Service Marketing - Research Paper Example

? Service Marketing Contents Introduction 3 Concept Experience 3 Experience in Service Organizations 5 Components of Service Marketing Mix 7 Product 7 Price 7 Place 8 Promotion 8 People 9 Process 9 Physical Evidence 10 Service Marketing Mix and Effective Customer Experience 10 Conclusions 12 References 12 Introduction The success of every organization depends on the satisfaction of the customers. Customer satisfaction and delight are the two main components that drive all businesses. However many organizations fail in understanding this aspect. Every other of aspect of business is given detailed attention but the main aspect of Customer experience is often lost. In service industry Customer experience in service industry on the other hand is a very important factor. Service industry directly deals with the customers. Unlike other industries service industry has more exposure towards the customers. The start to end process of the service industry deals with the customers and is dependent on their experience. Service industries mainly position themselves as alternatives to make the life of the customers easier and happy. Their advertisements and promotions are all centered around the customer’s convenience on availing the services. Most services availed by customers are for luxury or leisure purpose and the performance of such services are completely dependent on the experience the customer has throughout the process. Being aware of the customer’s need and providing them with it is a key factor in service industry. Established players like the Hilton group of hotels, The Marriott group and all the privately run hospitals are aware of the direct impact of customer experience on their business. A single customer having a bad experience with their service can cause them lose many potential customers (Goodman, 2009, p.16). Concept of Customer Experience The level of interaction which an organization develops with its customer profile helps in the development of the concept of customer experience. An enhanced understanding of the concept includes the involvement of several parameters. Parameters studied involve the operational aspects of the companies, the different senses which the company’s operation evokes and the emotional aspect adhered to the products and services produced by the company. Further analysis shows that the level of customer experience developed in an organization depends on the level of interaction of consumers with the elements like people, different processes, cultural parameters, technological and other resources, and other strategies devised by the company in gaining more revenues and market share. The same can be diagrammatically represented as follows. The study of the concept of customer interaction in regards to companies gains importance owing tom certain reasons. Firstly the enhancement of customer interaction helps in the development of a long standing relationship between the people and the organization. Secondly the customers through such enhanced interaction tend to develop a strong liking for the products and services of the company and thereby enhance the parameter of loyalty. Thirdly this process helps the organization in augmenting the value of the offerings rendered in regards to the customers (Shaw, 2005, p.51, 56). Figure 1 (Source: Shaw, 2005, p.51) Customer Experience in Service Organizations The level of customer experience in regards to service organizations can be studied along the following parameters. Customers experience in regards to service organizations involves the direct interaction of the consumers with the pattern of service offerings rendered by the service industries. From the viewpoint of the service industries it also aims to study the aspect which the service organizations generally take in dealing with its effective customers. The experiences which the customer gains of the organizational service are thereby studied mainly along two sets. Firstly the experience which the customer gains while interacting with the organizational staff is closely dealt with to understand the consumer psychology. Secondly the consumer psychology is also studied based on the level of preferences developed in regards to the existing organizational processes and systems. Experiences which the customer gains in regards to the level of service offerings can be further analyzed based on the following aspects. Firstly the service organizations in order to gain better consumer insights must effectively endeavor to enhance the personalization aspect of the service offerings. Secondly the service organizations need to be highly responsive to external changes in order to meet the growing demands and expectations of the consumers. Thirdly the level of customer experience in regards to the service organizations can be further enhanced through the process of flexibility enabled in the human resources aspect of the organization. The staffs in direct interaction with the customers must be effectively trained to meet the growing consumer expectations. Fourthly the level of service experience can be enhanced by helping the customers gain easy access to organizational resources for gaining better information about the concern. The above aspect being closely dealt signifies that then service organization works to augment the values of the customer. Fifthly the human resources of the service industries must be focused in helping to maintain better relationship with the existing and new consumers to the service processes (Johnston, 2007, p.28). Moreover the service organizations need to work on innovation of the service parameters to render more effective consumer experience. Services are rendered by the different organizations depending on both tangible and intangible aspects. However for service organizations the parameter of intangibility