MKT335 Assinment 3-Final
Content
EXECUTIVE SUMMARY
In the today world, marketing is not simple as someone knocks your door to ask you to fill in a survey or trying to sell you something. Marketing in the today society is almost everything we see, we hear, we watch, we read. It is right in the newspaper we read every morning, in the big panel we drive pass every day, in the television, and even right in the movie we have seen, and marketing is everywhere from the newspaper into your mobile phone, from the road into your email account. So marketing is staying in every sense of life. In this report, it will re-summarize my case and my friend¶s case. Besides, this report will identify important services marketing theory; the theoretical gaps and the blueprinting. Also, this report will discuss the mistakes of our cases and make the suggestion to improve the services counter.
TABLE OF CONTENTS
I. Introduction ......................................................................................................................... 1
II. The Cases background ......................................................................................................... 3
III.
Critically evaluate forum discussion ................................................................................. 6
IV.
Identify the theoretical gaps ............................................................................................ 12
A. SERVQUAL .................................................................................................................. 12
B. Gap Analysis .................................................................................................................. 12
V. Service Blue Print .............................................................................................................. 14
VI.
Recommendation ........................................................................................................... 17
VII.
Conclusion ..................................................................................................................... 20
VIII. Reference ....................................................................................................................... 21
MKT 335 SERVICE MAKETING ASSIGNMENT 3 I. INTRODUCTION
In the today world, marketing is not simple as someone knocks your door to ask you to fill in a survey or trying to sell you something. Marketing in the today society is almost everything we see, we hear, we watch, we read. It is right in the newspaper we read every morning, in the big panel we drive pass every day, in the television, and even right in the movie we have seen, and marketing is everywhere from the newspaper into your mobile phone, from the road into your email account. So marketing is staying in every sense of life. What is marketing and what definition is correct? There are many different definitions of marketing such as the followings from Hossan, (Hossan,2008) ³The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time´ ³The achievement of corporate goals through meeting and exceeding customer needs better than the competition´ ³The management process that identifies, anticipates and supplies customer requirements efficiently and profitably´ ³Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges´ ³Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large´ (Elliot,2009) Actually, they are all correct definition. Marketing is the support for the needs and wants of customers. Moreover, marketing is a function which belongs to business-wide and it is not operates separately from other business activities; and also marketing is about understanding customers and finding ways to provide products or services which will satisfy customers demand. Peter Drucker (Drucker, 1963) has said: ³Because the purpose of business is to create and keep customers, it has only two central functions²marketing and innovation. The basic function of marketing is to attract and retain customers at a profit.´
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
In this report, it will mainly focus on the service marketing, theories, characteristics and distinct features of services marketing, and from those points, applying into the real-life cases to find out the services¶ blue print and providing the recommendation.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 II. THE CASES BACKGROUND
This report firstly wills summary the cases which have been posed on the forum task 1 and 2. Four years ago, I and a mate went to city central, and we were parking the car at Ballow Street. We went out for coffee in Chinatown. After half an hour, we came back, and recognized that our car had been hijacked. The theft had stolen one mobile phone and one camera, the total value at that time was $3000. We phoned to the emergency number, and hoping the police from the nearby police station will come and help us. But shocked when we heard the first question from the police officer: Are you local or overseas? And guess what, we said we are overseas. The officer then denied coming, and all he did, was just giving us a reference number for the call. Even we said we had the evidence and the security camera had recorded all the sense when the theft hijacked our car. That was our first experienced shortly after arrive in Sydney. Further one of my classmates also encountered a bad service. The story below will be based on the experiences of Fedezica Ross and her trip to the Yosemite National Park in California, US. Few years ago, Ross had travelled to America during her holiday. The day tour to Yosemite National Park in California was unforgettable to her. Below will be her story about the trip. Ross and a mate went to California for holiday. During the holiday, based on some advice of local people, they had booked a hiking tour to Yosemite National Park. Her first impress of the service was not good; the tour guide came late for half an hour without any explanation and apology. The second thing was the service supportive was terrible. The local company did not tell them how the weather, what should customer prepare. Also, they did not provide enough rain coats; hiking shoes to the customers even the weather was not good with little rain and cold. The tour guide also did not provide any information about the place they will arrive. All he did was just took the visitors to the place, led them go around and that¶s all. The most terrible thing happened when the tour guide even did not count the visitors, and after lunch, he even did not check whether anyone is missing. Ross and her mate were missing. They were just walking around and waiting for the tour guide to finish his lunch. However, when they came back, the group already disappeared. Ross and her mate were threaten and scared. They were lost in the national park. And if they have to spend a night in the national park without any protection, who PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
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MKT 335 SERVICE MAKETING ASSIGNMENT 3
knows what is going to happen. But fortunately, they found the way out to the car park at last. But once again, the bus was leaving without them on board. Service sector is the engine of economic growth in developed (and most developing) countries. Service sector now accounts for between 60-80% of GDP, and between 50-90% of all new employment in many economies. Service can be defined as an exchange of value between the service provider and customer. Because of the important of the service, almost every business in any aspect of the economics is doing many ways to improve their customer¶s satisfaction. However, in this case, the customer service was not good. Based on some of the distinct characteristic of service which are stated in the text book, in my opinion, this case can be apply into the ³service often difficult to visualize and understand´ and ³other people involves into the production´. In this case, the service provider is the tourist company and the customers are Ross and her mate. However, the tour guide is the main factor who decides the value of the services. Because of the failure to eliminate the perceived risk of the tour guide to the customers, failure to satisfy the customer expectation, the core value of this service was totally failure. According to the Maslow¶s hierarchy, the first and second priority demands of the customers was not meet.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
