Management of Service Quality at Coca Cola Company - Essay Example

Student Name: Instructor’s Name: Title: Case study related questions Course: Institution: Table of Contents Table of Contents 2 PART A 3 Case 1: A Systems Approach to Service Quality 3 1. Systems approach at Coca Cola Company 3 2. Managing customers’ complaints 4 Significance of handling clients’ complains 5 Case 2: The impact of service-encounter quality in service evaluation: evidence from a business-to-business context 6 1. Service encounter 6 2. Perceived value 7 PART B 8 1. Adding new service to an organization 8 Challenges of adopting new technology in various stages of designing, delivery and evaluation services 10 3. The importance of services in impacting current economies 12 Bibliography 14 PART A Case 1: A Systems Approach to Service Quality 1. Systems approach at Coca Cola Company Every service should be assessed continuously in order to evaluate its effectiveness (Testa & Sipe, 2006). Managers at Coca Cola Company can use a grid of employee-tools, which has particular steps that can be considered to enhance service that customers can appreciate. The grid entails five steps. The first step is to identify and communicate matters. When this is done the company is able to recognize issues that arise from whichever level of management and tackle it effectively. The second step involves training and educating workers. When this is done, employees are able to interact effectively with customers hence meeting their expectations. The third step is process improvement. When processes that are implemented are improved, the clients will be able to appreciate quality service (Mosahab et al. 2010). The fourth step is to assess results and giving feedback. When evaluation is done, weaknesses of the processes are identified and rectified promptly. The final step is celebrating success of effective performance of employees which can be seen through satisfaction of clients. The approach of systems-thinking argues that interventions need to be done at the level of root-cause (Testa & Sipe, 2006). This awareness level is the pattern degree, which entails the logic that events appear to be connected and either decreasing or increasing. The subsequent level of awareness is the structural level. This implies that managers at Coca Cola Company can start to visualize the incidences happening at the iceberg tip are brought about by the structures and systems formulated to achieve the goals of the organization. One therefore considers the most significant results for the company and if, profitability or customer gratification is the overriding determinant of the success of the organization. 2. Managing customers’ complaints Studies show that if customers’ complaints are not handled correctly, clients may possibly never come back to an organization and worse than that is that these clients will inform their friends not to also come back. It is indicated that when people have an issue with a firm, they are prone to tell seven to ten individuals about it especially in the expanding world of social media (Jones & George, 2011). Studies show that a system of complaint management that is effective needs to be an integral component of quality service (Jones & George, 2011). When line managers are not able to handle the root origins of complaints, a cyclic process takes place in that the same service that relates to issue continues to come up despite the number of times the manager handles them. In the case study for instance, complaints elevated regarding Sears Automotive’s policies on service and repair. The consequences of the Sears accusations was a 15% loss of its nationalized auto repair company. Since the negative action happening at the event level which is effect was so remote from the level of mental model which is cause, it was hard for the makers of policy and managers comparable to visualize how the issue had come up (Testa & Sipe, 2006). Another effect of ignoring clients’ complaints is seen in the Euro Disney project. Trying to develop in Europe, in 1992 Disney established the park merely peripheral to Paris. The park experienced a lot of problems and nearly faced bankrupt. The chief cause for poor performance was failure to acknowledge how cultural dissimilarities involving the United States and its Western equivalents affected the park’s perception by the guests (Testa & Sipe, 2006). Relationship between Deming 14 points and Service Quality Model dimensions Both Deming 14 points and SERVQUAL dimensions are used in service quality (Fitzsimmons & Fitzsimmons, 2008). For instance, the SERVQUAL dimensions entail a brief representation of the essential measure that clients use in evaluating quality of service. Deming 14 points comprises of 14 values that emphasize the significance of human aspects in attaining excellence. SERVQUAL dimensions measures the perception of a customer of a given encounter of service on every dimension of quality and makes its comparison with the client’s expectations for the kind of encounter (Mosahab