Servicescape Concept in Service Marketing - Tiger Airways - Case Study Example

Service Marketing Case Study Part A Servicescape is a concept in services marketing originally introduced by Booms & Bitner (1981) to illustrate the impact that the physical environment has on the service process. According to Booms & Bitner (1981), servicescape is the environment where service is assembled, provided and where service providers and customers interact. Servicescape also incorporates tangible aspects such as physical design and décor among other physical evidence that facilitate the communication and performance of the service. Zeithaml et al (2012) observe that servicescape is a vital asset for communicating the quality of service, creating foundation for understanding customer expectations, enhancing employee productivity and building the service experience. Form the above illustrations, it is evident that servicescape is a very important tool that touches can affect employees performance and forms grounds upon which customers can evaluate the quality services delivered (Rosenbaum 2005; Zeithaml et al 2012). A critical look at the provided case study, it is evident that Tiger Airways servicescape may include elements such as; its website, physical design and decor elements of its airplane exterior and interior such as seats, lighting, temperatures in the waiting room and quality of safety equipments among other elements. Over the years, a number of studies have established that elements in the servicescape can significantly affect behavior of both employees and customers (Bitner 1992; Rosenbaum 2005; Zeithaml et al 2012). On this note Bitner (1992) notes that, servicescape elements influence that nature and quality of interaction between customers and employees. Similarly, Zeithaml et al (2012) observe that servicescape have a strong impact on how customers perceive service experience and how employees perform within the service environment. Based on these sentiments, it is plausible to argue that in order to understand the effects of servicescape on behaviour, it is necessary for Tiger Airways to include both their customers and employees in the framework used. In reference to the Expectation Confirmation Theory we can argue that, it is necessary for Tiger Airways to include their customers in any framework for understanding servicescape effects on behavior because servicescape elements significantly determine how customer’s perceive service quality. The Expectation Confirmation Theory postulates that customers expectations and they way in which their perceive service performance significantly influences their satisfaction levels (Oliver 1980). In this regard , Zeithaml et al (2012) note that, servicescape plays a very significant role in communicating the image and service quality offered by an organisation. Servicescape elements determine whether customers will have a positive or negative service encounter. Consequently, this will influence their patronage or loyalty towards the organisation. In the case of Tiger Airways, it evident that customers expect a well functioning website that is responsive to their needs. If this expectation is not met or they perceive the performance of the website to poor they are likely to become dissatisfied. Elements of Tiger Airways’ servicescape such as a well functioning website that is responsive to customer needs and makes it easy for customer to access services may help to eliminate confusion and service delays. As a result, customers are likely to have a positive attitude towards the organisation. This will in turn enhance their loyalty (Berman 2005; Zeithaml et al 2012). The impact of servicescape on the behaviour of employees can understood in the context of social interactions. On this note, Bitner (1992) notes that servicescape influences that nature and quality of interaction between the customers and the employees. It is vital to note that an airline as Tiger Airways offer interpersonal services. This is a kind of service where both the customers and the employees are present in the servicescape. Therefore, it can be observed that interactions between employees and the customers are inevitable in this case. Any factor that influences such relationship becomes central to the success of therefore service organisation. Therefore, it is necessary for Tiger Airways to include both employee and customers in any framework for understanding servicescape effects on behavior. Tiger airways can use their servicescape to positively influence their customers. For instance, they could upgrade or improve their website such that it is able to accommodate a large number of users and enhance customer accessibility to services. Improving their servicescape could also play a significant role in enhancing their staff‘s overall work experience and performance. For instance, when they upgrade or improve their website, the company staff may find it easy to interact and serve customers. Part B Question 1 In reference to Parasuraman et al. (1991) framework of service