Also, according to Hofstede, culture is one of the most important factors that affect to service. Culture is defined as the sum of learned beliefs, values and customs that create behavioral norms for a given society. In this case, masculinity/feminity is the dimension of cultural value. The tour guide was treating customer by the way of masculinity. Masculinity means manly character. It specifically describes men and boys, that is personal and human, unlike male which can also be used to describe animals, or masculine which can also be used to describe noun classes. Therefore, Ross and her mate were shock with the difference culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 III. CRITICALLY EVALUATE FORUM DISCUSSION
Service marketing has occupied a prominent place in business studies all over the world. According to Lovelock (Lovelock,2007) service can be defined as any act, performance or experience that one party can offer to another, essentially intangible and does not result in the ownership of anything or economic activities that provide time, place, form, problem solving or experiential value or something that may be bought or sold but cannot be dropped on your foot Customers buy services because they are looking for desired results. And therefore, customers expect to obtain value from their service purchases in exchange for their money, time and effort. Its production may or may not be tied to a physical product. This definition points out that service can be bifurcated from the physical product with its characteristics features. Characteristics of service marketing: y Intangibility: Physical products can be examined in terms of physical integrity, taste, aesthetic value, smell, colour and so on, before one makes the purchase. But services which have no tangible properties cannot be tasted or examined before the purchase. However, the purchaser has to believe the attributes like reliability, personal care,etc.
y
Perishability: Another feature of service is perishability. Service is perishable in nature because it cannot be stored as in the case of products. For instant, product like machine, mobile phone can be preserved or stored till they are sold. But services like education, teaching, protecting, guiding cannot be stored. Perishability feature of service is the cause of concern for the service is the cause of concern for the service providers so as to maintain continuous demand for services. like a product can be kept. Perishability feature of service is the cause of concern for the sercie providers so as to maintain continuous demand for services.
y
Inseparability: in the case of tangible goods, the production and consumption are independent activities. Here, the producer produces goods as per the production
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
programmer, and keeps it ready for the consumption. But the consumers avails it whenever they want to. Hence, in the case of tangible goods, the production and consumption activities are independent. However, in the case of service both production and consumption are inseparable. If the benefit of service is to be realized, both producers and consumers should meet at a convenient place to exchange the value. For instance, in the case of services of travelling, tour guides have to present at the place like hotel to pick up his clients, and then bring them to the place of interest to exchange the benefits and value. Thus, inseparability is a feature if service. Ownership: Another feature of service is the ownership. The ownership of service cannot be transferred as in the case of products. The service user has only the right to buying process such as listening to a teacher, asking for supporting from the service providers, and so on. Further, the service cannot be bought and sold. One cannot buy and own any service.
y
y
Variability: As consumers are also connected with production of services, the services are varied in accordance with their needs. Further, the inspection of service before purchase is not possible. Hence, the variability of the quality of service rendered is of great concern for service organizations. However, the variability of services is less in machineoriented services than in human-based services. Many service organizations, therefore, try to reduce variability and develop strong brand for their services through machine0based operations. Computerization of office service is an example of reducing variability in services.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
According to Reading 1.2 Module 1, the below is the eight distinct differences of service. y y y y y y y y Most service products can¶t be inventoried. Intangible elements dominate value creation. Many services are difficult to visualize and understand. Customers may be involved in production. Other people are sometimes part of the product. Operational inputs and outputs vary more widely. The time factor assumes greater importance. Distribution may take place through non-physical channels.
The first case involves on two characteristics of services as most service products cannot be inventoried and other people are sometimes part of the product. At first, when my car had been hijacked, I rang the emergency number, and I had to speak with the machine to choose between police, ambulance or fire services. Then I had to wait for the police representative to respond, and I had no choice but had to wait. And this part is related to the first characteristic of services. The second part involves when I spoke to the police officer. I did not receive the support as promises, the police man did not turn up, just gave me the preference number instead of came and helped me to catch the thief. The police man may not be trained on how to treat to other people. He may be trained how to be a solider but not to be a good and friendly solider. My friend¶s case also involve in three characteristics of services such as most service products cannot be inventoried; intangible elements dominate value creation and other people are sometimes part of the product. The first character involved when the tour guide did not turn up on time, the information he provided to his clients was not enough. Further, because the service is intangible, therefore, it¶s impossible to try, test, or touch the product. Therefore, my friend had to trust the service provider in the quality of services. And this is related to the second character of services. The third character is related to the way the tour guide treated the tourists. The company may not recognize the important of customers¶ satisfaction or the tour guide did not receive a necessary training on customers¶ service.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
These cases also involve in perceived risks and culture. Before customer decides to purchase a service, it is usually will go through three stages of buying a service: pre-purchase stage, the service encounter stage and post purchase stage. At the pre-purchase stage, it is normal that when we attaint the new product or service, everyone will feel afraid, afraid of the services, the quality of services or products, how it works, and so on. According to Business Dictionary website (Business dictionary,2010), perceived risk can be defined as ³Consumer's level of uncertainty regarding the outcome of a purchase decision, especially in case of high priced item such as a car, or a complex item like a computer. Consumers attempt to reduce their anxiety by collecting more information and by seeking the recommendations of a peer group or an entity (person or consumer advocacy group) considered an expert on the subject matter. Manufacturers and marketers try to reduce this risk with reassuring guaranties, by obtaining the backing or recognized groups or opinion leaders, or by hiring a well known and respected spokesperson´. Culture also is an important factor that affected to the services. In my case and my friend case, culture also has an important role. The figure below will describe the culture¶s role in customer¶s decision making.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
The typical model of a customer¶s decision process below in textbook will reflect these above information.
