Why the Firm Is Categorized as a Service Provider, and Not a Goods Provider: of ANZ Bank - Case Study Example

Executive summary Marketing is vital for every organization, be it a service provider, or a goods provider. The marketing mix elements or 7Ps are essential for effective marketing of a service industry. The difference between a service industry and a product industry lies on the difference between a service and a product. Varying features of products and services demonstrate this. The major aim of the paper is to select an appropriate service and offer a clear justification as to why the firm is categorized as a service provider, and not a good’s provider. It also seeks to describe some of the characteristics of a service as compared to a product. Additionally, the paper aims at analyzing the use of marketing mix elements in relation to ANZ bank in Australia, as well as to provide appropriate recommendations in relation to the analysis. Introduction Service industries are different from goods providers in a number of ways. The difference is demonstrated by the certain features of service, which are different from the products including intangibility, inseparability, simultaneity, perishability, ownership, and different standards and criteria among others. For service industries to succeed, they ought to adopt strong and appropriate marketing strategies, which include the 7Ps of a marketing mix. Therefore, the paper intends to explore the service marketing in relation to a banking industry, ANZ bank in Australia. It also aims at analyzing the use of the 7Ps, which include product, price, people, process, promotion, place, and physical environment. Based on the analysis of the bank’s marketing strategy, the paper attempts to offer certain recommendations to the company in order to achieve success. Justification that company chosen is a service provider ANZ bank is a service provider, and not a good provider because of their different nature and characteristics. According to Lamarque, Quétier and Lavorel (2011), consumers offer vital inputs in the service’s production process. In the manufacturing process of services, consumers may contribute ideas regarding the design of the products, but individual consumers may be merely involved in the selection and utilization of the output. The unified service theory states that the distinction between the service and product processes is seen in the consumer contribution presence, as well as their implications. Consumers’ contributions are the main cause of varied challenges and matters of service management. About the issue of the productiveness of services, productive services entails those that fix and identify themselves in particular subject or vendible commodity. On contrast, unproductive services involve those that expire directly during performance (Brown and Maxwell 2002). Cheon (2009) asserts that the growth of services is determined by different motivational factors, such as Privatization and Relaxation of Professional Association Standards. Another driving force for service development involves information, or technological globalization and innovation. Moreover, service development is influenced by leasing, manufacturers, rental growth, and outsourcing. Besides, service growth of an organization is affected by the advancement of franchising and network firms. A service involves a mixture of outcomes and experiences that are delivered to and attained by a customer. Service experience entails express relations and experience with a client. This implies the level of personalizing a process, the responsiveness of a service firm, the flexibility of the client-facing staff, and the extent of feeling valued by an organization. It also involves customer-facing employees’ courtesy and competence, as well as links between them and other customers. Besides, service result implies an outcome of service delivery to a buyer (Cheon 2009). Better understanding of the services’ nature is obtained through exploring the classes of services that exist. For instance, services exist in form of service features; branch; service responsibility in a firm; level of customization, degree of client contact; facility service, and field services; core and supplementary service; the service’s subject; and level of demand alteration with time. This aspect of classifying services is vital in providing information of advanced strategies’ invention, service position, and improved recognition of managers’ challenges (Brown and Maxwell 2002). Characteristics of services ANZ is service product because of the features displayed by its services, which vary from products. Some of the features of services handled by the bank include intangibility heterogeneity, ownership, inseparability, and perishability. The services offered by ANZ bank are less tangible, varied, and performed by away from consumers. In terms of inseparability, the process of producing and utilizing a service offers it an inseparable characteristic. In the case of ANZ bank, the process of producing and consuming banking services occur simultaneity. Here, the distinct between service and product lies in their features. This means that the performance of the banking services differ from one bank to the other; from one performer to another performer; from one day to another; or from one client to another (Jaw, Lo, and Lin 2011). Unlike in a good’s provider, there is exceptional standardization necessary in the achievement of uniformity of relationship quality among bank employees and their consumers. This is because in the industry, fellow human beings handle human beings, and thus, it is impossible to realize standardization. For instance, in case bank tellers are replaced, the new one may be inefficient and takes a longer time on the same duty, as compared to the last one. Regarding perishability, services may neither be stored nor transferred from one customer to another. If services are not used, there is a probability that a firm will incur a loss, or a fluctuating market demand. For instance, ANZ bank financial services are highly perishable. Besides perishability, banking services at ANZ bank are intangible. This implies that its services cannot be touched, seen, felt, or tested for its performance. This means that consumers