Product service
Food and Beverage

Hospitality industry and its product services

Industries are defined by its outputs; in the case of hospitality split into foodservices and accommodation industries.

Over the years academics have argued over the distinction between goods and services. When you think about it there is no such thing as a ‘pure product’.

All products are produced then sold. Break this down further they is production and delivery elements generally separated by distance or time or both.

Reframe all products have some form of tangible (or physical) element and all products have some intangible (or non-physical) element. In the case of the hospitality industry, the tangible and intangible elements combine.

Generally defining marketing elements of product, price, promotion and place is sufficient for many industries. However the hospitality industry can and should be broken down to seven elements.

  • Intangibility – refers to the nature of the service element of the product. The accommodation and food and beverages can be described and defined but the service element is intangible potentially variable both in the process and in the way it is carried out.
  • Perishability
    you cannot sell yesterday’s accommodation, conference facilities, restaurant covers
    today or tomorrow. The opportunity has passed.
  • Simultaneous production and consumption – the product (viewed from the customers prospective) is generated when ordered.
  • Ease of duplication. Food, drink component is tangible therefore easily duplicated. The intangible is the delivery of product the procedural aspects, the cordial interaction between customer and staff.
  • Heterogeneity – The procedural execution and conviviality of the product service delivery elements applied to the hospitality sector are difficult to consistently replicate.
  • Variability of output – Cyclic demand the season, month, week, day for product service will vary demand other factors such as the state of the national, global economy have even greater influences upon the market.
  • Difficulty of comparison – the implicit, tacit elements of the product service makes direct comparison virtually impossible. Other factors customers tend to consider when making a purchasing decision include the following:
    • Search qualities – attributes that differentiate you from your competitors.
      How easy is it for customers to compare offerings?
    • Experienced qualities – tangible attributes that can be identified before purchase.
    • Credence qualities – elements of product service that customer cannot evaluate because of a lack of experience, knowledge or the skills to assess.

More often than not if you ask a customer why they made a purchasing decision they cannot completely articulate their thinking. The reason their decision has intangible factor an emotional reaction. Tangible reasons might be personal experience or recommendation or reviews or guidebooks.

That cliché applies again ‘customer experience’ determines demand.

Success REQUIRES strategy

Christopher Bird Author

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