Unit 5

Ritz-Carlton Case Study

Ritz-Carlton has become a brand which had obtained a very high standard in customer service

as a luxury hotel. The Ritz-Carlton dates back to the early 20th Century, where it originated in

Boston. The Luxury hotel and resort currently operates on 70 properties that are located in major

cities of 23 countries worldwide. The luxury hotel is managed by the Ritz-Carlton Hotel

Company, which is a subsidiary of Marriott International. The five star hotels provide top notch

facilities but also take customer service extremely seriously. (Kotler & Keller, 2011, p.379) This

case study will explore how the Ritz-Carlton match up to competitive hotels while noting the key

differences, and discussing the importance of the "wow stories" in customer service at the luxury

hotel.

When it comes to luxury hotels, there is no shortage of them to choose from. From the Four

Seasons Hotels and the Mandarin Oriental, they too provide excellent service, but according to

analysts, there are very few hotels that could meet the level of service which customers have

become accustomed to at the Ritz-Carlton. (Kotler & Keller, 2011, p.379) As of 2007, the Ritz-

Carlton was the only luxury hotel who has won the prestigious Malcolm Baldrige Quality award,

and the only company to have won it twice. (D'Antonio, 2007) According to the Ritz-Carlton

website, they vow to provide the best personal service and facilities for their guests. Ritz-

Carlton fulfills this promise by providing training for its employees and following through on its

three steps of service and 12 service values. (Kotler & Keller, 2011, p.379) The three steps of

service may sound pretty obvious to most of us, but apparently it is something that very easily

gets overlooked. The first step is to deliver a warm and sincere greeting, and they must use the

guest's name; the second step is to anticipate and fulfill the needs of each guest; and the third step

is to use the guest's name, when providing a warm good-bye. (D'Antonio, 2007) When it comes

to the 12 service values, each employee carries these values on a plastic laminated card, outlining

these values in bullet form. An example of one of the values is; value number 3: which states

that the employee is empowered to create a unique, memorable and personal experience for their

guests. (Kotler & Keller, 2011, p.379)

According to a Ritz-Carlton HR representative Hargett, he stated that sixty-seven percent of

customer leaves an establishment because of indifference as to how they were treated.

Therefore, the customers judge the overall quality of the institution by how the employees handle

their issues. This is a major concern which has been recognized by the Ritz-Carlton executives,

so they have empowered the front line service employees to spend up to $2000 per guest, per

day, to resolve any potential conflicts. (D'Antonio, 2007)

Every morning managers gather their employees for a 15 minute line up meeting, at this time,

the managers touch base with their employees in order to resolve any outstanding issues, and the

remainder of the time is spent discussing what the Ritz-Carlton calls wow stories. (D'Antonio,

2007) The wow story of the day is read to every employee, at every Ritz-Carlton in the world.

This is very significant to the employees, they offer two things; the stories provide their

employees a form of local fame, this in turn becomes a very powerful motivator tool. Secondly,

the stories reinforce the values which each employee is expected display.

Upon each quarter, there are five employees that are chosen, whom have gone beyond their

customers expectations. Those employees each receive a sum of $500 each and they will also

compete for the Ritz-Carlton annual award; an opportunity to fly roundtrip to any Ritz Carlton

establishment located anywhere in the world, they are also rewarded with $8500 cash for

spending money. (Gallo, 2011)

The Ritz-Carlton has managed to stay ahead of their competitors by focusing on customer

satisfaction. With the recent decline in the economy, many establishments have been forced to

do more with less. While some sacrifices are absolutely necessary in order for an organization

to survive, the Ritz-Carlton recognized the importance of customer satisfaction by focusing on

educating their staff and keeping them motivated. The motivation is accomplished by the wow

stories which are told in their daily morning meeting, encouraging their employees to go over

and beyond for their customer in every possible way. The Ritz-Carlton accomplishes this by

empowering their employees with a set budget to resolve any concerns which their customer may

be experiencing. There is no wonder that the Ritz-Carlton has retained the reputation of being a

truly luxurious hotel.

References

Kotler, P., & Keller, K. L. (2011). Marketing management. (14 ed., p. 379). New Jersey: Prentice Hall.

Kotler, P., & Keller, K. L. (2011). Marketing management. (14 ed., p. 379). New Jersey: Prentice Hall.

D'Antonio, M. (2007, february 27). Inside the ritz-carlton. Retrieved from http://www.1to1media.com/view.aspx?DocID=30068&m=n

Kotler, P., & Keller, K. L. (2011). Marketing management. (14 ed., p. 379). New Jersey: Prentice Hall.

D'Antonio, M. (2007, february 27). Inside the ritz-carlton. Retrieved from http://www.1to1media.com/view.aspx?DocID=30068&m=n

Kotler, P., & Keller, K. L. (2011). Marketing management. (14 ed., p. 379). New Jersey: Prentice Hall.

Gallo, C. (2011, Feb. 23). Wow your customers the ritz-carlton way. Retrieved from http://www.forbes.com/sites/carminegallo/2011/02/23/wow-your-customers-the-ritz-carlton-way/