gains further importance than the tangible aspects through which the service is rendered. Taking the example of banking system it is found that customers generally hop from one bank to another to avail better service facilities pertaining to the speed at which their queries are effectively addressed. The emergence of internet has helped in rendering sophistication to the business environment of the organizations. Rendering innovation in such areas like installation of web interface in case of banks and thereby modifying the level of service offerings enhances the value of the services offered (Terrill & Middlebrooks, 2000, p.42). Components of Service Marketing Mix Product Product is referred as the goods and services which is being offered to the customer. Apart from the utility of the products there are several other factors that influence the customers. Elements like the packaging, the features of the product, warranty and extra service provided and the brand name of the product are also integral to the product. Appearance along with the functioning of the product plays an important role in positioning the product. The entire product bundle should meet the demands and needs of a specific target market. Thus the core product, the utility of the product, the design and the packaging of the product all together define the product (Ehmke, Fulton and Lusk, 2007, p.1). Price The price is referred as the money that the customer must pay to obtain the good or the services. Setting the price of the product requires a lot of strategizing. The pricing strategy decides the future of the product. The pricing strategy can be broadly divided into five categories. Going rate is when the product is priced at the same rate which is applicable in the current market. Skimming, in this case the product is introduced at a high price in the market. The product is launched for the affluent customers. Discount, in discounted rate the product is given in a rate lesser than the listed rate. Loss-Leader, in this case the product is launched at a price rate lesser than the actual price to attract customer. Psychological, in psychological pricing the product are priced at a rate which are a little less than the round off number. For example products are priced at $3.99 instead of $4.00 (Ehmke, Fulton and Lusk, 2007, p.2). Place Place signifies the distribution channel used to get the product to the customers. The nature of the product directly influences the kind of distribution required. Perishable products require efficient and fast distribution in comparison to durable products. The main focus while deciding the place for the product is making it easily available to the customers. The decision regarding the distribution channel which need to be applied are based on two factors, the nature of the product and the target customers (Ehmke, Fulton and Lusk, 2007, p.3). Promotion Promotion describes the advertisement and marketing aspect of the product. The purpose of promotion is to attract customers towards the product. Creating awareness regarding the product amongst the customers is the main aim behind the promotion of the product. To be effective in promotion the message displayed in the promotions and the advertisements should be clear. The message should also be aimed at the target segment. An effective advertisement and promotion campaign can generate increase in sales. The media that should be used to advertise the product should also been chosen according to the target customers. The various media that can be used for promotion aspect are Radio, Television, Print and Electronic. Radio advertisements are generally less cost incurring and have a wide local reach. Television on the other hand has much wider reach depending on the network chosen. However Television is a very costly media for advertisement purpose. Direct post mail and printed resources also have a wider reach. Print media is less costly than the television. Trade magazines and flyers are also used for advertisements. Electronic media includes e-mails, company website and also the newest trend viral marketing (Ehmke, Fulton and Lusk, 2007, p.4). People This vector involves all the people who play a role in the professional delivery of the service provided. The way these key people conduct those in front of the customers influence the sales directly. The personnel carrying out the service delivery is also perceived by customer as part of the service. Any mistake on the part of these personnel will be taken as a drawback in the service. On the other hand any extra service given by these personnel will add on to the value of the core service. Thus, these personnel act as a medium of service delivery and marketing (Crane, 1993, p.16). Process This part of service deals with the actual procedure carried out in order to provide a particular service. In service industry the delivery point is not the only point of interaction with the customers. Customers availing a certain service are also interested in knowing the steps followed by the service provider in the process of providing the service. In few of the service industry like the IT consultancy, regular feedback from the customer is required to understand the requirement of the customer and curtailing the service accordingly. The customers in most service industry prefer knowing the entire process before committing to avail the service. In certain service industry especially in the hospitality industry the customers want to know about the functioning of the service provider. Knowing the process followed by the service provider helps the customer to understand the service better (Crane, 1993, p. 17) Physical Evidence Physical evidences are the tangibles that the customer can see and assess the quality of the service. Pamphlets, promotional videos and other means of exhibiting the customer the infrastructure