Chapter 1 The Basics of Wow!

Philippine Christian University
Dasmariñas City, Cavite
COLLEGE OF BUSINESS AND TECHNOLOGY

S.Y. 2020-2021
STRATEGIC MANAGEMENT
AND
TOTAL QUALITY MANAGEMENT
CHAPTER 1
Name: __________________________________________________________
Year &Section: ___________________________________________________
Prepared by:
Eileen A. Enriquez, Ph.D.
Disclaimer: This module is adapted and modified from the source materials listed in the references list. This is an exclusive property
of Philippine Christian University-Dasmariñas COLLEGE and is provided only to enrolled students for their academic use. This module
is provided for free by the school through softcopy and/or printed media. Reproduction of this module without official permission is
prohibited.
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LEARNING OBJECTIVES:
After reading this chapter, you should understand:
* Important differences between making products and serving guests.

* The importance of meeting the hospitality guest's expectations.
* The importance of the guest experience.
* The components of the guest experience.
* The definition of service quality and service value in the hospitality field.
* Reasons why "it all starts with the guest."
KEY TERMS AND CONCEPTS
benchmark organizations service delivery system

cost service encounter
expectations service environment
guest experience service package
guestologist service product
guestology service quality
hospitality service setting
internal customers service value
moment of truth servicescape
quality value
service
Serving guests and making products are such different activities that they require different
management principles and concepts. Catching a defective tire or a paint blemish in a car finish
at the final inspection stage of the assembly-line production process is one thing. Quite another is
listening to irate guests tell you in no uncertain terms that your motel, restaurant, or airline has
failed to deliver the service experience they expected. In the first instance, the quality inspector--
one of many middlemen between the maker of the product and the final customer--can send the
defect back to rework so that the customer never sees the faulty product. In the second situation,
there may be no one to buffer the relationship between the person delivering the unsatisfactory
service and the guest dissatisfied with it.
At its most basic, the hospitality industry is made up of organizations that offer guests courteous,
professional food, drink, and lodging services, alone or in combination. Beyond that, the industry
has been defined in many different ways. An expanded definition might also include theme park,
gaming, cruise ship, trade show, fair, meeting planning, and convention organizations. Because
we think the principles and practices presented in this book have wide application, we are going
to use this more expanded concept of the industry. The challenge for organizations in this
industry is to ensure that their personnel always offer the high level of service that guests want
and expect--every time, perfectly.
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GUESTOLOGY: WHAT IS IT?
In this chapter, we organize the available knowledge about meeting these challenges and
opportunities around guestology, a term originated by Bruce Laval of the Walt Disney Company.
Guestology means in essence treat customers like guests and manage the organization from the
guest's point of view. Customer-guests are, to the extent possible, studied scientifically (the
-ology in guestology). Their demographic characteristics and their wants, needs, and
expectations regarding the hospitality guest experience are determined. In addition, their actual
behavior within the hospitality organization is carefully observed
The findings of such study are then turned into the organizational practices that provide
outstanding service. The organization's strategy, staff, and systems are aligned to meet or exceed
the customer's expectations regarding the three aspects of the guest experience: service product,
service setting (also called service environment), and service delivery. These aspects or elements
are carefully woven together to give guests what they want and expect, plus a little bit more. "It
all starts with the guest" is not just an inspirational slogan; in the service-centered hospitality
organization, it is the truth and everybody accepts and lives up to it.
Guestology turns traditional management thinking on its head. Instead of focusing on

