Service and relationship marketing - Essay Example

?Service Marketing and Relationship Marketing Contents Introduction 4 Service Blueprint of Subway 4 Front Stage and Back Stage Functions 7 Moments ofTruth 8 Determinants of Satisfaction and Dissatisfaction- GAP Model 9 Service-Recovery Strategy Plan 12 Conclusion 13 Reference List 14 Introduction Designing a delivery system for service organisation is a creative process. Service organisations are those having higher customer interactions and customer touch points than FMCG or Product related firms. Thus, creating a strategy which will provide superior service to its customers compared to competitors is one of the most important objectives of service organisations (Cronin, Brady and Hult, 2000). In the present report, a service blueprint of Subway has been formulated and evaluated. Different components of service delivery process are described in service blueprint of Subway. Theories and practical applications of service blueprint have been discussed with respect to the organisation. Moments of truth or customer touch points with respect to Subway has been discussed. The report has also evaluated strategic plans for service recovery process. Service Blueprint of Subway As a blueprint, Subway will have five components all together performing front stage and back stage operations. The elements of Subway’s physical evidence include exterior facilities, interior facilities and signage. The exterior facilities include waiting areas consist of benches, sofas and chairs and external sitting areas for customers who wants to enjoy their meal outside the restaurant. Subway has a typical green colour dominating its physical landscape which implies nature and warmth. Also, the fast food joint have established signboards for travellers and onlookers. The subway store signage is uniform as established by uniform standards. Glass branding such as on windows and door panels is not usual in Subway as the store size is generally small. The interior facilities can be described as cosy and comfortable. Internally the store is not very brightened but has sufficient lighting and consists of minimalist sitting areas. The company is also engaged in home delivery services. Customer experiences and points of customer contact occur in several places. First is when a customer enters the restaurant and is greeted by the staff members. In the seating area, customers are served with water, if requested. Since subway is a self service restaurant, most of the customer-employee interactions occur in the area where food is prepared. Helping the customer to decide on the food product, recommending choice of ingredients in cases of confused products billing and payment are other customer contact points. Line of interaction divides customer experiences and employee actions. Onstage employee actions and backstage employee actions are divided by line of visibility. The backstage employee actions in subway include housekeeping services and employees involved in keeping stocks and supply, maintenance department coordinating various operations and department for cash management. Finally the support processes include back system operating all the daily activities of the restaurant, technical department involving in market research, customer research and feedback and customer data collection, POS system involved in cashing and inflow of liquid cash etc. Figure 1 Service Blueprint of Subway (Source: Author’s Creation) Front Stage and Back Stage Functions Blueprinting is a tool for service planning. It can be used either for the development of new services or improvement of existing services. Service blueprint is also helpful in ensuring the quality of services offered by a company. The output of a service blueprint is a graphical representation of the overview of service and its related activities. It helps to visualize the development process. During each process, visible contacts are established between the firm and client. It is also possible to discover various areas of innovation and identification of failure points (Hauser, Tellis and Griffin, 2006). A Service blueprint consists of five components; 1. Customer Actions 2. Visible/ Employee Action 3. Invisible/ Backstage Employee Action 4. Support Processes 5. Physical Evidence Basically these are front stage and back stage functions of an organization. Customer actions include all those steps taken by a customer in the process of service delivery. They are generally represented across the top of a blueprint program. It is an important component as customers are the focus point in a service organization. Another critical component is the front stage or visible employee contact options. This is separated from the customer action by the line of interaction. These are all those actions of frontline employees and managers which occur during face-to face encounter of customers and the company (Asubonteng, McCleary and Swan, 1996). Moment of truth occurs every time a line of interaction is crossed via customer to employee. The moment of truth can also occur between customer and technology developed by the service organization. Next critical component of a service blueprint is the backstage operations also known as invisible employee - customer contact. These are the indirect services provided by the organization to the customer. They are separated from the visible or onstage actions through a line of visibility. Everything below the line of visibility is invisible. Even though this stage is not in direct touch with the customer, they have a significant influence on the overall service progress. These may include from a simple telephone call to technical staffs that are responsible for billing and logistics operations (Koljonen and Reid, 2000). The fourth component of a service blueprint is support services. A line of internal interaction separates the services processes from contact employees. These are described as all those activities