and the operations of the service provider are considered as Physical evidence. Customers are in better position to understand the service nature on being shown a visual presentation of the service. A pamphlet showing the machineries or the various aspects of the service process helps the customer in comprehending the level of service that is being provides. Visual presentation always gives the customer the clarity regarding the service provided (Crane, 1993, p. 17). Service Marketing Mix and Effective Customer Experience The experiences of the consumers in regards to the service organizations can be effectively enhanced through the effective incorporation of the elements of the different marketing mixes of service marketing. The marketing mix elements in regards to service marketing are constituted of nine parameters like product, price, place, promotion, people, process and physical evidence. Each of the different elements must be so designed as to render effective consumer service to the people and thereby enhance the level of consumer satisfaction. In terms of service product then service organizations must strongly focus on generating quality products through the existing service delivery processes to the final consumers. Say for example the cleanliness of the cloth materials rendered by the dry cleaner service companies turns out to be an effective product in satisfying consumer needs. In regards to setting the right price on the products rendered the service organizations must focus on augmenting the quality of the service offerings. Focusing on enhancement of service quality also helps the service organizations to carve niche market bases upon which the prices of the offerings could be determined. Thus the pricing parameters of the services rendered are also closely attached to the quality of services rendered and the enhanced level of consumer expectations from the service companies. As regards to the place factor the consumer experiences of the service delivery processes and systems can be further enhanced by working to help the consumers get enhanced access to the services and products offered. Food pavilions by helping in reaching the products to the consumers by paying visits to their doors helps in the enhancement of the level of consumer experiences. Again working on the promotional parameter the service organizations are required to gain further consumer focus through the enhancement of the intangibility aspect. The process through which enhanced customization is enabled by the service industries needs to be properly reflected in the promotional campaigns to help in the augmentation of consumer loyalty. In extension to the above aspects the people factor in services marketing stands out to an important element which must be properly streamed to help the firm gain huge productivity. In that the people must be effectively trained to in accordance to the changes in the external business environment to meet enhanced customer expectations. Further these people must be directly involved while taking key organizational decisions which helps in the growth of employee motivation to perform more effectively. As regards to the service delivery processes the service organizations need to continually enhance the process through which services is rendered by working on an innovative framework. Rendering innovation and sophistication to the service delivery processes helps in gaining consumer appreciation and in building consumer loyalty. Finally in regards to physical evidence the service organizations need to work on effectively designing the atmospherics to enhance the psychological aspect of the consumers. Effective designing rendered in a shopping mall or restaurant through colors and music and also through putting staff uniforms attracts the mindset of the consumers in a profound manner (Beamish & Ashford, 2006,p.243-245). Conclusions The consumers are one of the important stakeholders of any business organization. These customers reflect different set of ideologies in regards to the level of product or services offered. The business organizations need to adequately fulfill the increasing needs and desires of the consumers in order to gain a better position amongst the large number of global competitors. However if the business organization in focus is a service industry it requires to fulfill the customer expectations based on the level of seven P’s which are counted as product, price, place, promotion, people, process and physical evidence. These marketing mix elements must be effectively managed and innovatively designed to help the consumers gain enhanced satisfaction in regards to the service offerings. Services organization through the effective mix of the above elements can proceed to gain further space in the marketing sphere. References Beamish, K. & R. Ashford. (2006). CIM Coursebook 06/07 Marketing Planning. Butterworth-Heinemann. Crane, F.G. (1993). Professional services marketing: strategy and tactics. Routledge. Donnelly, R. Harrison, G. & P. Megicks. (2009). CIM Coursebook: The Marketing Planning Process. Butterworth-Heinemann. Ehmke, C, Fulton`. J & Lusk, J. (2007). Marketing’s four P’s: First steps four new entrepreneurs. [Pdf]. Available at: http://www.extension.purdue.edu/extmedia/EC/EC-730. (Accessed on May 19, 2011). Goodman, J.A. (2009). Strategic customer service: managing the customer experience to increase positive word of mouth, build loyalty, and maximize profits. AMACOM Div American Mgmt Assn. Johnston. (2007). Service Operations Management: Improving Service Delivery, 2/E. Pearson Education India. Shaw, C. (2005). Revolutionize your customer experience: Colin Shaw. Palgrave Macmillan. Terrill, C. & A. Middlebrooks. (2000). Market leadership strategies for service companies: creating growth, profits, and customer loyalty. McGraw-Hill Professional. Read More