Business and Service Marketing - Article Example

needs, expectations and the market place are changing more rapidly than ever and the companies have to be prepared to face the challenges (Grant Thornton, 2006). It has become critical to stay in close contact with the customers and understand and anticipate their needs. This requires the right mix of skills to execute changes effectively and quickly. Markets have become more competitive and customers are not as loyal as they used to be. Information flow in the digital era has allowed the customers to research the information they require. This has enhanced the importance for companies to strengthen their relationship with their customers. Companies have been striving to introduce new strategies to solidify these bonds. They are trying to weave the relationships with specific products and services. In the service industry service is inseparable from the person providing the service. Services are intangible in nature and hence the interaction between the customers and the service workers is the means by which the company can achieve customer loyalty (Bove & Johnson, 2000). The service industry faces challenges as the demands and expectations of the customers continue to escalate. Singapore Airlines (SIA), one of the leading airlines of the world, is aware that they cannot afford to be complacent in the face of stiff competition. They give importance to internally positioning, benchmarking and integrating its services (Wirtz & Johnston, 2003). The customer expectations and demand forces them to constantly review and change their strategy. They give importance to their internal customers or the staff as they are the ones that deliver service. They also have to ensure that they are able to keep the brand promise while the services are personalized. Usually customers adjust their expectations with the brand image of a product or service. This poses a major challenge to SIA as customer expectations are already sky-high. All the service components have to be excellent for the airline to offer excellence in service. They have to ensure the same standard in food, décor, punctuality, seat comfort or even just pouring coffee without spilling it. SIA also recognizes that there has to be consistency in service excellence. In the service industry, since human element is the most important, there is potential for service inconsistency. To ensure this SIA carries out research and trials, mock ups and assesses customer reaction to ensure they remain consistent. They have also trained their personnel to be flexible and not just go by the rule. They are trained to maintain a balance in service and bend the rules if necessary to satisfy the customer. Since the crew is the one that interacts with the passengers, they give lot of weightage to what the crew has to say. They make adjustments accordingly. They take both compliments and complaints seriously. Their front line staff is regularly trained and motivated. The demanding customers place a lot of stress on the staff and this leads to emotional turmoil. This is another challenge for the airline to keep the staff motivated and support them to deal with difficult situations. To manage their crew of 6600 people they have divided them into teams with a team leader in charge of 13 people. This fosters a group feeling and the team leader understands the nuances of his team members thereby better able to guide and motivate them. In service delivery, that people are the most important element has been recognized by Marriott International also as their philosophy is “take care of Marriott people and they will take care of Marriott guests” (Cannon, 2002). The challenge that Marriott faces in delivery service as per customer demands and expectations is compounded due to high attrition rate in the industry. Employees leave the organization or form unions when they are dissatisfied with the management. They have hands-on managers that possess the skill to support, inspire, encourage, lead and listen to associates. Quality for them means to delight the customer. They have five different functions including finance, people, product and service, sales and marketing, and development each of which individually and collectively contributes to quality (Dodwell & Simmons, 1994). Marriott realizes that its managers need to have a long term commitment to the organization and work towards its objectives. To meet the challenges in maintaining quality, Marriott started a quality circle and appointed a quality support manager. Marriott thus had 65 circles operating in 11 hotels within three months, which enhanced the motivation, involvement and participation. Very soon they realized the flaws in their strategy as the middle management became uncooperative. Marriott had had assumed that the managers would accept the new idea without even questioning the facts. With the quality circle program they now had three types of managers - the committed and self-educated, the lip-service brigade and the old-fashioned cynics. They had to change their strategy and involve the top management in all their decisions and activities. Effective, training and empowerment are essential in the services industries like the hospitality industry. Building and maintaining long-term customer relationship is central to improved business performance and this implies that customer loyalty should be the primary goal of the companies (Bove & Johnson, 2000). In the retail industry, competition has intensified and locking-in customers has become important. Many have failed