging companies and managements. intangibility of hotel serv

31、ices influence on higher level of risk perception before customer visit and during the process of decision making. it will be influence on growing level informal and external communications which hotels management cannot control.8 at the same time this will influence on the management perception the

32、y have to create appealing visual physical elements in order to persuade customers to make their choice. perishability and demand fluctuation on the other side create problems of matching demand and supply, especially in the period when the level of demand is higher contrary hotel capacity. those in

33、fluence on the fact that service quality and customer satisfaction are becoming crucial moment for successful hotel and tourism business. recognizing that delivery of high service quality is the shortest path to increasing customer satisfaction, reducing complaints and decreasing operational costs,

34、hotels are focusing their energies on identifying means of providing high service quality to their guests. when used in a cohesive and systematic manner, operations management tools can significantly impact a hotels ability to achieve substantial gains in such widely promulgated service quality dime

35、nsions as performance, responsiveness and reliability9 and aid hotel managers in 7 davis, j. c. (1989), globalization of hotel market is going strong: segmentation is meeting the needs of the 1990s“, national real estate investor (december); 59-76 8 babi-hodovi, (2001), strategy and implementation s

36、ervices marketing, faculty of economics, sarajevo 9 zeitahml, parasuraman and berry (1990) delivering quality service balancing customer perception and 5 responding to customer demands effectively and efficiently. since the quality and customer satisfaction is highly correlated, specifically as the

37、tool to create desirable business outcome10, we have tried to realize the study of bosnian hotels management attitudes regarding the most significant dimensions of quality for visitors and marketing tools they use for building their competitive position. figure 1. quality, satisfaction and business

38、outcome relationship source: loizos, c., and lycourgos, h., a customers expectation and perception of hotel service quality in cyprus“, fiu reivew, vol. 23, 2. purpose of the study in recent years, hotel industry in bosnia and herzegovina has encountered difficult economic times due to increasing cu

39、stomers demand and strong internal industry development competition. the hospitality industrys main concern globally is to serve its customers needs and desires, most of which are addressed through personal services. hence, the hotel businesses that are able to provide quality services to its ever-d

40、emanding customers in a warm and efficient manner are those businesses which will be more likely to obtain a long term competitive advantage over their rivals. ironically the quality of services frequently cannot be fully appreciated until something goes wrong and then, the poor quality of services

41、can have long lasting lingering effects on the customer base and, hence, often is translated into a loss of business. even contrary application of room discounting applying at the new average hotels was a direct result of these new market conditions. although this practice is remedial in the short r

42、un, it destroys brand image and detracts from the value of the lodging product in the long run. on the other side, starting from the different types of risks customers face with when they decide of buying services, lower prices could communicate lower level of quality.11 that is the reason managers

43、at the service sector expectations, the free press, new york 10 loizos, c., and lycourgos, h., a customers expectation and perception of hotel service quality in cyprus“, fiu reivew, vol. 23, pp. 45 11 babi-hodovi, (2001), strategy and implementation services marketing, faculty of economics, sarajev

44、o desirable business outcome increased customer satisfaction service quality enhancement product quality enhancement critical relationship 6 should think about meaning of each type of marketing mix their hotels offer to the potential visitors. this study attempts to investigate the marketing tactics

45、 used in services marketing strategy, strategic marketing methods which actually cultivate lodging business for the long run by forging strong relationships between the lodging property and its customers. services marketing strategy is based on trust and commitment to the lodging consumer and is exe

46、mplified when a lodging property is able to provide high levels of satisfactory service to the lodging consumer. the process of pursuing and applying services marketing strategy involves internal marketing strategies, relationship marketing strategies (based on database marketing), and the addition

47、of value to the intangible lodging product through the offering of more services. the problem of managing expectations still is standing unsolved. if hotels create higher level of expectations theyll have problems to fulfill them, and possibly they can create unsatisfied customers. if they use lower

48、 expectation strategy (precisely more realistic promises) they wont be attractive enough compared to their competitors.12 this study researches the hypothesis that the most progressive hotel industry marketers are most aware of the value of services marketing strategy, but unfortunately more based o

49、n their instincts than overall implementation of marketing services strategy. these marketers expect to attribute their survival in the competitive market and much of their future success to the utilization of services marketing strategy. during this research we wanted to identify and describe those

50、 lodging properties and marketing segments where services marketing strategy and differences of services industry are most valued and utilized. we expect the results of this study provide relevant, useful information for hotels and lodging marketers at bh market. 3. methodology the survey was consis

51、ted of 20 multiple choice questions. letter of invitation and instruction how to filled questionnaire, including the questionnaire, was mailed to all registered hotels and other lodging properties at the official register published by tourist association of bosnia and herzegovina. the list had 217 e

52、-mail addresses. therefore, an equitable representation of the concentration of the total lodging market and the differing sizes of lodging products exists among the responses, similar to the structure of data we found at official statistic data. the survey was completed during september-october 200

53、7 and weve got 53 usable responses. data was analyzed using the spss computer program and methodology employed in the analysis of the data collected from these responses directly relates to the design of the survey. limitations to this research were presented by the fact that some of the electronic

54、mail addresses werent correct which influence on the high level of returned messages and survey. 12 babi-hodovi, (2001), strategy and implementation services marketing, faculty of economics, sarajevo 7 table 1. type of lodging propertiesno% hotels3668% motels1223% bad and breakfast59% total53100% 4.

55、 results the survey data were tabulated and summarized by frequency charts. the respondents represented 36 hotels, 12 motels and 5 inns. the descriptive data collected from the survey classified the survey respondents as representing mostly medium-sized (50%) or small-sized (30%) and full service av

56、erage level (51%) or luxury (26%) lodging facilities. the majority of responding companies were located in the federation of bosnia and herzegovina (85%) and other 15% were located at the other entity (republic srpska). speaking about most attractive tourist destination, the majority of responding c

57、ompanies were located at sarajevo canton which is the most visited location in bosnia and herzegovina (29%) and herzegovina-neretva canton (where mostar is located and the single seaside town bosnia and herzegovina has) (27%). the majority of the respondents reported that they organization was priva

58、tely owned (80%). the other 12% of the responses were privatized companies (sold during the process of privatization in bh) and 2% of them owned by corporate capital or other options (without specifications 6%). the current range of average occupancy rates predicted by industry analysts is very low

59、16% at sarajevo canton to 75 to 80% at the coast during the season. forty-six percent of the respondents indicated that their property carried occupancy rate between 50 to 75 % and the other between 25 to 50 %. only 7% of them reported occupancy rate between 75 and 99 %. comparing these results with

60、 the structure of respondent we can found some inconsistencies, especially because of the number of respondents located at sarajevo canton. this data give us reasonable doubt that some of the hotels or lodging properties using different data of occupancy for official (tax and government bodies) and