organizational design, managerial hierarchy, and production systems to maximize organizational
efficiency, it forces the organization to look systematically at the guest experience from the
customer's or guest's point of view. What customers do and want are first systematically
modeled, studied, and predicted. Only then can the rest of the organizational issues be addressed.
The goal is to create and sustain an organization that can respond to the customer's needs and
still make a profit.
Meeting Customer Expectations
Customers come to a service provider with certain expectations for themselves and their families.
First-time guests may have general expectations. For example, first-time guests of a major hotel
expect nice beds, good mattresses, clean surroundings, satisfactory meals, and a reasonable price.
Repeat guests may have more specific expectations based on past experience.
A guestologist seeks to understand and plan for these expectations before guests ever enter the
service setting, so that everything is ready for each customer to have a successful and enjoyable
experience.
Managers of all hospitality organizations can extend the lessons learned by Disney guestologists
to their own firms. If the organizational goal is to provide an outstanding experience, then the
organization must understand why the guest comes to the hospitality organization, what that
guest expects, and how to deliver that expectation. Many people think running a restaurant is
simple, profitable restaurants know that guests patronize them (or get angry and leave) for a
variety of reasons other than food quality. Managing the total dining experience is a much bigger
job than merely executing a good recipe. Guestology involves systematically determining what
those factors are, modeling them for study, measuring their impact on the guest experience,
testing various strategies that might improve the quality of that experience, and then providing
the combination of factors or elements that attracts guests and keeps them coming back.
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Serving Internal Customers
In addition to serving public consumers, the hospitality organization has within itself many
internal customers, persons and units that depend on each other and "serve" each other. The
principles for providing an outstanding service experience for external customers also apply to
these many internal customers. For example, as a computer help desk serves its internal
customers, it must understand and fulfill the expectations of these customers just as the
organization seeks to meet
and exceed the expectations of its external customers.
This logic can easily and rightfully be extended to the individual employee level. The
organization must meet or exceed the expectations of employees about how they will be treated.
Smart hospitality organizations know employees deserve the same care and consideration that
the organization encourages employees to extend to guests.
Service
We have frequently spoken of service, a word with numerous meanings. A common way to think
of service is as the intangible part of a transaction relationship between a provider organization
and its customer, client, or guest. (1) Another way to think of service is strictly from the
customer's point of view rather than the organization's. To be of service literally means to attend
to someone's needs. It involves helping, giving, sharing, and meeting needs. Service is always
rendered ultimately to people (customers) and/or their property either (1) directly via person-to-
person service encounters (traditional education, haircut, surgery, personal selling, counseling),
(2) directly via person-to-property service encounters (lawn care, car repair, phone line repair),
(3) indirectly via high-tech service devices (automated teller machine, automated fueling
devices, voice mail, Internet), or (4) some combination of these.
Service Products
Another, perhaps even more common, meaning of service refers to the entire bundle of tangibles
and intangibles in a transaction with a significant service component. If you leave town for a
month and pay for pet-sitting service, the organization or individual may buy and serve pet food,
brush and comb pets, interact with them, bring toys, clean their litter box, and so forth. Some of
what you pay for when you purchase the pet-sitting service is tangible (the cat food, for
example); some is intangible. For such tangible-intangible mixtures or bundles, the term service
package or service product is often used. It is used to describe pure services as well, since the
pure service provided is the product the organization offers for sale. Although these overlapping
meanings can be confusing (service sometimes referring to a tangible-intangible mixture, service
product sometimes referring to a pure service with no tangible product), the way the term is used
in context should make clear what we are talking about in this book. In different contexts,
sometimes one
term will feel appropriate, sometimes the other.
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A final point about the service product: Both the organization and the guest define it, and the
definitions may not be the same. The organization may think its service product is the well-made
tasty hamburger, reliably consistent from location to location. But the guest may be "buying" a
more extended service product: a well-made, tasty, consistent hamburger delivered quickly in
clean surroundings by a cheerful server. Cleanliness and cheerfulness may be as important as
burger taste for many guests.
The Guest Experience
A term that will recur many times in the following pages is the guest experience. It is the sum
total of the experience that the guest has with the service provider on a given occasion or set of
occasions. If you tell your friend that last night you had a "wonderful evening of dinner theater,"
you are referring to the evening as a whole and are thinking of it that way; the evening of theater
was your guest experience. To provide you with the different phases and aspects of the
wonderful evening, however, many dinner theater organization members worked on many
different activities and projects. For purposes of planning and execution, most hospitality
organizations divide the total experience they offer into convenient units. For purposes of
discussing and explaining the total guest experience, we shall do the same, even though such a
division is to an extent artificial. C. Lovelock and R. Young support that point: "As products are
increasingly bundled with service components, the neat separation between product and
interaction experience can become blurred.”
Product, Setting, and Delivery
In a way, this entire book can be oversimplified into one (fairly long!) sentence: We are going to
show how the benchmark hospitality organizations use their strategy, staff, and systems to
provide each guest with a seamless three-part guest experience--service product, service setting,
and service delivery--each part of which will at least meet the guest's expectations and the sum
total of which ideally will make the guest say, or at least think, wow! In a simple service
situation, the entire guest experience might be delivered by a single person, but for the typical
guest experience, speaking of a service delivery system seems more accurate. That system
consists of an inanimate technology part (including organization and information systems and
techniques) and the people part--most importantly, the front-line server who delivers, presents, or
"produces" the service to the guest. Here is the basic equation:
Guest experience = service product + service setting + service delivery system
All the moments you spent at the theater add up to the guest experience you later describe as a
"wonderful evening of theater." But you probably had many, smaller service experiences during
the evening. If, for example, at intermission you went to a designated area and received beverage
service, that short experience consisted of service, setting, and a delivery system. The next time
you spend a day at a vacation resort, you will have numerous service experiences, and you will
end up with a feeling for the overall guest experience. If you spend three days or a week at the
resort, as many people do, each day's individual guest experiences will add up to the overall
day's experience, and the one-day experiences will add up to the overall resort experience.
COMPONENTS OF A GUEST EXPEREINCE

