“The service industry, commonly known as tertiary sector of industry by economists, involves the provision of services to businesses as well as final consumers” (Terill and Arthur, 2000). Schneider and Susan (2004) continues to expound on this by explaining that such include accounting, trademanship (like mechanic or plumber services), computer services, restaurants and tourism, just to mention a few.
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To differentiate between the different types of industries, a service industry can be defined as “one where no goods are produced whereas primary industries are those that extract minerals and oil, among other things, from the ground and secondary industries are those that manufacture products” (Terill and Arthur, 2000). To understand this further, the author explains that “service industry companies are involved in retail, transport, distribution, food services, as well as other service-dominated businesses” (Terill and Arthur, 2000).
Service industries categories
- Economics of the service industry
- Financial industry
- Hospitality industry
- Public services
- Real estate
- Service companies
The service industry in the UK
“The service sector is the dominant sector of the UK economy, and continues around 73% of GDP” (Office for National Statistics, 2006).
|Creative industries||“It accounts for 7%GVA in the UK and between 1997 and 2005, the industry grew at an average of 6% per annum” (Department of culture, media and sport, 2008)|
|Education, health and social work||The sector’s total gross capital formation in 2008 was estimated at £17.7 billion pounds (Office for National Statistics, 2006)|
|Financial and business services||According to REF, the industry contributed more than £86,000 million to the country’s economy each year in 2003 and 2004|
|Hotels and restaurants||In 2004, the industry is reported to have contributed more than £33,000 million to the country’s economy|
|Other social and personal services||This industry contributes over £55,000 million every year to UK economy since the year 2004 (Knox, 2010)|
|Public administration and defense||Its contribution to the economy is approximated at more than £55,000 million each year since 2004.|
|Real estate and renting service||“In 2004, the letting sector contributed over £83,000 million to the economy, while the other real estate and business support activities added gross value of £175,333 million” (Office of National Statistics, 2008).|
|Tourism||“The United Kingdom is the sixth major tourist destination in the world” (World Tourism Organization UNWTO, 2011). As a result, the tourism industry is very significant to its economy. In 2006, London received more than 15 million visitors, ranking it first among the most visited city in the world.|
|Transport, storage and communication||2004 statistics record that the communication and the transport and storage industries added £29,000 million and £49,5000 million to the UK economy respectively in the same year. British Airways, Virgin Atlantic and BMI are some of the major companies in the industry.|
|Wholesale and retail trade||“This sector comprises of personal household goods, motor trade and auto repairs industries” (Porter, 2011). In 2004, the sector added over £127,000 million to the country’s economy. Major grocery companies include the Asda, Sainsbury’s, The Co-operative food, and Tesco. “In 2010, London had the highest non-food retail sales of any city in the world, with a total spend of around £64.2 billion” (Porter, 2011)|
Understand service quality and customer loyalty in the service sector in UK
- Briefly understand and analyze the service industry in the UK
- Find out what drives customer satisfaction
- Establish the relationship between the service quality and customer loyalty in service businesses in UK
Justification for study
Customer service is an area that has been of concern to researchers and other practitioners since it plays an important role in improving the performance of businesses and encouraging customers to remain loyal. Customers have different orientations and this may lead them into attaching varying importance dimensions to service delivery. Many scholars have been conducting research on the importance of service delivery emphasizing its importance in satisfying customers, reducing costs and building the loyalty of customers in an organization (Berndt & Brink, 2004)
In the UK, it has been discovered that provision of service quality is one of the most critical requirements for service businesses. It is a tool that provides corporate advantage in addition to functioning as competitive strategies since businesses that perfect service quality win the loyalty of customers. However, service delivery in the service sectors is a complex issue as many researchers and scholars have not agreed on what should drive effective service delivery. This makes the topic of the importance of service delivery in establishing customer satisfaction in the UK a really important topic for my dissertation.
Research Questions to be answered
Service quality is very important to any organization since the financial success of any organization highly depends on how the loyalty of customers to the organization. The financial output of any organization will not be relevant if the customers are not loyal to the organization since this has an impact of reducing the profits. “Many businesses in the UK have discovered the importance of using service quality to establish customer loyalty and they have made this endeavor one of their valued priorities” (Charter Uk, 2011). For this to be effective, it is important for companies to be conversant with how consumers behave. The first question that this research will seek to answer is finding out what drives customer satisfaction. The other question to be answered is to find out the relationship between the service quality and customer loyalty in service businesses in UK.
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According to Lewis and Boom (1983), quoted in Lewis (1999) “service quality involves a comparison of expectations with performance, and is a measure of how well a delivered service matches the customers’ expectations”. A customer’s encounter with a service is encountered when it is provided and delivered when and where the customer needs it. The main focus of service quality is to meet a customer’s expectations and needs, and at the same time do so at a cost that makes economical sense. This means that a company is dependent on its customers’ satisfaction to progress and develop, since more satisfied customers translate to more financial gains for it.
Quality practice in a business results in various outcomes. The first outcome involves understanding, and ultimately improving a business’ operations. The second outcome is being able to identify problems and inconsistencies in a timely and systematic manner. These two outcomes are dependent on a business’ ability to encourage communication and feedback from its customers. The third outcome of quality practices is “establishing valid and reliable service performance measures” (Fuller, 2007). The fourth and last outcome is measuring satisfaction, which is also only realized through feedback and well-established performance measures.
Criteria of service quality
Gansler and Hans (2004) explain that “word-of-mouth, personal needs and past experiences create an expected service (expectation of service)”. A customer’s expectations will be measured against the perceived service, to measure the service quality. A gap occurs when there is a difference between the perceived service, and what was expected by a customer. Factors that cause these gaps have been identified. Among them is access, which measures the ease at which a customer can reach the services.