because they overlooked the social context and the behavior of the customers. This is because customers today have more knowledge about the products and the resources to research who can provide them with the best products at most competitive prices (Grant Thornton, 2006). Tesco continually faces the challenge of customer loyalty. They have adopted different methods like Club Loyalty Cards which allows the customers to special rates and access to special information (Rowley, 2006). These loyalty cards provide details of the customer’s purchase habits, weekly products purchased and how product associations are made. They then employ the data mining techniques to transfer the data into valuable source of information, for targeted mailing and personalized communications. This helps because a retailer needs to know what creates value for their customer Again, in the highly competitive mass-discount market it becomes important to continuously determine what the customer wants. Determining customer needs and wants and delivery service before others is vital. The digital era has made available new rich sources of data about customers. Companies have to combine and integrate this information in the right manner. Wal-Mart could succeed in integrating data to some extent. Market research could not identify the problem when Wal-Mart was struggling to increase its sales (Forsyth, Galante & Guild, 2006). They then integrated point-of-sale date with an online survey on shopping behavior in stores and general customer interests. The survey revealed that a large number of people who purchased TV from Wal-Mart were basically interested in watching sports. Very efficiently Wal-Mart capitalized on this information and they immediately introduced features which sports-minded people enjoy - picture-in-picture capabilities, digital connections, and plenty of audiovisual ports. Thus a company has to manage the customer service as customer expectations keep on escalating. To face the challenges of understanding the needs and expectations of the customers regular surveys have become essential. Customer relationships have to be redefined. The current customers have to be re-impressed and hence the companies are including a broader mix of competencies, products and services to enable a faster and more flexible response to customer needs. They are thus involving the customers in the development of new products and services. General Motors, for instance, uses its blog to discuss its latest designs with its customers (Singh, Veron-Jackson & Cullinane, 2008). It invites ideas and assesses their needs. Blogs enable marketers to segment their customers and interact with them at personalized level. The data so collected serves as a valuable tool for future marketing and helps the companies to meet the challenges of meeting customer expectations. Thus it can be seen that as the marketplace evolves, companies too change their strategies. They realize that they need to be in touch with their customers at all times to ensure they understand the customer needs and even anticipate needs. In addition, it allows them to lock-in customers. This is important in the digital era as information is readily available or searchable. Services have to be personalized and should be excellent. Human element is the most important in delivering efficient service and companies cannot afford to ignore them. Hence the appropriate training, motivation and empowerment are essential too. The employees undergo stress and emotional turmoil to handle which they need the support of the company. This too is another challenge faced by the companies in addition to anticipating, assessing and fulfilling the needs and demands of the customers. The digital era, the ready availability of information, the high attrition rate in the service sector, the ever changing customer demands fueled by competitive offers are the challenges that companies have to address and meet with. They are using technology in different ways to combat the issue like offering loyalty cards and then collecting data to devise the marketing strategy. They make all efforts to encourage customer loyalty as they realize it is costly and difficult to bring in new customers. References: Bove, LL & Johnson, LW 2000, A customer-service worker relationship model, International Journal of Service Industry Management, vol. 11, no. 5, pp. 491-511. Cannon, DF 2002, Managing Service Quality’. vol. 12, no. 2, pp. 87-99 Dodwell, S & Simmons, P 1994, Trials and Tribulations in the Pursuit of Quality Improvement, International Journal of Contemporary Hospitality Management, vol. 6. nos. 1/2, pp. 14-18 Forsyth, JE Galante, N & Guild, T 2006, Capitalizing on customer insights, The McKinsey Quarterly, retrieved online February 19, 2009 from http://www.mckinseyquarterly.com/Marketing/Management/Capitalizing_on_customer_insights_1823 Grant Thornton, 2006, Survey of U.S. Business Leaders, retrieved online February 19, 2009 from http://www.grantthornton.com/staticfiles/GTCom/files/AboutUs/BusinessLeadersCouncil/susbl_12.pdf Rowley, J 2006, Customer relationship management through the Tesco Clubcard loyalty scheme, International Journal of Retail & Distribution Management, vol. 33, no. 3, pp. 194-206 Singh, T Veron-Jackson, L & Cullinane, J 2008, Blogging: A new play in your marketing game plan, Business Horizons, vol. 51, pp. 281—292 Wirtz, J & Johnston, R 2003, Singapore Airlines: what it takes to sustain service excellence - a senior management perspective, Managing Service Quality, vol. 13, no. 1, pp. 10-19 Read More