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Though the three elements that the hospitality organization has to work with often blend
seamlessly into one experience, and should do so, we can for purposes of discussion break them
out into the service product, environment, and delivery system. Here is a fuller description of
each.
The Service Product
The service product, sometimes called the service package or service/product mix, is why the
customer, client, or guest comes to the organization in the first place. An organization's reason
for being is often embodied in the name of the business: Riverside Amusement Park, Omni
Convention Center, Sally's Video Arcade, Multiplex Movie Theater, Cheers Bar and Grill. The
basic product can be relatively tangible, like a hotel room, or relatively intangible, like a rock
concert. Most service products have both tangible and intangible elements and can range from
mostly product with little service to mostly service with little if any product.
The Service Setting
The second component of the guest experience is the setting or environment in which the
experience takes place. The term servicescape, the landscape within which service is
experienced, has been used to describe the physical aspects of the setting that contribute to the
guest's overall physical "feel" of the experience.
The Service-Delivery System
The third part of the guest experience is the service delivery system, including the human
components (like the restaurant server who places the meal on the table or the sound engineer at
the rock concert) and the physical production processes (like the kitchen facilities in the
restaurant or the rock concert's sophisticated amplification system) plus the organizational and
information systems and techniques that help deliver the service to the customer. Unlike a
factory's assembly line system, which is generally closed to consumers, many parts of service
delivery systems are open to consumers who can avail themselves of the services directly. Also,
the output products of an assembly line system can be touched, physically owned, and seen; the
services produced by the service delivery system are experienced
While all aspects of the service delivery system are important, the people interacting with
customers or guests are by far the most important component of the service delivery system--and
the most challenging to manage. It is the waitstaff, the cabin crew, the desk agents, the valet
parkers--their attitude, friendliness, genuine concern, and helpfulness--who largely determine
both the value and the quality of the experience for the guest. At the moment or across the series
of moments when the service is delivered and experienced, that one person, that single server, is
the server's department, the entire organization, perhaps in effect the entire hospitality industry to
the guest. The feeling that the guest takes away from the guest experience is largely derived from
prohibited.
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what happens during the encounters or interactions between the guest and the employee, and the
less tangible the service product, the more important the server becomes in defining the quality
and value of the guest experience. No wonder the leading hotels, restaurants, and other
hospitality organizations spend endless hours and countless dollars finding, training, and
supporting their frontline employees. If these folks fail to do it right, the guest and everyone the
guest ever tells about the experience may be lost.
Service Encounters and Moments of Truth
Although many service situations or interactions between organization and guest are now
automated, the automatic teller machine being a familiar example, the term service encounter is
often used to refer to the person-to-person interaction or series of interactions between the
customer and the person delivering the service--in brief, "employee interactions with customers."
It is a period of time during which the organization and the guest interact. The length of a typical
service encounter will vary from one service provider or organizational type to another. The
purchase of a ticket is a brief service encounter; the interaction between guest and agent at a
hotel front desk is usually somewhat longer, and the series of interactions between guest and
server comprising a restaurant meal is a longer encounter. A day in a
Theme park may involve fifty to a hundred service encounters
Service encounters or interactions, and especially certain critical moments within them, are
obviously of crucial importance to the guest's evaluation of service quality; they can make or
break the entire guest experience. Jan Carlzon, the former president of Scandinavian Airline
Services, refers to the key moments during these interactions, and to some brief encounters or
interactions themselves, as moments of truth. Obviously, if the meal was bad, the airplane
wouldn't fly, or the air conditioning in the hotel room didn't work, you won't care how pleasant
the server was or how good that person made you feel. On the other hand, since most meals are
similar to other meals, most plane rides are like other rides, and most hotel rooms are like other
hotel rooms, the distinguishing characteristic of most guest experiences is how the people
providing the service did it! Even if the meal, plane ride, or hotel room are the best of your life, a
rude or careless service person can wreck your guest experience in a moment. If that happens, all
of the organization's other efforts and expenditures are wasted. Little wonder that the effective
hospitality organizations spend serious time and money to manage those moments.
At the moment of truth, a server or other organizational representative is typically present and
attempting to provide service. Some writers include interactions with inanimate objects as