should be reliant on the reputation and image to determine its quality. When ANZ clients buy its services, they simply purchase an idea, concept, or dream, since the services are intangible. This implies that they may just develop an imaginary picture of the specific service, as they may not be touch, smell, feel them (Beriss & Sutton 2007). ANZ is also a service provider, as its products have different standards and criteria. This implies that services are performances, which consumer find difficult to evaluate before buying. Regarding the involvement of clients in service process, ANZ banking services greatly engage clients in its processes, especially through the physical appearance and customer services. Additionally, ownership of a service, upon purchasing the banking services, consumers cannot own a service, as in the case of the products (Jaw, Lo, and Lin 2011). Analysis ANZ bank using 7P’s Particular main matters determine successful marketing of any organization. These matters include the plans for production, charging, delivering, as well as marketing the services to the customers. These important aspects are called the conventional 4Ps, and they include price, product, place, and promotion. Following the growth of marketing strategies in firms, there was a necessity to invent additional aspects that would help boost their prosperity. As a result, people, process, and physical evidence were added to list. Therefore, the 4Ps marketing plans transformed to the current 7ps marketing strategies, also known as marketing mix. Product Here, Dann (2010) argues that a product involves goods and services a firm gives to its clients. In addition to the noticeable product itself, there are several characteristics relating to what may appeal to customers like product packaging (ANZ 2011). Other features are services, quality, options, features, warranties, and brand name. Thus, an organization ought to consider what to give as a service or goods’ packaging. Product’s support, function, and appearance form what consumers are actually buying. Efficient managers focus on the consumers’ needs that the services are designed to satisfy. To be successful, every organization should ensure that its products offer its consumers the intended value. It is worth noting that value of a product is always in the beholder’s eye, and thus the necessity to meet all the consumers’ needs. In terms of ANZ bank, its banking services are packaged in way that meets all the clients’ needs. The products also give desirable return risk and tradeoff. What is more, the bank’s priority is to focus on the consumers in order to meet their needs and expectations. ANZ bank also has products that are market-oriented to increase its profitability. Moreover, the company offers a broad range of services that target various segments of its consumers, such as, small business, personal, and corporations (Hyman 2004). Price This involves the amount of money that a service provider charges for its services or products. Many businesspersons think that least prices are appropriate, and that they create a notion of bargain pricing in their firms. In a service industry, especially a bank, a product is always worth the amount that the consumers are prepared to pay (Dann 2010). They should also ensure that product price is competitive, but this should imply the lowest prices. For small business competing with larger ones, it is imperative to add some services or details that will provide customers a great value for the amount paid. To articulate the importance of a price, it is significant to think of price as a cost to a client. Besides, a price is helpful in the positioning of a firm in the market, because high prices are always associated with high value or quality its consumers will expect for their money. In relation to ANZ bank, the bank offers clients sensible prices, since it is one of the main factors affecting marketing mix. Price is critical in a banking industry, because clients commonly rely on that to select the economic service. Furthermore, the ANZ bank ensures that its pricing also gives it enough profit. It is worth noting that price is the only element in the marketing mix that offers revenue, as other elements are just expenses. Moreover, the bank knows that price is instrumental in the positioning of a company in the market (Jaw, Lo, and Lin 2011). In addition, Dann (2010) maintains that already existing clients are less price-sensitive in comparison with the new one and thus, the need to handle the former well. Because price facilitates the positioning of a business in the market, it helps in directing both the potential and current consumers on the appropriate manner of positioning its venture in the market with respect to its competitors. Place A business organization ought to ensure that clients buy their products and allocate them to the locations, which are convenient for its consumers. This implies that the products must be accessible in the suitable time, place, quantity, and time, while inventory, distribution, and storage expenses to an appropriate extent. Studies reveal that delivery performance is one of the best strategies of choosing a supplier (Gordon 2012). In addition, a place refers to the manner which a product s shown to the customer groups, either through the online or traditional shops. Here, place involves the distribution channels applied in the process of moving services to the target market. In relation to ANZ bank, the company is a banking service, which has numerous branches that are clustered mainly in Australia, as well as in South East Asia. Nevertheless, the bank has skipped the American and Europe. The company has its branches in various cities of the country in order to reach out to as many clients as possible. The location of the branches is appropriate as various companies, which offer it as many consumers as possible, surround it. Promotion This is marketing mix element, which entails a way in which a firm communicates its services, operations, or products to the customers. Some of these strategies include advertising, public relations, branding, sales management, exhibition, corporate identity, and special offers among others. To be effective, promotion ought to achieve attention, relay a consistent