Another cause of gaps is competence, which measures the skills a service possesses. It also measures how easily the providers of a service can be reached to offer support. Security is a crucial factor of consideration when measuring a services’ quality. The security factor determines a product’s freedom from risks and the amount of confidentiality it offers a customer. Other significant factors include credibility, reliability and responsiveness, among others. These factors determine the ability to be trusted, give accurate results, and perform respectively.
Consumer brand loyalty
If any brand has to survive competitively in the market, the brand’s value has to be maximized. Managing a consumer-brand value is not possible without understanding consumer-brand bonds and market principles. Much research in the market is based on suppliers and manufactures or sellers and buyers. Little research and effort have been put to understand the relationship between consumers and brands, an essential relationship that determines how and which products move in the market. Developing and maintaining a brand loyalty is at the heart of many companies’ marketing plans today and “this is especially so in the face of unpredictable and changeable market environments and highly competitive markets” (Haugtvedt and Karen, 2002).
An established brand loyalty is important to a company since it makes it more harder for new products to gain a market share, it increases a company’s ability and strength to respond to competitive threats, it allows a business greater sales and revenues and it creates a consumer market base which is less sensitive to competitors efforts to gain a market share. Knowing this, it is no wonder that companies are putting in effort to understand consumer-brand relationships, something that has been neglected for a long time. “Most of the studies are based on a psychological orientation which looks at the cognitive process responsible for the development of a brand’s strength and attitude” (Fournier, 1999). Attention is centered on the relationships between loyalty of consumers, their satisfaction and a brand’s quality. “Other studies are based on a sociological view, trying to understand the meanings and emotional aspects of brand loyalty” (Harrison and Edward, 2007).
History of brand loyalty
It is a well-known factor that one of the ways in which consumers express their satisfaction with a product is through their loyalty to it. It is therefore not surprising that for many years one of the key objectives of many businesses has been to give their customers overall satisfaction. “Loyalty can be defined as a customer’s repurchase intention” (Hein, 2010). A customer’s overall satisfaction will determine their commitment to the brand, will determine their motivation for a repurchase which is what amounts to a brand reputation. “The perceived quality of a brand which is to a large extent dependent on a brand’s reputation is important as it is responsible for motivating a first-time buyer” (Holtzman, 2011). A first-time buyer then has to take time to interact and experience the brand, a period which is important in deciding their level of satisfaction with it and the cycle continues. A brand trust then creates a long-term relationship with the consumer and it is not easy for them to be convinced to try out new brands.
Trust is critical in developing and sustaining an enduring long-term relationship between a consumer and a brand. “It plays a big role in predicting the future intentions of both high and low relational consumers and it also derives implications which are of importance to any manufacturer” (Copenhagen Business School, 2002). First, trust in a brand by customers means that a brand has characteristics which make it more than just a mere product and sometimes it could mean that it gives customers more than they expect. Secondly, a long-term relationship between a brand and a consumer means that the everyday execution of marketing plans by a company are working. Finally, trust and a long-term relationship between a brand and customers imply that “it has been able to create value and go beyond customers’ satisfaction with its attributes and functional performance” (Vashisht, 2005).
Trust concept in the brand loyalty domain
“In a brand domain, trust is about customers feeling secure that a brand will meet their expectations and satisfy their consumption needs” (Teas, 1994). The feeling is based on the brand’s reliability and what it intends to do for the customer. “A brand’s reliability is based on an assumption that it has the required capacity to respond to the consumers needs by offering what they need and by offering a quality level” (Maclnnis and Park, 2008). It also requires that a brand gives the consumer a promise of future performance which then has to be fulfilled if the company has to establish and maintain the customers’ trust on the brand and repurchase intentions the next time the same need arises.
Brand intentions are considered more abstract due to their emotional and effective origin, taking into consideration the fact that in consumption and buying, the customer is vulnerable to a company’s decisions and actions with the belief that the company will not take advantage of this vulnerability to exploit customers (Franzen and Sandra, 2009).
This may be in the form of breaking promises made on purchase of the brand or making products that are totally incapable of meeting the needs they promise to meet. Customers’ trust on a brand is therefore very dependent on how the brand will behave when circumstances and situations not expected, or experienced before, occur.
“Apart from the dynamic nature of a market, perceived risks associated with a brand play an important role in gaining loyalty from its customers” (Woodside, 2005). This is because risks create situations in which a customer faces ambiguity or uncertainty in the satisfaction of their expectations. Information available on a brand plays a critical role in how customers deal with such situations and how they make their decisions concerning holding to their loyalty on the brand or seeking alternatives in the market. Complete lack of information leads to a gamble which can be very disappointing to a consumer while comprehensive information leads to rational decisions meaning that a consumer uses a brand with an informed mind, and is well aware of any disappointments that may occur (Akbar and Noorjaham, 2009).
Sources of trust
According to Ballester and Jose (2000), “the process by which an individual attribute a trust image to the brand is based on her/his experience with the brand and an experience attributes will be influenced by the customer’s evaluation on any direct or indirect contact with the brand”. In order for a customer to develop trust for a brand, the consumption experience has to have more relevance to their lives. “The experience is responsible for creating a feeling of association and relevance of the brand” (Werther and David, 2011). It also gives the brand a chance to prove its consistency and fulfillment of the promises it comes with. Furthermore, it is a chance for the customer to verify the product’s ability to satisfy his/her needs, interests and welfare. The overall satisfaction of a brand is therefore tested by the process of purchasing the brand and consuming it.
The most important source of trust for a brand is its level of satisfaction to a consumer (Bejou, Wray and Ingram, 1996). The more a consumer is satisfied with a brand, the more they will trust it. Nevertheless, it is important to take into consideration the fact that a first-time consumer needs motivation to involve themselves with a brand, before they can get the experience. This means that a company has to be able to motivate a consumer to try out the product for the first time and maintain their level of involvement with it. Customers who are constantly involved with a product will be able to make loyal decisions even in the face of uncertainties and possible inconsistencies. The biggest source of information consumers has about a brand is their own experience with it.
