Customer Expectations in the Hospitality Thesis

Excerpt from Thesis :

For any hospitality services business to attain the role of trusted advisor they must consistently keep these elements of the proposed Services Expectation Model synchronized with each other.

The approaches companies take to create Cooperative Advantage of accomplishing improved organizational performance on the one hand and superior customer value on the other require the prerequisite of their being a tightly coupled integration between Validation and Reinforcement of Trust and Social Exchange Behaviors and Voluntary Performance Behaviors. Where previous maturity models that have been defined (Hatch, Schultz, 2002) contribute to this dynamic including the work done is in continually looking at an organization for the potential of creating trustworthy experiences for customers. Every customer, at any specific point in time, is at a specific level of trust or mistrust with an organization. To the extent that an organization can earn the trust of its customers is the extent to which the velocity and flow of information through proposed Services Expectation Model is achieved. More critical than that, yet more long-term, is the ability to re-define organizational values based on what customers require an organization to be, and vice versa. In this sense the proposed Services Expectation Model needs to be reciprocal in fostering and nurturing trust within the organization of customers' expectations being accurate and attainable.

Also inherent in the nature and character of expectations in the ability of company cultures to consistently create and sustain intense brand loyalties. Apple has been very successful at tightly coupling their values with their customers, and creating in effect an ecosystem where values where one reinforces the other. Another example is Toyota and the trusted advisor status they have achieved in the auto industry. There are many more examples of this dynamic, where the proposed Services Expectation Model is illustrated in the relative distance or proximity and intimacy an organization is capable of achieving with its customers.

Validation and Reinforcement of Trust must be tightly coupled with Social Exchange and Voluntary Performance Behaviors to create equilibrium and balance throughout an organization. The ability to earn and keep trust defines the extent of a Cooperative Advantage overall that leads to the development of consistent organizational performance and the development of exceptional customer value over time. Trust becomes the catalyst of continual financial performance and growth, not price or the short-term focus on competitive tactics. From this perspective, customer loyalty earned though consistently exceeding expectations becomes the unique competitive advantage of any firm. This becomes particularly relevant in the area of hospitality firms where the development of a unique competitive advantage must emanate from the staff's ability to sense and respond to the unique requirements of customers and tailor their response to their specific needs. The agility and responsiveness of hospitality firms to sense and accurately respond to these unique requirements of customers in a service setting, once defined first as a process and then engrained into its culture, is critical for long-term competitive advantage.

Like Porter's Determinants of Competitive Advantage, the proposed analytical construct of the Services Expectation Model also illustrates the need to create localized competitive competence and strength first, and then scale globally specifically focusing on how to transform the ability to regularly exceed expectations as a competitive advantage.

This point is made apparent in the need for equilibrium in the model first, and the ever-growing requirement of transforming an organization from being trusted only a regional basis to deliver value into a global one. The proposed Services Expectation Model also shows how organizations need to create shared visions, make shared commitments and promises, and work with intensity to fulfill, in fact, exceed the many expectations they create. Only by making this dynamic a core strength, the ability to set and keep a series of visions, commitments, and promises, can an organization hope to remain viable and competitive in the years to come.

One of the more valuable aspects of expectations being continually met over time is the creation of a high perceived value of the product or service being delivered. When a given product or service attains this level of value, the credibility and integrity of the brand becomes part of the nature and characteristics of expectations consumers have. Specifically in the hospitality industry this is apparent in the expectations customers have when checking into a Four Seasons vs. A mid-tier hotel from Accor or Marriott for example. The ability of any services firm or organization to consistently meet expectations, leading to high levels of customer loyalty leads to value creation for the company's brand over time. Value creation is the accumulation of customer loyalty over time; it is in fact being increasingly quantified in the context of the hospitality industry today (Bowen, Sparks, 1998). The creation of customer value has increasingly been seen as the next source of competitive advantage (Woodruff, 1997). Yet, despite the attention focused on this concept, there is still remarkably little in the way of agreement in the literature on what constitutes "value" and "customer value" or how it is related to expectations and the creation of customer loyalty.

Both value and customer value now need to be seen in the context of customer and organizational values alignment, which may be referred to as "relational value congruence."

The notion of value creation through continual reinforcement of and exceeding of expectations has been implicit in marketing science since the beginnings of study of how loyalty affects perception of service quality as well. Gronroos (1996), for example, referred to an ancient Chinese merchant who progressively built stronger and deeper relationships with the customers in his village by changing his role from that of "transaction-oriented channel member to a value-enhancing relationship manager." In this way the merchant continually sought to exceed the expectations of his clients by continually reinforcing their trust. Sheth and Parvatijar (1995) pointed out that relational bonding between traders in preindustrial society was prevalent and that the development of markets in this period was concerned with the continuity of a repeat purchaser which also served to quantify trust as a differentiator in service relationships. Such continuity was achieved because those who participated in the market knew and trusted each other (MacKenney, 1987). These early examples illustrate buyer-seller relationships in which both parties received some form of value and had common preferences that led to an ongoing relationship. The foundation of these findings is in the fact that expectations met or exceeded over time led to higher levels of trust being attained.

Value is also implied in theoretical work on exchange theory. For example, the pioneering work of Kotler and Levy (1969) and Kotler (1972) on broadening the concept of the marketing mix regarded the process of exchange as an essential part of marketing activity: "The core concept of marketing is transaction. A transaction is the exchange of values between two parties. The things-of-value need not be limited to goods, services, and money; they include other resources such as time, energy, and feelings" (Kotler, 1972). A little later, Bagozzi (1975) focused on the importance of the exchange process in greater detail, noting that there are three broad determinants of exchange relationships: (a) social actor variables (attraction, similarity, prestige, and expertise), (b) social influence variables (specific actions, communications, and information transmitted between parties), and - situational variables (alternative sources of value, the physical and psychological setting, and the legal and normative setting or organizational norms and values). However, while the exchange theory of marketing provides good normative rules for exchange relationships, it does not yet explain why and how values and, arguably, value is directly created from expectations (Sheth, Gardner, & Garrett, 1988).

Consumer values and consumer value were researched extensively in the 1970s and 1980s to specifically understand how expectations influence them over time from a marketing standpoint. Much of this research was based on the seminal work of Kotler (1972). The specific use of the term "value" (and values) as applied to marketing has emerged in the literature over the past 25 years. However, the term "value" as suggestive of values derived from work outside marketing, such as that undertaken by (Altinay, 2007). Much of this early work focused on value as preference. More recently, researchers have explored value as a way of explaining economic behavior based on expectations fueling trust over time. Other work focused on developing a priori lists of values such as that developed by Rokeach (1973), who created a classification scheme based on 36 personal values, further attempting to quantify the effects of expectations on long-term perception of value on the part of services purchasers.

Work on consumer values has its origins in work on human values. However, it is important not to confuse the terms consumer "values" and consumer "value," and a distinction needs to be made between value (singular) and values (plural). According to Holbrook (1994), the term value refers to a preferential judgment, while values are used to refer to the criteria by which such judgments are made. Rokeach (1973) described values…

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