Customer Service, Customer Satisfaction, and Corporate Performance in the Service Sector - Assignment Example

I. Introduction This paper aims to explore the concept of service, its different from products and its special characteristics by analysing the case of John King, an entrepreneur who has started his fly fishing guiding service. With Tasmania as one of the best fishing waters in the world, the island has attracted tourists which has boosted the islands recreational fishing industry (IFSFishOnline 2005). Guides are appreciated by tourists – there has been a huge demand for local knowledge in the form of “services that range from one-day fishing lessons for beginners to fully guided expeditions (IFSFish Online 2005).” Fly-fishing – one of the most popular techniques in catching fish, has been John Kings passion and expertise that he offers to visiting anglers though his guiding services. By looking at the problems that has arisen in his case due to the special characteristics of service and looking for solutions in order to address these problems, an in-depth learning of the concept of service marketing is achieved. II. Questions A. Define and discuss, using relevant examples from the case, the special characteristics of services that distinguish them from tangible products. Intangibility. One of the special characteristics of service is intangibility – it cannot be experienced by either of the five senses, whether felt, heard, tasted, smelled, or seen before it is purchased (Gabbott & Hogg 1994). For example, when the American angler has been assessing the risks that are related to the purchase of Johns guiding service such as poor fishing experience, he cannot see, feel, taste, hear of smell the service in order to determine his decision, unlike for products (Duncan 2005). The reason why he has to rely on testimonials and a video clip is for him to refer to past experiences of other people (Dresner & Yu 1995) as well as his judgement of Johns ability in the video. This is one feature that distinguishes service from products. Heterogeneity. Another characteristic of a service is heterogeneity or variability – no two services are very much alike in terms of quality, as the quality is dependent on factors like who the provider is, the time when the service is provided, the place, and the how (Schneider et al. 2005). While Johns skills are excellent, heterogeneity is apparent in the difference in experiences of his first two customers – the American anglers and the Canadian anglers. While the American anglers have a good fishing experience, the experience has been a bad one for Canadians. Although it is not Johns fault, the service in this case is dependent on the favourability of the weather, which has resulted in some unexpected events like the accident. This is another difference of service to products. Simultaneous production and consumption. Simultaneous production and consumption is another special characteristic of service – the service cannot be separated from the service provider (Duncan 2005). Because of this characteristic, John cannot sell the service without him, the service provider. When he delivers the service to the customers, he spends 18 hours in fulfilling the service, from 4am to 10pm. This is because the production and consumption of the service is simultaneous (Gabbott & Hogg 1994). When there is no service to deliver or consumed, there is no production for John as in the last few weeks of November; another difference with products where consumption and production do not necessarily go simultaneously. Perishability. Services cannot be stored for later use or sale – this is service perishability, which is another special characteristic that distinguishes it from a product (Woodside, Frey, & Daly 1989). Because his service is perishable, he cannot make adjustments when the two sets of customers have booked in December. Unlike a product that can be manufactured in November, and can be sold in December when there is a lot of demand, he cannot store his service for later use, in such a way that the service he can do in November, he can sell in December when there are a lot of customers. B. Using examples, explain how the problems stemming from the special characteristics of services are impacting on Johns guiding services. Intangibility. Because a service is intangible, John finds it hard to make the customers experience the service through the five senses in order to judge and assess the risks of purchasing the service (Heskett et al. 1994) This makes it hard for John to sell the services easily; it requires some kind of testimonials and evidence of satisfactory experience before customers are convinced of purchasing the service. If the American angler has not taken a chance on Johns ability, John will not have a sale or a source of revenue for the month. Unlike products which can be displayed, smelled with a tester, experienced with taste tests, or feel or hear, the service cannot be judged until it is performed. This creates some problems when John markets its guiding services. Heterogeneity. No two performance of a service can be totally similar, unlike products. Because the delivery of a service is dependent on many factors aside from the service provider, customer experience varies (Shostack 1987). The customer will have a predicted service level or “service level that [she] believes the firm will actually deliver (OLoughlin 2009, Slide 54).” This predicted service level will spring from Johns promise of service quality through his marketing communications. If the desired service level or “the wished-for level of service quality that the customer believes can and should be delivered (OLoughlin 2009, Slide 54),” matches the predicted service level of Johns business, the customer will book for his service. Heterogeneity poses a problem in Johns guiding service when he has tried to ask his father to help him accommodate the additional customers. The challenge is, for his father to meet the acceptable level of service or “the minimum acceptable level of service”, and surpass it by delivering the desired service level of the customer. If his fathers skills is better than Johns, with a significant difference, the level of satisfaction that the customers have when the father is the guide will be different