potential moments of truth. Opening the door of a hotel room might be such a moment. If the
guest's first impression is negative, if the organization has slipped up and forgotten to clean the
room, for example, a crucial moment has not been properly managed and a guest, possibly an
excellent long-
term customer, may be lost for good.
prohibited.
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The moment-of-truth concept is very important. Each guest may have only a few moments of
truth during a guest experience or in a lifetime relationship with a company, but each server is
involved in many make-or-break moments of truth every day.
The Nature of Services
Services and manufactured products have different characteristics. Manufactured products tend
to be tangible; produced, shipped, and purchased now for consumption later; and lacking in
much if any interaction between the manufacturer and the consumer. Services tend to be
intangible, purchased (if not always paid for) first, then simultaneously produced and consumed,
and accompanied by considerable provider-customer interaction. Let's look at these
characteristics
more closely.
1. Services Are Partly or Wholly Intangible. If the service rendered includes a tangible item (the
Mickey Mouse hat, the gold filling, a good meal), then the total guest experience is the sum of
the service/product mix, the environment within which it is delivered, and the service product's
delivery. Because part or all of the service product is intangible, it is impossible to assess the
product's quality or value accurately or objectively, to inventory it, or to repair it (although we
will talk later about correcting service failures). Since the customer decides whether or not the
quality is acceptable or value is present, the only way to measure either quality or value is
through subjective assessment techniques, the most basic of which is to ask the customer.
A second implication of this intangibility characteristic is that every guest experience is unique.
Even though a room at the Ritz-Carlton looks the same to everyone, the overall experience at the
Ritz will be different for each guest. The less tangible the service provided, the more likely each
guest will define the experience differently. The point is simple: Since every guest is unique,
every
guest experience will also be unique
Services are intangible and therefore difficult to comprehend fully before they are delivered and
experienced, organizations wanting guests to try their services rather than those of competitors
must make the intangible tangible--through photographs in advertising, an Internet view of a
restaurant interior, amenities on the night table, Dave Thomas of Wendy's doing his own TV
advertising, elegant paneling on the hotel lobby wall, endorsements by famous people, and so
forth. Such efforts to give tangible evidence of service quality help the employees as well. After
all, the service is as intangible for organizations as for guests. Tangibles help organization
members form a mental image of what the service should be like and what its quality level
should be.
2. Services Are Consumed at the Moment or during the Period of Production or Delivery.
Even if the guest takes home the Mickey Mouse hat, or the gold filling, or the full stomach, or
even if the luncheon was prepared an hour before the customer ate it, the service as a whole and
from the customer's perspective was consumed as delivered. The customer can take the hat home
but not the service. What are the important managerial implications of this characteristic for
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hospitality managers? Organizational systems must be carefully designed to ensure the service is
reliably produced so that each guest has a high-quality experience nearly equal to that
experienced by every other guest (except for differences supplied by servers in response to each
guest's expression of unique needs). In addition, the experience must equal that which the same
guest had in previous visits. The hospitality organization must think through the service delivery
process by working
from the guest backward.
This working backward to meet customer desires and expectations is a major difference between
all hospitality organizations and the typical bureaucratic functional organization, which is often
designed for the convenience and efficiency of the organizational members. In a well-designed
hospitality organization, the focus is on the guest experience and those who deliver it. All the
traditional organizational and managerial concepts that have been classically taught as the best
way to manage are turned upside down. Instead of concentrating on managerial control systems
to ensure consistency and employee predictability, hospitality organizations must concentrate on
employee empowerment. They know managers cannot watch every guest-employee interaction.
The guest experience cannot be held back until the boss checks it for errors, as would be true of a
new book, tractor, or suit. The frontline service provider who cares about the service, the
organization, and the guest must be trusted to deliver the guest experience as well as that person
knows how. Instead of managers following the traditional model of reviewing performance after
the fact, in the hospitality organization they must use new skills that help the employee know
how and why the consistent delivery of a high-quality guest experience is critical to guest
satisfaction and organizational success. Instead of tracing information and authority from the top
down, the guest-focused organization must trace it from the bottom up.
Figure 1-1 Interaction Relationships between Customer/Guest/Client and Service Provider.
Customer present Customer not present
Service provider Electric/Gas utilities, Answering services,

