The Effect of Service Price Increases on Customer Retention - Case Study Example

Title: 7 Ps of service Marketing Name Institution Date of Submission Service marketing audit report of Sazón Espresso This is a consultant report audit of the seven Ps of service marketing of the Sazón Espresso coffee shop in Adelaide. It is a Mexican coffee shop. The 7 Ps of service marketing include promotion, product, people, price, physical evidence/infrastructure, place and processes. The second part of the report gives the recommendation which needs to be implemented by Sazón Espresso coffee shop as this raise its reputation as well as become a dream destination for its clients and potential customers. Having a good reputation will make Sazón Espresso coffee shop market itself, not only locally but also countrywide and globally. The recommendations have the possibility to promote the effectiveness as well as the efficiency of the service marketing of Sazón Espresso when put into practice. Sazón Espresso was open about five years ago by Mexican cousins Oswaldo and José Estrella. Sazón is located in Mount Barker in the Adelaide Hills. The food and drink joint has brought a wide range of funky food to the place. Sazón mainly focuses in a remarkable coffee experience alongside Mediterranean food. Every Friday and Saturday nights, it specializes in serving genuine Mexican street food. Sazón also serves food and coffee that the Adelaide locals and visitors need. As a service industry, Sazón Espresso has a good brand reputation for serving an excellent coffee. Apart from the best coffee, it is best known for serving a wide variety of hot chocolate and tea. Due to their unique and addictive coffee, their reputation is very impressive. They also ensure you try the chili hot chocolate, the Mexican style centerpiece My experience with Sazón Espresso coffee shop The Sazón Espresso coffee shop is owned by my cousin. During my free I like visiting the place to help them in one way or another. I also learn and gain some skills in the management of business ventures. It is during these frequent visits that I got the chance to put in practice what I have in class. One of which is the audit and analysis of the service management of the Sazón Espresso coffee shop The 7 Ps of service marketing which I was able to audit Sazón Espresso coffee shop are; promotion, product, people, price, physical evidence/infrastructure, place and processes (Kapoor, Paul, & Halder, 2011 Pg. 22. My audit and analysis was based on these parameters. I also have some recommendations from this analysis Before giving the audit report, it is to understand what service marketing is. Service marketing is a sub branch of marketing which entails the marketing of services and goods. Service marketing refers to the promotion of business to business or business to the direct customer. Service marketing is often usually found in the air travel, financial services, professional services, hospitality services, health care and vehicle or car rental service. Marketing of goods on the other hand, involves the promotion of fast moving goods and durables. (Weitz, & Wensley, 2002, Pg485) Product Service the produced and offered by a service company in this case. Just as in any other service industry, Sazón Espresso product’s service is intangible, perishable and heterogeneous. Its production and consumption time are inseparable. Sazón Espresso has customized its service to meet its customers need as it is needed in the service industry. This also because there is needs to have a unique interaction and encounter with the client (Masterson, & Pickton, 2010 Pg. 199. Sazón Espresso service products are available are breakfast, lunch and early evening meals, however, they have specialized in unique sweet coffee which they are well known for it. From as early as 7 am customers are served with the unique and favorite coffee. Other dishes available are scrambled eggs, hearty Huevos, oven baked tortillas which are topped with some slices of Spanish chorizo, coriander salsa, onions and fresh tomatoes. There are also other lighter alternatives available apart from the full breakfast. Lunch time meals include freshly prepared in-house Sazón rounds and squares. Mexican quesadillas and salads are also ordered. They are prepared with the locally available produce Sazón Espresso utilizes locally source produce because they are fresh and gives a unique atmosphere that make customers feel home. Also available is a wide range of cakes, pastries, tarts and muffins. Sazón Espresso owns in-house made bread base which the clients order for their taste and additives added based on the tastes and choices Sazón Espresso coffee shop’s customer can order food all day long. It is wholly devoted to service orders from the clients. Physical Evidence Both physical environment and infrastructure are critical for service marketing industry for the delivery of service. For Sazón Espresso coffee shop it is very essential