Figure 1: culture involves in customers¶ decision making Lovelock has describe culture is the sum of learned beliefs, values and customs that create behavioral norms for a given society. Hofstede also identified four underlying dimensions of culture values which will be describes as below:
Figure 2: Hofstede¶s four dimensions of culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
The culture that I and my friend were involved related to the differences of culture between masculinity and femininity. . In this case, masculinity vs feminity is the dimension of cultural value. The tour guide and the police man were treating us by the way of masculinity.
Masculinity means manly character. It specifically describes men and boys that are personal and human, unlike male which can also be used to describe animals, or masculine which can also be used to describe noun classes. Therefore, Ross and I were shock with the difference culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 IV. IDENTIFY THE THEORETICAL GAPS
A. SERVQUAL
SERVQUAL is methodology, which defines five dimes ions of service quality. y y Reliability: doing what they say they will do, on time and to specification
·
Assurance: possession of the required skills to perform the service and also convey trust,
confidence and security. y y Tangibles: which include the physical appearance of people and facilities
·
Empathy: showing an understanding of customer needs and provide and individualised
·
service y
Responsiveness: willingness to help and respond to individual requirements
SERVQUAL helps to identify customer perceptions of service quality.
B.
GAP ANALYSIS
A gap analysis takes this further and helps to identify the because of service quality shortfalls in each or all of the dimensions. Customers build an expectation of the service to be received depending on four factors. These are, word of mouth communications obtained from friends and acquaintances, personal needs, past experience plays a part and, communications put out by the service company create their own expectations. These individual factors are evaluated as follows: y Gap 1 results from a difference between what customers expect and what management perceives these expectations to be. This can occur, as a result of insufficient research or communication failures. y Gap 2 results from a difference between management perceptions of what customers expect and the specifications that management draws up, detailing the service quality delivery actions required. This can result from inadequate management commitment and interest, a perception that the company cannot actually meet customer requirements, a failure to specify in detail what is required, or a failure in the way in which the company sets its goals in relation to customers. PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
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MKT 335 SERVICE MAKETING ASSIGNMENT 3
y Gap 3 results from a mismatch between the service delivery specifications required by management and the actual service that is delivered by front line staff. There are many possible causes such as inappropriate technology, staff or training, poor teamwork, and inappropriate control measures. y Gap 4 results from a difference between that actual service that is delivered and messages that are put out to customers about what to expect. Clearly a major reason for this is poor internal communication and lack of familiarity with operations. There is also the oftenfound propensity to ³over-promise´. Clearly it is more desirable to under-promise and over deliver. y Customer gap: The difference between customer expectations and perceptions ± the service quality gap.
Figure 3: The Integrated Gaps Model of Service Quality (Parasuraman, Zeithaml, Berry 1985)
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MKT 335 SERVICE MAKETING ASSIGNMENT 3 V. SERVICE BLUE PRINT
Service blueprinting was initially introduced as a process control technique for services that offered several advantages: it was more precise than verbal definitions; it could help solve problems preemptively; and it was able to identify failure points in a service operation.24 Just as firms have evolved to become more customer-focused, so has service blueprinting. One early adaptation was the clarification of service blueprinting as a process for plotting the customer process against organizational structure.25 Service blueprinting was further developed to distinguish between onstage and backstage activities. These key components still form the basis of the technique and its most important feature, that of illuminating the customer¶s role in the service process.26 In addition, it provides an overview so that employees and internal units can relate what they do to the entire, integrated service system. Blueprints also help to reinforce a customer-orientation among employees as well as clarify interfaces across departmental lines. There are five components of a typical service blueprint (See Figure 1 for a diagram of key components): y y y y y Customer Actions, Onstage/Visible Contact Employee Actions, Backstage/Invisible Contact Employee Actions, Support Processes, and Physical Evidence.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
Based on the theory above, this is the service blueprint of Traveling agent which involve on my friend case. The figure below will describe the service blueprint of Day-Tour Service Provider.
terrible
unsatisfaction
Poor service
Figure 4: Service blueprint for day tour. As from the service blue print above, the tour guide has made many mistakes which are happened right after the tourists met the tour guide, during the transport, and while experiencing the services. Figure 4 will explain the blueprint for my case which involves with the police services.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
terrible
Stop from there. Not go any further.