not present ATM, Vending machines TV security services
Service provider Hospitality, Medical, Lawn service,

present Professional Watch repair
3. Services Usually Require Interaction between the Service Provider and the Customer,
Client, or Guest. This interaction can be as short as the brief encounter between the customer
and the order taker at McDonald's or as long as the lifetime relationship between the patient and
the family physician. These interactions can be face-to-face, over the phone, or by mail, e-mail,
or fax.
Figure 1-1 displays four different types of relationships between provider and customer, with
examples of each type noted inside the respective boxes. Different service situations call for
different strategies in systems, personnel, and settings by the service provider. If the provider is
not going to be present in the encounter, the service system must be foolproof for all types of
prohibited.
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customers who will use it. South Florida automatic teller machines, for example, ask customers
whether they want to read the instructions on the screen in English or Spanish. Some ATMs have
phones for people who cannot figure out the instructions. On the other hand, if the provider is
present, then the organization must focus on the customer's interactions with that provider as a
major means for adding value to the product. A full-service hotel or restaurant, for example,
relies extensively on its employees to deliver the value in the guest experience; the owner of
vending
machines does not.
Many services are delivered with customers present at some stages but not all. At car
dealerships, most car repairs take place out of the customer's sight. The two points of contact
occur at the customer service desk and the payment window. The appearance of both the
physical setting and the people at those contact points are quite different from those back in the
repair area, beyond the sight of customers. Each type of customer contact may call for a different
managerial strategy, environment, and delivery system.
Just What Does the Guest Expect?
Most guests have the same general expectations when they go to a hospitality organization for
service. Surveys and interviews are not required to determine that most guests expect cleanliness,
courtesy, responsiveness, reliability, and friendliness. Customers complain when they do not get
what they expect or when they receive negatives that they do not expect. Another way to get at
what customers expect is to examine their complaints. Len Berry has listed the ten most common
customer complaints. Considering what customers do not want can provide insight into what
they do want. A common thread running through the complaints suggests that what bothers
customers most is disrespect. Here are Berry's ten complaints; they can help us arrive at a still
general but slightly more specific set of guest expectations:
1. Guest Complaint: Lying, dishonesty, unfairness. Guest Expectation: To be told the truth
and treated fairly.
2. Guest Complaint: Harsh, disrespectful treatment by employees. Guest Expectation: To

be treated with respect.
3. Guest Complaint: Carelessness, mistakes, broken promises. Guest Expectation: To

receive careful, reliable service.
4. Guest Complaint: Employees without the desire or authority to solve problems. Guest
Expectation: To receive prompt solutions to problems.
5. Guest Complaint: Waiting in line because some service lanes or counters are closed.
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Guest Expectation: To wait as short a time as possible.
6. Guest Complaint: Impersonal service. Guest Expectation: To receive personal attention

and genuine interest from service employees.
7. Guest Complaint: Inadequate communication after problems arise. Guest Expectation:

To be kept informed about recovery efforts after reporting problems or service failures.
8. Guest Complaint: Employees unwilling to make extra effort or who seem annoyed by
requests for assistance. Guest Expectation: To receive assistance rendered willingly by
service employees.
9. Guest Complaint: Employees who don't know what's happening. Guest Expectation:
To receive accurate answers from service employees to common questions.
10. Guest Complaint: Employees who put their own interests first, conduct personal
business, or chat with each other while the customers wait. Guest Expectation: To have
their interests come first.
Being aware of these common guest concerns and expectations should be part of any hospitality
organization's knowledge base. As we shall see later, however, the benchmark organizations dig
deeper to discover the more specific guest expectations that allow them to personalize each
guest's experience as much as possible. Some organizations actually keep a record of these
expectations to be sure of meeting them on the guest’s next visit.
QUALITY, VALUE, AND COST DEFINED
In the hospitality industry, the terms quality, value, and cost have specialized meanings to fit the guest-
focused orientation of the benchmark firms
Quality
Two "equations" can help make clear what quality, value, and cost mean to the guestologist and
why we say that quality and value are determined not in any absolute sense, as they might be in
other situations, but by the guest. The quality of the entire guest experience or of any part of it is
defined as the difference between the quality that the guest expects and the quality that the guest
gets. If the two are the same, then quality in this special sense is average or normal; you got what
you expected and you are satisfied. If you got more than you expected, quality was positive; less
than you expected, quality was negative.
The first equation that follows describes these relationships for the quality of the guest
experience, Qe. It is equal to the quality of the experience as delivered, Qed, minus the quality
expected, Qee. If the delivered and expected quality are about the same, quality is not zero as it
would be if these were true mathematical equations but average or normal. If quality is average
or above average, the guest can be described as satisfied. If quality is below average, the guest is
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dissatisfied.
QE= QED- QEE