The other source of trust on a brand is consistency of a brand. The more consistent a brand is, the more likely a customer is going to be dependent on it (Berry and Parasuraman, 1991). In the tourism industry for example, it is important that a company is able to stay constantly updated on the needs of the market to ensure it gives updated products as per the needs of its clients. Even with the changes, a brand should be able to maintain what sold it to the customer in the first place. In the financial industry for example, a company’s brand may have attracted a huge clientele due to its market rates on loans, quality of services offered to customers, availability of information and a warm treatment of customer, among many other factors. This therefore means that even when trend in the banking industry are changing to fit into the current market trends, it still should have the same qualities which its “old” clientele expects. A restaurant company that targets travelers for example might want to maintain portability of its products and proper packaging methods.
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Another important source of trust on brands is reward for loyalty. This allows consumers to feel appreciated and feel as part of the team. It could include discounts on quantities purchased, pricing considerations for long time customers and promotions, just to mention a few. It could also include conducting surveys to get customers opinions on the brand and what more they would expect from it. Rewarding loyalty could also happen by paying good dividends to shareholders in a company, who many at times will be consumers of the company’s brands.
Strategies for developing brand loyalty
Today we find many different types of products in the service industry, some new and some which have stood the test of time to exist many years later. The sector is considered among one of the most competitive, exiting and diverse. It is also a constantly changing sector with new market trends and products coming up each day. In such a competitive sector, introducing a new brand in the market is a risk which should be properly analyzed and considered. Developing brand loyalty is not easy and especially on a new brand. Any new brand would only succeed with a business strategy that is strong enough to penetrate a market that is almost saturated.
The big brands in different industries of the sector have developed strong foundations and it would therefore not be easy to build a market share or develop brand loyalty. A good example is the wholesale and retail trade industry in the UK, where five companies own 80% of the market share. Tesco, the biggest retailer in the country is also ranked as third-largest in the world by revenues. For a new or even an existing small brand to succeed in such an environment, the basic requirements in any brand development must be in place and there should be enough funds to implement them. Businesses today have to spend large amounts of money on building brands and making sure that their customers stick to the brands. Retailers and distributors now are required to be alert and recognize the dangers of operating a business in such a fast changing business environment and consumer preferences. The service industry environment is usually a very unpredictable, making it hard for businesses to achieve and maintain stability.
Building a brand name and loyalty requires that a company starts by defining their specific market and having a clear knowledge of what they want to achieve in that market. When a target market is not defined, there are high chances of having contrasting market activities, sometimes attracting many customers who may not last for long. There is a need for a company to distinguish between their strategic planning and tactical planning to help explain how their marketing will differ at different levels and areas. A business needs to be able to clearly identify and describe the environmental characteristics which may influence strategic decisions about their brand. Finally the business needs to be able build and explain how they intend to enhance their customer satisfaction. This can be done by use of marketing, having a solid and well organized strategic plan and by use of healthy customer relationships.
“Marketing can be defined as the art of acquiring customers for products and keeping them satisfied and it means more than just getting more awareness on products out there” (Kuenzel, 2008). A company’s marketing plan must be able to explain how the brand will create its utilities and describe how it is going to achieve its targets in satisfying customers. The purchasing and marketing departments are responsible for this part of business and its success is very dependent on coordination between the two. It is supposed to be focused on getting customers to use, experience a product and repurchase it.
Marketing has many advantages when creating a brand loyalty and brands today cannot do without it. It allows designers of a product and distributors to have available goods in the market whenever customers want them, an important factor when trying to develop a good relationship between a brand and its consumers. It also allows businesses to locate the most convenient place and time to avail its products. Its marketing that gives a business the ability to transfer goods and services to the buyer or the consumer. Since it involves a long process of analyzing customers’ needs, it will allow the business to design and produce only those products which match a consumers expectations building trust towards the brand.
In the process of satisfying customers’ preferences, a brand is then able to create and maintain relationships with its consumers. In today’s business environments and especially in the service industry where there are new brands each day, brand-consumer relationships are very important to a business to ensure that it is constantly updated on consumers’ expectations and dissatisfaction, which will then allow it to work on them before the customers shift their preferences. “The emergence of a marketing concept therefore must be customer oriented, have long-term ambitions and help develop and maintain effective relationships with customers” (Pommerening, 2007). It should also give them an avenue to air their complaints before they try out new options which distracts the trust relationship that may have been developing for the brand.
“Strategic planning means being able to anticipate future events and conditions of a brand and determine the best ways to achieve medium or long term objectives” (Paapu, 2005). It entails being able to identify a brand’s primary objectives and adopting courses of action that will allow the brand satisfy the needs it claims to and fulfill the promises given to a consumer. It is an important tool when making long-term directions for decision making and “gives a business the advantage of being able to view the market ahead of time and therefore effectively prepare, which is very important especially for a new brand” (Nash, 2010).
Strategic planning has the advantage of being able to address current, short and long term expectations of a customer. Its essential purpose is to differentiate one brand from the other and therefore guides the development of solutions for that particular brand (Bolton and Drew, 1991). It is an important tool when dealing with big competitors, and is a determining factor of how much strength competitors can have over a particular brand. It will also help the brand be able to take advantage of customers’ new needs and opportunities that may arise in future. This however will happen if the strategic plan allows for flexibility, adaptability and efficient resources for implementation of the plan towards creating and maintaining a positive relationship between a brand and its consumers.
Customer relationship in one among the most important relationships in a business, and is one of the strongest strategy for many big brands. The whole brand loyalty theory is based on the relationship between a brand and the consumer. It is responsible for how the big brands identify and enhance their customers’ satisfaction ability. Customer satisfaction is one of the strongest tools used in maintaining customers and acquiring more through word of mouth from existing ones, and from their experience with a brand. “Customer relationships have the ability of allowing a brand to develop, grow and maintain short and long-term relationships with customers” (Aaker, 2001).