Figure 5: Blue Print for Emergency Call. As the service blueprint above, the police representative had not followed the blueprint. He just gave the customer preference number and stop from there without any further conversation or instruction.
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MKT 335 SERVICE MAKETING ASSIGNMENT 3 VI. RECOMMENDATION
Regarding the cases and theories above, there are several mistakes on the service blue print which will have terrify affect to the companies. These problems can be listed down as cultural, staff training, perceived risk of the services. Culture is the system of knowledge, beliefs, values, rituals and artifacts by which a society or their large group defines itself. (Elliot,2010). The four dimensions of culture that Hostede has found as power distance, uncertainty avoidance, individualism/ collectivism, masculinity/ femininity, and long term orientation. According to the recently research of Elliot (Elliot,2010) show that Australia and US have higher point of masculinity culture in service compare to the world average whilst other Asean countries such as Thailand, Vietnam, and some European countries as Italia, have higher point of femininity culture. Therefore, if Vietnamese or Italian customers travel to Australia or US, they will experience a culture shock. Culture shock is a condition of disorientation affecting someone who is suddenly exposed to an unfamiliar culture or way of life or set of attitudes. (world net web, 2010). Thus, the first recommend for service provider companies in Australia and US is consider about the customers¶ culture background. Also, because of tourism and studying abroad in Australia are the third highest foreign incomes for Australia after exporting iron ores and coals. Companies should change their culture of services from masculinity to femininity in order to keep customers come back and gain competitive advantage. The second problem is about the perceived risk. Chapter 1 of the text book describe one of the basic characteristics of services is service products as intangible performance (Lovelock, 2007). Therefore, customer can not try out the services in advance before purchase it. Customer can only ³buy a promises´ that the service providers will deliver what is customers expected. According to Business Dictionary website (Business dictionary,2010), perceived risk can be defined as ³Consumer's level of uncertainty regarding the outcome of a purchase decision, especially in case of high priced item such as a car, or a complex item like a computer. Consumers attempt to reduce their anxiety by collecting more information and by seeking the recommendations of a peer group or an entity (person or consumer advocacy group) considered
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
an expert on the subject matter. Manufacturers and marketers try to reduce this risk with reassuring guaranties, by obtaining the backing or recognized groups or opinion leaders, or by hiring a well known and respected spokesperson´. Elliot has said that with the service provider businesses, training front line staff is the most expensive and most important job in order to keep businesses survive and compete with the rivalry. For instant, McDonald has trained their front line staffs so well so even they are just under 18, they can serve customers nicely and make customers¶ happy and come back. Also because the front line staffs are the one directly contact with customers, and they are the one representative for the companies¶ image. Therefore, it will create a terrible damage into the companies¶ image if the frontline staffs have not been trained well and can not control their tempers, attitude and so on. Companies want to avoid that should have train very well their frontline staffs. Further, to make customers¶ satisfaction in order to receive the value in return, companies have to keep their promises and satisfy customer expectation. The figure below will show how company benefit from satisfy customers.
Figure 6: An experience to profits model (Lovelock,2007)
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
In the other hand, customer perceived value has several components such as performance value, social value, emotional value, interaction value, and price. Moreover, customer¶s satisfaction may also affect from the fairness of the ratio between what they have input and the output they actual received. This is called µEquity theory is concerned with perceived fairness or a comparison of the ratio of the buyer¶s inputs to the outputs received´. (Loverlock, 2007). Further, the degree of personal involvement also affect into the customer¶s satisfaction. Loverlock has stated: ³Personal Involvement: the degree of the customer¶s involvement with the service will affect their expectations and evaluation´. (Loverlock, 2007).
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MKT 335 SERVICE MAKETING ASSIGNMENT 3 VII. CONCLUSION
In conclusion, customer service is the overall activity of identifying and satisfying customer needs and it is really important in the business. In the report, it summarized the mistakes in the case for service market and also made recommendation to improve the problem in these cases.
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MKT 335 SERVICE MAKETING ASSIGNMENT 3 VIII. REFERENCE
Business Dictionary. Perceived Risk .Retrieved on 15/08/2010 from www.businessdictionary.com Dick Schaaf, Keeping the Edge : Giving Customers the Service they demand, Plume Penguin, New York,1997. ISBN: 0452271916 Drucker, P.F. (1963), The Practice of Management. Heinemann Published Elliott (2010). Marketing. John Wiley & Sons Australia published. Hossan (2008). Marketing - an introduction. Retrieved on 01/08/2010 from: http://yusuf-bmc.com/index.php?option=com_content&task=view&id=26&Itemid=27 Lovelock. (2007). Services marketing: An Asian-Pacific and Australian perspective (4th ed.). Frenchs Forest, NSW: Pearson. Valerie Zeithaml, A. Parasuraman and Leonard Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations. Publisher: Free Press; New York, March 1990. ISBN: 0029357012 Worldnetweb.(2010). Marketing Dictionary. Retreived on 15-09-2010 from http://wordnetweb.princeton.edu/perl/webwn?s=culture%20shock
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
In the today world, marketing is not simple as someone knocks your door to ask you to fill in a survey or trying to sell you something. Marketing in the today society is almost everything we see, we hear, we watch, we read. It is right in the newspaper we read every morning, in the big panel we drive pass every day, in the television, and even right in the movie we have seen, and marketing is everywhere from the newspaper into your mobile phone, from the road into your email account. So marketing is staying in every sense of life. In this report, it will re-summarize my case and my friend¶s case. Besides, this report will identify important services marketing theory; the theoretical gaps and the blueprinting. Also, this report will discuss the mistakes of our cases and make the suggestion to improve the services counter.