As reflected on the right side of the equation, quality as perceived by the guest will be affected
by changes in either guest expectations or organizational performance. If Qe is high enough, the
guest had an exceptional, memorable, or wow service experience. The quality of any aspect of
the service experience could be described in the same way.
Quality is independent of cost or value. Quality can be high and cost also high; quality can be
high and cost low, and so forth.
Value
The value of the guest experience (Ve) is equal to the quality of the experience (Qe) as
"calculated" in the first equation divided by the costs of all kinds to the guest of obtaining the
experience:
Ve=Qe/allcosts
If the quality and cost of the experience are about the same, the value of the experience to the
guest would be normal or about average; the guest would be satisfied by this fair value but not
wowed. Low quality and low cost, and high quality and high cost, satisfy the guest about the
same, because they are a good match for the guest's expectations. Organizations try to add value
to the guest experience by providing additional features and amenities for guests without increasing
the cost to guests.
Cost
One cost to a guest eating lunch today at your restaurant rather than someone else's is, of course,
the price of the meal. In addition, experienced restaurant and other hospitality managers
appreciate that the guest has also incurred other, less quantifiable costs, including the so-called
"opportunity costs" of missing out on alternative meals at competing restaurants and of foregoing
experiences or opportunities other than eating a restaurant meal. The cost of the guest's time and
the cost of any risks associated with entering into this service transaction must also enter the
equation. The guest's time may not be worth an exact dollar figure per minute or hour, but it is
certainly worth something to the guest, so time expenditures (time spent getting to your
restaurant, waiting for a table, waiting for service) are also costly. Finally, the customer at your
restaurant runs some risks, slim but real and potentially costly, like the risk that your restaurant
cannot meet expectations or the risk that your service staff will embarrass that customer in front
of the customer's own special
guest today: her boss.
prohibited.
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All of these tangible and intangible, financial and nonfinancial costs comprise the "all costs"
denominator of the second equation's right side. They make up the total burden to the guest who
chooses a given guest experience.
Cost of Quality
An important concept in service organizations is the cost of quality. Interestingly enough, it is

often used to serve as a reminder not of how much it costs the organization to provide service
quality at a high level but of how little it costs compared to the cost of not providing quality. If
the organization thinks about the costs of fixing errors, compensating guests for failures, lost
customers, low employee morale, and negative word of mouth that can result from poor service,
the cost of quality is low indeed and the cost of not providing quality enormous. That is why
benchmark organizations expend whatever resources are necessary to accomplish two
complementary goals: exceed expectations to deliver wow to the level of guest delight and
prevent failures.
Who Defines Quality and Value?
Because service is intangible and guest expectations are variable, no objective determination of quality
level (and therefore of value) can be made. In some areas of business, a quality inspector might be able to
define and determine the quality of a product before a customer ever sees it. In the hospitality field, only
the guest can define quality and value. No matter how brilliantly the organization designs the service, the
environment, and the delivery system, if the guest is dissatisfied with any of these elements, the
organization has failed to meet the guest's expectations; it has not provided a guest experience of
acceptable quality and value.
To meet or exceed the expectations of all the different types of guests with their different needs,
wants, experiences, and moods is the fundamental and most exciting challenge of a hospitality
organization. If the hospitality manager does not believe that the guest is always right (at least in
the guest's mind), then the manager had better find a new career. Even when guests are wrong
according to any reasonable standard, the hospitality manager must find ways to let them be
wrong with dignity so that their self-esteem and satisfaction with the guest experience and the
organization are not negatively affected.
IMPORTANCE OF GUESTOLOGY
While guestology is obviously most helpful in organizing knowledge about the management of
hospitality businesses--like hotels and restaurants--which have traditionally spoken of their
clientele as guests, it can be used to study and understand any situation in which people are
served in some way. Even manufacturing firms have "guests" or people that they should treat
like guests: their own employees, their customers, and their strategic partners. Nevertheless, the
traditional management model found in typical texts tends to be oriented toward the
manufacturing sector, the making of physical products. Using the manufacturing model to
describe providing hospitality
services is a questionable approach.
prohibited.
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Lessons Learned
1. Treat each customer like a guest, and always start with the guest.
2. Your guest defines the value and the quality of your service, so you had better know what your
guest wants.
3. Ask, ask, ask your guests.
4. Provide memorable experiences that exceed guest expectations when possible, but know when
enough is enough; deliver more than the guest expects, but not more than the guest wants.
5. Manage all three parts of the guest experience: the service product, the service environment,
and the service delivery system (both the processes and the people).
6. The less tangible the guest experience, the more important are the front-line people delivering
the service to the guest's perception of quality and value.
7. Underpromise and overdeliver.
8. The cost of providing quality is very low, compared to the potential cost of not providing
quality.
9. Service product + service environment + service delivery system = guest experience
Review Questions
1. Consider the formula presented in the chapter:
service product + service environment + service-delivery system = guest experience
A. Although all parts are important, do you think these three types of organization--a hotel, a
restaurant, and an airline--would tend to place a different emphasis on the three parts in
providing the total guest experience?
B. If product + environment + delivery system = 100%, how would the hotel, restaurant, and
airline divide up their emphasis? Or, if you prefer to compare them this way, how would these
organizational types rank the three parts of the guest experience in order of emphasis?
2. Imagine that a Rolex watch, a Radio Shack watch, an Eagle Mirado #2 pencil, and a Cross
fountain pen are sitting on a table in front of you. Which item is highest in quality, and which is
lowest in quality?
3. These standard rooms are available in your locality: the Ritz-Carlton Hotel ($350 per night), a
prohibited.
14
Holiday Inn ($100), a YMCA or YWCA ($40), and a No-Tell Motel ($29.95). Which room is
highest in quality, and which is lowest in quality?
4. Consider the examples in questions 2 and 3 in terms of value. Under what circumstances can
quality be high and value low? Value high and quality low?
5. A guest experience is a service, and this chapter explained that services are largely intangible.
Think of a somewhat costly guest experience you have had. What tangibles did the organization
use to make you feel that your intangible experience was worth the cost you paid?
6. Reflect on a recent, enjoyable guest experience and on a disappointing guest experience.
A. What were the significant events, the moments of truth, during each experience?
B. How did they contribute to your enjoyment or disappointment?
C. How does all that relate to managing the guest experience in hospitality organizations?
7. This chapter makes some general statements about how people form their expectations for
guest experiences.
A. How do those statements match up with the way you personally form your expectations for a
new upcoming experience?
B. If you are going for a repeat experience, would your expectations be based totally on previous
experiences?
C. If you were a hospitality manager, what level and type of expectations would you want to
create in your guests, and how would you try to create them?
D. How would you take into account the fact that some guests are new, some are repeaters, and
you may not know which are which?
8. You are probably familiar with the expression "too much of a good thing." In the hospitality
setting, that would describe overdelivering the service guests have come to receive.
A. How much service is too much service? Have you ever experienced excessive service?
B. How does a hospitality manager ensure that guest expectations are met or exceeded without
going overboard?
9. From an article in a guest services magazine: "What brings hotel guests back? A fluffy robe
hanging on a padded hanger? Creamy chocolate reposing on the pillow? The jungle safari
bedroom decor? Or plain vanilla, old-fashioned service?" What do you say?
10. How is service quality related to guest satisfaction?