than the level of satisfaction the customers will have when John is the guide. This is also true when the situation is reversed, if Johns skills is better than his fathers. This difference is crucial in moments like repeat purchases, where the two experiences are compared; the predicted service level which is a result of the past purchase will differ with the actual service level because of the difference in service providers. Since John is new in the industry, he has no concrete idea yet about customers zone of tolerance – “the range within which customers are willing to accept variations in service delivery (OLoughlin 2009, Slide 54).” In order to address the impact of this difference, John has to determine the zone of tolerance and try to minimise the variations in the service levels. This difference can also affect the business when it comes to testimonials; if the differences in quality are significant, there will be cognitive dissonance in the minds of the consumers which can affect their purchase decision. This has been true in the differences in experience between the American and Canadian customers. Although Johns skills are good, the quality of the service for the Canadian customers have suffered due to other factors. Because of the weather, John ponders if he is able to even surpass the adequate service level, since the experience has left the Canadians with a relatively bad fishing experience – few catch and an injury. In fairness to John, his service recovery system includes measures on how to effectively handle the complaints in the case of Canadians; although the complaints are not totally resolved because the root causes have been the weather as well as the accident. This heterogeneity and lack of uniformity in service performance makes it hard for John to qualify the quality of his service as it varies from one customer to another. Because of this, John finds it hard to create a brand promise with regard to the quality of his guiding service as a marketing offer to induce customers into buying. If he communicates a certain brand promise and he fails to deliver and meet the customers expectations such as in the case of the Canadians, his business will suffer as well as his personal reputation. Simultaneous production and consumption. Production has been one of Johns concerns when it comes to service. Because the delivery of service is dependent upon his physical efforts, he can only produce only a few units of service for a given period of time. Because he cannot multiply himself, he cannot increase his production within a given set of time. He works from 4am to 10pm, and he can only provide service to one set of customer within the day. Since he cannot increase his production, he cannot increase his revenues as well. Perishability. Unlike a product which can be manufactured and stored for a later date to sell or to use, a service, because of its simultaneous production and consumption characteristic, cannot. During the last few weeks of November, John does not have any client. However, during the first few weeks of December, he has too many clients. Because his production is limited to the physical effort within a given time period, his services can only cater to a set of customers. If he can use the time during November to perform the service and sell them at a later date, such as in December when there are a number of customers, he would not have any problems with regard to the conflicts of the schedules. However, a service is perishable (Woodside, Frey, & Daly 1989); he would have to give up the additional revenue in December because he cannot manufacture the service in advance in order to deliver the needs of the customers. C. Explain how John could use the extended marketing mix elements to help manage the problems caused by the special characteristics of services. The extended marketing mix elements include people, physical evidence and process. These additional elements that are added to the traditional marketing mix, which has been mostly used for tangible products, has been argued to be more helpful in crafting the marketing mix for services. The people element of the marketing mix argues that all the people who are involved directly and indirectly when the service is performed contribute to the value when the service is being performed (Heskett 1994). Physical evidence includes all the tangibles that the customer may encounter when the service is being performed that could influence the customers perception of the service quality (Bitner, Ostrom & Morgan 2008). Processes include all the activities in the performance of the service (Parasuraman, Zeithaml, & Berry 1995). John experiences a lot of problems with regard to his operation due to the special characteristics of service. In order to address these problems, he can utilise the three additional elements of the marketing mix by creating a blueprint of his service. The service blueprint will integrate these three additional marketing mix elements in order for him to be able to make his service reproducible (Bitner, Ostrom & Morgan 2008). Service blueprinting starts by identifying the physical evidences that the customers will encounter which can influence the service quality (Bitner, Ostrom & Morgan 2008). This includes Johns brochure, Johns websites which can include videos of him fly fishing as well as some educational information that will prove his credentials, and his equipments. By showing that he is professional in his ways by creating a perception of the high service quality through all the physical evidences the customer will encounter, it will address the problems that arise from service intangibility. As per the other variables that contribute to the customers experiences, John can have a standard choices for the physical environment / fishing area where he will bring his customers. If the weather is the same, the fishing area is the same, and his skills are the same, the problem that arises from service heterogeneity can be minimised and customers may have the same level of quality with regard to the experience. Processes that are both visible and non-visible to customers are also important (Parasuraman, Zeithaml, & Berry 1995). These processes should be included in the service blueprint in order to set standards when it comes