Nike: A Multinational Company in China Nike is one of the largest athletic shoe brands in the world and sells millions of shoes and clothing each year. The company was….
The Service Company Can Differentiate Its Service Delivery
Principles of Logistics and Marketing Essay “The service company can differentiate its service delivery in three ways: through people, physical environment and process” (Kotler P, 2005). Introduction: In today’s competitive marketplace companies are competing strategically through service quality for better differentiation. In certain time of period the successful companies were using marketing mix model of four elements: Product, price, promotion and place. However later on, Booms and Bitner suggested the extension of the 4-Ps framework to include three additional factors: People, Physical evidence and process as marketing.
The additional 3-Ps has been adopted in the service marketing literature, and also 7-Ps marketing mix model is more useful for services industries like Transport and Logistics. People for most services are the most important and irreplaceable element of the marketing mix. “Successful companies focus on the services-dominant paradigm with investment in people, technology, human resource policies and compensation linked to service performance of employees. It’s very important because contact employees’ attitudes and behaviours significantly influence the quality of service. (Johnston R, & Clark G, 2005). In other words they represent the “face and voice” of their organizations to customers. Personnel, who come into contact with customer, have to make positive first impression to achieve customer satisfaction. They are responsible for representation of the image of the service company for which they operate. It is important that employees’ attitudes and behaviours are suitable to the delivery of service quality. For example in Travel industries, service personnel must have knowledge of advertising.
The advertising should have positive effects on contact personnel. It should provide tangible clues to the customers and make service offering well understood. It is also necessary for service companies to make sure that employees are giving the best quality performance. The ways to do that can be very simple, for example providing personnel with a necessary tools and equipment, such as mobile phones, computers, or creating better working environment by offering employees: child care service; health care service; family support service; family sick days; flexible return.
However to have an affective marketing strategy, service companies have to make eye-catching image of the company for customers satisfaction. To achieve this, service companies are using another marketing mix element: Physical Evidence. “Physical Evidence in the Booms and Bitner framework refers to the environment in which the service is delivered and any tangible good that facilitate the performance and communication of the service. Physical evidence is important because customers use tangible clues to assess the quality of service provided. (Rafiq, M. & Pervaiz, K. A. 1995) The physical evidence of service is composed of all the physical representations of service. I. e. in transport and logistics service these tangible representations are: buildings, exclusive colour-painted vehicles, letterhead, carry-bags, uniforms of the personnel, package materials with coloured logotypes. Colours also have a meaning for physical evidence. For example red and yellow colours symbolize speed, energy and power.
These colours are widely used in transport and logistics services, for example delivery services company DHL, used both colours in their company logo, also the flag carrier airlines of Spain – Iberia, are using these colours in their company logo and on the aircraft they own. By noticing these tangible cues, customers understand what company wants to say about its quality and performance. Also transport and logistics services create its appearance by using the newest model vehicles.
From the companies which are using the latest model vehicles, customers automatically expect good service quality and fast transportation. On aircraft when customer is flying in the first class, he expects enough room to lay down, comfortable seats, cabin crew which wears clean and tidy uniforms. Generally speaking, physical evidence is capable to visually reflect what the company stands for, and simplifies the activities of employees. And the main purpose of physical evidence element is that it should be helping potential customers to see what kind of service they are buying.
However to achieve customers expectation and satisfaction of the delivery service, an attractive environment is not enough, companies should show visualization of the service processes to the customer. “Processes are the lifeblood of the service operation. Rather like DNA provides the patter for living organism, a good process ensures that service is delivered consistently, time after time. “(Johnston R, & Clark G, 2005). It is said that logistics is a process of resource management providing: The right product, in the right place, at the right time. Therefore logistics companies should make this process visible for their customers.
I. e. the world largest courier companies such as DHL, UPS, FedEx and TNT are using shipment tracking systems, customers can track their packages on companies’ web sites . On these web sites customers can find out where there shipment is. In other words, courier companies can offer customer real-time details of their shipment’s progress as it speeds through the companies’ network on the way to its destination. By seeing this process customer can evaluate the courier company and if these service processes satisfy him, he probably will be using the company’s service in the future.
Therefore the power of IT should be integrated in this segment because it can speed up the availability of the information. Also, service firms use “service blueprinting” to better manage the service encounter and to allow clearer visualization of the service processes. “In typical service blueprint, the customer occupies the top zone, management occupies the bottom zone and service operations are inserted between them. ” (Shostack, L. G. 1984). Although it should be remembered that, “Badly designed processes are likely to annoy customers because of slow, bureaucratic, and ineffective service delivery.
Similarly, poor processes make it difficult for front-line staff to do their jobs well, result in low productivity, and increase the likelihood of service failures. ”(Lovelock, C. H. , Wright, L. 2002). Conclusion: The additional elements of people, physical environment and process, have vital meaning for marketing services. Customers’ satisfaction of service delivery depends on how well these elements: people, physical environment and process, function together. These segments composed of the people who operate the service in the delivery service, the physical environment in hich the services are performed and the service processes which maintains these performances. Besides these three elements of service marketing mix have main influence on clients decision to purchase the service or not. In transport, the core product is service (movement) but there still are number of physical goods needed i. e. vehicles, roads, offices, for the business to operate. Whiles today’s marketplace is on competitiveness peak and the competition between service delivery companies is at the highest level it is important for delivery service companies to provide best quality of service to acquire and retain their customers.
Bibliography: Johnston, R. & Clark, G. (2005) Service Operations Management Improving Service Delivery 2nd ed. Essex: Pearson Education Limited. Lovelock, C. H. , Wright, L. (2002). Principles of service marketing and management . 2nd ed. New Jersey: Prentice Hall. p14. Rafiq, M & Pervaiz K. A. (1995). Using the 7Ps as a generic marketing mix. Marketing Intelligence & Planning. 13 (9), pp4-15. Shostack, L. G. (1984). Design Services that Deliver. Harvard Business Review pp133-139.