prohibited.
15
Activities
Many of the chapters in this module will include suggested hospitality field exercises or
activities that might involve speaking to customers, employees, and managers of hospitality
organizations. Your instructor will guide you on whether to do these assignments and how to go
about them. You will also have assignments that ask you to report on a service failure or write a
letter of complaint. You are doing these assignments to learn, not to make trouble for hospitality
employees, so don't use real names in your reports unless your instructor gives permission.
Excellent sources for study are your own organization, if you are presently working, and the
organizations for whom your friends may be working. Ideally, your information will come from
hospitality organizations but if your personal situation does not permit that, study some other
type of service organization. For some of the requested first-hand information, however, you
may have to visit the organization and talk with its people. If so, be a good guest!
For the following three exercises, and all the others in this module, you will write your responses
or prepare to discuss them in class, as your instructor directs.
1. Pick two service organizations, in the same service field, you have patronized recently or can
visit conveniently. Compare them in terms of the service quality and value you received.
2. Think about the last business of any kind you visited or the next one you visit. What are the
tangibles of its service product? What are the intangibles?
3. Divide up into groups. On the basis of the group's collective experience, what is good service?
Mention some organizations that deliver good service. Compare notes with other groups.
Case Study
Eastern States Air Environment
Gloria Rooney assumed the presidency of Eastern States Air in the later 1990s, after proving her
ability as executive vice president with two other major airlines. Like most other surviving
airlines, Eastern States Air weathered rough times during the early 1990s.But as the year 2000
neared, Rooney took over an airline that was doing well. Naturally, Rooney couldn't be satisfied
with simply
staying the course; she wanted to do better. And she thought she knew how.
Rooney saw that service in the airline industry had been in a state of steady decline for several
years. More and more passengers were flying than ever before, but their level of satisfaction
went down as their numbers went up. Crowded airports, flight delays, overbooking, the
occasional disastrous accident, and other factors had all combined to raise industry complaints to
all-time-high levels just when passenger flight miles were also at an all-time
high.
prohibited.
16
In that atmosphere, Rooney finally had an opportunity to put into practice one of her most deeply
held beliefs about running an airline: "It's not what you do; it's how you do it." She told her staff
time after time: "The What is the easy part. What we do is take passengers from here to there.
The way we can distinguish ourselves favorably from our competitors is in The How."
Eastern States Air became known as "the airline that put the Frills back into Flying." A small
lounge was added to all planes that could accommodate one. For people not wanting to leave
their seats, two complimentary drinks per passenger per flight, delivered to the seat, became the
standard. An internationally known chef was hired to supervise a food-service system that
produced meals as close to the gourmet level as was possible given the state of technology. Just
before passengers exited each Eastern States flight, they were surveyed to see how satisfied they
had been with the basics of the flight and with the frills which Eastern States had put back into
flying. Early results of Rooney's campaign showed that passenger satisfaction levels were off the
chart at the top. In one
astonishing month, the airline received no complaints about anything. Rooney was overjoyed.
"They said zero defects was an impossible standard in airline service. We proved them wrong."
The passengers who raved about Eastern States Air and flew the airline as often as they could,
sometimes simply for sheer pleasure, understood that there is no free lunch. Eastern States had to
raise
its fares considerably to provide outstanding service, but some people paid the higher prices
happily.
Unfortunately, the number of passengers flying Eastern States Air took a disastrous drop. The
ones who stayed loved the airline. They became evangelists for Eastern States, but there were not
enough of them. Rooney realized that she had been somewhat deceived by the excellent survey
results. She had been surveying only those who stayed, not those who left.
Surveying a broader cross section of passengers, former passengers, and passengers of other
airlines led Rooney to change her strategy. "When you get right down to it," she said, "this is
really a very simple business. Steamships used to be a mode of transportation; now they provide
luxury cruises that end up where they started. But in our business, what people want is to get
from here to there as inexpensively as possible. In the current market, cheap airfares are what
people expect, and that's what we need to give them. But we won't forget the loyal customers
who have stayed with us. If we do this right, we can appeal to both groups."
To implement the new strategy, Eastern States cut back on the number of seats in first class but
increased their size, along with first-class appointments and level of service, to retain the airline
guests who had been satisfied to have the frills put back into flying and were willing to pay for
them. Throughout the rest of the plane, however, economy became the watchword. More seats
were stuffed into each plane, the number of flight attendants was reduced, and "meals" consisted
of dry finger food, mainly pretzels.
Eastern States began to make a financial comeback, but the number of complaints skyrocketed to
record levels. The following comments were typical:
prohibited.
17
"You are putting all your service into the front of the plane. What about those of us stuck in the
back?"
"I've seen the animals in cattle cars treated better than this."
"I used to be able to get by a window or on the aisle; now I always seem to get stuck in the
middle seat. Why is that?"
"I see that your industry is enjoying record profits. How about using some of that dough to give
us a better ride?"
"I'm a little over six feet tall, and I have to twist my legs to fit in that cramped space you give
me."
"Seats too narrow, too close together. Flight attendant handed me pretzels just as we were
landing."
"I've had better seats and better service on the crosstown bus."
Some of these disappointed and angry passengers took out their resentment on the flight crews.
Morale among the pilots and flight attendants began to drop. Rooney was baffled and
disappointed. "You can't win in this business. You give people what they want, and the
complaints go through the roof." She was quite concerned about the next board of directors
meeting and what the board would have to say about her management of the airline.
1. What is the service product of the airline industry?
2. What were Rooney's mistakes?
3. How could they have been avoided?
4. What now?
prohibited.
18