quality (SERQUAL/RATER model), there are five distinctive service dimensions namely; reliability, assurance, tangibles, empathy and responsiveness. Tiger Airways can capitalise on these service dimensions to reposition itself in the airline industry. In order for Tiger Airways to reposition itself amidst the increasing competition and loss of customer confidence, they should focus on enhancing their reliability. According to Parasuraman et al. (1991), reliability is the ability of a firm to deliver services dependably and accurately as promised. The airline can enhance its reliability by observing its flight schedules.On this note, it can be observed that the firm is doing well especially in observing flight schedules. It has gained recognition among other players within Australian airline industry due to emphasis on reliability. In fact in 2011 it was rated amongst the best in terms of on time departure in all Australian airlines. This indicates that they have developed reliability and accuracy in their operations therefore their customers can depend on them for far as time management is concerned. Secondly, the company can regain its position in the airline industry by adhering to the safety protocols or regulations set by the Civil Aviation Safety Authority (CASA). Responsiveness is the second service dimension Tiger Airways should employ to get back on their feet in Australian Airline industry. According to Parasuraman et al. (1991) responsiveness is the readiness and willing of firms to help customers by providing prompt services. The management of the firm should develop the willingness to help its customers and provide prompt services whenever demanded by the customers. In the contemporary information age, most people find it easier to obtain most of the information they need from the internet. Eshghi and Ganguli (2008) argue that many organisations need to set up websites to so as to enhance service delivery to customers. However, this had been one of the fail points Tiger Airways had experienced in the course of recovery from the flight ban when their websites crashed. Therefore, the airline needs to upgrade or improve their website such that it is able to accommodate a large number of users and enhance customer accessibility to services. Tangible aspects of the physical environment also play a significant role in enhancing Tiger Airway’s competitive edge in the Australian airline market. In this case, tangible aspects include; physical facilities, personnel, communication materials and equipments. Tiger Airline Company can capitalise on this service dimension by ensuring the physical facilities, also known as servicescape, in the organisation’s premises are visually appealing and of good quality. This will help attract large numbers of customer. As previous studies have shown tangible aspects in a service system influence customers’ perception on service quality (Bitner 1992; Rosenbaum 2005; Zeithaml et al 2012). Furthermore, they must ensure that they use modern equipment in the premise. For instance facilities such as signage, air plane seats, security screening equipment and the general layout design should be modernised. Additionally, any material related to the service delivery such as billing statements, brochures and business cards must be virtually appealing and sufficiently informational. Another crucial service dimension that Tiger Airways can capitalise on is customer assurance (Carman 1990). In this case, the management of Tiger Airways must ensure that it recruits employees who are competent and fully equipped with relevant service delivery skills that will instill confidence in their customers. Furthermore, proper training of the existing staff should be carried out on a regular basis. The airline staff can particularly benefit from a communication training programme on effective communication with the customers. Hoffman and John (2007) note that, service failures are likely to occur in any service system. As a result, there is need for providers to train their staff members to adopt necessary measures or actions, rectify and restore the experience to a consumer in order to maintain customers’ trust towards the service provider. Empathy is also another distinct service dimension that Tiger Airways can capitalise on in order to regain their competitive edge in the market. According to Parasuraman et al. (1991), empathy entails the provision of caring and customer-centered services. The airline can capitalise on this dimension by providing their customers with personalised services. This implies that they should not generalise the enquiries or needs of their customers. The needs of each customer should be addressed independently and separately. Furthermore the organization must vividly understand the specific needs of their various customer segments (McDonald & Messinger 2010). Question 2 According to Hoffman and John (2011), service gaps are the potential areas where the customers’ expectations are not met in the course of service delivery. According to Rao (2009), service gap is observed due to inconsistencies and the shortcoming in the processes of quality management. A critical look at the provided case study, it is evident that Tiger Airline has certain service gap that may be a result of the deficiencies in the quality management process. First, the firm is experiencing management perception gap. This gap is caused by the difference between what customers expect and management perception of customer’ expectation. Service companies sometimes fail to properly understand the expectations of the customers thereby ending up delivery services that do not satisfy customers’ expectations (Hoffman & John 2011). For instance the airline failed to understand that the customers expected a less stringent check-in cut-off times. In this case, they designed a check-in cut-off that takes 45 minutes thereby taking most of the customers’ time. Another potential fail point arises from failures that relate to service design and performance standards. This gap is referred to as service delivery gap. Hoffman and John (2011) observe that standard gap is generated by the differences between the management perceptions of customers’ expectation and the actual set standard of service delivery. The standard of service delivery should be supported by sufficient and appropriate resources such as technology, systems and employees (Rao 2009). For instance, a service firm may wish to communicate with the customers outside the organisation but are limited by unclear service designs. This is clearly evident in the case of Tiger Airline. In April 2013, it is observed that the company wished to communicate to the customers but their website crushed and impeded this desire. This situation was due to the fact that the website could not handle huge traffic relayed by the customers. In order for Tiger Airline to bridge these service gaps, they should assess their operations through customer defined standards. The policies set in service delivery should be customer oriented rather than solely targeting to meet the set goals by the airline. Subsequently, the airline should align its various service designs to meet customer expectations (Hoffman and John 2011). Question 3 Customer satisfaction refers to the positive emotional feeling that the customers experience after buying a product or service (Carson Research Consulting Inc, 2006). Parasuraman et al. (1991) argue that customer’s satisfaction is the decision that customers make after service experience. There are significant numbers of empirical studies which associate customer satisfaction to creation of customer loyalty. For instance, the research conducted by Carson Research Consulting Inc (2006) suggests that customer satisfaction plays a significant role in influencing customers to buy the product or service in future. This implies that customers who are satisfied will always be proud of the service experience and would come back to the same organisation in case they need the same commodity in future. Therefore, through customer satisfaction, organizations are able to retain the existing customers and draw new customers. Furthermore, Johnston (1994) note that customer satisfaction helps firms to secure future revenues. For example, by increasing quality to improve customer satisfaction, firms cut on the costs associated related with defective goods and services such as warranty costs and managing complaints (Carson Research Consulting Inc 2006). Parasuraman et al. (1991) note that satisfied customers will tend to share their good experience with other people. This fact indicates that organisations have great chances of gaining more customers through satisfying the needs of the existing customers. Zeithaml et al (2012) argue that when satisfied customers share their good experience with other people. Moreover firms tend to incur lower costs when it comes to attracting new customer. Additionally, they observe that by sharing their good service encounter, the satisfied customers help in building a positive image of the company. In order for Tiger Airways to increase customer satisfaction they should provide customer-centered services. This can be realised by foremost assessing customers’ service expectations. As evident in the Expectation Confirmation Theory which postulates that customers’ expectations significantly influences their satisfaction levels (Oliver 1980), the airline should therefore emphasise on meeting customer expectations. Another way that Tiger Airways can influence customer satisfaction is through its service design. Service design is tool that organisations employ to plan and organise employees, communication, infrastructure and servicescape so as to improve service quality and the interaction with the customers. Therefore, service design is very important instrument that can help organisations to combat internal challenges, such as complications that may arise from communication system and employee incompetence, so as to improve customer experience by improving service quality. Moreover, by enabling