Different Characteristics of Services - Assignment Example

1. Consumer decision model has a huge role to play in case of services. Since, service has different characteristics as it cannot be seen but can be felt so after sales service govern the buying process. The customer decision model looks as follows (Buyer Behavior, 2010) The above chart shows that post purchase evaluation has a role to play in services. Customers looking towards a particular service looks towards the service they will get in the future. This is an important consideration in the buying process as customer look towards the service they will get while making the purchase decision. This can be better understood from the following example For example, when a customer purchases a washing machine the buying process of the consumer is determined by the after sale service that the customer will receive. The customer looks for maintenance and servicing of their machine from the buyer in the future. This is an important aspect which companies are also looking to their advantage. Companies are looking towards distinguishing themselves based on after sales service as it helps them to create a niche market for the product or services. This is seen as one of the phenomenon which influences consumer buying process and is looked into. 2. Customer satisfaction and loyalty is an aspect which is important for every company irrespective of their size and stature. Companies ensure that the customers are satisfied and remain loyal look towards providing quality product and services that matches to the customer requirements. This ensures that customers don’t jump from one company to another thereby enabling them to ensure that companies have a pool of loyal customers. An important component of the service recovery system is solving the queries of customers. Companies have worked in this direction by having call centers and people that solve the problems faced by the customers at the shortest notice. Another component of the service recovery system is quality after sale service. This ensures that the customer is able to get value for the product or services as the cost associated with the product or service is less than the benefit that the customer receives. This is an important aspect that companies look to use and ensure that the service provided is of high quality. Companies look towards using the different components of the service recovery system in such a way that it provides maximum value to the customers. It helps to ensure that the customer remains loyal and the satisfaction is high. 3. There are different ways in which service can be processed. The four different ways are as follows Direct: Providing service to people on a face to face basis. This is a manner in which service is provided by coming in direct contact with the people. For example coaching provided to children and students. This is done on a face to face basis and is an important manner in which service is provided (Services, 2010). Indirect: This is a way of providing service by looking into the community on a whole. Through this mechanism service is provided in an indirect way. For example, cleaning up the river or roadside cleaning. This is a way where service is provided to a large community in an indirect way (Services, 2010) Advocacy: This is a mechanism of providing service by creating awareness about services so that it evokes public interest. For example, public speaking which is directly aimed at the whole community and is looked towards providing awareness among the masses (Services, 2010). Research: This is a mechanism which looks towards gathering, finding and reporting of information so that it helps to evoke public interest. For example, surveys conducted for schools or public interest. This helps to find information which helps the society and thereby provides service (Services, 2010). 4. Marketers need to apply the seven questions while deciding an effective pricing schedule. This is seen from the following example. For example a hotel industry which provides services needs to look at the seven questions while deciding the service. The hotel industry needs to identify the money they need to charge for the service based on the quality and features and price charged by the competitors. The hotel industry needs to decide the basis of pricing which will be based on service, geographic, physical resources and other factors which will ensure regular customers. The hotel industry also needs to look in the manner the money will be collected. While determining it the money collected should be decided based on the intermediary. The hotel industry also needs to look in the way the payments need to be made while purchasing the resources that will ensure quality service. The hotel industry also needs to ensure the way in which the payment will be made. It should be evaluated on the basis of cash, token and other factors. The hotel industry finally should find the mechanism in which the price will be communicated to the customer or target customer. Using the above question will thereby help the hotel industry to ensure that the servi provided is of high quality and customer satisfaction is achieved. 5. Services are something which is felt and cannot be seen. It is consumed as the same time and the quality of service has a different relevance on different individuals based on the needs and requirements of the person. This thereby has a different role and impacts every customer in a different way. The quality of service has an important role to play while rendering services. For example the hose keeping services which look after cleanliness and maintenance in hotels help to determine the way services have an impact on the customer and the way it helps to satisfy them. This increases the role of the service provider as they need to look into different aspect of the services and design their process in such a way that it yields maximum satisfaction and helps to ensure that the impact on the customer is sound. Services are differentiated by the customer based on their perception and feeling about it. This makes it imperative that the service provider looks into the different role which has an impact on services and the mechanism which will help to improve it so that the satisfaction level increases and the customer become loyal towards it. 6. Marketing of services creates problem as it is a specialized service and requires the knowledge and expertise to ensure high customer satisfaction. The magnitude of the problem magnifies for promotional of insurance services as it is a high contact service which requires that the front line personnel have the required knowledge to be able to communicate the policy clearly (Lovelock, Wirtz & Chaterjee 2010) Promoting insurance services faces another problem of commoditizing the product as personal line product and selling it as per the requirements of the customers (Valarmathy, 2010). Since, the front line personnel has to deal with all the intricacies of promoting the insurance product and needs to provide correct information so the magnitude of the problem magnifies. This problem can be overcome by ensuring that the front line personnel has the required experience and knowledge to handle the different queries raised by the customers. Along with it the front line personnel should be able to understand the requirements of the customers and suggest a policy that will fetch him maximum value in the long run and meets the requirements. This will help to ensure long term relationship and will enable the personnel to sell insurance services easily. 