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Philippine Christian University

Dasmariñas City, Cavite

COLLEGE OF BUSINESS AND TECHNOLOGY

Eileen A. Enriquez, Ph.D.

After reading this chapter, you should understand:

* Important differences between making products and serving guests.

benchmark organizations service delivery system

Guestology turns traditional management thinking on its head. Instead of focusing on

Guest experience = service product + service setting + service delivery system

COMPONENTS OF A GUEST EXPEREINCE

The Service Product

The Service Setting

The Service-Delivery System

Service Encounters and Moments of Truth

The Nature of Services

Figure 1-1 Interaction Relationships between Customer/Guest/Client and Service Provider.

Customer present Customer not present

Service provider Electric/Gas utilities, Answering services,

Service provider Hospitality, Medical, Lawn service,

Just What Does the Guest Expect?

2. Guest Complaint: Harsh, disrespectful treatment by employees. Guest Expectation: To

3. Guest Complaint: Carelessness, mistakes, broken promises. Guest Expectation: To

6. Guest Complaint: Impersonal service. Guest Expectation: To receive personal attention

7. Guest Complaint: Inadequate communication after problems arise. Guest Expectation:

QUALITY, VALUE, AND COST DEFINED

QE= QED- QEE

An important concept in service organizations is the cost of quality. Interestingly enough, it is

Who Defines Quality and Value?

3. Ask, ask, ask your guests.

7. Underpromise and overdeliver.

9. Service product + service environment + service delivery system = guest experience

service product + service environment + service-delivery system = guest experience

6. Reflect on a recent, enjoyable guest experience and on a disappointing guest experience.

B. How did they contribute to your enjoyment or disappointment?

10. How is service quality related to guest satisfaction?

Eastern States Air Environment

1. What is the service product of the airline industry?

2. What were Rooney's mistakes?

3. How could they have been avoided?

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