TABLE OF CONTENTS
I. Introduction ......................................................................................................................... 1
II. The Cases background ......................................................................................................... 3
III.
Critically evaluate forum discussion ................................................................................. 6
IV.
Identify the theoretical gaps ............................................................................................ 12
A. SERVQUAL .................................................................................................................. 12
B. Gap Analysis .................................................................................................................. 12
V. Service Blue Print .............................................................................................................. 14
VI.
Recommendation ........................................................................................................... 17
VII.
Conclusion ..................................................................................................................... 20
VIII. Reference ....................................................................................................................... 21
MKT 335 SERVICE MAKETING ASSIGNMENT 3 I. INTRODUCTION
In the today world, marketing is not simple as someone knocks your door to ask you to fill in a survey or trying to sell you something. Marketing in the today society is almost everything we see, we hear, we watch, we read. It is right in the newspaper we read every morning, in the big panel we drive pass every day, in the television, and even right in the movie we have seen, and marketing is everywhere from the newspaper into your mobile phone, from the road into your email account. So marketing is staying in every sense of life. What is marketing and what definition is correct? There are many different definitions of marketing such as the followings from Hossan, (Hossan,2008) ³The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time´ ³The achievement of corporate goals through meeting and exceeding customer needs better than the competition´ ³The management process that identifies, anticipates and supplies customer requirements efficiently and profitably´ ³Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges´ ³Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large´ (Elliot,2009) Actually, they are all correct definition. Marketing is the support for the needs and wants of customers. Moreover, marketing is a function which belongs to business-wide and it is not operates separately from other business activities; and also marketing is about understanding customers and finding ways to provide products or services which will satisfy customers demand. Peter Drucker (Drucker, 1963) has said: ³Because the purpose of business is to create and keep customers, it has only two central functions²marketing and innovation. The basic function of marketing is to attract and retain customers at a profit.´
1
PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
In this report, it will mainly focus on the service marketing, theories, characteristics and distinct features of services marketing, and from those points, applying into the real-life cases to find out the services¶ blue print and providing the recommendation.
2
PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 II. THE CASES BACKGROUND
This report firstly wills summary the cases which have been posed on the forum task 1 and 2. Four years ago, I and a mate went to city central, and we were parking the car at Ballow Street. We went out for coffee in Chinatown. After half an hour, we came back, and recognized that our car had been hijacked. The theft had stolen one mobile phone and one camera, the total value at that time was $3000. We phoned to the emergency number, and hoping the police from the nearby police station will come and help us. But shocked when we heard the first question from the police officer: Are you local or overseas? And guess what, we said we are overseas. The officer then denied coming, and all he did, was just giving us a reference number for the call. Even we said we had the evidence and the security camera had recorded all the sense when the theft hijacked our car. That was our first experienced shortly after arrive in Sydney. Further one of my classmates also encountered a bad service. The story below will be based on the experiences of Fedezica Ross and her trip to the Yosemite National Park in California, US. Few years ago, Ross had travelled to America during her holiday. The day tour to Yosemite National Park in California was unforgettable to her. Below will be her story about the trip. Ross and a mate went to California for holiday. During the holiday, based on some advice of local people, they had booked a hiking tour to Yosemite National Park. Her first impress of the service was not good; the tour guide came late for half an hour without any explanation and apology. The second thing was the service supportive was terrible. The local company did not tell them how the weather, what should customer prepare. Also, they did not provide enough rain coats; hiking shoes to the customers even the weather was not good with little rain and cold. The tour guide also did not provide any information about the place they will arrive. All he did was just took the visitors to the place, led them go around and that¶s all. The most terrible thing happened when the tour guide even did not count the visitors, and after lunch, he even did not check whether anyone is missing. Ross and her mate were missing. They were just walking around and waiting for the tour guide to finish his lunch. However, when they came back, the group already disappeared. Ross and her mate were threaten and scared. They were lost in the national park. And if they have to spend a night in the national park without any protection, who PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
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MKT 335 SERVICE MAKETING ASSIGNMENT 3
knows what is going to happen. But fortunately, they found the way out to the car park at last. But once again, the bus was leaving without them on board. Service sector is the engine of economic growth in developed (and most developing) countries. Service sector now accounts for between 60-80% of GDP, and between 50-90% of all new employment in many economies. Service can be defined as an exchange of value between the service provider and customer. Because of the important of the service, almost every business in any aspect of the economics is doing many ways to improve their customer¶s satisfaction. However, in this case, the customer service was not good. Based on some of the distinct characteristic of service which are stated in the text book, in my opinion, this case can be apply into the ³service often difficult to visualize and understand´ and ³other people involves into the production´. In this case, the service provider is the tourist company and the customers are Ross and her mate. However, the tour guide is the main factor who decides the value of the services. Because of the failure to eliminate the perceived risk of the tour guide to the customers, failure to satisfy the customer expectation, the core value of this service was totally failure. According to the Maslow¶s hierarchy, the first and second priority demands of the customers was not meet.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
