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Producing Unique Service - Essay Example

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The essay "Producing Unique Service" focuses on the critical analysis of the major issues in producing unique service. Truly said, people will never forget about the services given by service-based organizations like restaurants, beauty parlors, consultancy firms, etc…
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Producing Unique Service
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People will forget what you said, people will forget what you did, but people will never forget how you made them feel." - Bonnie Jean Wasmund Truly said, people will never forget about the services given by any service based organizations like restaurants, beauty parlors, consultancy firms etc. A true and unique service must be provided by setting a pricing policy as 1) selecting the pricing objective, 2) Determining demand, 3) Estimating costs, 4) Analyzing competitors’ costs, prices and offers, 5) Selecting a pricing method, 6) Selecting the final price of the service. Price: Although pricing can be one of the most difficult marketing decisions, the basic process is to set a price of service is calculating your costs; estimating the benefits to customers and the limits on how much they’re willing to pay; and comparing your products, services, and prices to others that are similar i.e. with the competitors. A company can follow five major objectives through pricing, they are: Survival- it is a short- term objective and for the long run the company must be able to add values or face extinction. Maximum current profit- here marketer estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit, cash flow, or return on investment (ROI). Maximum market share- here marketer thinks that higher sales volume will lead to unit costs and higher long-run profit. So they set the lowest price. Maximum market skimming- here marketer sets high price to ‘skim’ the market as he considers that high price communicates the image of a superior service. Product/service quality leadership- providing high quality services at higher price specially targets premium customers. Here marketer believes in perfection with no compromise and thus offers his service at higher price. A price is being established on the basis of owner’s own choice by following any of the above major objectives and also by the willingness of the consumers on how much they can pay, what are the substitutes available to them, is your competitor offering the same or better service that too on a lower cost than your service, you have to evaluate and then set the price of the product. The price could be a low one so that you could attract and have access to a larger audience. Or you could approach it from the opposite end – charge a high premium so that each service would generate a lot of revenue and you would not have to work the long hours nor have more over-head. For e.g. one of my friends is running a restaurant named as ‘The Diners Park’ and has invested a major chunk of his capital for this venture. So earlier, with the fixed costs, it was getting really hard for him to generate substantial profit. The customers very often like the quality of food and ambience of his restaurant but it was the price of the food items which was the main concern of his customers and of his as well. He earlier took product/service-quality leader as an objective and thus set the prices higher than his competitors but provided a high –class premium quality food and services. But after analyzing the whole case he found that though consumers wanted a good service and nice ambience but charging heavily for that was not accepted by them, so my friend decided to cut the fixed costs and variable costs and took maximize the market share as an objective. This does not mean he compromised with the quality, but he used to cut some of the extra costs from the logistics, human resources and lot of show offs. He is successfully doing his business now. Communication: Services can be differentiated. The alternative to price competition is to develop a differentiated offering, delivery and image. Here communication plays an important role with the new concept known as Integrated Marketing Communication (IMC). It is a management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than working in isolation. Here the service marketer has to evaluate what is his communication objective. Following are communication objectives: Awareness- creating awareness for whatever the marketer is offering to the customer becomes very important task; the brand name of the service should be made to recognize with simple repetitive messages though print media, electronic media, direct marketing. Knowledge- the target customers might are aware of your services but do not know more than that, then you have to get in touch with them. Liking- do the target customers like your services? Or they are much satisfied by your competitors’ services. This has to be found out by the service marketer and here comes the role of a good public relation. If the problems are real then the owner must check and fix the problem. Preference- the target customer may like your products and services but not prefer it to others. So it is the marketer’s role to build the preference over other. For e.g. Kids generally prefer to go to MacDonald’s rather than to Pizza hut or any other food joint as the former provides toys, play junction and playful ambience to them. Purchase- the last and the final objective of any marketer is to make the target audience convince and purchase your services over others. After sales services- the most important objective to attain is customer satisfaction so that not only old customers are retained but new customers are made by good will and spread of good words. Promotion and making aware of what is available to the customers and what the offerings are is the important and an essential part of any marketing strategy; keeping this in mind my friend who owns The Diners Park restaurant, promoted the Unique Selling Proposition (USP) i.e. good quality at an affordable price with great ambience to the customers. For this he: Made attractive pamphlets and distributed through the volunteers to his target customers. Published & telecasted a print or an electronic advertisement of ‘The Diners Park’. Offered some food vouchers through contests or college fests. Offered free gifts like soft toy or a coffee mug to food lovers especially to kids. Most importantly, made them feel great through ambience and aroma of the food so that a good word of mouth can be spread. So, Communication and creating awareness and positioning well in the minds of consumers creates a unique, credible, sustainable and valued place in consumers’ minds for that service. Also, The communication strategy addresses the special characteristics of services which make it different and unique from goods; that are: Intangibility, inseparability, perish ability and variability. Services unlike goods cannot be seen, touched, heard, smelt before they are actually consumed or experienced, also services have to be produced and consumed simultaneously; services cannot be stored and services are highly variable i.e. there is no standard form in which it could be made but, it is because of communication through old customers, good will and spread of good words that make wonders. So if there is a healthy and wise communication between the service provider and the consumer, it will enhance the expertise and skills of the owner which in turn will enhance the profit. Physical Evidence The major challenge is that most service offerings and innovations are easily copied. But the company that continuously introduces innovations will gain a succession over temporary advantages over competitors. And here comes the role of physical evidence which is the most important attribute in positioning the service and communicating the service quality. Physical evidence is the material part of a service. Physical environment is the packaging form of service and customers mostly judges the quality of services provided by feeling the environment, atmosphere and the ambience of the service industry; as in the case of tourism attractions, resorts and restaurants (e.g. Disney World), parcel and mail services (e.g. FedEx), and large banks and insurance companies. There are many examples of physical evidence, including Packaging, Internet/web pages, brochures, furnishings, business cards the building or the place itself and many others. Physical evidence is an essential ingredient of the service mix; consumers will make perceptions based on their sight of the service provision which will have an impact on the overall sales of the services being offered. Thus, to a larger extent the physical evidence of service play role in positioning the service and communicating service quality which in turn helps in having goodwill and spread of good words among the consumers and customers as well; making profit to the service provider. References: Wirth, Ross A., Ph. D. Integrated Marketing Communication. Last modified- September 23, 2008 Available from: Entarga.com, < http://www.entarga.com/mktgplan/imc.htm> [Accessed 11 January 2009] Kotler, Philip. 11th ed. (2003) Marketing Management. New Delhi: Pearson Education(Singapore). Sengupta, Subroto. (2006) Brand Positioning; Strategies for Competitive Advantage. New Delhi: Tata McGraw Hill. Read More
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