The Nature of Services and Service Customers - Coursework Example

REPORT ON SERVICE ENCOUNTERS 2ND SEPTEMBER, 2008 TABLE OF CONTENTS 1. Abstract………………………………………………………………………… 3.0 2. Introduction…………………………………………………………………….. 3.0 3. Unique Aspects of Service Product…………………………………………….. 4.0 4. Services Marketing and Service Quality……………………………………….. 5.0 5. Service Encounters…………………………………………………………….. 6.0 6. Analysis of the Service Encounter written up in the Diary………………………7.0 7. Contemporary Issues in Service Marketing…………………………………….. 9.0 8. Focus on Interactions Rather than Exchange………………………………….. 10.0 9. Service Logic……………………………………………………………………. 11.0 10. Implications for Future Research……………………………………………… 12.0 11. Conclusion……………………………………………………………………. 12.0 12. References………………………………………………………………………13.0 ABSTRACT We all are surrounded by services which we as consumers use every day. It’s the new rise of the century which has widely recognized the growth of the service sector and its contribution to the economy. The following report deals with the nature of services and service customers as a core competency that draws up the implications of the service marketing and the managers. The report outlines the parameters to make the managers more thoughtful about the behaviour, thinking patterns, feelings and decision making of their service customers which can assist them in attaining successful outcomes. The study also focuses on the evaluation of the service encounters in terms of contemporary service marketing.  INTRODUCTION A service business is one where the perceived value of the commodity offered to the buyer is decided by the service parameters rather then the product offered. Till recently, the marketing literature has emphasized very little on the service marketers but the past decade has shown a significant contribution in innovative and new ways of managing and marketing the service firms. Modern marketing focuses on a customer centric approach an h but service marketing places customer at an even higher position capturing more pivotal role as they are the active participants in service production and delivery. When organizations offer services as their core product, or provide services that facilitate the marketing of its physical products, sustainable competitive advantages can be attained only by offering superior customer experiences. The output of service quality and customer satisfaction determines the success or the failure of the business. To gather data and conduct an analyses for evaluating service encounter in day to day life a diary study methodology was chosen to gather different real life experiences of encounters such as a visit to a restaurant, bank, optician etc. the diary reveals the impact that service businesses have on our daily life. Moreover the study also helps in understanding contemporary service quality from the consumer's perspective within a service context. UNIQUE ASPECTS OF SERVICE PRODUCT Service marketing is a dynamic and growing discipline. Services have their unique concept engrossed in factors such as tangibility, concurrent production and consumption of service products, heterogeneity and variability in relation to tasks performed and products offered, perishability, role of the customer, and the analyses on the fact that in services marketing process is itself equivalent to the product. We face encounters almost every moment of or life, some being related to services. The analysis of the past encounters in a month’s time clearly defines the different factors in a unique way in every different encounter confronted. The simple transaction with the bank displayed the heterogeneity of services provided to almost 100 customers at the same time with different objectives to be accomplished. The heterogeneity feature of service originated from variations linked with the human service employee. SERVICES MARKETING AND SERVICE QUALITY Service quality has varied dimensions such as reliability in order to fulfill the promises, responsiveness at every step where help is needed and imparted willingly, assurance to augment trust and confidence, empathy where every customer is truly respected and treated as an individual and tangibility representing the services physically. While service satisfaction and service quality are co related, very fewer researches have been conducted so far to reveal a clear understanding of how they are related. The development of services marketing has led to the development of service-oriented dominant logic of marketing. Quality is generally taken to be as an attitude in marketing; it is built on the evaluation of experiences which a customer derives in his day to day marketing and interaction exercise. SERVICE ENCOUNTERS A Service encounter is a key component for service marketers. To summarize the equation it can be stated as Service Encounters = åTransactions = åTasks. Poor quality in rendering and accomplishment of one task can taint the perception of quality for the entire sequence. For instance the encounter mentioned in the report in a music shop was fouled right in the beginning of the task by entering into the music store which changed the perception of quality before being into the actual process. Service encounter can also be drafted as: Service Transaction 1 service transaction 2 service transaction 3 Initiation – Diagnosis—service – verify Service encounters are a mode to influence customer’s perceptions and predefined opinions and views about the services rendered and the quality of the service provided. They are the opportunities to manage services transactions and interactions. The encounters are probed with distinguished characteristics such as purposes behind their existence for instance a customer asking for the advice on a menu from the attendant. The distinguishing characteristics of service encounters which make them differ from other social interaction such as the purpose behind their existence. For example if a customer asks for an advice on the menu from the attendant or the waiter there is a