Ritz Carlton. Embracing the Service Perspective and Adopting the Service Imperative

Introduction

Customers are not looking for goods or services, but for benefits or solutions to their problems. To be competitive, firms need to understand their selected customers' total needs in order to design and deliver the core solution (the pertinent package of goods and services).

In the service perspective, the role of service components in building and maintaining customer relationships is fundamental and strategic, and sustainable competitive advantage can only be created by understanding and meeting every element of the individual customer relationship. Given the highly demanding and discriminating behavior and needs of the luxury buyer, embracing and implementing the service perspective effectively becomes even more imperative if a firm is to succeed in this highly competitive market.

For this reason the company must get to know its customers well and adopt the principles and practice of service management. To this effect 4 types of resources are essential: customers, technology, employees and time. Customers because they take an active role. Technology because systems must be designed from a customer-oriented perspective (as opposed to internal production oriented). Employees because their attitudes, commitment and performance are all crucial to the success of the strategy. Time which must be well managed for both parties. Perceived wastage of time will be detrimental to the overall perception of the service.

This report will deal with how three companies (Ritz Carlton Hotels, Singapore Airlines, IHI), not only embraced the service perspective but reached high notoriety as luxury service companies.

Ritz Carlton

Embracing the service perspective and adopting the service imperative.

The focus in establishing a great customer relationship rather than just delivering a good can easily be observed in Ritz Carlton's mission statement:

"We are not in the hotel business. The hotel business is about selling rooms, selling food, selling the bar. We do those things incidentally, but our business is service. We charge for service"

-Schulze

The company creates a promise , an expression of what target customers can expect from their experience with the hotel, and incorporates in into standards (The Golden Standards-create a focus on taking care of customers and of employees, The Credo, The Basic Rules).

The general focus of management is shifted from product-based value to total value in customer relationships, and in order to not only keep the promise made, but to exceed the expectation of consumers, all areas adopt a customer oriented approach.

Since the moment when the contact is made with the customer is very important (moment of truth), all customer contact staff has to become part time marketers. Ritz achieves this by:

-Recruiting personnel that have the right service attitude and can adopt the hotel's philosophy.

-Giving employees the skills, tools, and supporting processes needed to deliver the customer experience.

- Making everyone a 'brand' manager who is behind the 'brand' and supports the 'brand'.

-Giving customer contact employees the authority to make prompt decisions, so as not to miss opportunities.

-Decentralizing decision-making, especially at operational level.

-Supervisory control, reward systems and monitoring focus.

-CRM-customer relationship management.

In order to have a consistent image, the opening process and management of the hotels is centralized but differences are made according to the native culture of the population where the hotel is located. Ritz also has a centralized database where information about each customer is collected and saved. This ensures that a guest is recognized in any Ritz hotel, regardless of the country and a more customized service is provided.

Becoming a luxury service provider

Choosing the right target customer

Independent Travelers-business or pleasure travelers, foreign diplomats (In Washington D.C case)

Meeting event planners (Beat at booking rooms in advance and assuring usually 40 % of annual sales income)

Before opening a hotel, a feasibility study is conducted to identify the primary target customers, as well as their wants, needs and expectations. Afterwards, a market customization is performed in order to meet the needs of the target customer.

Positioning

The positioning is expressed through the Credo:

"We provide the finest personnel service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz Carlton experience enlivens the senses, instills well being, and fulfills even the unexpressed wishes and needs of our guests."

Implementing a luxury market strategy

Product

Augmented service offering

The Core Service: Premium hotel rooms, food & beverages

The Enabling Services: Booking (via Internet/ Phone), Reception Desk/ Check-In, Porter/doorman

The Enhancing Services: Spa, Destination Club (personalized luxury vacation), 24h Cleaner, Limousine Shuttles, Gift Cards (voucher),Personal Concierge, *greeting travelers with mimosas and discount coupons presented on silver trays, serenades with piano concerts, hotel room in the airport complete with armoire, bed, television etc, 'Technology Butler'-comprised staff of technicians available 24 hours a day to assist guests with computing problems and other technological