Service Marketing Service Encounter Analysis CVS Pharmacy

Service Marketing

Service encounter analysis CVS Pharmacy

Service encounter analysis-1 CVS Pharmacy

Service encounter analysis-2

Service encounter analysis-3

Service encounter analysis-4

Service encounter analysis-5

Service journal entryform-1

Appendix A Encounter 1 CVS Pharmacy

Service journal entry form-2

Service journal entry form-3

Service journal entry form-4

Service journal entry form-5

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.

2.

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 guests have an enjoyable meal and serene atmosphere was more important to our waiter than their efficiency in getting another order filled.

In looking at some of the other Hofstede dimensions the area of Power Distance could apply in the fact that the waiter who was serving the meal being at the less powerful position, was very accommodating (Hofstede, 2009). They did not have to be hailed or called over to refill our cups, check on the meal, bring additional napkins, or food without any cues. Though this may be true of any excellent waiter, it was noticeably exceptional at Shangrila that the waiter was there to serve and was comfortable even to the point of their discomfort.

2.4 Service encounter analysis-4

T-Mobile Touch Wi-Fi Cell Phone (See Appendix D)

According to the SERVQUAL model Gap #1 refers to perceptions of management being different than the customers. Well that was exactly the experience this customer had to deal with. Somehow the manager failed to completely save all my previous phone data, half of a mere 100 phone numbers, contacts, and email addresses were lost. Add to this media such as music and photos and basically the phone was useless for several days. Thankfully, I had a former phone basically obsolete now except for use as an address and phone book, that contained much of the info I needed to transport. Yet this still had to be done by hand, ask how this bit of information was discovered, it was discovered by a return trip to the manager the very next day to ask for assistance in getting the contact information transferred to the new phone. The manager simply said this could not be done with the older model phone. They were willing to send it in for service to figure it out for a fee. I couldn't believe my ears, since I had heard how my sibling was able to get their contact names, numbers, photos, and email lists transferred at no additional charge when they purchased the new phone. Indeed there was a gap #2 here, the manager felt they had done an excellent job by making a sale of an high end phone, perceiving they had served me well in giving me the best quality and value service and product (Staples, Dalrymple & Bryar, 2011). However, my perception was that the manager had basically misled me and then gave poor quality service in setting up the new cell phone services.

Figure 1 SERVQUAL Model (Berry, 2011).

2.5 Service encounter analysis-5

Return the Touch Screen Wi-Fi Smart Cell Phone.

The SERVQUAL Gap 3 and 5 relates to the relationship between the quality of service expected by the company and the actual level of service delivery (Staple, Dalrymple, and Bryar, 2011). The question about the situation in response to this Gap in service quality, was the expected and actual standard level of quality upheld on a consistent basis? Obviously the answer was absolutely not. After three weeks, the phone stopped working. By this time several trips have been made to the carrier service center for help with this expensive phone that is now dead and a very expensive address and contact book. The manager, by this time does not want to speak to me and has actually cancelled one of our appointments. In analysis of the level of service, this was definitely a gap between expected and actual service level.

One key service dimension that was not met include reliability or the readiness of the manager to work on my phone correctly and without fail. Compare this to the service at NeimanMarcus where the salesperson would go to any length to assist the customer. This was a glaring disappointment. The manager was totally unwilling to give me a new phone, insisting I had somehow damaged it. They were willing to send it in for repair only.

Another key services dimension is Responsiveness. This refers to the willingness of the manager to assist the customer and provide service at the convenience of the customer. Obviously after having to take several trips to the service center, the convenience of the customer was not held in high regard. Also the fact that they would not make an exception and simply replace the phone was another inconvenience and failure to show a readiness to serve the customer.

3.Conclusion

The attribution theory in could be applied to the encounter with the purchase of the Armani jeans. The salesperson in that instance was intrinsically motivated (Mager, 1992). They were very positive and self assured of the ability to provide a successful level of service in meeting and exceeding the customer expectations. The theory emphasizes the realization that the salesperson can easily recognize a level of success by the response from the customer rather than failure. This will influence the desire to repeat a similar effort in helping another customer utilizing the same behavior for an equivalent result (Lepper, 1989)

The equity theory was effective in the encounter with the manager selling the cell phone. It was evident that the managers at the store were satisfied level of service they supplied. So far the level of service they were supplying was equitable to the number of units being sold. When comparing the volume of sales it is possible that the manager has trained his entire staff in the same manner of customer service presented to myself. The outcomes of dissatisfied customers must be at an acceptable level in order for the manager to refuse to change their policy for replacing vs. repairing defective cell phone units. On the flip side if enough customers report a high level of dissatisfaction with the service level of the carrier at the service center. The balance of equity will be disrupted which will cause a change in the way business is conducted in order to preserve the successful number of output or units sold (Carrell & Dittrich, 1978).