carried out by units and individuals within an organisation who are not contact company employees. These processes are inter-functionally connected and are essential for smooth completion of the service cycle. Physical evidence is the fifth component of a service blueprint and it is present at the top of a service blueprint of any organisation. These are the tangibles directly exposed to the customers and influence their overall quality perceptions. Moments of Truth Moments of truth is a term used in service marketing. It is the instance of interaction or contact between a firm and its customers. It can be through a sales force, product or simply a visit to the store. It is an opportunity for both customers and firm to change their impression towards each other. As a result of the dramatic increase of service driven markets and multiple provider proliferation, it has become essential for organisations to interact with customers as much as possible. Management of these expectations is crucial and thus moments of truth have gained an important position in the strategy of service organisations. Moments of truth can be good or bad. For example if a customer get a free burger or a free toast as he/she is the 100th or 1000th customer of the restaurant, it becomes a moment of magic for that customer as he/she is getting more than what was expected from the visit. Every now and then Subway offers various discounts and freebies in order to create positive moments of truth between customers and firm. Moments of magic or positive customers interaction are highly influential in spreading positive word of mouth which in turn increases the overall footfalls and eventually sales (Brown and Bond, 1995). Bad moments of truth occur when interactions with customers yield negative outcomes. These can be described as moments of misery as they can be real bad for the overall image of the organisation. A delay if providing food, inattentive and rude behaviour by staffs, poor quality of food, poor maintenance of the restaurant are all examples of situations which will lead to moments of misery. Though, it is known that avoiding all kinds of lapses unachievable organisations can take certain steps in order to ensure that these lapses are minimised. Proper and quick actions can be taken in situations of urgency. Determinants of Satisfaction and Dissatisfaction- GAP Model Gap Model, also known as service quality gap model is an effective tool to identify various service gaps in an organisation’s service blueprint. It is used to identify gaps between actual services offered and customer expectations at different service delivery stages (Edvardsen, Tomasson and Ovretveit, 1994). Analysis of service gap helps in improving overall service and closing gaps between actual and expected services. Because of its unique characteristics, gap model is known as a measure of satisfaction and dissatisfaction among consumers and management. Figure 2 GAP Model (Source: The Marketing Association of Australia and New Zealand, 2005) Five different gaps have been identified in the gap model. 1. Knowledge Gap Knowledge gap arises when an organisation fails to recognise customer expectations. This is the gap between management perception and customer expectations. For example, restaurant managers might think that customers expect good quality food and more variety. But customers might be concerned about responsiveness of the staffs and cleanliness of the restaurant. The two most important factors resulting in increased knowledge gap are lack of proper market research and level of management and upward communication. Many times companies design their services and products without doing proper market research. This results in an increased knowledge gap. There should be a direct interaction between customers and managers. Too many management layers between front line executives and top management will increase barrier and consume more time while taking any crucial decision. 2. Design gap or standard gap Design gap or standard gap occurs when there is a difference between perception of managers towards expectations of customers and actual design of service specifications by the management. This gap generally occurs as a result of complexity faced by higher management in integrating expectations of customers into an actual service process. Factors which influence the standard gap are goal settings and design specifications. Rather focussing on making profits or cost reduction, goals of a company should emphasize on high delivery of performance and providing high quality services and products. By setting a quality goal the overall performance of the organisation will definitely increase. Subway’s delivery process is one of the examples of high quality goal setting. Standardization of the specific tasks and rules is very important for quality maintained. It not only helps in making the entire operations streamlined, but also helps in clearly defining the job specifications and requirements. In Subway every employee is assigned a specific job description and is expected to excel in his/her own area of expertise. 3. Delivery Gap The gap between standard specification of service and actual service delivered to the consumers in known as delivery gap. Also known as service performance gap, its extent depends on service providers. When these service providers fail to deliver the level of service expected by top management, a delivery gap occurs. Since delivery gap can be individualistic, quality can be influenced by team work, employee skills, conflicts, experience and training (Mudie and Pirrie, 2006). Factors influencing the service quality and delivery gap are team work, role conflict and employee job fit and training. Personal commitment and work involvement increases in teamwork and standard specifications of the service delivery can be achieved. Clear and distinct roles for every employee will help in decreasing employee conflicts and increase employee skills in their precise area of expertise. Employee training is very essential for increasing the overall productivity of the organization. 