Service marketing relates to a customer's behaviors in relation to a market strategy. Over the past few months the opportunity to observe several encounters with different vendors has resulted in exploration of marketing concepts and theories learned in the classroom. The integration between course learning and practical application from not another's perspective but the intrinsic view of each student is unique. Following are the results of this exercise in five encounters as a consumer in the market place.
The first an encounter at CVS Pharmacy involves the 7 Ps relating to Price, Product, Place, and Promotion. When a business is very busy and there are many customers this is great for the company's profits (. However, the level of service may suffer if the number of customers is more than the business can service. This relates to capacity management and may require that some customers take a rain check or have to get service at a later time. This happened on the first personal encounter in July of 2011 right before Independence Day (See Appendix A).
The second was the search for some designer jeans which also involved components from the service industry 7Ps related to customer satisfaction. The factors of People and Process gained Neumann Marcus a new loyal customer (See Appendix B).
The third encounter was visiting an authentic Chinese restaurant that only served traditional cuisine, this was due to a dare by a friend who was of this ethnic group (Appendix C).
The fourth relates to the SERVQUAL model and purchasing a new cell phone.
The fifth also relates to the SERVQUAL model and returning the cell phone due to defects.
Following the analysis of each encounter a recap of how each of these personal marketing scenarios have affected Perceived value, performance quality-value social value, emotional value, and interaction value.
Service encounter analysis CVS Pharmacy (See Appendix A)
2.1 Service encounter analysis-1
CVS had a decision to make concerning how many bags of charcoal to have on hand to satisfy the holiday customers. The marketing department chose this particular brand because of its popularity believing the quantity ordered would meet consumer demand. The pricing of the product also was set with the understanding that a low price would attract customers to not only purchase the product but multiple quantities due to the price. The yield management of the pricing structure for the charcoal resulted in selling out of the product. What if the price had been slightly higher but less than the competition. Would the product still have sold out. At what price point would the charcoal still have sold out. Could CVS have sold more if they had them in stock. How much more could have been sold if the inventory was available. With multiple stores, the three visited all were out of stock on the charcoal. How much money did CVS lose on July 3rd due to running out of stock on the product. The amount earned per bag sold after costs may have been a low profit margin. How much profit may have been lost due to the wrong pricing. The pricing strategy used by CVS is part of a revenue strategy. Was it as profitable as it could have been.
2.2 Service Encounter Analysis 2
Neiman-Marcus & Armani Collezioni Designs (See Appendix B).
In service marketing it is necessary to look beyond the conventional marketing mix of the 4Ps which refer to the product, price, market being promoted through communications, and distribution channel (Financial Times, 2001). With service marketing there are the additional 3Ps of physical substantiation, people and the service process.
The delivery or process involved in the services process are just as significant as the actual function of making the sale (Financial Times, 2001). The experience as a customer at Neiman Marcus resulted in many different emotions during the sales process. At first the attitude was one of simply completing an assignment and there wasn't a great deal of interest. Once in the process and actually interacting with the salesperson and the product, however, emotions changed. Finding a keen interest in the fabric and fit of the product, it seemed the desire to have those jeans regardless of the cost was irresistible. Finding out they were out of stock was a total disappointment and the emotion of discontent was experienced. Next it seems a bit of disdain for the premium pricing and unavailability of the product resulted in a feeling of contempt toward the salesperson and Neiman Marcus. After all it was no different than a CVS Pharmacy with all its promise of an extraordinary shopping experience. Yeah right! But next instead of a rain check, and my filing a complaint with management, the salesperson immediately begin to look for a solution. It seems the process was to find a solution, not give excuses. This was an uncommon response and excited at the prospect of getting the jeans, both the salesperson and customer begin working together. The procedures adopted by the retailer involved several options to resolving the problem. The sales system offered online options and even a direct tie in with the manufacturer if needed. The quality of this response was exemplary. The product was found, shipped out within a day and delivered direct to the home. Remarkable.
Employing the right people to sell the product was obviously of great importance at this retailer of Armani Collezioni Designs. It was obvious that the salesperson had received a higher level of training and had an intrinsic enjoyment for helping others. In addition management had provided the tools and resources for the employee to be successful. When they needed new options for finding the exact product needed. The necessary technical and system resources were available along with a can do it attitude. For that retailer, they gained a new loyal customer that day. The people component of the 7Ps was a definite, competitive advantage (Financial Times, 2001).
2.3 Service encounter analysis-3
Shangrila Fine Chinese Dining (See Appendix C)
Applying the Hofstede cultural model to this dining experience was expected to be an exercise in trying food that was unfamiliar, unsatisfying (portion wise) and even a bit undesirable. The Hofstede model is used to define various markets based on five basic dimensions as they relate to cultural influences (Hofstede, 2009). Normally a typical example would be to introduce a new product in a new culture would require testing the market for interest. However in this case, the consumer, is willing to step out of a familiar culture to try something new. In the one case, a company would attempt to modify their service to the locale and tastes of the target market. In the other, they would still have to create interest in a different cultural menu. Some restaurants do this by offering for example American menu options along with the authentic entrees in order to appeal to the local consumers. While the Hofstede model is often used by international markets, it can be used to explore branding, consumer response, and advertising strategies (Spaulding, 1992). The five dimensions include 'uncertainty avoidance', 'individualism', collectivism, uncertainty/avoidance, masculinity/femininity, and power/distance (Hofstede, 2009). In analyzing the Shangrila encounter, a friend suggested an appetizer after I stumbled with the menu for over ten minutes. The uncertainty avoidance factor on my part being rather high, she emphasized the fact that the egg rolls were filled with chicken (which for me is quite familiar). She did this to lower my apprehension. I enjoyed the egg rolls, though the sauce was too sweet for my tastes.
The next menu item involved soup simple won ton dumplings, since the idea was to try new foods, my friend decided to have this soup. Being the collectivist type at least for this evening, I also ordered this soup. It was funny because neither of us enjoyed this fair, though we both ate it. The next part involved tea, and it was a particularly strong variety. It was at this point that the waiter came up to take the entree order and bowed lowly waiting for us to acknowledge their presence. Expecting the waiter to start explaining the special menu items, I said nothing and so the three of us just sat their for a couple minutes. The politeness of the Chinese is sometimes surprising and perhaps the rest of the evening would have passed if my friend had not been there. I think each of us was waiting for the other to make a move. It was quite humbling and made me appreciate the length to which a person could go in attempting to make me feel comfortable. This was definitely a demonstration of Hofstede's Long-term orientation (Clearlycultural, 2011). That is since ensuring the…