HFT1000 Exam 1 Brymer Chapter 1 The Service Economy Service Dominant Logic The great economic law is this services are exchanged for services it is trivial very commonplace it is nonetheless the beginning the middle and the end of economic science Fredric Bastiat 1848 The importance of physical products lies not so much in owning them as obtaining the services they render Philip Kotler 1977 Customers do not buy goods or services They buy offerings which render services which create value activities render services things render services Evert Gummesson 1995 Distinctive Characteristics of Service Operations Customer participation e g super markets fast food Simultaneity Perishability e g hotel room airlines dentist Intangibility Heterogeneity Nontransferable ownership e g massage taxi ride The Service Package A bundle of goods and services with information that is provided in some environment Supporting facility e g golf course hospital Facilitating goods e g golf clubs medical supplies Information e g electronic medical records Explicit services e g smooth running car after tune up Implicit services e g psychological benefits of auto repair Hospitality world Globally Hospitality is one of the fastest growing industries in the Dynamic Hospitality is fast paced exciting every day is different Hospitality The BIG Picture Hospitality enterprises are part of the service industry The hospitality product is intangible 1 Example employee guest interaction such as at a hotel front desk or in a restaurant 3 Differs from traditional manufacturing industries that produce goods 2 The manufacturing product is tangible you can hold it 3 Example a pair of jeans Hospitality The BIG Picture Businesses in the hospitality industry are generally service organizations that offer Food Beverages Lodging Entertainment And a whole lot more Taking good care of the guest is the single most critical element for success The Moment of Truth o A term used in the service industry to describe numerous experiences that happen simultaneously in hospitality organizations o Refers to any time the guest comes in contact with anything or anyone that represents the operation o It cannot be taken back or done over again o The service experience has been created for better or worse The Economy Our economy is made up of 3 separate parts Agriculture Manufacturing Service The shift of dominance from agriculture and manufacturing to service has required people to acquire different skills Today s Economy In today s economy the service industries dominate There is no tangible product The product is mostly service The quality of that product the service experience rests in the mind of the guest The skills needed are more interpersonal and intellectual than in the past For many this has been quite a change and a difficult transition Hospitality Industry Segments Largest segments Lodging Food Service Smaller segments yet thriving Recreation Entertainment Travel Many more Lodging Many different types of lodging Resorts Inns Economy motel Bed and Breakfast Mega hotel Exclusive converted castle And plenty of other variations 1 Common bond All have sleeping rooms Lodging vs Food o The profitability percentage of a sold guest room is usually higher than from selling a meal o Goal Sell rooms o Marketing challenge Bring people to the property to buy rooms o Once there the guest will judge and determine what he she believes The guest not management determines perceived Quality and Value Guest Rooms A guest room is a perishable product If not sold on any one night that revenue is lost forever Managements Challenge knowing how to sell that room based on customers expectation and their perception of value Food Service This part of the hospitality industry is growing at a dramatic rate Growth primarily resulting from lifestyle changes among society More families are eating out instead of home Changing demographic profile of families To meet economic needs more adults are working and working longer hours Inadequate time to prepare meals The business is also growing because it caters to many types of consumers specific needs Getting together with friends Special occasions Impressing someone special Ambiance Is made up of the or Servicescape D cor Sound level Lighting Furniture Symphony of dining sounds o the diner s conversation and laughter o the clanking of dishes and silverware Restaurants Incredibly varied in menu options atmosphere pricing time needed for meal more Different types of restaurants Fine Dining Casual Fast food Fast Casual Other types of food service Private Clubs Non commercial Schools Prisons Military Special Events Catering Branding the process of taking a known brand like McDonald s and opening that facility in a business hospital or a school This trend brings to the operation o Name recognition o Appeal o Standards of operation for that brand Fast Food or Quick Service Largest segment of the food service industry Convenience o eat in the car at work or at home o it s quick o it s easy Brands keep adding to their menus but the eating public still prefers to order hamburgers fried chicken and pizza The Hospitality Industry is about managing the Moments of Truth occurring throughout the business operation o Ideally if the Moments of Truth are positive they become Happy Memories for the guests o Guests tell friends and family about happy memories which in turn creates the desire in others to experience the same and ultimately they become future guests of that business Bottom Line Summary Moment of truth any time a guest comes in contact with anything that represents the operation The Hospitality Industry is about managing the Moments of Truth occurring throughout the business operation Ideally if the Moments of Truth are positive they become Happy Memories for the guests Guests tell friends and family about happy memories which in turn creates the desire in others to experience the same and ultimately they become future guests of that business Chapter 2 Hospitality History The Ancient and Medieval World Hospitality began in the early days of human civilization through the catalyst of The concentration of people into towns The development of road systems and transoceanic travel The growth of interregional trade The adoption of exchangeable currency The Roman Empire built an extensive network of roads throughout the Mediterranean region ie required inns for travelers meals and lodging The Silk Road a trade route that
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