Issues of Services Marketing - Coursework Example

Services Marketing Task Using a company/companies discussed from the “Made in Britain” series 3: identify, discuss, and critically review the keycharacteristics of service. Refer to services marketing theory in your answer and illustrate your understanding by using examples from your chosen company. Note: Illustrate that you have knowledge of all of the key characteristics of service, but only discuss 2 in depth. The literature on services puts forth four major differences in the nature of services vis-à-vis products. These differences or unique characteristics of services lend special challenges in the marketing of services and have important implications for both marketer as well as the consumers of service. Since the 1980s, the IHIP characteristics framework that mentions intangibility, heterogeneity, inseparability and perishability as the characteristics of services has been widely accepted Moeller (2010). These characteristics are briefly described below: Intangibility Unlike goods, services cannot be seen, touched or held. They do not occupy any shelf space and are therefore passed on as an experience to the customer. For e.g. a person opting for cosmetic surgery can only see and feel the impact after the medical procedure is over. Inseparability This characteristic of services refers to the fact that in most cases, the service provider cannot be segregated from the service delivery process and therefore the production and consumption of the service happens at the same time. Variability Services lend themselves to a lot of variability because they depend not only on who provides them and who receives them, but also when and where are they provided. Services are rendered in different situations and therefore it becomes difficult for an organization to standardize the service performance. Perishability Perishability refers to the fact that services cannot be produced or stored beforehand. They have to be produced at a time when the consumption occurs. It is noteworthy to mention that, in services, there is no physical product that changes hands. Services essentially provide the customers transitory control and access rather than possession of something. In other words, buyers of services buy a process rather than a tangible outcome. The Burj Al Arab hotel is a classic example of a service organization that has managed the characteristics of intangibility and perishability to good effect. Intangibility A lot of uncertainty creeps into the minds of the consumers due to the intangibility of services. As such, consumers draw inferences about the quality of service from numerous cues including the place where the service is rendered, people who render the service, equipment used for service delivery, communication material used in the service factory and the price of the service. The challenge for the service marketer is to convert the intangible service into concrete benefits and a well defined experience for the customer (Ivy 2008). The Burj Al Arab can safely be said to have ‘tangibalized the intangible’ and positioned itself as a luxury hotel. The building per se and the ambience, décor of the hotel, epitomize luxury, to say the least. The well mannered and immaculately dressed staff conveys the ultra special services that a customer can hope for. Everything about this hotel is awe inspiring. The 321 m (1,053 ft) high Burj Al Arab stands tall on an artificial island 280 m (920 ft) out from Jumeirah beach. The humungous structure, resembling a billowing sail, is connected to the mainland by a private curving bridge. Each of the 70 floors of the hotel has a private reception desk. A brigade of highly professional and well trained butlers render personalized services to each of the guests at Burj Al Arab. Consumers can opt for a pick up and drop off from and to their respective locations and that too in a chauffeur driven Rolls Royce. The guests at the hotel can savor the finest sea food or the modern international cuisine by dining at the apex of the hotel, at the base of the foyer or even under sea. Perishability The characteristic of perishability warrants the necessity of demand management in services. Unlike goods, services cannot be produced in overnight shifted and stocked to be delivered as and when the demand occurs. Service organizations must ensure that right services are available at the right places, at the right time and right process to maximize profitability. Burj Al Arab manages its demand through a system of reservation for its breakfast, lunch, evening snacks and dinner packages. The premium pricing and a ‘no refund’ policy on cancellations ensures that demand and guest inflow can be accurately anticipated well in advance. Task 2: “Service quality does not come about by chance – organisations need to develop strategies for ensuring that they deliver consistent and high-quality services” Palmer 2008. Critically assess how organisations can consistently deliver high-quality services. Illustrate your answer using examples from a company discussed on “Made in Britain” In the service sector domain, quality is determined by individual factors like perceptions, expectations and experiences of customer. While quality control measures have long existed for tangible goods, such measures are limited