to fulfilling them in order to match the brand promise with regard to quality (Parasuraman, Zeithaml, & Berry 1995). For example, one of these processes that are visible to the customers include fetching and dropping off customers from and to the airport, then bringing them to the fishing itineraries. John can list down all the processes, both visible and non-visible to the customers, find out what processes can be done by other people, and what processes are only exclusive to him because of his expertise. John will have to rank the processes according to which provides best value to the customers, and what customers will rate as the most important from their point of view. Among these processes, fetching and dropping customers from and to the airport to the fishing areas can be done by other people aside from John. Accompanying the customers while they are fishing in case they need some help can also be done by other people. Where John could concentrate on is the training part of the session, where he is going to guide and train the customers when it comes to fly fishing. For example, if John has three customers for a given period, he could hire people to fetch and drop them to the fishing areas instead of doing it himself. While he trains one set of customers, he can think of some other activities for the other two sets of customers to do while waiting for their turns for the sessions. He can move from one fishing area to the other in order to check the progress of the customers every now and then, while taking turns. In order for him to deliver the service without making customers feel being alienated when he goes to the other fishing areas, he can hire and train some staff who are also knowledgeable in fly fishing in order to assist the customers while he is not around. Making his service reproducible in some way addresses the problems that arise from service perishability. This brings people element of the marketing mix to the picture. John must ensure that he properly trains his staff because the processes, both the visible and non-visible ones which these people are involved will contribute to the value that John aims to provide by the delivery of the service (Bendapudi & Bendapudi 2005). Aside from the core process (Chrzastek & Reid 2006) of him teaching and sharing his knowledge and techniques in fly fishing in order for the customers to have great experiences, all these three components contribute to the level of quality of the service that his business provides. Another way to address the problem of heterogeneity is to determine the zone of tolerance among the target market, and create a service recovery system that includes an effective complaint handling in order to ensure increased in customer satisfaction (Bitner, Ostrom & Morgan 2008). The effective complaint handling part of the service recovery system will include process as follows: “by identifying the service complaints, resolving them effectively, and learning from the recovery experience in order to do the job right the first time, in line with continuous service improvement (OLaughlin 2009, Slide 69).” The people part of this service recovery system is crucial, since John will not be the only person in the company to interact with the customers. A simple framework called “act with TACT” can be made part of the service recovery system: “T-take ownership; A-acknowledge and apologize; C-Correct and communicate; T-Thank, track, trend and learn (Scott 2009, 45).” III. Conclusion Johns problems arise from the special characteristics of services which include: service intangibility, he finds it hard to convince consumers to purchase the service because there is less reason to believe with regard to the service quality other than what they can witness using the five sense; service heterogeneity, where because of many factors, there are no two service performances that are the same, which could bring a distortion when it comes to the perception of service quality, which could then affect the brand image and future saleability of the service; the simultaneous production and consumption of service which limits his operations and his ability to earn; as well as service perishability which renders him less efficient when it comes to producing the service and generating more revenues. The solution in order to address Johns problems that arise from these special characteristics of service is found by utilising the extended marketing mix elements, which include people, processes and physical evidence. By creating a perception of the high service quality through all the physical evidences the customer will encounter, it will address the problems that arise from service intangibility. As per the other variables that contribute to the customers experiences, John can have a standard choices for the physical environment / fishing area where he will bring his customers. If the weather is the same, the fishing area is the same, and his skills are the same, the problem that arises from service heterogeneity can be minimised and customers may have the same level of quality with regard to the experience. Making his service reproducible by streamlining and standardising his processes addresses the problems that arise from service perishability. By hiring and training people who could do some of the processes on his behalf without sacrificing the quality of service which is dependent upon his skills, his problems arising from the simultaneous production and consumption of services, i.e. not being able to expand his production beyond his physical effort within a period of time can be solved. References Bendapudi, N. & Bendapudi V. (2005 May). "Creating the Living Brand." Harvard Business Review. p. 124-132. Business Source Premier, EBSCOhost (accessed April 28, 2010). Bitner, M. J., Ostrom, A., & Morgan, F.. (Spring 2008). "Service Blueprinting: A Practical Technique for Service Innovation." California Management Review Volume 50 Number 3, p. 66-94. Business Source Premier, EBSCOhost (accessed April 28, 2010). Chrzastek, J. D. & Reid, C. (2006). "Overcoming the Challenges of Professional Services Marketing." Journal of Integrated Marketing Communications. p. 22-27. Business Source Premier, EBSCOhost (accessed April 28, 2010). 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