It allows customers to view themselves as equal partners in any transaction and development of a brand, and hence allow them to feel valued. It encourages confidence in a customer which allows him or her to make repetitive purchases and sometimes multiple brand purchases from the same company. “The collaborative exchanges that take place between the business and buyers then serve as an effective tool for the business to collect information and data which is very important in brands development” (Murphy, 2005). With first hand information, a brand is then able to have its qualities and solutions as close to the customers’ preferences as possible.
Key elements in the market that help understand brand-consumer relationships
“A market analysis is aimed at determining the attractiveness of a market and to understand its evolving threats and opportunities as they relate to those of a business” (Mathisen, 2003). It is performed to help determine who the customers are in the market and what they want from a brand. Even if not everyone involved in the brand development process is asked to participate in the process, everyone in a company must be able to make decisions using the data collected during market analysis. Several areas of interest in data evaluation include market research, sales forecasting and market strategies. The dimensions of a market analysis when trying to understand or create brand loyalty include the market size of the brand, its growth and consumption rate, trends, profitability, its cost structure, success factors, weaknesses and distribution channels.
“A market size can be evaluated on the basis of present or potential sales if a brand’s uses were expanded” (Azevedo, 2005). Different sources are relevant in determining the market size of a brand and can range from governmental data on brands in a specific industry, customers preference surveys, trade associations data on exchanges of similar brands, financial data from major brands and many other sources which prove relevant. To decide on how big any brand’s market size, correct customers must be targeted in terms of income levels, demographics, sex and any other factor which may prove relevant in choosing customers for a specific brand. In the service sector, it is clear that price and relevance of a product are big factors. This helps choose the right clientele for a brand and decide on which solutions the brand should offer to the market. It is also important when selecting selling and promotional strategies which will have a lasting impact on the targeted clientele.
The market growth rate is useful to a brand in predicting future expansion of a market and how the growth will affect a brand’s competence. “The best and most commonly used method of forecasting is extrapolation of historical data into the future” (Loveman, 2010). However, Bhattacharya and Sankar (2007) argue that “while this method is very good in providing first order estimates, it is not efficient when predicting important turning points in future”. This is the reason why some companies choose to use another method which involves study of drivers in the complementary products such as sales growth and demographic information. Such a study serves as a growth indicator which has proved to be more accurate than simple past data extrapolation.
The service sector changes so rapidly that historic trends may not be very relevant in predicting where the future is headed. Certain trends in the industry have tendencies of coming back after many years and observing the trends by which this happens may help understand what is to be expected. The brands which have stood the test of time in the industry are those which have been able to go through the trends without losing their quality and appeal to its customers.
“Product diffusion curves can be used in this industry to predict important inflection points and growth rate” (Liu, 2005). The author further explains that “by studying the adoption rate of a similar product such as a loan product in a past period, it is easy to estimate or predict the shape of the product diffusion curve”. Kessler (2000) points out that “ultimately, each product will reach its maturity stage and a decline period”. However, how long that takes is dependent on several factors is including ability to fight price pressure from a competing brand, ability to maintain brand loyalty, how well it can hold with emergence of new products, how soon the market gets saturated amongst many other factors. Lack of growth drives however has negative effects on a brand’s performance in a market regardless of its quality or how well it can cope with pressure and competition in the market.
Market profitability is very important in deciding where to grow a brand’s loyalty. “While profitability of different brands will vary in the same market, a brand’s average profit potential is used to give guidelines on how easy or difficult it is to do well in it” (Karami, 2007). A market’s profitability is influenced by several factors among them being the existing brands’ power, buyer power, threat of substitute brands, new entry barriers and rivalry among different brands. It helps to identify a market’s potential and the benefits a brand will enjoy by entering the market. This then allows a company to decide on which brands to sell in the market how to sell and how to price them in a way that favors both the brand and the consumers.
The distribution channels of a brand play a big role on how the consumers relate with it. For example, a brand that is only distributed in affluent neighborhoods may not attract any attention from a customer who is price conscious regardless of its quality or affordability. Distribution channels are important in helping a company decide on the best methods to distribute their brands and ones which will ensure that they are accessible to as many of its loyal consumers as possible. In any market, there are existing distribution channels, emerging channels, trends and a power structure for the channels. Existing channels are more direct to the customers as customers are used, are more comfortable getting products from them and can easily access the brands. Emerging ones however offer brands an opportunity to develop a more competitive advantage as each brand has a chance to come in with a new one. The power structures give consumers power to negotiate with the manufacturers.
Cost structures play a big role in brands indirect costs and consequently profitability, which determines its consistency in the market. A company may not be able to sell a certain brand in a market whose cost structure is too high even though the product may have a very low design cost. The cost is dependent on the market share a business holds and the amount of sales of the brand. Understanding a brand and its cost structure can give it a powerful competitive advantage over new entries.
Since cost is an essential consideration in any brand, “assessing a company’s costs position against that of its competitors can have explicitly strategic implications, which are best understood by using concepts from game theory” (Bhattacharya and Sankar, 2007). If a business understands its competitor’s costs, it is able to understand the competitor’s supply curve which gives information such as a price at which a business might choose to exit a market. Understanding cost structures can therefore be used as a tool to help brands become cost leaders. Since cost is a big factor in how consumers relate with brands, it is a huge consideration for any company willing to establish its brands presence in the market.
