Understanding Customer Choices: A Key to Successful Management of Hospitality Services

Excerpt] We know that hospitality customers usually make purchases by simultaneously evaluating several criteria. A typical buying decision might take into account service quality, delivery speed, price, and any special buying incentives, for instance. It is imperative that businesses take into account customer preferences and choices when making decisions regarding product and service attributes. Managers need to understand how customers integrate, value, and trade off different product and service attributes. By the same token, information about customer demands and preferences must be incorporated into the design and day-to-day management of service-delivery processes. In this paper we describe a particularly effective way to determine those customer preferences and to assess the tradeoffs that customers make in considering various product and service bundles. The methodology we describe is discrete-choice analysis (DCA). After explaining DCA, we provide guidelines for incorporating customer-preference information into the design and management of business processes. The DCA approach provides a robust and systematic way to identify the implied relative weights and attribute trade-offs revealed by decision makers' choices (whether customers or managers).