Service Marketing - Case Study Example

SERVICE MARKETING: A CASE STUDY THE MTN COMPANY s Table of Contents Table of Contents 1 Discussion 3 Literature review 4 Theory 5 Issue analysis 6 Limitations in the study 11 References 12 Abstract Understanding of the customer demand and needs is exceptionally indispensable for the success of any company. Different customers have diverse perception on different products produced into the market. On the other hand, different customers have different customers’ beliefs and perceptions. It is therefore the responsibility of the company management to comprehend different perception held by the company’s customers. Customers’ culture also influences the desires and needs of the customer to the goods and services in the market. In order viaduct the gap between customers and the company, market survey is exceedingly essential. Service marketing helps the company in understanding the customers’ needs and expectations. The paper below will analyse MTN misconception of its customers’ need in different cultural settings. It will also expound on the theories relevant in analysing the situation affecting the MTN Company Introduction MTN is a multinational telecommunication company. It has its headquarters in Johannesburg in South Africa. It offers communication services in many parts of Africa and in Middle East countries (MTN group, 2012). In the recent years, the company has been challenged for customer services impediment in Middle East countries like Iran and also in many African countries where it operates. It has been held liable of violating its customer’s privacy right which was contrary to their expectation. In January 2012, the company was blamed and condemned for assisting the Iran government in locating and tracking the MTN cell phone users. The same fault was raised in South African and Lesotho in February 2012. On December 2010, MTN customers in Nigeria complained to the company for the discloser of their information to the security agencies. The customers expressed their distress through the company’s customer service but there was no action taken. Some customer also reported to be ignored by customer service attendants when they raised the issue (MTN website, 2012). In general, the MTN Company has been blamed for disclosing the customers’ information to the government and security agencies which is contrary to the customer expectation. Privacy is one of the human basic rights and it’s valued all over the diverse cultures. By disclosing the customers’ private information, the company did contrary to their customers cultural beliefs. Discussion The critics have to a great extent affected the service marketing of MTN all over the affected countries thus raising customer service issues in the company. It has complicated their marketing effort in the affected countries and in other countries where it operates. There are lobby group in Iran (United against Nuclear Iran) which is advocating for the cessation of MTN operations in the country due to desecration of their customers cultural beliefs as well as being incompetent in fulfilling the customers’ expectation. In South Africa, the Communication Association have expressed their dissatisfaction with the MTN initiative. The customer rights are very imperative in ensuring there is workable service marketing in any company. According to the United against Nuclear Iran, “assisting the government to track and locate the cell phone users is total contravention of the customers’ service rights as well as their basic fundamental and cultural rights. This ought not to be allowed to continue in an independent country like Iran”. In the beginning of March 2012, the Communication Association in South Africa threatened to prosecute the company for disclosing the customer personal information to the security agencies and the government. Literature review According to Sheth (2000, p. 171), services marketing has it bases on the concepts of marketing. The concept has developed as a result of the philosophies underlying customer orientation. Every activity in an organization must have the customer in mind and directed towards fulfilling the customers desires. The idea of satisfying the customers’ needs have dictated the course of marketing through out the marketing history. Over time, the service marketing has been changing systematically due to the vibrant nature of the customer. According to Ambler (2000, p. 90), there are exceedingly lots of concepts and theory which are emerging to develop proficient and effective service marketing. This models also helps in understanding and analyzing the complexity and significant of service marketing. According to Shove (2005, p.50), service marketing is a subsection of the entire marketing concept. It constitutes both marketing of perishable and non perishable goods. It entails interface between the customers and the organisation and also the organisation with other organisation. On the other hand, service is activity; act or process intended to benefit the customer and the performer. According to Grönroos (2007, p. 68), customer service, entails handling dissatisfactions, complains, answering questions and giving all the appropriate advise and information to the potential and existing customers. Customer service is therefore the most essential concept in service management. However, the customer’s service contentment varies from one customer to another hence there is no collective way of treating customers (Constantinides 2006, p.407). Theory There are some marketing theories which are exceptionally significant in understanding the concepts and functionality of service marketing. The theory of the Gaps Model in Service Marketing is very imperative in unfolding the prerequisite of successful service marketing (Parasuraman and Zeithaml 1985, p.45). The theory was invented in 1985 by Berry, Parasuraman and Zeithaml. The