“Market trends, whether secondary or secular, play a big role in consumer-brand relationships helps identify the direction in which a brand will move over time” (Kahaner, 2009). Secondary market trends are short term and give a direction within a primary trend which includes few weeks or months. The secular market trend is long term covering five to more than twenty five years durations. Depending with the solutions a brand aims to satisfy, it may take different durations of time for a brand to gain total trust from its consumers. Changes taking place in a market are considered very important as they often come with new opportunities for brands. They also come with threats which may work in favor of a brand with better strategies as they may drive some of its competitors out. Relevant market trends are very dependent on different industries but are also dependent on other factors such as price, supply, demand and level of emphasis and support for various brands available in the market.
Taking into account all the factors considered when doing a market analysis for a brand, it is clear that its comprehensive nature provides brands with information that is too important to ignore. “The numerical data helps investors discern patterns and probable future movements based on that data” (Iacobucci and Amy, 1995). Brands will always be interested at how prices within their sector of interest is moving and how the market as a whole is tending, information which market analysis provides.
Customer relations are today a widely-implemented strategy in many businesses for maintaining a healthy interaction with customers. It is also important for companies trying to attract new clients and sales prospects. Businesses today use customer relations as a way to automate and organize their business processes especially those related to sales, marketing, technical support and most importantly customer services. The overall goal of healthy customer relations is to find, win and keep customers. This in turn reduces the cost of marketing and the amount of money businesses use on client services.
Customer relations are implemented and supported through three phases. The first phase is acquiring where the business has to go out there and get new customers. This only happens when businesses are willing to campaign for and contact new people who have not heard or had an experience with their products. The process could just include contacting new clients who may take time to respond and sometimes could end up in making new sales. The second new phase is enhancing and building the newly established and existing relationships. This includes offering customers reasons to stay by ensuring all customer service tools are in place. It includes ensuring consistent quality, addressing customer concerns and complaints promptly. It also includes ensuring new customers are well oriented to products to ensure they have an easy time using them.
The third phase is retention phase where a business needs to follow up on its customers, ensure they are constantly satisfied and products are readily available for them. The most important thing at this point is customer convenience and satisfaction. At this point, it is very important for a business to ensure that its customers don’t have a reason to look for other options. Customer databases allow businesses identify and reward loyal customers and make initiatives to follow up on those who may get lost along the way. Today, customer relations management software makes it easier for business to achieve this.
Importance of customer relations
“It is a well known factor that one of the ways in which consumers express their satisfaction with a product is through feedback and their level of loyalty to it” (Schafer, 2003). It is therefore not surprising that businesses today are putting in place strategies which will allow their customers talk back to them. It is also not surprising that one of the key objectives for many businesses today is to ensure maximum satisfaction for their customers. Customer relations to a large extent determine the possibility and percentage of customers’ repurchases. A customer’s level of relationship with a business and their overall satisfaction will determine their commitment to the company’s products and will determine how long the commitment lasts. If they have an avenue to speak out when they don’t get what they expected from a brand, they are more likely to stay true to it even when it is experiencing challenges. They are less likely to try out other brands when they experience challenges with a product they are used to. This serves as a company’s advantage since they are informed when a product has a problem before their customers migrate.
A company’s reputation is very important when they are trying to attract new customers. Satisfied customers are more likely to tell other people about their experiences with a brand. A friendly company definitely makes it even simpler for new customers and clients to attract them. A first time buyer who is only trying a product will be more willing to stay with it if the company shows appreciation by following up, getting their feedback and helping them have a better experience with the product. This in turn helps a new customer develop trust more easily and feel more comfortable to try out more products from the business.
It is a well known fact that if any brand has to survive competitively in the market today, the business has to take seriously the value of how they relate with their customers. Managing a consumer-business relationship value is not possible without understanding consumer-products relationships and market principles. This can only be done by collecting as much as possible customer information. Much research in the market is based on distributors, retailers and consumers all who are customers to the manufacturer. Little research and effort has been put to understand the relationship between businesses, brands and consumers, all which are essential relationships which determine how and which products move in the market and for how long they can sustain a profitable sale. Developing and maintaining customer loyalty is at the heart of many companies’ marketing plans today and this is especially so in the face of unpredictable, changeable market environments and highly competitive markets where business really need to retain their customers and market share (Allen, 2004).
Customer databases such as purchasing customer relations management software enables a company to keep an easy to refer to list of customers. It is able to identify profitable customers and differentiate them from those who are not. This way, it is possible to establish the most profitable areas and group of a business and maximize on returns from the group. It also enable a business establish which customers to invest more in by improving marketing and sales efforts (Sorensen, 2008). This information is important in helping a business understand its market and customers. Having extensive information about every individual customer helps a business get involved on a level which makes the customer feel appreciated. Ensuring a customer is constantly updated on new products for example ensures that they are not out of touch with a brand.
Customer relations help a business customize efforts and products to suit their customers. This is from the fact that a business has extensive knowledge about the customers. This saves a business a lot of money that would otherwise be used on research especially when it is introducing a new product in the market or upgrading already existing products. The business already has an idea of what works and what doesn’t for their customers. This also ensures that the needs of the customers are satisfactorily catered to. This translates to customer satisfaction and they in turn continue to use the company for their needs and willingly partner with them in the markets.
An established customer relation strategy is important to a company since it increases customer loyalty to the company’s brand. This makes it easy for new businesses to establish a presence or gain a market share. It increases a company’s ability and strength to respond to competitive threats since their customers are able to give information more freely to them. This means more sales and revenues for the business, which strengthens their profitability giving them an added advantage in the market. With this knowledge, it is no wonder that companies are putting in effort to understand consumer relations today, something that has been neglected for a long time. More businesses are more willing to spend more resources and time to understand their customers and stay as close to them as possible. Attention and efforts today in big businesses and organizations is centered on the relationships between customers and the business, their satisfaction and how they relate to a brand and its quality (Fournier, 1999).