purpose or rationale behind the call. Service providers are generally. In service encounters prior acquaintance between the customer and the provider is not required; it is the moment of truth. Encounters are limited in scope due to the nature and the kind of service which is being delivered (Baron, S., & Harris, K. 2003). Even when the customer faces multiple interactions with a firm, each encounter is different from the other in creating a composite or a cumulated image perception of the company in the minds of the customer. The service logic states that all encounters are not equally important in building relationships such as normal dealings with the bank because of its nature. A formal, rigid and structures relationship can also develop professional relationships so far the needs and requirements of the customer are fulfilled (Zeithaml, V.A., Bitner, M.J 2006.) A service encounter occurs every time a customer interacts with the service provider, however the encounters can be categorized as remote, phone and face to face encounters. Remote ones are without any direct human contact like transaction through ATM, internet etc Phone encounters are general inquiry or order taking functions while face to face exist as a direct link between the service provider and the customer (Lovelock, C. & Wirtz, J. 2002). As per the analysis done on encounters, I think the most effective ones are the face to face encounters where a relationship establishes prolongs for a longer duration with the human element as an added advantage. ANALYSIS OF THE SERVICE ENCOUNTER WRITTEN UP IN THE DIARY In the past few, encounters faced included different satisfaction levels, such as few being excellent while most of them being mediocre and average experiences. To analyze few of them for better clarity and conception of the concept, the best one was a dinner with friends in a new restaurant opened just few months ago named ‘My Wife’s Place’. The food served was excellent both in quality and sufficient quantity as well. The attentiveness and promptness of service made it look class apart from the rest. The ambience, the interiors, the staff were all at there best with reasonable price tags. The encounter was rated high among the rest and is definitely a place to be recommends to others. Self introspection revealed the criteria’s which a customer actually walks in with at such places. Another encounter which scored high rank was with a well known street optician. The shop wasn’t centrally located and could have been easily missed, however the encounter resulted in analyzing the importance of an individual nature and communication skills to impress and satisfy a customer. A sales assistant was more than helpful in selecting a pair of glasses for me, even a dull gesture on my part was returned back with smiles and a welcoming aura to visit again. The experience clearly revealed the ability of oneself to make a difference. A very mediocre kind of encounter was observed in music gallery ,’Platinum M’ which was over crowded with public waiting for a chance to be heard . The chaotic condition was highly discomfortable, though the sales assistant tried to help by looking for the latest pop collection asked for but too much workload restricted him to give his best. Humble nature and courteous gestures helped to maintain cool headedness but on the whole, mismanagement of service created a negative impact. The outlet could have increased the manpower to satisfy the increasing clients in the store rather than dissatisfying the new as well as its regular customers. A similar instance is also quoted in a study by Cunningham S, Bainbridge D, Mckay D, 2007 which relates to the behaviour in music information retrieval along with the importance of a diary based methodology of deriving interpretations and analyses. Another experiences related to airline ticket booking, a transaction with the bank and car repair all resulted in a very average rated satisfaction. All these three encounters had something in common that is a very dull, unenthusiastic and a casual approach towards the customer. Though the work allotted or demanded was done but in an unconvincing and uninvited manner which did not resulted in a positive attitude towards the service marketers. Analyses drawn from the above mentioned encounters point towards the individual capacity of the marketer. Rendering services in an informal manner with courteous gestures and welcoming attitude makes a customer feel more comfortable and attracted towards repeat purchase but a harsh, rigid and cold behavior would never encourage a consumer for reiterating transactions. CONTEMPORARY ISSUES IN SERVICE MARKETING In the modern world there a number of issues which pose numerous diversified views and discussions for marketing managers. However, few of such contemporary issues relate to the concept of transactions and relationship marketing. Many study it from an academic perspective while few others describe it in the form of discrete transactions. Relationship marketing is a new approach to management thinking. However the dilemma still exists when few researchers study it from the organization and its customer’s point of view while others broaden up the horizon by including a vertical stakeholder relationship angle to the theory. In practical terms, delivering both transaction and relationship marketing is pretty difficult. Different aspects need to be explored further to imbibe both the concepts for maximum gains for the business as well as the consumers. Another issue which creeps up is the implementation of the service activity. The high reliance on people in the contemporary theory has also raised the expectations of the consumers on the service delivery aspects. To bridge the gap between the consumer’s aspects of service performance and the actual implementation of service delivery, the companies should meticulously design the entire procedure reflecting their strengths and weaknesses in response to the competitive environment in which they are working along with the