et al. 2010). Significance of handling clients’ complains Irrespective of how good the customer service of an organization is, it is certain that at some point, it will have customers that are unhappy (Mosahab et al. 2010). That is the reason for having a system for managing clients’ complaints. Importance of handling customers’ complaints is to help gratify the client. This leads to referrals and loyalty of the clients. Effective management of clients’ complains can resolve problems in that the company sees its weakness in the products or process that need to be corrected. Quickly and correctly solving complaints of clients can assist a business to grow (Mosahab et al. 2010). Case 2: The impact of service-encounter quality in service evaluation: evidence from a business-to-business context 1. Service encounter There is an expanding knowledge regarding how service clients take in, view, and analyze services. The significance of service interactions is the relation linking the client and the provider of the service. Service encounters have turned out to be an important component of the image that is portrayed to the company’s customers sequentially, will play a powerful role in establishing the firm’s success (Fitzsimmons & Fitzsimmons, 2008). Some scholars argue that there is a positive link between service quality, loyalty and client gratification (Jayawardhena, 2010). Service quality has indicated an essential effect on clients’ objective to repeat purchase in the contexts of business-to-consumer and business-to-business. Researchers who analyze service evaluation in organizations argue that service quality mirrors the client’s evaluation of the general degree of service provided by an organization and that the evaluation is frequently grounded on views formulated in the course of service encounters. Positive views of quality service encounter may result in expectations of the general service quality (Jayawardhena, 2010). The current and broad ranging concentration on satisfaction of service encounter and quality of service addresses both the significance and the complication of the matters. A scholar contends that loyalty of customers to service companies is still under-explored. The reason that brings about complexities is coupled with various factors. For instance, people have personal preferences and may or may not develop attachment towards the firm or the employee of service provision. Hence, other factors should be considered a part from loyalty and satisfaction. On the other hand, the service encounter that a client gets from the firm depicts their consumer behavior (Fitzsimmons & Fitzsimmons, 2008). 2. Perceived value Perceived value takes place at various points of the process of service purchasing experienced prior to buying, at the time of buying, at the moment of use, and after utilization (Jayawardhena, 2010). Presently, a study has been conducted evaluating the connection between loyalty and perceived value. Hence it was noted that perceived value affects the client preference behavior at the stage of before purchase and influences the lasting intentions and relationships to recommend after usage. Perceived value is determined by the theory of equity, which considers the ratio of input/output of the client to the input/output of the service provider, and means the client’s evaluations of what is appropriate, fair or worth for the perceived expenses of offering (Jayawardhena, 2010). It is contended that great value is one essential motivation for client support. Some authors state that customers portray behavioral objectives toward providers of service provided that the relational exchanges offer great value. Some researchers argue that there is a positive connection between quality of service, loyalty and customer gratification (Horovitz, 2004). The reason is that the higher the general quality of service perception, the greater chances of clients engaging in behaviors that are positive to the company, like being loyal to the company. Quality of service has indicated a beneficial outcome on the intention of the client to repeat purchase. There is a positive relation between firm’s loyalty and perceived value. Satisfaction of the client has a potential control on the client’s behavior intentions and client retention. Perceived value can be reflected on prior to and after purchase as a client wants to get extra advantage in comparison to the expense when buying a service or a product (Jayawardhena, 2010). If the commodity if not affordable and perceived quality is substandard, the client would not want to purchase the product, this is considered as perceived value of pre-purchase. On the contrary, client gratification can be considered in an occurrence of post buying because the product or service value is perceived and assessed by the experiences of the client with the service or product (Horovitz, 2004). With this in mind, it is argued that there is an encouraging relation that exists between customer fulfillment and supposed value. PART B 1. Adding new service to