Also, according to Hofstede, culture is one of the most important factors that affect to service. Culture is defined as the sum of learned beliefs, values and customs that create behavioral norms for a given society. In this case, masculinity/feminity is the dimension of cultural value. The tour guide was treating customer by the way of masculinity. Masculinity means manly character. It specifically describes men and boys, that is personal and human, unlike male which can also be used to describe animals, or masculine which can also be used to describe noun classes. Therefore, Ross and her mate were shock with the difference culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 III. CRITICALLY EVALUATE FORUM DISCUSSION
Service marketing has occupied a prominent place in business studies all over the world. According to Lovelock (Lovelock,2007) service can be defined as any act, performance or experience that one party can offer to another, essentially intangible and does not result in the ownership of anything or economic activities that provide time, place, form, problem solving or experiential value or something that may be bought or sold but cannot be dropped on your foot Customers buy services because they are looking for desired results. And therefore, customers expect to obtain value from their service purchases in exchange for their money, time and effort. Its production may or may not be tied to a physical product. This definition points out that service can be bifurcated from the physical product with its characteristics features. Characteristics of service marketing: y Intangibility: Physical products can be examined in terms of physical integrity, taste, aesthetic value, smell, colour and so on, before one makes the purchase. But services which have no tangible properties cannot be tasted or examined before the purchase. However, the purchaser has to believe the attributes like reliability, personal care,etc.
y
Perishability: Another feature of service is perishability. Service is perishable in nature because it cannot be stored as in the case of products. For instant, product like machine, mobile phone can be preserved or stored till they are sold. But services like education, teaching, protecting, guiding cannot be stored. Perishability feature of service is the cause of concern for the service is the cause of concern for the service providers so as to maintain continuous demand for services. like a product can be kept. Perishability feature of service is the cause of concern for the sercie providers so as to maintain continuous demand for services.
y
Inseparability: in the case of tangible goods, the production and consumption are independent activities. Here, the producer produces goods as per the production
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
programmer, and keeps it ready for the consumption. But the consumers avails it whenever they want to. Hence, in the case of tangible goods, the production and consumption activities are independent. However, in the case of service both production and consumption are inseparable. If the benefit of service is to be realized, both producers and consumers should meet at a convenient place to exchange the value. For instance, in the case of services of travelling, tour guides have to present at the place like hotel to pick up his clients, and then bring them to the place of interest to exchange the benefits and value. Thus, inseparability is a feature if service. Ownership: Another feature of service is the ownership. The ownership of service cannot be transferred as in the case of products. The service user has only the right to buying process such as listening to a teacher, asking for supporting from the service providers, and so on. Further, the service cannot be bought and sold. One cannot buy and own any service.
y
y
Variability: As consumers are also connected with production of services, the services are varied in accordance with their needs. Further, the inspection of service before purchase is not possible. Hence, the variability of the quality of service rendered is of great concern for service organizations. However, the variability of services is less in machineoriented services than in human-based services. Many service organizations, therefore, try to reduce variability and develop strong brand for their services through machine0based operations. Computerization of office service is an example of reducing variability in services.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
According to Reading 1.2 Module 1, the below is the eight distinct differences of service. y y y y y y y y Most service products can¶t be inventoried. Intangible elements dominate value creation. Many services are difficult to visualize and understand. Customers may be involved in production. Other people are sometimes part of the product. Operational inputs and outputs vary more widely. The time factor assumes greater importance. Distribution may take place through non-physical channels.
The first case involves on two characteristics of services as most service products cannot be inventoried and other people are sometimes part of the product. At first, when my car had been hijacked, I rang the emergency number, and I had to speak with the machine to choose between police, ambulance or fire services. Then I had to wait for the police representative to respond, and I had no choice but had to wait. And this part is related to the first characteristic of services. The second part involves when I spoke to the police officer. I did not receive the support as promises, the police man did not turn up, just gave me the preference number instead of came and helped me to catch the thief. The police man may not be trained on how to treat to other people. He may be trained how to be a solider but not to be a good and friendly solider. My friend¶s case also involve in three characteristics of services such as most service products cannot be inventoried; intangible elements dominate value creation and other people are sometimes part of the product. The first character involved when the tour guide did not turn up on time, the information he provided to his clients was not enough. Further, because the service is intangible, therefore, it¶s impossible to try, test, or touch the product. Therefore, my friend had to trust the service provider in the quality of services. And this is related to the second character of services. The third character is related to the way the tour guide treated the tourists. The company may not recognize the important of customers¶ satisfaction or the tour guide did not receive a necessary training on customers¶ service.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
These cases also involve in perceived risks and culture. Before customer decides to purchase a service, it is usually will go through three stages of buying a service: pre-purchase stage, the service encounter stage and post purchase stage. At the pre-purchase stage, it is normal that when we attaint the new product or service, everyone will feel afraid, afraid of the services, the quality of services or products, how it works, and so on. According to Business Dictionary website (Business dictionary,2010), perceived risk can be defined as ³Consumer's level of uncertainty regarding the outcome of a purchase decision, especially in case of high priced item such as a car, or a complex item like a computer. Consumers attempt to reduce their anxiety by collecting more information and by seeking the recommendations of a peer group or an entity (person or consumer advocacy group) considered an expert on the subject matter. Manufacturers and marketers try to reduce this risk with reassuring guaranties, by obtaining the backing or recognized groups or opinion leaders, or by hiring a well known and respected spokesperson´. Culture also is an important factor that affected to the services. In my case and my friend case, culture also has an important role. The figure below will describe the culture¶s role in customer¶s decision making.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
The typical model of a customer¶s decision process below in textbook will reflect these above information.