The role and script theory is best described in the encounter with the Shangrila Restaurant. The waiter best performed the role theory by providing service to the customers who come to the restaurant to eat. They are expected to take menu orders, bring the food requested and respond to requests by the customers. Waiters therefore play a role that is generally expected of all waiters regardless of what type of restaurant they 'act' in. There is a common level of behavior given in this type of interpersonal encounter with customers. Script theory is not always as predictable however, for instance my customary offering of a tip to the waiter who would not accept it, was unexpected. It was highly unusual for a waiter in my experience to refuse a tip. The differences in our cultures, played a part in that exchange. The script theory from a customer perspective always expects to tip the waiter. Yet the cultural difference changed the service experience (Bowles, 2011).

4.References

Berry, Z.P. (2011). ServQual. Retrieved September 2, 2011 from http://www.12manage.com/methods_zeithaml_servqual.html

Bowles, M. (2011). Script theory. Retrieved September 2, 2011 from http://www.marcbowles.com/courses/adv_dip/module12/chapter11/amc12_ch11_three2.htm

Carrell, & M.R., Dittrich, JE. (1978). Equity theory recent literature. Methodology Considerations & New Direction. Academia of Management Reviews. pp: 202-

Clearly Cultural. (2011). Long-term orientation. Retrieved September 2, 2011 from http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/long-term-orientation/

Financial Times. (2001). Service marketing definition. Retrieved September 2, 2011

from http://lexicon.ft.com/Term?term=services-marketing

Hofstede, Geert. (2009). Cultural dimensions. Retrieved September 2, 2011 from http://www.geert-hofstede.com/

Lepper, M.R. & Hodell, M. (1989). Intrinsic motivation in the classroom. In C. Ames & R. Ames, Research on Motivation in Education: Goals And Cognitions (Vol

3). New York: Academic Press.

Mager, R. (1992). You really oughta wanna. Belmont, CA: Faeron.

Spaulding, C.L. (1992). Motivation in the classroom. New York: McGraw-Hill.

Staples, W.J.S., Dalrymple, J.F. & Bryar, R.M. (2011). Assessing call center quality using SERVQUAL. Retrieved September 2, 2011 from http://www.crm2day.com/library/docs/ap0055.pdf

5.

Appendix

5.1

Service journal entryform-1

Appendix A Encounter 1 CVS Pharmacy

Entry July 3.

The family picnic on July 4th had been planned since February when family members started meeting each month to plan the annual reunion. Volunteer teams made up of relatives from all over the country decided what they wanted to contribute to the cook out event involving hundreds of family members. Being on the grilling team, part of the responsibility was to get the grills and all related supplies for the cooks. Well from a marketing standpoint the place to go was CVS which had Kingsford charcoal 20 lb. bags for only $6.99. The plan for the team of four was to arrive at the store the first day of the sale and purchase at least 3 bags each. The first day of the sale was July 1 and that was the day chosen to get the goods. Needless to say I did not go to CVS on July 1st. I did not go to CVS July 2nd, so now on July 3rd arriving at CVS at the end of the day there were about 6 bags left on arrival. Grabbing three bags, I go to the counter to make the payment, but then hear this shrill scream 'those are mine'. I look around and there is this customer pointing at the cart that I was pushing saying the bags belonged to them. Turning to them the retort was 'your name is not on them'. Of course it actually was, they were being saved or held for the customer while they pulled their car to the front door. Holding receipt in hand, she quickly grabbed the bags from my cart and transferred them to her own. Apologizing, I asked a stockperson did they have more charcoal. They did not. Proceeding to the next nearest CVS, there was no charcoal at that location either. Driving on to a third location, same result. At this point, I decided to pay $11 a bag for charcoal, after getting a rain check for the sold out product.

5.2

Service journal entry form-2

Appendix B Encounter 2 Armani Collezioni Designer Jeans

July 13.