an organization The success of a firm at addition of fresh service greatly relies on application of the features of the fresh cycle of service development, and management and measurement of the quality service encounter so as to attain constant great levels of satisfaction and loyalty of the client (Ian & Chad, 2002). This means that in order to satisfy and retain customers, a number of service developments should be practiced. For instance Company X implements a number of service development and its quality service encounter is managed and assessed effectively. The company must consider the needs of the clients prior to implementation of new service development. A relationship is observed the quality of service, gratification and loyalty. The correlation involving behavior of service and quality of service has justified its role and significance in marketing/management (Ian & Chad, 2002). Concepts of service satisfaction and service quality have been greatly considered and employed within the texts and activities of marketing in the past years (Fitzsimmons & Fitzsimmons, 2008). Scholars in marketing have praised the benefits of gratification and quality, and have regarded them as indicators of a firm’s competitive benefit. On the contrary, service loyalty is considered among the most significant features in Company X, because of its outcome on clients’ recurrent purchase, and actually, the loyal clients who do repetitive purchases are regarded as the foundation of the company. Service quality plays a big role in customer satisfaction and loyalty. It is documented that customer satisfaction and customer loyalty are linked at some degree. In fact, studies postulate that satisfaction of the client is quite essential in attaining loyalty of the client. A study in Company X found that client satisfaction originates from personal transactions where the outline of reference is the employee. Subsequently, customer gratification is directly connected to loyalty to a personal service provider, instead of a company in general. This is supported by Ian & Chad (2002), who contend that customers can develop an emotional attachment towards their employee’s service provider. Satisfaction of client is a major feature in creation of the desires of the client for future buying. Additionally, the clients that are satisfied are likely to talk to their friends regarding their good experience in a firm. However, satisfaction has been illustrated as the difference between performance and expectation, nevertheless there are dissimilarities involving satisfaction and quality. For instance, Horovitz (2004), states that gratification is a decision created post experience whereas quality is not equal. Service firms that are successful understand well the significance of carefully managing and assessing satisfaction of their clients (Ian & Chad, 2002). This is because; service encounter specifically has a great task in determination of a client gratification. Service encounter is the relations that take place between employees who have contact with customers and customers. Effective management and monitoring of service encounter at the Company X has been reflected on the company’s productivity. This is because of the good service experience that clients get at the company majorly on the emotional development that clients grow upon their personal service providers. Due to this, it is then fine to say that service development and effective management and monitoring of service encounter service leads to client satisfaction and loyalty. If a service sector is to have an ongoing development, profitability that is long-term, and continuous competitiveness, it needs to invent fresh services in order to attract and gratify clients (Ian & Chad, 2002). Challenges of adopting new technology in various stages of designing, delivery and evaluation services The new technology’s contribution to economic development can only be discovered when and if the technology is broadly diffused and utilized (Treat, 2011). New technologies to a company present some issues basically because the technologies are new. This entails, and not limited to new systems, new software and latest versions of software and systems that already exist. The internet has simplified the delivery of customer demand. When designing adoption of new technology in a company, it is good to conduct a pilot study in order to determine the effectiveness of the introduced technology (Hall & Khan, 2002). Failure to do this may bring about reduced exploitation of the introduced technology. A study carried out at Company Y identified that employees need to have a basic knowledge on Information and Technologies (IT). Operational employees are supposed to be involved in the adoption of new technology immediately, and the official formation of runbooks is an effective method of getting an operation staff familiar with technology they have not encountered before (Fitzsimmons & Fitzsimmons, 2008). Company Y, indicated financial issues as a major challenge when adopting new