customers’ satisfaction in service delivery depends on the gaps existing in an organisation. There are four foremost explicit gaps in this theory which are believed to affects the quality of service delivery in different ways. The first gap explains the differences that might subsist between what the costumers expectation and the perception of the management concerning what the customer needs. The second gap concerns the management take on customers’ expectation and the translation of these perceptions in the design and specialisation of the quality of the service. The difference between the actual service delivered to the customer and the standard of services the customer expect is what constitute the third gap. The fourth gap constitutes the differences between the quality promised by the company to the customer and the actual service delivered to the customer. The company has to make sure all these gaps have been addressed to for effective service marketing. According to the theory, customers’ needs ought to be the mainstay of service marketing. The specialisation of the customers must be met to enhance customer satisfaction. Issue analysis MTN Company operates on different cultural perspective. A clear understanding of different cultural perspective is therefore very relevant in the company marketing strategy. Cultural belief is the entire expectations of a product by the customer. This has to do with the quality, quantity, cost, and place of access. Customers from different culture have different expectation to the products and services produced by a company. As observed by Parasuraman, Zeithaml and Berry (2003, p.12), service management has to do with satisfying the needs and expectation of the customer. The expectation of the customer to the services offered is what determines the contentment of the customer. This can only be achieved by bridging the communication gap between the customer and the company. For a company to fit in the contemporary dynamic market, satisfying the needs and expectations of a customer is perceptible and necessary. According to Gummesson (2006, p. 352),) service marketing have been changing over time and from one culture to another. The changes are brought about by the nature of the market in different cultures. Technological advancement, civilisation, cultural differences and industrialisation have a take on the changes in service marketing. Time to time and adequate training and seminar are therefore very vital in enhancing customers’ satisfaction. On the other hand, concrete understanding of customers’ culture is also very relevant. Customer care initiatives are very apparent in handling the customer claims and needs as well as addressing the listen gap (Lusch and Vargo 2006, p. 89). The MTN Company failed short in addressing the customers’ needs. In this case, the customers expected the company to keep private their personal information. However, they MTN did not honour that expectation. It also failed to uphold some of the beliefs apparent across different cultures. According to the customer’s belief, privacy of their personal information was very vital. As stated by Lovelock and Wirtz (2007, p. 90), bringing back customers is more expensive in terms of money and resources that attracting new customers. In reference to different marketing theories and models, the customer needs should be the steering principle in the operation and functioning of any organisation. The MTN ignored the demands and requirements of its customers of keeping private their personal information. Their attempt to assist the government and other security agencies in locating and tracking their cell phone users was immense infringement of the customers’ expectations and needs on their privacy. Different cultures uphold the right of privacy differently. It is against the customers’ culture to disclose their personal information to unwarranted entities. On the other hand, the company failed to listen to complain raised by its customers through the customer care services. According to the prevailing service marketing models and the literature available, acting divergent to the customers’ culture and expectation has a very significant consequence in the relationship between the company and the customers. Customer service is extraordinarily significant in addressing the customers complains and demand. The company in this case ignored complain launched by its customers concerning their action of helping the government in locating and tracking its customer. Very many customers diverted their demands to other companies which could listen and comply to their cultural demands. (Palmer 2004, p. 234) According to Berry and Zeithaml (2008, p.35), as per the theory of Gap Model in Service Marketing, the MTN Company was not in a position to viaduct the listening and design gaps which existed between them and the customers. The company did not value the desires and cultural expectation and divergence of the customer of keeping secret their personal information. The customer expected the company to reverence their fundamental right by keeping secret their personal information. In its place, the company disclosed their information to the government an act which was contrary to the customers’ culture. On the other hand, though the company managers were informed and were aware of what the customer expects of them, they literary did contrary customers need. According to Johnston and Clark, (2005, p. 456), the theory of the Gap Model in Service Marketing have identified several determinant of quality service delivery. Communication is very indispensable in ensuring the company meets the expectation of the customer. Customers from different cultures have different means of communication. Although the customer rose their apprehension relating to the MTN company initiative of liaising with the government, they company declined to respond to the customers