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Customer Service Management for Tourism and Hospitality

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  • Level: Diploma
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Introduction

Customer service management refers to the strategies, tactics and technologies that are implemented by various organisations in order to retain existing and attract prospective customers. It helps to maintain good relations with the clients by rendering them good services. For all the companies who are executing their business in the tourism and hospitality industry, it is vital to provide good services to all the visitors to gain their trust (Ariffin and Maghzi, 2012). This report is based on the customer relationship management strategy of British Airways which is the largest airline in the UK and it is mainly based in Waterside, London, UK. Various topics have been discussed in this report such as the use of Hofstede's model of culture dimension, the identification and exploration of significant differences between Chinese and British consumer behaviour, evaluation of the considerations that will be taken into account by British Airways while designing its marketing mix in order to enhance service encounters.

Hofstede Cultural Dimensions

TASK 1

1. Use of Hofstede's model of cultural dimensions to identify differences between Chinese and British consumer behaviour

Consumer behaviour: It can be defined as the study of customer's reactions to buying, selecting, using, and disposing of goods and services that are acquired by them in order to satisfy their needs. For all the organisations whether they are offering products or services to the consumers to analyse their behaviours so that they can fulfil all their requirements. As British Airways is a large organisation that is rendering services all around the world hence it is very important for the company to manage all of them effectively so that they can be retained. Consumer behaviour can be analysed with the help of appropriate research in which their needs, demands, preferences, tastes etc. elements are considered by the marketers (Boella and Goss-Turner, 2013).

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Hofstede's cultural dimensions: This model was introduced by Dr. Geert Hofstede in the year 1970s. It helps to determine the effect of a society's culture on the beliefs of community members. There are six different dimensions of this model that can help to determine the difference between the behaviour of Chinese and British consumers of British Airways. All the differences are as follows:

Hofstede's cultural dimensions

British

Chinese

Power distance index

It depicts that less powerful members of an organisation expect to distribute the power unequally. PDI score is high in Britain hence it will affect consumer behaviour as there is a large difference in their compensation. Customers in the UK are concerned with brands (Chathoth and et.al., 2014).

In China the PDI score is low as there is no difference in compensation and all the managers and employees are treated the same. In China, all the customers are focused on innovation.

Individualism vs. collectivism

It is the strength of ties that individuals have together in their community. IDV score of Western consumers is high as they respect the privacy of other community members. The consumers of the UK have persuasion behaviour.

IDV score of Chinese consumers is low as they believe in building skills so that they can become masters in something. The consumer of China has trust in their local technology.

Masculinity vs. femininity

It refers to the distribution of resources on the basis of gender. In Britain, the MAS is low as males and females are not treated equally and various issues are related to the pay gap of women and men. In Western countries, females are overshadowed by males. In the UK consumers buy brands for status among them women are mainly concerned with a higher standard of living.

In China, the MAS score is very high as males and females are treated equally and their pay scales are also equal. It helps to ignore the issues that are related to the pay scale gap. In China, all the consumers believe in living a simple life and they do not focus on brands to enhance their standard of living (Testa and Sipe, 2012).

Uncertainty avoidance index

It is related to the cooperation with anxiety and sudden problems. UAI score of British consumers is high as they can cope with problems specifically and they can implement effective strategies to deal with sudden problems or anxiety. They can cope with the risk of purchase.

UAI score in China is very low because the consumers there only try to invent new things rather than find solutions for existing problems as they don't want to waste their time. In China, all the consumers are mainly concerned with innovation or change.

Long versus short-term orientation

It defines the steps that are taken by the organisations in order to attain long as well as short-term gains. In Britain, there is a long term orientation as they are more concerned with the education level and modesty. In the UK consumers always will to invest in brand.

In China, there is a short-term orientation as the local citizens consider attaining short-term gains and quick results for the problems. In China, consumers do not want to invest in brands as they believe in innovation.

Indulgence versus restraint

It can be defined as the regulations of people's conduct and behaviour. In Britain, the IVR score is very low because consumers are very strict about social norms.

In China, the IVR score is high as they consider enjoying life and having fun so that they can enhance their standard of living.

Culture: It can be defined as the social behaviour and the beliefs that are found in human societies. It is considered as a primal thought in anthropology. In other words, culture can be defined as the characteristics and knowledge of a group of individuals who encompass social habits, languages, religion, cuisines and other factors. Customers of British Airways have different cultures as they belong to different countries. It is very important for the organisation to respect their culture so that the business can be executed successfully (Wong, 2013).