Figure 1: culture involves in customers¶ decision making Lovelock has describe culture is the sum of learned beliefs, values and customs that create behavioral norms for a given society. Hofstede also identified four underlying dimensions of culture values which will be describes as below:
Figure 2: Hofstede¶s four dimensions of culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
The culture that I and my friend were involved related to the differences of culture between masculinity and femininity. . In this case, masculinity vs feminity is the dimension of cultural value. The tour guide and the police man were treating us by the way of masculinity.
Masculinity means manly character. It specifically describes men and boys that are personal and human, unlike male which can also be used to describe animals, or masculine which can also be used to describe noun classes. Therefore, Ross and I were shock with the difference culture.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 IV. IDENTIFY THE THEORETICAL GAPS
A. SERVQUAL
SERVQUAL is methodology, which defines five dimes ions of service quality. y y Reliability: doing what they say they will do, on time and to specification
·
Assurance: possession of the required skills to perform the service and also convey trust,
confidence and security. y y Tangibles: which include the physical appearance of people and facilities
·
Empathy: showing an understanding of customer needs and provide and individualised
·
service y
Responsiveness: willingness to help and respond to individual requirements
SERVQUAL helps to identify customer perceptions of service quality.
B.
GAP ANALYSIS
A gap analysis takes this further and helps to identify the because of service quality shortfalls in each or all of the dimensions. Customers build an expectation of the service to be received depending on four factors. These are, word of mouth communications obtained from friends and acquaintances, personal needs, past experience plays a part and, communications put out by the service company create their own expectations. These individual factors are evaluated as follows: y Gap 1 results from a difference between what customers expect and what management perceives these expectations to be. This can occur, as a result of insufficient research or communication failures. y Gap 2 results from a difference between management perceptions of what customers expect and the specifications that management draws up, detailing the service quality delivery actions required. This can result from inadequate management commitment and interest, a perception that the company cannot actually meet customer requirements, a failure to specify in detail what is required, or a failure in the way in which the company sets its goals in relation to customers. PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
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MKT 335 SERVICE MAKETING ASSIGNMENT 3
y Gap 3 results from a mismatch between the service delivery specifications required by management and the actual service that is delivered by front line staff. There are many possible causes such as inappropriate technology, staff or training, poor teamwork, and inappropriate control measures. y Gap 4 results from a difference between that actual service that is delivered and messages that are put out to customers about what to expect. Clearly a major reason for this is poor internal communication and lack of familiarity with operations. There is also the oftenfound propensity to ³over-promise´. Clearly it is more desirable to under-promise and over deliver. y Customer gap: The difference between customer expectations and perceptions ± the service quality gap.
Figure 3: The Integrated Gaps Model of Service Quality (Parasuraman, Zeithaml, Berry 1985)
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 V. SERVICE BLUE PRINT
Service blueprinting was initially introduced as a process control technique for services that offered several advantages: it was more precise than verbal definitions; it could help solve problems preemptively; and it was able to identify failure points in a service operation.24 Just as firms have evolved to become more customer-focused, so has service blueprinting. One early adaptation was the clarification of service blueprinting as a process for plotting the customer process against organizational structure.25 Service blueprinting was further developed to distinguish between onstage and backstage activities. These key components still form the basis of the technique and its most important feature, that of illuminating the customer¶s role in the service process.26 In addition, it provides an overview so that employees and internal units can relate what they do to the entire, integrated service system. Blueprints also help to reinforce a customer-orientation among employees as well as clarify interfaces across departmental lines. There are five components of a typical service blueprint (See Figure 1 for a diagram of key components): y y y y y Customer Actions, Onstage/Visible Contact Employee Actions, Backstage/Invisible Contact Employee Actions, Support Processes, and Physical Evidence.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
Based on the theory above, this is the service blueprint of Traveling agent which involve on my friend case. The figure below will describe the service blueprint of Day-Tour Service Provider.
terrible
unsatisfaction
Poor service
Figure 4: Service blueprint for day tour. As from the service blue print above, the tour guide has made many mistakes which are happened right after the tourists met the tour guide, during the transport, and while experiencing the services. Figure 4 will explain the blueprint for my case which involves with the police services.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
terrible
Stop from there. Not go any further.