message, be appealing, and offer a customer a rationale to opt for a certain company’s products and services. Gordon (2012) says that effective marketing must also be one-way activity, but offer a chance for discussion between target clients and an organization. Besides, Jaw, Lo, and Lin (2011) maintain that promotion ought to communicate the advantages that customers get from a given product, and a feature of the product. Regardless of the nature of marketing material, it must be capable of attracting consumers’ attention. To boost a service’s effectiveness, various techniques should be used including personal selling, advertising, publicity, and sales promotion. In relation to the use of promotion as a marketing strategy, ANZ bank spends a lot of money in promotional activities including advertisement, though it is unsustainable. It uses television advertisements in order to reach out to several clients. ANZ bank also employs online social network sites like Facebook, You Tube, and Twitter in order to access its target market. For instance, the bank is running a promotion on credit card in order to widen its customer base (ANZ 2011). Additionally, the bank uses personal selling as a marketing strategy to improve its performance. It also uses publicity, and sales promotion to market its services to the target market. Regarding distribution marketing technique, the bank considers the clients’ location, and whether the location and its services are corresponding. The company can also sell its services to the consumers directly, and intermediaries. It is imperative to note the firm strives to choose distribution channels that meet as many clients as possible in a cost-effective way (Gordon 2012). People Anybody that is handling the consumers in an organization may develop a picture, which can have either positive or negative influence on the clients’ satisfaction. The reputation of a particular product is based on the way consumers are treated; hence, there is a need to motivate, train, and develop the right attitude towards the given products. It is essential to make sure that all the employees in charge of handling the clients in an organization are properly trained and appropriate for their jobs. Most of the clients do not isolate the product or service from the worker that provides it; hence, the importance of members of staff in a firm. Furthermore, Gordon (2012) argues that the extent of the after sales support and advice provides a firm with a competitive advantage. With respect to ANZ bank, the employees are well trained, motivated, and developed to handle the clients appropriately, and meet their needs effectively. The bank’s employees are highly concerned about the debt investors and shareholders. The bank also, through the employees, provides job opportunities to the community, and intern and undergraduate programs (ANZ 2011). Process The process of offering a service and the manner of the people delivery are vital to the client’s satisfaction. This entails techniques, procedures, as well as the flow of tasks through which an organization delivers its services. It also entails the systems of delivering and operating systems. Because services are performances or activities carried out for, or with customers, they commonly involve certain steps and activities. The mixture of the steps consists of a service process that the customers assess (Hyman 2004). Additionally, it is probable that clients can make long queues while waiting to receive their services, and service delivery takes a certain amount of waiting time. This is critical in enabling marketers to facilitate the clients’ understanding of course of obtaining a particular service, as well as the acceptable times of delivery. The development and management of efficient service measures are vital tasks for service firms. Notably, management of a process factor in a marketing mix is essential in that services are perishable. This implies the impossibility of storing, inventory, returning, or recycling services. Furthermore, Gordon (2012) holds that it is difficult for a service industry to manage situations that concern over or under demand, as services entail actions or performances that are impossible to store. As the production and use of services occur simultaneously, and because clients always engage in the process, there are several chances available for service customization to meet the needs of the clients. For instance, there is an opportunity regarding the extent to which service aspects and delivery system offer themselves to customization range. Another example regards an opportunity concerning the flexibility degree that contact members of staff may exercise in the satisfaction of customer needs. More so, Hyman (2004) says that because of the experiential and dynamic nature of services, and their simultaneity, service firms, especially banks use service planning to boost service counter management, as well as to facilitate a more explicit service processes’ visualization. Moreover, a standardized or customized method, which is founded on the clients’ needs and expectations, consists of another feature of service process, which provides evidence to the client. As regards, ANZ bank the company acknowledges process as a crucial since it is among the major characteristics of banking. ANZ offers convenient and safe service that originates form an effective process (ANZ 2011). Physical evidence Hyman (2004) holds that it is difficult to experience a service prior to its delivery. This means that choosing to use a service may be an uncertain matter due to the intangibility of services. The reduction of this uncertainty is potential by helping the clients recognize what they are buying. Some of the things suggesting that a firm keep its promises include well-decorated, spotless, and orderly reception compartment, case studies, and testimonials. Thus, physical evidence indicated by a firm must confirm the clients’ hypotheses. For example, financial services need formal environment, while children entertainment requires relaxed strategies and locations. Although clients do not experience the services before buying, they may talk to other people about the service’s experience. Their proof is convincing, as their views do not result from the company. Some