Glocalisation theory: It is a historic process in which localities are motivated to develop direct economics and cultural relations all around the world so that skills and knowledge can be exchanged. For this purpose, information technology and other methods can be used by the government. It is a mixture of two different concepts: globalisation and localisation. This theory is used by British Airways to describe all its services that are offered and developed to customers who are from different locations but is also adjusted to accommodate the user or consumer in the local market. It is very important to apply this theory effectively so that a large number of customers can be attracted to the organisation.

Forces for National Market Responsiveness

From the above chart, it has been analysed that high forces for national market responsiveness and global coordination will help the organisations to be localised. This will help to operate the business worldwide (So and Wang, 2016).

Standardisation: it can be defined as the process of developing and evaluating techniques that are based on the agreement of different parties in which firms, organisations, government and other interested groups are included. It can help to enhance and maximise the compatibility, safety and interoperability of the services. It is very important for British Airways to standardise its services so that customers can choose services that match their standards. Standardisation is very beneficial for British Airways as it can reduce variability and also lead the organisation to continuous improvement (Prebensen, Chen and Uysal, 2018).

Adaption: It can be defined as the process of adapting a particular strategy that can help to operate the business in a more effective manner. According to this concept it is very important for British Airways to respect all the local specifications and expectations so that local authorities can be liberal while analysing the information of the organisation which is provided to them. It will be beneficial for the organisation as it can establish an excellent local image. Sometimes it may also result negatively for the organisation because the cost of adaption is very high and consumes time but if it is handled effectively then it can help to operate the business successfully.

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Ethnocentric staffing: It refers to the hiring of managers from the same nationality as the parent company. As British Airways belongs from Britain and if this staffing technique is chosen by the organization then all the employees for foreign branches will be hired from Britain. It offers an opportunity for companies to transfer their values to other countries and execute business more successfully.

Poly-centric staffing: In this type of staffing the employees are selected from the host country. If this type of staffing is adopted by British Airways then staff members will be selected from those countries where the organization is executing business (Nickson, 2013).

Ethnocentric vs. poly-centric staffing:

Ethnocentric

Poly-centric staffing

It helps to establish better coordination between parent and host country.

It is used for the purpose of reducing cultural and communication challenges.

As employees are hired from the country of the parent company hence there is a high possibility of control over all the subsidiary companies.

Productivity and profitability will be increased as staff have broad knowledge of the local market.

Parent companies can keep an eye on the operations of subsidiaries.

Career options for the host country's individuals will be increased.

Government regulations and restrictions of the host country may affect the business of the parent organization.

Managers of parent companies may have to face difficulties while controlling subsidiaries.

2. Evaluations of the considerations that will be taken into account while designing its marketing mix

Marketing mix: It is the combination of four different P's these are product, price, place and promotion late three more P's were introduced especially for the service sector these are people, process and physical evidence (Marketing mix,2018). For British Airways analysis of the marketing mix is as follows:

Product: It can be defined as the services that are provided by the organization to its customers. British Airways is providing good quality services to its customers that help to retain them and set a positive image in their minds. It also helps to create a good value for the services that are rendered by the organization.

Price: British Airways is offering services at an appropriate price so that all types of customers can be attracted by the organization. There are various types of pricing strategies that can be chosen by British Airways to operate its business. All the strategies are as follows:

  • Premium Pricing: In this pricing strategy high prices for the products or services are set by the organizations and they have a selected area of the market who are targeted by them. The products and services offered by such companies are mainly for the upper class of society.
  • Penetration Pricing: In this strategy price for all the products and services is set low to high so that a large market share can be captured by the organization. It is mainly used by such business entities that are launching a product for the first time in the market. Sometimes it is also used to retain and attract a large number of customers so that market share can be gained.
  • Economy Pricing: In this type of strategy lower prices are set by the organization for their services so that they can attract a large number of customers. The main objective behind the use of this strategy is to capture the large market area.
  • Skimming Pricing: In this strategy high price is set by the organizations on their products until any competitor tries to capture their market share. The main objective of this strategy is to maximize the profits of the organization.

From the above-mentioned pricing strategies, the penetration strategy is used by British Airways. The organization is targeting all types of customers who are from different classes.

Place: It refers to the location of the organization where the customers can reach easily and get the services quickly. British Airways always chose such places for the distribution of the tickets for the flights where the technology is highly supported by the individuals. It prefers such places where the connectivity of the network is very high so that clients can book tickets easily. Chinese people always source information from online media hence it is very important for the organization to consider their choice.

Promotion: It can be defined as the marketing and advertising activities that are conducted by the organizations to aware customers of the brand and the services that are offered by them. British Airways uses effective methods for promotion as it helps to establish a good market image.

People: British Airways always hires skilled and well-educated employees for the organization so that they can contribute to the development of the business. The EPRG model is used by the organization so that all its subsidiaries and employees can be managed appropriate manner.