in number when it comes to services. Services lack physically quantifiable or measurable dimensions like weight or size primarily because they are intangible. As such they do not lend themselves to an objective evaluation and measurement of quality. Service quality is conceptualized as the discrepancy between customer expectations and perceptions of what is delivered. It is worthwhile to mention that service quality is not synonymous with customer service. In fact, customer service and customer relations are only sub parts of service quality (Lawton 1992). As a strategy, companies invest significantly in training efforts of employees that result in heightened customer satisfaction. Different firms employ different strategies to implement quality within a service environment. While some repose their faith in customer care programs, others rely on the conventional total quality management and teamwork-based initiatives. Some, companies go ahead and adopt the quality assurance route. Such companies implement BS5750, commonly known as the Q90 series in the US. (Tanner 1994). Paradoxically, while service quality is of utmost importance in services, its measurement poses maximum difficulty in a service setting. The pioneering and arguably the most noteworthy contribution in defining and measuring service quality emanated from the research work of Parasuraman, Zeithaml and Berry (Harvey 1993). This team put forth an instrument called SERVQUAL to measure service quality. Broadly speaking, SERQUAL suggested that customers perceive service quality on five dimensions namely; Tangibles (appearance of physical elements) Reliability (dependable, accurate performance) Responsiveness (promptness and helpfulness) Assurance (competence, courtesy, credibility and security) Empathy (easy access, good communications and customer understanding). It is imperative for organizations to score well on all the above parameters so that the service provided by them is perceived to be of high quality. It can be said that Inmarsat has taken positive steps on all these five dimensions of service quality. Tangibles Ever since its inception in 1979, Inmarsat has been the vanguard of mobile satellite services. Inmarsat has continuously strived to introduce new technologies and redefine the standard for the industry that it operates in. At present the company has a fleet of 11-satellites that provide seamless mobile voice and data communications throughout the globe. Reliability The maritime community thrives on the highly dependent services that Inmarsat renders. It is because of the unswerving services of Inmarsat that ships in deep sea have been able to stay in constant touch with each other over the phone. Inmarsat, by becoming the race partner and the official provider of satellite communication, played a pivotal role in making the Volvo Ocean Race 2011-12 happen. The dependable services of the company ensured that 1.8 billion fans across the world enjoyed the sporting event. Responsiveness In response to the ever growing need of a reliable satellite phone, Inmarsat has rolled out IsatPhone Pro, a phone that promises to work under any set of conditions. The phone reportedly has the longest battery life amongst competitors. The IsatPhone Pro comes with a robust handset and provides reliable network coverage and clear voice quality. Assurance As part of the latest upgradation plan, Inmarsat, in August 2010, contracted the manufacturing of a ground-breaking new constellation of satellites, named the Inmarsat-5s, to the United States based aerospace manufacturer, Boeing. The new technology is likely to propel the launch of Inmarsat Global Xpress network, which will deliver mobile broadband speeds of up to 50 megabits per second. Empathy In addition to the commercial aspect of its business, Inmarsat understands the importance of helping the communities that it operates in. In one of its latest initiative, the company has sponsored the Télécoms Sans Frontières, a program that provides free equipment and financial support to reinstate communications in disaster zones. Task 3: Discuss and critically review two service frameworks that have been developed to provide an understanding of the service experience. In particular identify how each of your chosen models gives a slightly different insight into the service experience in its own way. Illustrate your answer by using examples from companies discussed on “Made in Britain”. Two service frameworks viz. the services marketing mix and services blueprinting are discussed below: Services Marketing Mix The marketing mix is a set of controllable marketing tools that a company employs to elicit the desired response from the target market (Ivy 2008). Essentially, it consists of everything that an organization can do to influence the demand for the services that it offers. The domain of services has an extended marketing mix. In addition to the four elements; product, price, place and promotion, of the marketing mix for tangible products, services make use of physical evidence, people and processes to ensure that the service delivery process is smooth, standardized and perceived to be of high quality (Goi 2009). People A vital ingredient in any service organization is the hiring, training and retaining of competent staff. This element of the marketing