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Service and Retail Marketing - Assignment Example

Summary
The paper “Service and Retail Marketing” is a valuable example of a marketing assignment. According to Palmer (2008), a service refers to the production of an important intangible benefit, either on its own or as a key element of a tangible product, which through some form of exchange, satisfies an identified need of a customer…
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Extract of sample "Service and Retail Marketing"

4th May 2016

Question 1

According to Palmer (2008), a service refers to the production of an important intangible benefit, either in its own or as a key element of a tangible product, which through some form of exchange, satisfies an identified need of a customer. Within the global economy, services make significant contribution on the GDP. Similarly, services including banking, insurance, tourism, education, health, emergency, retail and law contribute approximately 75% of the gross domestic product of developed economies including UK, USA and Australia. Based on stiff competition in the banking industry, firms have adopted various strategies in order to achieve a strong positive brand-customer relationship with an aim of increasing their sales. For example, Barclays bank has identified excellent customer service as the primary element of retaining and attracting new customers. Additionally, the bank is now focused on using customer satisfaction scores instead of sales performance as the basis of providing incentives to the employees (Wilson et al, 2008). In achieving service quality in the banking sector, there are various characteristics that are important to Barclays as a major firm in the industry and which the employees should take into consideration when serving the customers. These include;

Intangibility

While products are tangible in nature, services are intangible. Pure services cannot be assessed by the four common sense including feel, sight, taste and smell. A service is made and delivered on the spot and it is not possible to measure it as easily as for the case of tangible product. Notable aspect of services is that the emphasize is on processes instead of outcomes. Additionally, the intangibility nature of services makes it difficult for customers to evaluate alternative services. Thus, as a bank, Barclays should provide services that are aimed at creating positive perception on the minds of the consumers. While utilizing the services, customers rely significantly on word-of-mouth (WOM) or electronic word-of-mouth (eWOM). As noted by DiPietro, Wang, Rompf, & Severt (2007), WOM shapes the behavior of the consumers and is the main source of information during decision making process. On the other hand, eWOM provides consumers with opportunities to intensify their voices in a unique manner especially with the increased use social marketing. To deal with the problem of intangibility, marketers must be more innovative in order to differentiate their services from those of the competitors in addition to creating better value for their services and attracting more customers.

Inseparability

This characteristic depicts that production of a service cannot be separated from its consumption. Once a product is produced, it can be taken away from the source; however, a service is produced and consumed at the point of purchase. Consumers are therefore taken as co-producers of the services. Being co-producers of its services, Barclays should ensure that consumers become part of its operations by engaging them in providing feedback through online platform or in suggestion boxes. Customers are often regarded as co-consumers of a service with other consumers. Thus, if services provided by Barclays are not satisfying to some consumers’ needs, others may also be aware of such services and also complain of their unsatisfying nature.

Variability

This characteristic indicates that each producer-consumer encounter is unique. Even though it is difficult to control quality while providing services, the variability of the services provides a reasonable opportunity to regulate quality and ensure consistency (Christopher and Jochen, 2011). For example, during their day to day tasks, Barclay’s bank employees are faced with challenges and issues from individual customers, and if handled effectively, they act as precedent to reference in future cases. Due to variability, services providing firms are faced with various challenges. For example, it is difficult to standardize services since they vary across time and people. Secondly, there is need for extensive staff training to ensure that the services comply with the requirements of individual customers or organizations.

Perishability

Perishability of services implies that they cannot be stored and if not used, the opportunity to sell them is permanently lost. This implies that the law of demand must be followed in order to ensure there is a match between the supply and demand for services since any mismatch can have negative impact on consumer experiences (Lovelock and Gummesson, 2004). One of the major causes of perishability is inability to store services due to lack of ownership. The fluctuating patterns of demand for banking services as the result of economic recession can for example make the services not useful for that particular time, resulting to a loss and reduced activities for a financial institution such as Barclays bank.

For marketing managers, Smriti (2015) argues that perishability of services has an essential implication. Since the inventory is nil, demand forecasting becomes a key aspect in service marketing. This implies that apart from demand, marketers must emulate creative thinking and capacity utilization. There is also need to have a backup plan to substitute any plan that fails. For example, in an Information Technology company, back-up projects should be initiated to ensure engineers are always working instead of staying idle.