Establishing customer relations
In a customer relationship domain, trust is about customers feeling secure enough about a business and its products, knowing it will meet their expectations and satisfy their consumer needs. The feeling is based on the business’ reliability, what it offers and what it intends to do for the customer. “A business’s reliability is based on customers’ assumption that it has the required capacity to respond to their needs and in turn the business has to fulfill these expectations” (Havard Business Review, 1999). This it does by offering exactly what the customers need and by offering it at a quality level. The only way a business would do this is if they fully understood what the customers expect from them. Customers can only give such kind of information if they have a developed a level of trust for a business which happens slowly as the business builds relationship with them.
Stability plays an important factor in gaining customers’ trust. Customers will only be willing to let in a company after they have seen what they can do and how reliable their products are. If a business is consistent and their products have consistent quality, it becomes easier for customers to trust the business. It also requires that a business gives the consumer a promise of better future performance. It then is the business’s responsibility to fulfill the promises if the company has to establish and maintain the customers’ trust and maintain a healthy relationship.
“Business intentions are considered more abstract due to their effective and emotional origins, taking into consideration the fact that business has more information than the customers” (Griffins, 2008). The customers are then more vulnerable to a company’s decisions and actions and need to be assured that the company will not take advantage of their vulnerability to exploit them (Linton, 1993). If a business is in a habit of breaking promises made on purchase of their products or making products which do not offer what they promise, customers will easily loss their trust in the business. Customer relations which are highly dependent on trust are therefore very dependent on how the promises a business makes are met.
Apart from the dynamic nature of a market, perceived risks associated with a business and their products plays an important role when building customer relations. Some business and products may create bigger risks than others. Some products may put a customer in a situation in which they face ambiguity or uncertainty in terms of satisfaction. A business and its products is supposed to be simple enough to a level where customers can relate with easily. The products must be able to meet customers day to day lives needs. A business which makes airplanes for example may not be able to develop a relationship with people who use the flights since they do not offer a product which a customer relates to at their level. The passenger will be more able to develop a relationship with a travel company than they are able to develop one with a planes manufacturer. A business therefore must be able to establish the customers it wants to relate with based on the level at which the customers experience the products.
Building a customer relationship requires that a company starts by defining their specific market and having a clear knowledge of what they want to achieve in this relationship (Kotler and Gary, 2010). When a target market is not defined, there are high chances of developing relationships with people who may not relate well with what the company is trying to offer. Sometimes, a business may also attract many customers who may not last for long while it could establish a few loyal and profitable customers who will stay. There is a need for a company to distinguish between their strategic planning and tactical planning to help explain how their customers will differ at different levels and areas (Kotler and Gary, 2010).
The business needs to be able to clearly identify and describe the market it is targeting and the people it wants to reach. Finally the business needs to be able build a strategy and clearly explain how they intend to stay close to their customers. Strategies which the business can use to establish its customer relations include marketing, rewarding loyal customers, social responsibilities and involving customers in relevant company events such as products launch events.
To understand the background of the service sector, and customer loyalty, books, reports, academic journals and online materials were used. Government, non-governmental and companies’ statistics were also used to understand the market trends and structure of the service sector. It also included a study of various works on customer satisfaction and the service sector, using UK as a case study. Study of books and different articles reveals that the service sector is among the most competitive, and among the sectors facing high levels of uncertainties as far as market trends are concerned. To improve on this, many businesses in the sector have realized the value and significance of quality, customer satisfaction and brand loyalty. As a result, a lot of attention is being focused on quality and customer satisfaction to increase their levels of loyalty.
It is also clear that many businesses are spending a lot of money to ensure satisfaction, safety and motivation of their customers. Communication and feedback have proved critical in many businesses in the service sector in an effort to have customers air out their dissatisfaction before making a decision to shift loyalty. Such information was available from various reports by different authors, as well as governmental and non-governmental sources. These reports served very effective and relevant in trying to understand this paper’s background. Recent and past books and research papers by different authors were also helpful in understanding the service sector in the UK, as well as brand management and customer satisfaction. Views from fellow students were also collected to get their thoughts on the subject and how it affects them.
As, Wood (1991) argues, “the best avenue for driving an organization’s performance gains is managing the implementation of its processes”. Identifying the key processes in customer satisfaction is very fundamental if a business is expecting to have a successful implementation of its brand loyalty strategies. Key brand management processes are easily identifiable by their level of impact on a business’ success. They are those processes whose success or failure has serious implications on a business’ goals and revenues. For a business to succeed in customer satisfaction and brand management, their implementation and management has to be given priority and has to be right. Its objectives should also be specific to a business’ unique policies, goals and approach. The study was aimed at establishing the truth in these arguments, and establishing areas of improvement.
The research adopted a triangulation method. This means that multiple methods of quantitative and qualitative methods were utilized. This decision is justified by the fact that while the research was interested in measuring the different policies and their effectiveness, it also attempted to qualify their impact on the performance of the companies in the service sector. Triangulation further allowed this project to get better results and manage any challenges that may arise from one research method. This was possible through balancing between the weaknesses of one research method against the strengths of the other. Data collected was categorized into primary and secondary data.
Primary data was collected through a semi-structured face to face interview of 5 senior management staff in different companies in the service sector. Four of these participants were general managers, while the fifth was a director. The surveys aided in exploring the views of customer satisfaction and brand loyalty promoters in the raison d’etre of formulating these policies, and their views on the relationship between the policies and the increased attention placed on customer satisfaction in the service sector. This method of data collection was necessary for the study to be able to collect detailed information about specific questions. “Using semi-structured questionnaires allows a broad scope of answers and sufficient latitude for further questioning on specific responses” (Singh and Naurang, 1996). Questions were closed at the initial stage and opened later to allow more in-depth discussions with the interviewees.