identification of the managerial issues at each stage of the service marketing process (Gilmore A, 2003). An important consideration in the contemporary issues is given to the managing of sustainable services. Different strategies for creating a people operated industry are a real challenge to be sorted out to maintain a consistent level of motivated staff and management for the ultimate success of the organization. FOCUS ON INTERACTIONS RATHER THAN EXCHANGE A focus on interaction has led to a new dimension for services marketing. Interactive marketing concept features during interaction when the purchase and consumption occur simultaneously. Eating in a restaurant has more to rely on interactions between the supplier and the consumer rather than just an exchange of the menu ordered and the price paid for it (Christian Grönroos, 2007). The service-oriented view of marketing is carried forwards with the objective of co-creating satisfied customer through positive interactions experiences which also requires a holistic view of the marketing process from the customers' perspective. As the field of service marketing continues to progress in the 21st century, new trends are emerging that would reshape and facilitate the needs of services marketing concepts and tools inclined towards the interactions rather than merely treating service marketing as an exchange product. SERVICE LOGIC Service is a perspective on value creation rather than a category of market offerings, in other words it is logic or a deep thinking which goes in marketing of services. The contemporary service marketing emphasizes on the value in use view. The view supports the fact that the value for any customer is created by the customer himself through interactions between the customer and the supplier of the services. Service logic facilitates processes that enhance customer value creation while a Good logic looks after only the resources available for customers for management of their individual processes. The service logic provides a reasoning base for creating an environment where all the resources function together with each other and interact with the consumer in his own capacity and space. The idea to emphasize on service logic is to make clear that customer value is not dependant on just one component but is generated by totality of experiences of all elements. IMPLICATIONS FOR FUTURE RESEARCH A lot of past literature has focused on the emergence of service marketing but still a lot more areas need to be focused for further research and smooth functioning of the organizations aiming for maximum productivity and highest level of customer satisfaction. To effectively integrate transaction and relationship marketing, research on activity resource investment needs to be undertaken. Different interventions need to be identified to bridge the discrepancies for service companies such as retail banks and insurance sectors where a balance between both transaction and relationship management is difficult to maintain. Reflecting on the key propositions, there are a number of areas that offer opportunities for future research in Relationship Marketing. Future research should assess and empirically test the previous circumstances of responses to relationship problems. Implication on self service technologies should also be assessed (Robertson L N, viewed on 2nd September, 2008) The future of the service marketing research and development depends upon the effective management of all the activities emphasizing on the quality of management decision making. A regular updating of new technological advancements, monitoring of the changing customer needs and satisfaction criteria’s, need to be incorporated in the service marketing strategy. The role of service mangers is crucial in the future time to come as their competencies help in assessing proper and effective service deliveries to both employers and consumers in relation to all the business aspects. CONCLUSION Services are a fast growing sector that have almost exceeded 50% contribution of GDP in developed economies. Judging services just as a different product line to offer to the consumer is too vague a conept to be comprehended. Therfore appliaction of the contemporary services marketing hightlights the worth of the mangement of the sercive delivery process and the nature of interaction between consumers and suppliers (Tomaž Kolar, viewed on 2nd Dec, 2008). The encounters experienced by each individual in his daily life support the contemporary view of analyzying the nature of interfaces and contacts one delas with in any marketing activity. The focal ppoint of all activities is therefore any service encounter where consumers actually experience marketing oreientation. REFERENCES 1. Tomaž Kolar, Development Of Market Orientation In A Servicescontext – An Alternative Model Proposal, Viewed on 2nd September, 2008, http://miha.ef.unilj.si/_dokumenti/wp/development%20of%20market.doc 2. Cunningham S, Bainbridge D, Mckay D, 2007, Finding New Music: A Diary Study Of Everyday Encounters With Novel Songs, Viewed on 2nd September, 2008, http://ismir2007.ismir.net/proceedings/ISMIR2007_p083_cunningham.pdf 3. Robertson L N, Consumer Complaint Behaviour And Relationship Marketing : A RESEARCH AGENDA, Viewed on 2nd September, 2008, http://smib.vuw.ac.nz:8081/WWW/ANZMAC2001/anzmac/AUTHORS/pdfs/Robertson.pdf 4. Christian Grönroos, Feb 21, 2007, Adopting a service logic for marketing, Sage Publications, Volume 6(3): 317–333 , Viewed on 2nd September, http://www.ifm.eng.cam.ac.uk/ssme/references/Gronroos_ref_cambridgessme07.pdf 5. Zeithaml, V.A., Bitner, M.J. 2006. Services marketing: Integrating customer focus across the firm (4th ed.). Sydney: McGraw-Hill Irwin. 6. Lovelock, C. & Wirtz, J. 2002. Services marketing , People, Technology, Strategy (4th ed.). Upper Saddle River NJ: Prentice-Hall. 7. Baron, S., & Harris, K. 2003. Services marketing: Texts and cases. Basingstoke UK: Palgrave. 8. Gilmore A,2003. Services Marketing and Management. Sage Publications, UK Read More