Lack of ownership: due to intangibility and perishability

Unlike for a product, an individual cannot own a service since buyers purchases the process and not a tangible outcome. Even though it is not possible to own a service, it can create unforgettable memories in the minds of the consumers. For example, if a customer purchases an air ticket to and from the US, he or she is not much interested by the ticket since the service is not tangible, but the experience he will get from the journey. In marketing, the impact of ownership rest on the performance of the employees or marketers when delivering the service. For example, a customer might not like the services provided by a bank, however. He or she would have already paid for its usage. This implies that the customer can positively or negatively impact the service product. Thus, banks should take precaution in their marketing mix in order to avoid disappointing the customer after the sale.

Question 2

Blueprinting refers to a visual representation of a service process. One of the major aspects of a blueprint is customer action. This entails the action that a customer takes as part of providing the service. The second one is frontstage actions. These aspects, which entail face-to-face actions between the customers and employees, are separated from customers’ actions using line of interactions. Backstage actions which are also referred to as invisible contact employee are separated from onstage by line of visibility. Anything that occurs below the line of visibility can be seen by customers while everything above the line of visibility is visible to customers (Beckwith, 1997). Support processes on the other hand, involves the activities that are undertaken by various units and individuals within an organization and which must happen in order for the services to be delivered effectively. The last concept is the physical evidence. For every action from a customer, the physical evidence that the customer come into contact with, is indicated at the top position of the blueprint. The physical evidence refers to the tangibles that the customers are exposed to and which play a significant part in quality perception.

A service blueprint for a banking sector

Stage in

Service

Process

Target 1 2 3 4

Time

Participants Teller serving Teller serving Teller serving Customer

customer customer customer care

Visible Appearance of Bank bronchures/ Appearance of staff Appearance

evidence bank/ furniture products list of staff

Line of visibility ------------------------------------------------------------------------------------------------

Invisible Staff Telephone Cleaning of baking Accounting

processes training calls hall Procedures

While receiving services from banks, customers are exposed to tangible cues which are distinctively separated by the line of visibility. These include stationery, furniture, bronchures, billing statements, employee uniform, reports and virtual servicescape (Loveman, 1998). The invisible processes as indicated in the example of Barclays bank blueprint include staff training, telephone calls, cleaning of banking hall and accounting procedures following withdrawal or depositing of customer funds (Shostack, 1984). Within a banking sector, potential fail points include initial telephone enquiry, staff courtesy, advise of the appropriate account, advise on charges, quality of waiting conditions, technological errors, quality of services, communication with supporting staff and assistance from senior managers.

During the provision of services in banks, service failure is unavoidable. Service failure arises when the performance of a service falls below customer’s expectations resulting into customer dissatisfaction. In response, the service recovery, which refers to the actions taken by an organization to address the failure, is undertaken. Service failure is related to the inseparability characteristic of a service and it is upon any organization to identify ways of knowing when a failure occurs during its service provision. In order to effectively address the service failure, the recovery should not only be rapid but also it should be appropriate and empathetic (Shostack, 1982). Based on the importance of banking sector in economic development of any country, banks must seek to restore customer trust and sense of equity following the potential failures.

The recovery procedure that banks should adopt an effective service recovery strategy must emulate eight key issues. These include treating customers fairly, providing adequate explanations to the service consumers, acting quickly, tracking complaints, making the service fail-safe, learning from lost customers, learning from recovery experiences and cultivating relationships with customers (Christine, Ya-Hui H and Yeong-Jia, 2009). Additionally, for banks to provide services that result into delighted customer experience, they can apply the SERVQUAL framework that seeks to achieve improved service quality by deducing customer expectations from perceptions. The first aspect as specified by the 5 dimensions (RATER) is reliability. This calls for banks to keep their promises which are essential for customers during their decision making processes. Secondly, banks should provide assurance. This means that members of staff should have adequate knowledge to answer complex questions from the customers or investors (Kardes et al, 2015). Thirdly, banks should provide resourceful tangibles including modern-looking equipment that are in line with the needs of the customers. Fourthly, banks should be in a position to provide personalized attention since customers are faced with diversified challenges that requires unique solutions. Fifthly, the culture of responsiveness should be advocated for by banks management. This implies that service providers including tellers, credit officers and business advisors should be willing to help the customers.

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