better understanding of the customers’ desires, service design helps organisations to structure their service delivery so as to meet customers’ expectations. Tiger airways can therefore influence the satisfaction of its customers by seeking avenues to understand the desires of the customers and aligning the process of service delivery along the lines of those desires. They can achieve this through paying attention to complaints raised by the customers. For instance, if noted that the customers complain about the stringent 45 minute check-in cut- off policy. They management can reorganise the process of service delivery to meet the need of the customers so as to eliminate such complaints (Szwarc 2005). Question 4 There are a wide range of research that can provide invaluable insight on the needs of the customers in the airline industry. For instance, consumer satisfaction research can help the airline investigates how they can meet the needs of their customers. Secondly, price elasticity testing can aid the organisation to understand customer’s sensitivity to the price changes. According to Andrew (2011) price elasticity is the measure of the effects of change in price to the quantity of commodity consumed. Similarly, I would conduct concept or market testing surveys. Concept testing is the process of measuring customers’ responsiveness to introduction of new ideas prior to introducing the said ideas into the market. Concept testing can also be used to change customers’ perception on the existing products. Furthermore, I would consider conducting positioning research. Shamoon and Saiqa (2011) observe that positioning research would help the airline to identify market challenges that affect the rate of consumption of the product in the market. Moreover, conducting brand name testing would also be essential in determining the need of the consumers of the airline’s service. According to Soomro et al. (2012), brand name testing helps organisations to create the relationship between the product of the company and the emotional perception of the customers. Furthermore, branding is simply defined as the process of fulfilling customer expectation and ensuring consistent customer satisfaction (Shamoon and Saiqa 2011). If given the opportunity to choose only two types of research to conduct, I would prefer consumer satisfaction research and brand name testing. My choice of these types research is influenced by the need to establish a strong relationship with the customers so as earn their loyalty. References Andrew, G 2011, Foundations of Economics, Oxford University Press, New York. Berman, B 2005, ‘How to delight your customers’, California Management Review, vol. 48, no.1. pp. 129-153. Booms, B.H & Bitner, M. J. 1981, "Marketing strategies and organisation structures for service firms". In Donnelly, J; George, WR. Marketing of Services, American Marketing Association. Chicago, IL. Bitner, M.J., 1992, ‘Servicescapes: the Impact of Physical Surroundings on Customers and Employees’, Journal of Marketing vol 56, no. 2, pp.57-71. Carman, J. M, 1990, ‘Consumer perceptions of service quality: An assessment of the SERVQUAL dimensions’, Journal of Retailing, vol. 66, no. 1, pp 33-55. Carson Research Consulting Inc, 2006, Customer Satisfaction and the Success of Your Organization, viewed September 26 2014 Eshghi, A., Roy, S.K., & Ganguli, S. 2008, ‘Service quality and customer satisfaction: An empirical investigation in Indian mobile Telecommunications services’, Marketing Management Journal vol 18, no. 2, pp. 119-144. Hoffman, K. & John B, 2011, Services Marketing: Concepts, Strategies, & Cases, Cengage Learning, New York. Johnston, R, 1994, ‘The determinants of service quality: satisfiers and dissatisfiers’, International Journal of Service Industry Management, vol. 6, no. 5, pp 53-71. McDonald N.M & Messinger, D.S 2010, The Development of Empathy: How, When, and Why, viewed September 26 2014 Oliver, R. L 1980, ‘A cognitive model of antecedents and consequences of satisfaction decisions’, Journal of Marketing Research, vol. 17, no.4, pp. 460-469. Parasuraman, A., Zeithaml, Valerie A. & Berry, Leonard L., 1991, “Refinement and reassessment of the SERVQUAL scale,” Journal of Retailing, vol. 67, no. 4, pp. 420-450 Rao, K.R., 2009, Services Marketing, Baba Barkha Nath, New Delhi. Rosenbaum, M. S., 2005, "The Symbolic Servicescape: Your Kind is Welcomed Here", Journal of Consumer Behaviour vol 4, iss 4, pp. 257–267. Shamoon, S & Saiqa T, 2011, "Brand Management: What Next?" Interdisciplinary Journal of Contemporary Research in Business, vol. 2, no .12, pp. 435–441. Soomro Y. A, Hameed, I., Shakoor, R. But, A.S & Kaim-khani S. A, 2012, ‘Factor affecting Consumer Preference in Airline Industry Far East’, Journal of Psychology and Business, vol. 7 pp 63-71. Szwarc, P., 2005, Researching Customer Satisfaction & Loyalty: How to Find Out what People Really Think , Kogan Page Ltd, New York. Zeithaml, V., Bitner, M.J. & Gremler, D., 2012, Services Marketing, 6th ed, McGraw-Hill Higher Education, Boston. Read More