complains. They developed communication and cultural barriers between them and the customers. The company denied the complaining customers admittance to their service desk which is contrary to the expectations of the existing theories and models. As stipulated by the theory of the Gaps Model in Service Marketing securing the customer information in any service marketing increases the reliability of the company (Egan 2004, p. 98). Additionally, the company administration demonstrated their incompetency as required for by service marketing managers. The company administrators seemed not to understand the service marketing requirements. The diagram below shows how the theory of gaps can be applied in conjunction with other important determinant in enhancing quality service delivery The theory of the Gaps Model in Service marketing and the quality service delivery determinants (Parasuraman, Zeithaml and Berry 2003, p.35) Quality of the managerial implication To counter the shortcoming in the MTN Company and to attract more customers, the company management ought to mull over the following important insights. 1. To start with, the company need to under the cultural diversity of its customers. Different customers have different cultural beliefs and product expectation. An understanding of different cultural perspective is very imperative for MTN Company to achieve its intended goal in different cultural perspective. 2. The MTN Company should assure its customer future protection of their personal information as provided for by the customer culture ideologies. Due to the exposure of the customer private information to the government, the company ought to apologize to the customer and assure them of future credibility. Listening to their culture and considering the customers culture will help the company to understand the cultural differences among their customers (Chary 2009, p. 23). 3. The company should also show reliability of what they had promised the customers. To enhance trustworthy between the company management and the customer, reliability is very imperative. Reliability is extremely essential especially on service marketing. However, reliability can only be appreciable when there is effective communication between the company and the customer. Different cultures have different ways of enhancing communication. To ensure reliability in the company, MTN must work toward ensuring they understand different cultural expectation. MTN must therefore make sure there is effective customer service in their company. Adequate communication between the company and the customers will also give the company an insight of the design and standard required by the customer. 4. The company should also make use of two way communications. Different cultures have different ways of adopting two way communications. The company have to be aware of what the customers want from the company. This can only be effective through effective communication. Any problem to the customer service should be communicated to the customer in the right time. On the other hand, customer must be given feedback of their concern within the limited time possible. Effective two way communication is incredibly important in building trust between the customer and the company as well as assisting the company manager in understanding the cultural expectation of the Iran people (Baker, 2006, p. 197). Limitations in the study There were limited literature materials addressing the MTN scenario since it is a recent occurrence. The customers who were involved in the situation were not willing to give the information concerning their fate to the study. The cultural differences also affected the study. Some interview cultural beliefs do not allow them to disclose their personal information to people they don’t know. In this regard, many of the expected respondents did not disclose their feeling toward the services offered by MTN. They also failed to disclose their expectation to the company. References Ambler, T. (2000), “Marketing and the Bottom Line”, London: Financial Times/Prentice Hall. Berry L., and Zeithaml V. (2008), “The Service-Quality Puzzle”, Business Horizons, 34,(45), 35-43 Baker, M. (2006),”Editorial”, Journal of Customer Behaviour, 5 (3), 197-200. Chary, H., (2009), “Production and operations management”, London: Tata McGraw-Hill Education Constantinides, E. (2006), “The Marketing Mix Revisted: Towards the 21st Century” Relationship Marketing. Harlow, UK: Prentice Hall/Financial Times. Grönroos, C. (2007), “Service Management and Marketing: Customer Management in Service Competition”, Chichester: Wiley Gummesson, E. (2006), “Many-to-many marketing as grand theory”, Toward a Service-Dominant Logic of Marketing: Dialog, Debate, and Directions, New York: M.E. Sharpe, 339-353. Johnston, R. and Clark, G. (2005), “Service Operations Management”, Harlow: Financial Times/Prentice Hall. Lovelock, C. and Wirtz, J. (2007), “Services Marketing: People, Technology, and Strategy”, Lusch, R. and Vargo, S., (2006), “Service-dominant logic: reactions, reflections And refinements”, Marketing Theory, 6 (3), 281-288. Marketing”, Journal of Marketing Management, 22 (3-4), 407-438. MTN group, www.mtn.co.za/ABOUTMTN/Pages/default.aspx MTN website: www.mtn.co.za/Support/Legal/Pages/CompanyDetails.aspx Parasuraman A and Zeithaml V., (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, 49, 41-50. Parasuraman A., Zeithaml V. & Berry L. (2003), SERVQUAL: “A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality”, Journal of Retailing; 64, (1), 12-40 Palmer, A. (2004), “Principles of Services Marketing”, London: McGraw-Hill Sheth, J., 2000, “Relationship marketing in consumer market”, Handbook of relationship marketing, 7, 171-208. Shove, E., (2005), “Consumers, producers and practices: Understanding the invention and reinvention of Nordic walking”, Journals of consumer culture, 5(1), 43-64. Read More