for both the physical environment and infrastructure as this is part of the service experience. The quality environment and the infrastructure part of the leading important proposition rendered by coffee shops, restaurants and luxury hotels to their clients (Haenlein, Kaplan, & Schoder, 2006 Pg.17). For Sazón Espresso coffee shop and many other service industries, the physical infrastructures together with the physical environment are the main source of competitive advantage against their competitors in the market. They command some premium as a result of their property (physical infrastructure) and the surrounding environment. The surrounding environment in the case of a coffee shop is its location, décor of the interior and the architecture of the premise. Each service offered has a tangible element which gives the physical sign of the service. The ambience of the coffee shop plays a crucial role in service quality being offered by Sazón Espresso Sazón Espresso is set in an historic cottage where some customer can dine where it previously a verandah prior to its conversion to a coffee shop. The décor is a diverse combination of old and new with some antique bricks exposed on the walls. It has trendy metal stools, chairs and tables. Marble bench tops and comfy bench seating in burnt orange are also available. Walls are largely white colored with some panels of beautiful Mexican tiles; its floors are dark wooden all giving an appealing décor which is very unique Place Location for any kind of business like Sazón Espresso is of utmost importance. (Dawes, 2009 Pg. 238). It is therefore very critical for the Sazón Espresso coffee shop to be located at the prime place or location. In case of hotel, restaurant and any other eatery like Sazón Espresso, it should be located on a busy street with a lot of people who can just pop in take meals. It should not be located on the outskirts of the town where there are few people, of which many of them take meals at home. Sazón Espresso is located on the sunny of Gawler Street, a serene and busy environment where its customers and clients can readily access it. A good eatery point located in the wrong location is destined to fail in meeting its business objectives. A well strategically located restaurant and such coffee joints usually distinguish good joints from iconic ones Pricing This is the amount the consumer pays for the service or product. It is the most essential factor in the marketing of services. It is determined by all the inputs the company and organizations when coming up with the price (Kazmi, 2007 Pg. 17) The price of food and beverages in Sazón Espresso is fair. Customers get good value for their money. That is why their customers keep coming back. Tourists who often come to Adelaide never miss to visit Sazón Espresso for coffee and other delicious meals. Customers are often enticed to taste other delicacies including the Mexican ones. Overall the food and beverages served in Sazón Espresso coffee shop are of high quality therefore fetching premium prices There are various challenges setting up the price of services in the industry, unlike those for the goods. Setting the prices of goods can set easily by putting in considerations the cost of raw materials. Services on the other hand, require labor cost, overhead cost as well as the cost of raw materials (Cant, 2006 Pg. 318). In the Sazón Espresso coffee shop, cost of food is charged together with the price of ambience offered. The restaurant will come up with the final price by adding up with appropriate profit margin Promotion It is a strategy that is a product of customization and standardization. Coffee shops, restaurants, hotels and other eatery joints depend on the promotions and advertising to its clients both locally and internationally (Verma, 2012 Pg. 255). The Sazón Espresso coffee shop has collaborated with many advisory and travel management companies and websites to market their services. Sazón Espresso promotes itself as one the finest coffee shop in Adelaide. It is a big sponsor of Mexican foods where every Friday and Saturday night Sazón hosts a Mexican night. Unique and authentic menu are served. The customers present enjoy a wide variety of Mexican dishes including quesos, fundidos, quesandillas and soft tacos among others. Appealing Mexican beers, margaritas local wines and tequilas are there in plenty for the enjoyment of the customers present. Mexican vibes and Latino tunes are played as the customers enjoy the evenings on the weekends after a long tiring week Sazón Espresso also depends on good word-of-mouth promotion and marketing by both the current and the former customers. This is one of the most effective means of marketing. The Sazón mission is to have satisfied consumers and aims to have them delighted as well People According to Birtner and Booms perception include all people who are both directly and indirectly tangled in the trade and marketing of the services. They