of the companies involve these clients and inquire about their reaction to enhance reference materials. New customers may then consider the testimonials and may buy with confidence (Jaw, Lo, and Lin 2011). In terms of the ANZ bank, the firm tries to maintain an attractive and convincing physical environment in order to achieve success. Since it is banking institution, it maintains a formal environment that facilitates successful operation of its activities and transactions. For instance, it ensures that there is minimum noise or interruption from the outside or within premises to maintain smooth operation. In terms of the appearance, the company has an attractive outlook that appeals to the clients, and has an ample working environment for its personnel (Gordon 2012). In terms of security, ANZ bank adopts a well-secured work environment that makes the both the clients and personnel feel secure and confident within its premises to ensure successful operations (ANZ 2011). Recommendations Despite the adoption of the aforementioned marketing mix elements, ANZ bank has not achieved all the marketing objectives. To ensure effective realization of the set goals and objectives, the following should adopt the following recommendations based on the product, price, place, and physical environment. Product To enhance it performance, the ANZ bank ought to work on its product element of marketing mix. It is imperative that the bank is aware that a perfect product offers value to its clients (ANZ 2011). It is also worth noting that the company realizes that a service’s value lies on the beholder’s eye. It should offer its customers their needs rather than what it thinks the clients require. It should also know that product is not usually tangible. Moreover, it is essential that the company installs a system which always checks what customers think of a particular product, sustaining service, as well as both future and the existing needs. This customer feedback is valuable in enabling the company work on its weaknesses, and maintain its strengths in order to achieve success in its operations. What is more, the company should make sure that its products are sold widely, and yield huge profits (Jaw, Lo, & Lin 2011). Price In order to realize success in a service industry, it is a significant to establish approaches based on the competitive setting, client demand, service, and other products. These efficient pricing arrangements are competitive, value-based, going-rate, cost-plus, skimming, psychological, loss leader, as well as discount. The company should adjust its interest rates in order to attract as many clients as possible. Still, the company should consider possible ways of establishing allowance, seasonal allowances, payment period, trade discounts, price flexibility, service bundling, volume discounts, wholesale pricing, price differences, and credit terms among target client and geographical localities. People A firm’s prosperity is determined by various factors including the way consumers are handled by the people attending to them. This is because people working charged with a responsibility of handing clients in an organization are influential in establishing a certain impression to the clients (Gordon 2012). At ANZ bank, all employees ought to know the importance of treating consumers appropriately. It is the company’s responsibility to hire highly competent employees to work in the customer service and other sectors to work towards meeting all the consumer needs and expectations. Moreover, the bank ought to ensure that it trains, motivates, and develops its members of staff to create a competitive advantage and achieve its objectives. It is also imperative for the bank to ensure that its employees can give valuable after sale services, advice, and aid in order to create a competitive advantage over its rivals (ANZ 2011). Physical evidence ANZ bank should ensure that its physical surrounding meets the standards of a banking institution. This implies that it should ensure that the working environment must be formal, with the least amount of noise and any distraction. Additionally, the working environment should demonstrate a convenient and inspiring setting, which enhances the workers’ performance towards success. In addition, the company must ensure that its environment can prove what the clients think about its services. It should also know that the physical evidence helps in attracting other consumers through other clients’ recommendations. It is also notable that the company involves its clients and asks about their reaction in order to boost the reference materials (Jaw, Lo, & Lin 2011). Conclusion Without doubt, there is a significant difference between service providers and goods providers. The distinct features existing between a service and a product show the difference. Some of the features of a service, especially a banking service are intangibility, inseparability, simultaneity, perishability, ownership, and different standards and criteria among others. The success of the service providers lies on the nature of their marketing strategies. In this case, ANZ bank is a service provider because its products’ nature meets the aforementioned features of a service. The company is successful because of employing 7P’s marketing mix elements including product, price, people, process, promotion, place, and physical environment. To achieve all its objectives, it is critical that the company ensures that the products offered meet the client’s needs, and set prices affordable and worth the value of its products. It should ensure that the personnel are well trained, developed, and motivated in order to present a positive image about the company. Lastly, the company ought to maintain an attractive, convincing, and convenient working and business environment to realize success. References ANZ 2011, ANZ Banking Group UN Global Compact Communication of Progress May 2010 – May 2011. Pp. 1-18. http://www.anz.com/resources/5/4/547f9f804716f4fe82aabbf55bff9ae9/ANZ+UN+Global+Compact+Report.pdf?CACHEID=547f9f804716f4fe82aabbf55bff9ae9 Beriss, D & Sutton, DE 2007, The Restaurants Book: Ethnographies of Where We Eat. P. 193 Birnbaum, S & Birnbaum, MA1989, Birnbaum's Great Britain. 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