7. A dissatisfied customer is a loss for the business as it leads to a loss of customer in the future along with a bad spread of mouth. This makes it important that customers are satisfied by providing proper services. There are various reasons which make a customer dis-satisifed. The most important of them is the quality of service, the value the customer gets and the perception of the customer towards the service. It is a seen phenomenon that certain group of customers complains when services fail and others do not as the perception and the dissatisfaction level differs among the customers. Some section of the customer accept the fact that it is an error which had occurred and will not happen again but others rate quality or satisfaction very high in their service chart and complain regarding the services. This brings forward the key elements of a service recovery process which will ensure that the satisfaction level of customers increases. The key elements of a service recovery process are monetary rewards, recognition, empowerment and reward consistency methods used by the organization (Yoo, Shin & Yang, 2006). This ensures the service provided by the business is of high quality and helps to influence the buying process of the customers. 8. Physical environment influences individuals and creates an image of the organization in the mind of the customer. The relationship gets stronger due to cognitive, emotional and physiological response towards the organization as it helps to create a different image. Cognitive response creates beliefs, categorization and symbolic meaning in the minds of the customers. Belief is created due to subjective judgment like cleanliness, furniture and table arrangement as in hotels. Categorization is done based on the size like a five star hotel or a normal restaurant and symbolic meaning based on the physical environment like the sitting condition in the hotel (Verma, 2007). Emotional response is created by providing specialized services which evokes a public desire and ensures a soft corner for the service. For example McDonalds which look to provide small gifts to children looks to evoke an emotional touch and crates an image different from other hotels (Verma, 2007). Physiological response is created due to the ambience in which service is provided like the noise, temperature and other similar features. For example, a hotel which looks to provide these amenities creates a different image from hotels which do not provide this thereby helping the customers to differentiate the quality of service. 9. Customers are referred to as partial employees especially in the service industry because they have a huge role and help to identify the success or failure of any service provider. Since, services have different characteristics from product so involving customers participation in the service production process helps to improve the quality of service. Involving customers in the service production process ensures that the services are delivered based on the requirements of the customers. Involving the customers helps to understand their requirement better. It helps to identify the areas which customers look in a service and ensuring that those areas are worked upon helps to enhance services. Involving customer in the service production process also ensures that timely changes can be made. It helps to understand the human perception better and the different areas which different customers look at. This ensures that the management is able to understand the core areas that customers want in the services. It ensures that the perception of customers becomes clearer in the minds of the service provider and the company can bring about the changes in the required time. This will ensure that the service is of high quality and as per the requirements of the customers. 10. Services have different characteristics in comparison to the product which makes it a specialized service rendered by organization. The characteristics are as follows Intangibility: Services cannot be seen but is felt by the customers who receive the services. This increases the implication for the service provider as they have to understand the customer wants and provide the services based on it so that customer satisfaction is high. For example, a waiter understanding the requirements of the customers so that the food served matches his requirements. Perishability: Services cannot be stored and have to be consumed. This makes it important that the service provider understand the time constraints and provides services accordingly. For example, a transport company transporting passengers cannot have the same passenger at two locations. Inseparability: The services rendered cannot be separated from the service provider. This makes it important that the service provider is present at the point of delivery so that the customer derives maximum benefit. For example, a pizza store delivering pizza at the doorstep of customers needs to be present while delivering pizzas. Simultaneity: The services rendered have to be consumed at the same time. This makes it important that the service provider ensures timely delivery of services. For example, different pizza companies working on the fundamental to deliver pizzas within the stated tome to ensure high customer satisfaction. Variability: The service rendered is variable and unique which differentiates it from other services. This makes it important that the service provider is able to provide consistency in service. For example, the restaurant ensures the same quality of service to all its customers so that there is consistency in service. References Buyer Behavior. 2010. Decision Making Process. Retrieved on June 1, 2011 from http://tutor2u.net/business/marketing/buying_decision_process.asp Lovelock, C., Wirtz, J. & Chaterjee, J. 2010. Services Marketing, 6th edition. Pearson Education, India Services. 2010. Type of Services. Retrieved on June 1, 2011 from http://www.laspillane.org/types.pdf Valarmathy, A. 2010. Various challenges faced by Insurance Markets. Retrieved on June 1, 2011 from http://toostep.com/insight/challenges-faced-in-insurance-markets Verma, H. 2007. Services Marketing: Text & Cases. 1st edition, Pearson Education, India Yoo, J., Shin, S. & Yang, S. 2006. Key attributes of internal recovery strategies as service employees. International Journal of Jospitality Management. Volume 25, Issue 3, pp. 469-509 Read More