mix can help the organization obtain a form of competitive advantage (Angelov 2010). Customer’s interaction with the employees of the organization plays a key role in forming their perception about the service delivery and service quality. Process All the administrative and bureaucratic functions of the service organization may be referred to as the process. Simply put, processes are the systems, rules, regulations or the standard operating procedures used in to ensure standardization in service delivery. Physical Evidence The physical structure of the service factory i.e. the place where the service is being rendered helps the customers form an opinion about the service. Consumers tend to make perceptions of service quality based on their sight of the service provision (Ivy 2008). In addition to this the use of colors, olfactory elements and the overall decor and ambience play an important role in deciding the customer experience of the service. In accordance with the services marketing mix, the Burj Al Arab hotel employs highly skilled and courteous people (chauffeurs, butlers, reception desk people etc.) who come in direct contact with the customers. The expertise of the backend employees is important to ensure that there is no glitch in accounting practices, procurement of raw material etc. The hotel ensures that their processes are infallible. For e.g. the pick up and drop off time are adhered to irrespective of the customer location. Finally, the physical evidence of the hotel enables it to charge a premium price from its customers. This physical evidence is far ranging; from the neat dress of the employee to the imposing structure of the hotel itself. Blueprinting Blueprinting refers to a visual representation of a service process. This visual representation delineates all the stages in the service process, the timing and sequencing of these processes as well as sub-processes and the participants (service provider staff as well as the customer) involved in each process. This operations-led approach defines the ‘Line of visibility’ i.e. the processes undertaken in the absence (back office) or presence (front office) of the consumer. The blueprinting technique if employed on the Burj Al Arab hotel would divulge that the customer’s experience with the hotel begins from the point of time the customer logs on to the hotel’s website. The time taken to browse the site and most importantly the effort and formalities involved in reserving one of the meal packages will have a lasting impression on the customer. The customer’s interaction with the hotel will start offsite if he has ordered for a pick up from their location. Once at the hotel, the hotel’s parking, process of registration, the care for customer belongings, escort to the actual site, experience at various stages of site tour including timely delivery of ordered food and finally check-out or exit process of the customer would be divulged by the blueprinting process. An important point of distinction between the services marketing mix and blueprinting is that the latter technique, unlike the former, has been employed for service innovation. . Services are dynamic, pragmatic and often co-produced in real time together by customers, employees and technology. There are very few stagnant physical properties associated with services, therefore service blueprinting, which provides a clear visualization of dynamic service processes, can be used as a tool for service innovation (Bitner 2008). References Angelov, B. 2010, Service design capability: Towards a service-based view of the firm, Polytechnic Institute of New York University. Beach, L.R. & Burns, L.R. 1995, "The service quality improvement strategy: Identifying priorities for change", Journal of Service Management, vol. 6, no. 5, pp. 5-5. Bitner, M.J., Ostrom, A.L. & Morgan, F.N. 2008, "Service Blueprinting: A Practical Technique for Service Innovation", California management review, vol. 50, no. 3, pp. 66-94. Burj Al Arab [Online] Available at http://www.burjalarabia.com/ [Accessed 8 December 2011] Goi, C.L. 2009, "A Review of Marketing Mix: 4Ps or More?", International Journal of Marketing Studies, vol. 1, no. 1, pp. 2-15. Harvey, T. & Gray, J. 1993, "Service quality as profit strategy?", Journal of Performance Management, vol. 6, no. 2, pp. 48-48 Inmarsat [Online] Available at http://www.inmarsat.com/ [Accessed 8 December 2011] Ivy, J. 2008, "A new higher education marketing mix: the 7Ps for MBA marketing", The International Journal of Educational Management, vol. 22, no. 4, pp. 288-299. Lawton, R. 1992, "A Service Quality Strategy That Will Work for You", The Journal for Quality and Participation, vol. 15, no. 3, pp. 38-38. Lo, K.P.Y. 2010, Emotional Design for Hotel Stay Experiences: Research on Guest Emotions and Design Opportunities, Hong Kong Polytechnic University (Hong Kong). Moeller, S. 2010, "Characteristics of services - a new approach uncovers their value", The Journal of Services Marketing, vol. 24, no. 5, pp. 359-368. Tanner, S. 1994, "Service quality as a competitive strategy", The Journal for Quality and Participation, vol. 17, no. 7, pp. 58-58 Ojasalo, J. 2007, "Characteristics of Professional Services and Managerial Approaches for Achieving Quality Excellence", The Business Review, Cambridge, vol. 7, no. 2, pp. 61-68 Read More