technology. Every organization of IT has a method of funding their applications. The company needs to provide resources and encouragement for the workers using the tool. Another challenge of introducing new technology is to form metrics to evaluate adoption and assist anticipate a decline in its use (Treat, 2011). Implementation of new technology in a company may call for outsourced experts which may be somehow expensive to the company. Other challenges include IT mis-specification which entails systems that are too large; poor usage of new IT technology whereby there is poor skills of IT and hardship in usage; resistance can also take place due to coordination of several parties; and not using the new IT (Fitzsimmons & Fitzsimmons, 2008). Any procedure is just as good as its mechanism of enforcement, criteria of compliance, and exemption and growth processes. Good governance is hence required to manage the challenges brought about by introduction of new technology. 3. The importance of services in impacting current economies In the current unstable market, the service sectors that are in a position to fulfill and exceed the customer’s expectations are the only ones that experience success (Doyle, 2011). Hence, it is important for businesses to have quality interactions with clients hence create client loyalty. The conventional method of forcing the service or product to the client is rapidly replaced by formulating business decisions that fulfill the expectations of the customer. The attractiveness of today’s markets to the service sector depends on a number of things. For instance, meeting client’s expectations as illustrated above. A study conducted in the Eastern Europe countries reveal that a successful service sector provides a direct outcome for the growth of the economy (Fernandes &The World Bank, 2008). High quality services have been shown to influence production expenses and hence the competitiveness and the level of incorporation into worldwide markets of businesses in every sector. Another factor that makes a company attractive in today’s market is the market diversity (Doyle, 2011). For instance, the more assorted the collection of market divisions covered by a company’s product, the more attractive the company becomes. A service sector is open to vital risk provided that its fate relies on a single market division. The attractiveness of the diversity of the market originates from the reality that various divisions will have dissimilar rates of growth and dissimilar cycles of demand (Horovitz, 2004). This is able to smooth out product demand and facilitate a more effective application of resources. On the other hand, today’s markets need to be understood before development of marketing strategies. The user market buys services and goods for individual consumption. Customers vary greatly in education, tastes, income, age, among other factors. Hence service sectors need to understand how customers influence marketing and other contributions into purchasing reactions. Client behavior is controlled by characteristics and the decision process. These characteristics may be social, psychological or cultural. A lot of these features cannot be influenced by service sectors, but they are important in recognizing and understanding the consumers who in turn determine the attractiveness of today's markets to the service sector (Doyle, 2011). Bibliography Doyle, E. 2011, Back To Business Basics: Industry Attractiveness Tool, Retrieved on 09 May, 2012, from http://www.doylestrategy.com/Industry_Attractiveness.php. Fernandes, A. & The World Bank, 2008, Structure and Performance of the Service Sector in Transition Economies, Retrieved on 09 May, 2012, from http://siteresources.worldbank.org/DEC/Resources/AnaMFernandes_ServicesECA.pdf Fitzsimmons, J. A., & Fitzsimmons, M. J. 2008, Service management: operations, strategy, information technology. Boston, McGraw-Hill/Irwin. Hall, B. & Khan B, 2002, Adoption of New Technology, New Economy Handbook, Retrieved on 09 May, 2012, from http://emlab.berkeley.edu/~bhhall/papers/HallKhan03%20diffusion.pdf Horovitz, J. 2004, Service strategy: management moves for customer results. Harlow [England], Prentice Hall/Financial Times. Ian, A. & Chad P. 2002, A customer-oriented new service development process, Journal of Services Marketing, Vol. 16 Issue 6, pp.515 – 534. Jayawardhena, C. 2010, The impact of service encounter quality in service evaluation: evidence from a business-to-business context, Journal of Business & Industrial Marketing, Vol. 25 Issue 5 pp. 338-348. Jones, G. R., & George, J. M. 2011, Essentials of contemporary management. Boston, McGraw-Hill/Irwin. Mosahab, R., Mahamad, O. & Ramayah T. 2010, Service Quality, Customer Satisfaction and Loyalty: A Test of Mediation, International Business Research, Vol. 3, Issue 4, pp 72-80. Testa, M. & Sipe L. 2006, A Systems Approach to Service Quality: Tools for Hospitality Leaders, Cornell University, Vol. 47, Issue 1, pp 36-48. Treat, T. 2011, Technology management. San Francisco, Jossey-Bass. Read More