4. Communication Gap Communication means having regular interaction with customers, informing them about latest developments in the organization and using a language which is easy and understandable. Communication also means creating awareness among customers about services and products through various channels and mediums such as sales promotion, advertising, word of mouth and personal selling (Chaston, 1994). Listening to consumers is also a medium of communication. Communication gap can occur in various ways. Overpromising customers but not delivering according to expectations, failing to stay in touch or interact with consumers and using messages which are not clearly understood by are few of the common strategic errors which increases the communication gap. Listening to feedbacks and complaints but not replying is another error which increases the communication gap. In order to reduce communication gap, the restaurant chain can use horizontal communication. Horizontal communication occurs when the operations department and the sales department are continuously communication with each other. It helps in awareness about new market trends, expectations and need of the customers. Direct customer interaction is very essential in order to update consumers about latest trends and availability. 5. Customer service gap Service gap comprises of all gaps from knowledge to communication. This gap arises from the consumer side. It is a gap which is consumer oriented as it occurs from the customer side. It can be described as the difference between perception of customers and expected service value which is actually going to be delivered to the consumers. This gap can cause negative advertising, customer dissatisfaction etc. In order to overpass or reduce this gap, companies should be engaged in good quality customer service and management functions and services should be in place (Lovelock, Wirtz and Chatterjee, 2006). Service-Recovery Strategy Plan While implementing recovery programs, organizations should differentiate between strategic initiatives taken before the occurrence of actual problems and tactical activities company should take in order to handle a crisis situation (Cunningham et al., 2006). Under strategic initiatives, the following points can be used; 1. Anticipating the recovery needs Whenever a product or service is rolled out, people associated with it are well aware of the potential problems and obstacles. However, out of arrogance, ego or simply ignorance employees are reluctant to devise any recovery plan. Anticipation of potential problems will help companies to resolve issues arising when customers have first contact with the services or products. 2. Building a fast and responsive organization Acting fast and designing for agility are few of the important factors necessary for making a fast and responsive organization. This helps in clear decision making and escalation. 3. Empowering front line managers In majority of the companies, employees who are engaged in interaction with the customers are the people least paid in the organizations. While salary hike is one of the methods of attracting and retaining talents, empowering employees and providing them with the freedom of taking decisions will ensure that consumers are satisfied and content (Robinson, 1999). 4. Training Employees A good training includes not only lessons on how to deliver perfect services but also includes tactics that teach individuals to improve or make recovery programs into quick actions if anything goes wrong. Conclusion Strategies of Subway are made in order to compliment its brand motto which is providing fresh food to its customers. Delivering constantly good service is a difficult act but if an organization succeeds, it can be the most profitable strategy. Service gaps occur when the organization is not able to deliver the expected services. These gaps can be knowledge gap, customer gap, design and implementation gaps etc. It is very important to understand the situations and places where these gaps might occur and take important steps to reduce or improvise. These service and customer gaps can be reduced by providing quality service delivery systems, communicating with the consumers at each level of customer touch point and ensuring that the products or services are delivered at the right time and at the right place. Consumers test the quality of service by comparing the actual service provided with the expected services. Thus, in order to provide an overall customer experience which is at par with the expected customer service, it will have to make a 360 approach to improve the overall performance. This will include physical evidence, customer responsiveness, employee reliability and ability of the employees to take independent decision. Reference List Asubonteng, P., McCleary, K.J. and Swan, J.E., 1996. SERVQUAL revisited: A critical review of service quality. Journal of Services Marketing, 10(6), pp. 62-81. Brown, S.W. and Bond, E.U. III, 1995. The internal/external framework and service quality: Toward theory in services marketing. Journal of Marketing Management, February, pp. 25-39. Chaston, I., 1994. Internal customer management and service gaps within the UK manufacturing sector. International Journal of Operations and Production, 14(9), pp. 45-56. Cronin, J.J., Brady, M.K. and Hult, G.T.M., 2000. Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of Retailing, 76(2), pp. 193-218. Cunningham, F.L., Young, C.E., Lee, M. and Ulaga, W., 2006. Customer perceptions of service dimensions: Cross-cultural analysis and perspective. International Marketing Review, 23(2), pp. 192-210. Edvardsen, B., Tomasson, B. and Ovretveit , J., 1994. Quality of Service: Making it really Work. New York, NY: McGraw-Hill. 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