Marketing of Services Issues - Term Paper Example

? Marketing of Services Contents Contents 2 Question 3 Package 3 Facilitator 3 Socializer 4 Differentiator 4 Question 2 4 Question 4 5 Prestige Pricing 5 Skimming Pricing strategy 6 Penetration Pricing 6 Question 6 6 (A) 6 (B) 7 Question 1 Services cape is the environment which surrounds a service. It refers to the environment in which the service is assembled together, where the consumer and the seller interact, combined with the tangible commodities which facilitate communication or performance of the service. But the people within the built environment can influence and shape the physical space; hence the social environment is also included in the expanded definition of the services cape. Research has shown that the design of a services cape influences a customer’s expectation, choice, satisfaction and other behaviour. The four strategic roles service scopes are as follows: Package The service scape and other physical evidence wrap the service so that it conveys a clear message to the consumers of what is inside. It is just like packaging a tangible product. The physical setting of a service essentially does the same thing through the interaction of the complex stimuli. The service scape is essentially the outward appearance of an organisation and hence it is critical in forming the first impression of customer expectation. Facilitator The service scape can aid in the performances of the persons in the environment. The design of the services cape can enhance or inhibit the efficient flow of the activities in the service setting. Thus it makes it easier or harder for the employees and the customers to accomplish their respective goals. A well designed functional facility can make a customer experience pleasure while an inefficient and poor design can frustrate both the employees and the customers. Socializer The design of a service scape can help in the socialization of both the employees and the customers. It helps to convey their expected behaviours, roles and relationships. For example a new employee would come to understand her role in the office through her office assignment and her location relative to others in the company. Differentiator The design of the services cape can differentiate a firm from its competitors and signal the market segment of the service which it is intended for. Any changes in the physical environment can be used to signal reposition a firm or to target new market segment. Question 2 Global business environment has become highly competitive as several organizations within the global business environment are implementing unique business operation strategies in order to gain potential competitive advantages. Several service providing organizations always try to ensure high quality customer service in order to develop potential customer base. It is true that high engagement service providing organizations need not have to concern about the issues of customer loyalty. Now-a-days, consumers always demand effective customer service from the organizations against their money. Satisfied customers always intend to stick with the brand or the organization. The do not try to take the risk of switch over another brand. Several service engagement organizations used to focus on strong and effective customer relationship management practices in order to retain its existing potential customer base. However, these organizations have to focus on developing new client base as the business environment in this world is becoming competitive and saturated. People are becoming loyal to particular brands due to high satisfaction from the offered services. Therefore, it is highly important for the organizations to attract the new customers who have never experienced about the services of other service providers. It is quite easy for an organization to gain customer loyalty of a new and inexperienced customer about different service. If the customer chose another brand then it will be difficult for that organization to attract the particular customers. High service engagement firms should not bother abut retaining existing customers as the consumers also try to stick with the brands due to effective relationship with the organization and customers. This relationship helps the customers to expect effective customer service every time. On the other hand, organizations also give value to their needs. But, it is most important for these firms to develop new client base to increase market share and gain competitive advantages. Question 4 Three different pricing strategies of service marketing are as follows: Prestige Pricing Prestige Pricing is a demand-based pricing strategy by the service marketers. It is offered for those who offer high-quality or status services. For example in health clubs, restaurants, hotels, airlines high price is charged for such luxury end business. Hotel guest who crave for pampering, are offered club floors which acts as high end amenities for them. Some customers actually value the high price since it represents quality image or prestige. In such prestige pricing strategy, the demand may actually increase as price increase since more costly a service gets the more value it reflects. Skimming Pricing strategy In this strategy, a new service is first introduced at high prices and is targeted to the high end customers. It is an effective approach when the services are bought back for major improvements over the past services. Here the customers are more concerned about obtaining the service than the cost of the service. This allows the service providers to skim the customers who are willing to pay more. Penetration Pricing This is used for new services which are introduced at low prices. It is mainly done to stimulate trail and widespread use. It is appropriate when the sales volume is sensitive to the price, when it is possible to achieve economies of scale and the service faces threat of competition soon after its introduction in to the market. It is also used when there is no class of buyers who are willing to pay higher price to obtain the service. But penetration pricing can sometimes lead to a making the price so low that the value of such service may get affected. Question 6 (A) Customer service can be defined as the advice and assistance offered by an organization to those individuals who used to purchase or use the products or services of the organization. Organizations generally provide effective services to the customers in order to develop effective relationship with customers and achieve significant business growth rate. (B) An organization has to ensure the integration of different tasks in customer service activities to meet the needs and demand of customers and attain significant business growth rate. There ar5e five key tasks to ensure effective customer service activities. First of all, it is highly important for an organization to respond to the quarries or problems or questions to individual customers. It can help the organization to collect required information and data that can help the organization to develop future strategies and rectify current issues. It is the responsibility of the service representatives. Secondly it is important for the organization to identify the source of dissatisfaction. The organization needs to understand the origin, nature and potential ramifications of the customer complaints or the problems. It will help the management of the organization to provide effective and most specific solution to the developed problems. Thirdly, it is important for the organization to conduct a root cause analysis in order to determine exact reason behind the problems. Several aspects can create customer service issues, such as inadequate follow-up, service quality or product quality. Effective root-cause analysis can help the organization to investigate the problem by reaching to the exact department and effective data analysis process that are stored in systems. Fourthly, the organization needs to resolve the systematic problems by implementing effective implementation advanced technological or manual processes. Lastly, the organization should provide effective feedback to the customers on the prevention of the created issues and problems and ensure high quality customers service activities. It will help the organization to maintain effective customer service activities. Read More