More primary data was collected through a survey carried out using self administered questionnaires. The questionnaires were administered using a convenience sample of 100 participants. 50 were male and 50 were female, all consumers in the different industries in the sector. The participants were all from London, and were asked to comment on their level of satisfaction on products in three different industries in the service sector. The choice of participants was based on my ability to reach them easily for follow up. The sample population balanced the representation of people from different professions, religion and gender. The self administered questionnaires were comprised mainly of closed questions and a few open questions. Closed questions make collection of data easier and they do not take a lot of the participants’ time.
To determine how the consumers’ felt about the quality if products in the service sector, a market survey was conducted using questionnaires. All the questionnaires were given to people aged between 18 and 60 years old. Participants had a choice to fill a printed copy of the questionnaire of fill it online. A research weblink was set up and was left active for a period of two months to allow participants fill the questionnaires in their own time and convenience. The questionnaires were easy and straight to the point to encourage more participants and help them fill them up more easily. They were divided into different sections, each aimed at establishing a different aspect of the topic.
The first part of the questionnaires was aimed at establishing the consumers’ overall experience with products in the service industry. Factors included here include experience, satisfaction, and their expectations. The second part of the survey was aimed at establish the level of loyalty among consumers. Parameters of importance investigated in this section included switching tendencies, factors that influence the choice of a brand, and the respondents’ believe factor. These variables were used to measure whether the participants found themselves likely to buy the same product on a regular basis after trying it for the first time. The exercise was also aimed at measuring the switching tendencies of the respondents. It was aimed at establishing how often respondents switch between similar products and their level of loyalty to a brand or a product. This was helpful in understanding how likely interested consumers were likely to switch to other brand names other than what they use currently in future.
The last part of the survey was used to measure the level of satisfaction among consumers in the service industry. As Groucutt, Patrick and Peter (2004) explain “a customer who is satisfied is more likely to purchase the product in future and even tell others about it” This therefore helped determine the respondents’ intentions of purchasing the same product repeatedly. It was aimed at collecting the consumers’ views on what needs to be improved. This part comprised of open questions to allow the participants give elaborative answers, and give their opinion comprehensively.
Structure of the survey
Interviews were conducted on 5 senior management staff. Four of these participants were general managers, while the fifth was a director. Furthermore, a survey was carried out using self administered questionnaires on a convenient sample of 100 participants. There was equal representation of gender, religion, profession and cultural beliefs. The interviewees were drawn from five different service companies in the UK. They all had over ten years experience working in the service sector.
Recruitment was done by using social network and online forums to reach out to targeted participants. The snowball technique was used to reach the targeted number of participants required for the study. In this technique, people familiar with the study were used to reach out to more people who were then be directed to the research’s weblink. For the interviews, the participants were contacted on the phone by fetching their numbers from the companies’ human resource management departments. All participants were presented with adequate explanations and guidelines for the study. All participants were also required to fill and sign a consent form agreeing to voluntary participation.
Data collection and type of data employed
To accomplish the objectives of this study, several types of data was employed. Data collected is classified into exploratory, descriptive and confirmatory. By so doing, it was possible to confirm or falsify already established hypothesis in the research. Data in this research paper was also classified into primary and secondary data. The research methodology applied in this research project was designed to achieve the set objectives of the paper. It included study of books, academic journals, online articles, past projects by different authors, government and non-governmental statistics to collect secondary data. To understand the background of the problem, literature on service quality, its policies, procedures and benefits was reviewed. Primary data collection was gathered through interviews on senior and junior managers who have interacted with the service industry and its activities for more than ten years for the primary data. It was also collected through questionnaires on 100 participants.
The case design was comprehensive and complete enough, to allow the government and service companies in the UK to understand and utilize the information in decision-making easily. Beneficiaries of the study include the government of UK, service companies in the country, employees, suppliers, clients, and most importantly the customers, among other stakeholders. Reviewing the case design was critical to ensure its validity and applicability. This was ensured in this research project. Cross-comparing the case design and its outcome, with similar research projects conducted in the past, helped this research to highlight commonalities and identify areas where the results need to be strengthened. Data analysis tools and software were beneficial when sorting out data and identifying patterns.
Data analysis comprised of diverse techniques since the study had different types of data and expected outcomes. When conducting a study on customer satisfaction and quality, data mining is an indispensable technique since it involves discovering knowledge, as opposed to describing it. In this project, 90% of the questionnaires distributed were returned and filled correctly. Interviews were scheduled early to guarantee enough time for preparation by participants. Secondary data was extremely valuable in augmenting the research. Before any data was collected, permission was sought from different authorities such as the companies where the participants worked. Data analysis tools and software were beneficial when sorting out data and identifying patterns. Answers to close-ended questions were analyzed in percentages while others were individually analyzed and discussed.
Justification of data collection methods
There are many applicable research methods for such a project. For primary data, questionnaires, interviews and surveys were the most applicable. Questionnaires are the main source of primary data. The target population this survey is made up of 100 participants, consumers from different industries in the service sector. As Jones (2000) advices, to ensure satisfactory results, the survey type adopted for any research project must ensure sampling is done from the target population.
Interviews are an excellent way of collecting information about rules, regulations and the working environment of the service sector. Interviews were conducted on 5 participants, all in managerial positions different companies in the sector. Other type of information and data was collected through reviewing available literature on customer satisfaction and service quality. This method of gathering information proved very relevant in understanding the background of the study.
Overall project plan
This research paper is expected to be complete in a duration of 2 months
There are a number of ethical issues that arose in the course of completing this research project. One of the most fundamental principles that I followed during data collection is voluntarism participation. The principle requires that no participant should be coerced to participate in a research or give false information. A participant must also give consent before their identity is revealed if there is a need to do so, although for this project, anonymity was applied.
During a research project, ethics also demand that the process must not subject the respondents to any danger or harm, a factor I took very seriously. A researcher is supposed to apply the principle of anonymity to protect them from consequences of revealing the information they do. It is also the respondent’s right to be treated with respect and dignity during the study. These ethical issues were strictly adhered to in the process of conducting this research.