Process: It can be defined as the way in which services are rendered to the customers of British Airways. The organization use the latest technology to deliver services to the clients so that they can be retained (Mok, Sparks and Kadampully, 2013).

Physical evidence: The services that are delivered by British Airways are of good quality and this helps to establish a good market image of the organization so that large number of customers get attracted.

All the above-discussed marketing mixes are managed by British Airways inappropriate manner so that it can establish a good market image.

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Factors that may limit customer service: 

The following are the factors that can limit customer services:

  • If the organization is not able to render services to the customers at that time when customers want it.
  • When the services are of low quality then it will leave a negative impact on the customers and they will switch to another service provider.
  • If British Airways misuse the technology then it will affect the customer's service because in this situation the organization will not be able to render good services to the clients.
  • When an organization is not considering the needs of customers then it will limit the services as customers will not buy such services that are not able to satisfy their needs.

Benefits and opportunities that derive from exceeding customer expectations:

If an organization is rendering such services to the customer that exceeds their expectations then it will help to gain their trust and provide various benefits to the organization. It will also benefit British Airways all of them are as follows:

  • The trust of customers will be enhanced when an organization exceeds customer expectations (Marković and Raspor Janković, 2013).
  • New opportunities for the business will take place as an organization will have a large number of customers.
  • Help to establish a good market image and brand-loyal customers.

If British airways considers the the needs of customers as the basis for the strategies that are formulated to increase the market share then it will exceed the expectations of the customers and help the organization to attain benefits and grab opportunities.

Good practices:

Various steps are taken by British Airways to acquire a large market share all of them are as follows:

  • British Airways has reduced the prices for all its tickets so that all types of customers may afford the tickets and a large market share can be captured by the organization.
  • Various strategies have been implemented in order to enhance the profits of the organization.
  • Innovative techniques are used in service delivery systems that help to remain competitive in the market (Dhar, 2015).
  • While British Airways has taken the initiative to provide services all around the world managers of the organization conducted market analysis which is done for the purpose of acquiring a higher market share.

From all the above-mentioned points it has been analyzed that British Airways has initiated to implementation of new and innovative techniques which has resulted positively for the organization (Chathoth and et.al., 2016). It has also been analyzed that British Airways is mainly concerned with the implementation of such strategies that are implemented for the betterment of the organization. All the strategies are formulated by considering the point of view of customers and their needs.

Conclusion

From the above project report, it has been concluded that customer relationship management is the process of implementing strategies, methods and techniques so that satisfaction levels can be maintained. All the organisations who are operating businesses in the hospitality and tourism sector have information about the tastes and preferences of consumers for the purpose of retaining them. If the companies are not able to gather information about consumer behaviour then it is not possible to supply them with such services that they are willing to acquire. Well-structured market research is a tool that can help to get exact information about the behaviour of customers. For all the organisations it is also very important to analyse all the elements of the marketing mix so that all the opportunities that are related to growth can be identified and grabbed.

References

Books and Journals:

  • Ariffin, A. A. M. and Maghzi, A., 2012. A preliminary study on customer expectations of hotel hospitality: Influences of personal and hotel factors. International Journal of Hospitality Management. 31(1). pp.191-198.
  • Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry: A guide to best practice. Routledge.
  • Chathoth, P. K. and et.al., 2014. Barriers affecting organisational adoption of higher order customer engagement in tourism service interactions. Tourism Management. 42. pp.181-193.
  • Chathoth, P. K. And et.al., 2016. Co-creation and higher order customer engagement in hospitality and tourism services: A critical review.International Journal of Contemporary Hospitality Management. 28(2). pp.222-245.
  • Dhar, R. L., 2015. Service quality and the training of employees: The mediating role of organizational commitment.Tourism Management. 46. pp.419-430.
  • Marković, S. and Raspor Janković, S., 2013. Exploring the relationship between service quality and customer satisfaction in Croatian hotel industry.Tourism and Hospitality Management. 19(2). pp.149-164.
  • Mok, C., Sparks, B. and Kadampully, J., 2013.Service quality management in hospitality, tourism, and leisure. Routledge.
  • Nickson, D., 2013. Human resource management for hospitality, tourism and events. Routledge.
  • Prebensen, N. K., Chen, J. S. and Uysal, M. eds., 2018.Creating experience value in tourism. Cabi.
  • So, K. K. F. and et.al., 2016. The role of customer engagement in building consumer loyalty to tourism brands. Journal of Travel Research. 55(1). pp.64-78.
  • Testa, M. R. and Sipe, L., 2012. Service-leadership competencies for hospitality and tourism management. International journal of hospitality management. 31(3). pp.648-658.
  • Wong, I. A., 2013. Exploring customer equity and the role of service experience in the casino service encounter.International Journal of Hospitality Management. 32. pp.91-101.
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