Core service concept and benefits of Paychex payroll outsourcing

Marketing

PAYCHEX Case Study

To define the service concept of PAYCHEX it is first necessary to look at the customer benefit concept, as this will drive the service concept. The customer benefits relate to the core benefits which firms receive from using a service (Speh & Hutt, 2012). In the case of PAYCHEX there is the provision of a range of HR services, which can provide a great deal of convenience to small and medium sized businesses, reducing their need for skilled labor that is needed for financial functions, such as payroll, filling tax payments and administering of retirement plans. The benefit can reduce the stresses and pressures in a HR department and benefit the firm with the ability to rely on a proven service where there are a high level of skills and knowledge, which may not have been available directly to the firm due to the costs of direct provision. The effect is to reduce the opportunity cost associated with payroll and other HR services, to allow the firm to focus in the issues that are important for operations without worrying about some of the bureaucratic aspects of running a business.

The service concept will be the articulation of the service concept, defining the services that will be provided. The basic services may be defined by function, the firm offers outsourcing payroll services, including flexibility with the ability of a client to use a single service or a bundle of services including payroll completion, filling of tax payments and administration of the retirement plans. However, the service concept goes behind just the functionality, it incorporates the way that the services will be provided. For PAYCHEX there is an integrated service offered which can grow as the business grows in order to offer long-term solutions. The services may be flexible and responsive, and they will definitely be professional, prompt and compliant with any legislation.

Question 2

When potential look at a service, it is not the functionally that is purchased, but the benefits the functionality will provide (Speh & Hutt, 2012). Kotler & Keller (2011) illustrate this concept by noting that people do not buy drills, they buy the ability to make a hole, and they do not buy a bed, but the ability to get a good nights sleep. While the context in business to business sales differs, the concept remains the same; the sales of a service to a business should focus on the benefits it will provide. If the management of a firm does not perceive a benefit in the purchase of a service, it will not be bought. This will be true of any product or service, however the sale of products focuses ion a tangible good, where there can be the highlighting of features. For example, a photocopier may print a certain number of copies every minute, may cost a set amount per copy and be a specific size, all of which may be assessed and compared. Services are different as they are intangible, and features or characteristics of the service may be difficult to present or assess. For services it is the sale of a concept rather than the sale of a physical item.

In the marketing and sales of services there has to be a higher level of engagement in order to assess the needs of the clients, with a potentially higher level of emotional influence in the purchase. The psychological feeling that a person gets by making a purchase and being associated with a particular brand or service level, will be important. The psychological response may different the way a customer chooses between competing services, influencing their perception of those services. The issue of service delivery is more important in services, as unlike goods there cannot been a stockpiling or creation of inventory to be used as a later date.