Figure 5: Blue Print for Emergency Call. As the service blueprint above, the police representative had not followed the blueprint. He just gave the customer preference number and stop from there without any further conversation or instruction.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 VI. RECOMMENDATION
Regarding the cases and theories above, there are several mistakes on the service blue print which will have terrify affect to the companies. These problems can be listed down as cultural, staff training, perceived risk of the services. Culture is the system of knowledge, beliefs, values, rituals and artifacts by which a society or their large group defines itself. (Elliot,2010). The four dimensions of culture that Hostede has found as power distance, uncertainty avoidance, individualism/ collectivism, masculinity/ femininity, and long term orientation. According to the recently research of Elliot (Elliot,2010) show that Australia and US have higher point of masculinity culture in service compare to the world average whilst other Asean countries such as Thailand, Vietnam, and some European countries as Italia, have higher point of femininity culture. Therefore, if Vietnamese or Italian customers travel to Australia or US, they will experience a culture shock. Culture shock is a condition of disorientation affecting someone who is suddenly exposed to an unfamiliar culture or way of life or set of attitudes. (world net web, 2010). Thus, the first recommend for service provider companies in Australia and US is consider about the customers¶ culture background. Also, because of tourism and studying abroad in Australia are the third highest foreign incomes for Australia after exporting iron ores and coals. Companies should change their culture of services from masculinity to femininity in order to keep customers come back and gain competitive advantage. The second problem is about the perceived risk. Chapter 1 of the text book describe one of the basic characteristics of services is service products as intangible performance (Lovelock, 2007). Therefore, customer can not try out the services in advance before purchase it. Customer can only ³buy a promises´ that the service providers will deliver what is customers expected. According to Business Dictionary website (Business dictionary,2010), perceived risk can be defined as ³Consumer's level of uncertainty regarding the outcome of a purchase decision, especially in case of high priced item such as a car, or a complex item like a computer. Consumers attempt to reduce their anxiety by collecting more information and by seeking the recommendations of a peer group or an entity (person or consumer advocacy group) considered
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
an expert on the subject matter. Manufacturers and marketers try to reduce this risk with reassuring guaranties, by obtaining the backing or recognized groups or opinion leaders, or by hiring a well known and respected spokesperson´. Elliot has said that with the service provider businesses, training front line staff is the most expensive and most important job in order to keep businesses survive and compete with the rivalry. For instant, McDonald has trained their front line staffs so well so even they are just under 18, they can serve customers nicely and make customers¶ happy and come back. Also because the front line staffs are the one directly contact with customers, and they are the one representative for the companies¶ image. Therefore, it will create a terrible damage into the companies¶ image if the frontline staffs have not been trained well and can not control their tempers, attitude and so on. Companies want to avoid that should have train very well their frontline staffs. Further, to make customers¶ satisfaction in order to receive the value in return, companies have to keep their promises and satisfy customer expectation. The figure below will show how company benefit from satisfy customers.
Figure 6: An experience to profits model (Lovelock,2007)
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3
In the other hand, customer perceived value has several components such as performance value, social value, emotional value, interaction value, and price. Moreover, customer¶s satisfaction may also affect from the fairness of the ratio between what they have input and the output they actual received. This is called µEquity theory is concerned with perceived fairness or a comparison of the ratio of the buyer¶s inputs to the outputs received´. (Loverlock, 2007). Further, the degree of personal involvement also affect into the customer¶s satisfaction. Loverlock has stated: ³Personal Involvement: the degree of the customer¶s involvement with the service will affect their expectations and evaluation´. (Loverlock, 2007).
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 VII. CONCLUSION
In conclusion, customer service is the overall activity of identifying and satisfying customer needs and it is really important in the business. In the report, it summarized the mistakes in the case for service market and also made recommendation to improve the problem in these cases.
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PHAM NGUYEN HONG NGOC ID NUMBER: 114 09011
MKT 335 SERVICE MAKETING ASSIGNMENT 3 VIII. REFERENCE
Business Dictionary. Perceived Risk .Retrieved on 15/08/2010 from www.businessdictionary.com Dick Schaaf, Keeping the Edge : Giving Customers the Service they demand, Plume Penguin, New York,1997. ISBN: 0452271916 Drucker, P.F. (1963), The Practice of Management. Heinemann Published Elliott (2010). Marketing. John Wiley & Sons Australia published. Hossan (2008). Marketing - an introduction. Retrieved on 01/08/2010 from: http://yusuf-bmc.com/index.php?option=com_content&task=view&id=26&Itemid=27 Lovelock. (2007). Services marketing: An Asian-Pacific and Australian perspective (4th ed.). Frenchs Forest, NSW: Pearson. Valerie Zeithaml, A. Parasuraman and Leonard Berry, Delivering Quality Service: Balancing Customer Perceptions and Expectations. Publisher: Free Press; New York, March 1990. ISBN: 0029357012 Worldnetweb.(2010). Marketing Dictionary. Retreived on 15-09-2010 from http://wordnetweb.princeton.edu/perl/webwn?s=culture%20shock
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