Company case 13: The Ritz
The Ritz Carlton features luxury hotels and five-star resorts worldwide: from America to the Middle East, and from Europe to Asia. With an unshakeable credo and a corporate philosophy of an unwavering commitment to service, the hotel has won countless rewards and has been recognized with numerous awards for being the gold standard of hospitality.
QUESTION 1: Most people see a Ritz Carlton hotel as a swanky building on a prime site, such as London’s Picadilly, but is the structure the essence of the hotel chain’s success?
Whereas a product marketer works with tangible products: things that can be tasted, heard and seen in advance – a service marketer does not. As is clear of the manual (Kotler P, Principles of Marketing) the intangibility of services makes it difficult for buyers to evaluate the service before consumption, therefore uncertainty is increased. To reduce uncertainty, buyers look for ‘signals’ of service quality: they draw conclusions about quality from the place, people, price, equipment and communications that they can see. Therefore, the service provider’s task is to make the service tangible in one or more ways to send the right signals about quality. This is also called evidence management, in which the service organisation presents its customers with organised, honest evidence of benefits of its offers. A hotel at the luxury end, such as the the Ritz Carlton, must make this positioning strategy tangible in every aspect of consumer contact through a number of marketing tools. Rather than leaving that evidence to chance, it has to carefully manage a set of visual and experiential clues. First, the place or the hotel’s physical setting should give an appropriate sense of style, grandeur or opulence: its exterior and interior must look beautiful, chic and be designed to look more than just a place to sleep. But this in itself is not enough, and is not the essence. Second, and essential, is the staff working at the hotel. The hotel’s staff should be properly dressed, attentive and responding, providing consistently good service so that frequent travellers are assured of a seamless service every time they visit the hotel. Other marketing tools to influence the visitor’s impression of the hotel include equipment, such as proper furniture in guest rooms, health and fitness or wellness centers and spa facilities – but also the hotel’s communication materials can be contributive when suggesting smartness, elegance and luxury with carefully chosen words and photos that communicate the hotel’s positioning. An example of the latter could be that the hotel could give guests the oppurtunity to view more photograps of rooms and public spaces on the internet, before they place a booking.
QUESTION 2: What accounts for the Ritz- Carlton’s continued success?
Besides intangible, services also account for a high degree in variability. This means that the quality of services depends on who provides them, as well as where and when, and how they are provided. As such, service quality is difficult to control. The ability to satisfy customers depends heavily on the behaviour of customer-facing or front-line service employees. A brilliant marketing strategy will achieve little if service employees do their job badly and deliver poor-quality service. Service firms, such as the the Ritz Carlton can take several steps towards quality control. First, they should invest in recruiting the right employees and providing excellent training, regardless of whether employees are highly skilled professionals or low skilled workers. The Ritz Carlton understands that most of the responsibility for keeping guests satisfied falls to the Ritz Carlton’s customer contact employees. Thus, the hotel takes grate care in selecting its personnel ‘we want only people who care about other people’. Once selected, employees are given intensive training in the art of coddling customers. New employees attend a two-day...
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