are mostly consumer contact staff, managers and other personnel. Customer contact staffs are the picture of the firm who transform the quality into service. They provide the service basing on the description of their entrepreneurship or their profession. These people are mostly the coaches, lawyers, hairdressers, gardeners, and contact center staff among others. The offer a physical service with evident results (Smith, & Taylor, 2004 Pg. 7) The significance of the people factor leads to growth in the service marketing sector because it them who offer services to the customers. This element, people, gives a huge competitive advantage too service firms like restaurants, hotels and coffee shops arise from the people it hires (Ariffin, Nameghi, & Zakaria, 2013 Pg. 132). It is these people who serve the customers, cook food in the kitchen, wait on the table take orders and serve the customer in eatery points like the Sazón Espresso. This manpower plays a very big role in the success of the Sazón Espresso coffee shop and the delivery of services which the customers enjoy. Service industry like the Sazón Espresso cannot do without the inputs of the skilled employees. They are the biggest asset as Sazón invest heavily in their training and development. Part of Sazón employees are Mexicans who prepare the Mexican food with the authentic touch can be met. Process This represents procedure, work structure, protocol and structure by which the service is delivered to the customer. They are outcomes of activities directed towards the consumer or with being with the customer. The process involves a series of steps and activities to achieve. This element is very important with the whole service of marketing mix strategy (Dibb, & Simkin, 2012 Pg. 161) Just like the manufacturing industry, service industry processes are very important. Lack or absence of in restaurant like Sazón Espresso can achieve efficiency and effectiveness. Effectiveness is whole about serving clients in the best possible way while efficiency entails meeting the many operational duties and tasks at the lowest possible cost. Without the right process Sazón Espresso will not be in a position to achieve its mission Sazón Espresso is very process oriented as managing it is an intensive activity. Due to this, Sazón has had a massive competitive advantage over its competitors. They have a well-established process of every task undertaken. In the restaurant, they take care of the detailed process in order to achieve the quality of services demanded by the customers. These processes have led to outline the restaurant in Adelaide Due to the customized system of Sazón Espresso, each process taking place do differ, especially with the presence of the bosses. The clients are well handled and their views are put into consideration. This flexibility in the delivery of service to the customer is an additional point in winning the customers’ loyalty by the Sazón Espresso. The whole operation management at Sazón Espresso is relies on processes. Each operation has its own set of operations which are unique from other sets. Example include a very detailed process course for the customer service Recommendations The Sazón Espresso need to make some additional changes to their products. They try out other dishes apart from coffee and Mexican dishes. It should first be tried on a small scale basis. The restaurant should also expand and open some branches in other towns and cities where they meet and serve their loyal customers so that they should not keep going all the way to Adelaide Conclusion For any service firm and restaurant like the Sazón Espresso coffee shop should be woven around the 7 Ps of service marketing to compete well with their competitors in the market. A service firm that fails to address the above 7 Ps is destined to fail (Nag, Hambrick, & Chen, 2007 Pg. 946). The audit is based experience being in frequent contact with the Sazón Espresso coffee shop in Adelaide. The audit reveals that Sazón Espresso is doing well on the 7 Ps. References Ariffin, A. A. M., Nameghi, E. N., & Zakaria, N. I. (2013). The effect of hospitableness and servicescape on guest satisfaction in the hotel industry. Canadian Journal of Administrative Sciences / Revue Canadienne Des Sciences De L'Administration. 30, 127-137. Cant, M. C. (2006). Marketing management. Cape Town, South Africa, Juta. Dawes, J. (2009). The Effect of Service Price Increases on Customer Retention.Journal of Service Research. 11, 232-245 Dibb, S., & Simkin, L. (2012). Marketing briefs: a revision and study guide. Oxford, Butterworth-Heinemann Haenlein, M., Kaplan, A. M., & Schoder, D. (2006). Valuing the Real Option of Abandoning Unprofitable Customers When Calculating Customer Lifetime Value. JOURNAL OF MARKETING. 70, 5-20 Kapoor, R., Paul, J., & Halder, B. (2011). Services marketing: concepts & practices. New Delhi, Tata McGraw Hill Education Kazmi, S. H. H. 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