Limitations faced in the exercise included language barrers since the industry employs a considerable number of foreigners. Lack of cooperation from some respondents also stood as a challenge and there were fears that they may not give accurate answers or they may take too long to respond. Conducting a research project is an expensive activity and finances posed as a challenge. These challenges were addressed by conducting research in the most common language in the region, which is English, and using translators where necessary. There were also comprehensive explanations about the scope of the research to respondents to ensure they understood the objectives and minimize resistance. I also ensured a proper costing and allocation of funds was done before the task commenced.
From the survey, the service sector in the UK needs to do much more to keep consumers happy and satisfied.
Customer ratings on quality in the sector can be summarized as follows;
The level of satisfaction among consumers can be summarized in the graph below:
Participants responded as follows when asked what influenced their brand choice and loyalty to it:
From the interview, it was established that marketing communication is a significant element of developing quality and ensuring customer satisfaction in the UK. The UK service companies have to function with the marketing communication framework to maintain sustainable leadership in the market. Traditionally, many businesses in the UK and all over the world based their marketing on the four Ps, which are product, promotion, place and pricing (Macnamara, 2004). Today, there are new avenues and factors to consider when communicating to consumers. Just like in the past, the main aim of market communication is to inform, persuade and remind customers of a specific product in the market. The strategy is used to increase sales volumes by informing customers of a product and encouraging them to try it.
All the interviews agree that after establishing new customers, marketing communication is responsible for ensuring that they are retained while new ones are created. “Retaining a customer base is done by reinforcing their purchasing behavior and providing additional information about the brand’s benefits” (Balsmeier and Annita, 1994). Other goals of marketing communication is creating and relating to prospects and other stakeholders. Marketing communication is combined of different options that make it successful. “These options include advertising, sales promotion, public relations, direct marketing, and personal selling” (Balsmeier and Annita, 1994). Each of these options has a special role to play in the process and completes the chain. The internet has today become an important option and strategy for marketing, especially for businesses that target the younger generation.
Integrated marketing communication
For the service sector in the UK, marketing communication has played an important role in ensuring brand take leadership in the market and stay there. The products, pricing and the services they provide, have to be and stay relevant to the market today. Most brands in the UK have illustrated an integrated marketing communication. This new perspective for the sector has evolved from a realization that advertising and sales are at odds as far as budgets and responsibilities are concerned. Secondly, this concept is from the need to have more market driven communications rather than having those which are market oriented.
Integrated marketing communication has allowed the big brands to build relationships and excitement. For most service businesses in the UK, as was established from the interviews, customers are not treated as targets but rather, a brand promotes a relationship with them, offering them partnership instead. The brand creates contacts which allow new customers and prospects encounter it through different hosts. By researching and having specific information about consumers and their lifestyles, a brand is able to send tailor made messages through the media and reach specific segments. This way, marketing is more targeting, bears more results and makes financial sense.
Integrated marketing communication is achieved by utilizing data and information, segmenting customers and potential clients. These groups are segmented on the basis of behavior, consumption and lifestyle. In doing this, it is possible for companies as a brand to establish profitable and stable relationships with its clients and generate coordination between products and consumers. The results are consistent, clear and maximized benefits of marketing.
The UK business environment is known for expensive advertising budgets. Companies’ advertisements are known for their persuasive and exciting nature. Brands’ biggest strength in the market is understanding its competition and countering competitors’ efforts early enough before they can affect the brand’s share market. One industry in which the service sector in the UK has enjoyed overwhelming success is the wholesale and retail industry. The UK boasts of three of the ten biggest retail stores in the world. Their market share even in other parts of the world is proof that they have been able to design and implement strategies that ensure customer satisfaction and brand loyalty.
The service sector in the UK uses both traditional and new modes of advertising. Its advertisement avenues include radio and television advertisements, bill boards, written literature, and sponsored programs. Part of advertise for the sector is top sales and marketing strategies and personnel. Quality marketing staff has been essential in sustaining strong and powerful brands in the sector. A company offering products in the service sector must establish a strong and well defined marketing plan to help them achieve their potential. For service businesses, the competitive nature of the sector requires that it has a well qualified staff, whose skills are constantly developed.
“Public relations are the management of functions that ensure a mutually beneficial relationship between a brand and its customers” (Macnamara, 2004). As opposed to the one way communication in advertisement, public relations involve both the brand and the customers. It is very dependent on feedback from customers. By monitoring feedback, it is able to tell how in touch customers are to a brand. The most primary tool in public relations is publicity, which takes advantage of a brand’s value and its use to disseminate information (McMillan, 2000).
Service providers in the UK create publicity through endorsements on the media, media articles and many other mediums whose messages are more likely to attract attention and be convincing to customers. As a result of too many advertisements in the market, consumers are more likely to avoid traditional advertisements. Businesses in sector have today chosen to venture in new coverage such as community programs, which are new and easily attract attention. Today, consumers are more dependent on a company’s image to make brand that is more environmentally friendly and responsible towards the community.
Environmental reputation of a business is a significant factor for customers when making decisions on what brands to support. Companies have therefore embarked on environmental campaigns that include funding environmental campaigns, implementing energy saving initiatives, selling “green” products, among others. The country has further enacted laws and policies that obligate businesses to manage their environmental and energy management systems.
Direct marketing is considered the oldest marketing practice. It involves direct communication with customers in a way that allows a personal and direct feedback mechanism. In the past, telephones and letters were used to do direct marketing. The service sector n the UK in the past has utilized these forms of communication with their customers. Today, brands use other methods of communication, the most common being the emails and social networks.
One of the strategies commonly utilized by service providing companies is collecting email addresses. The companies then use them to communicate any new information about the brand to the customers. That way, the mails can be personalized and customers can reply and communicate specific concerns or information. Personalized emails allow customers to feel appreciated and make it easy for them to air their complaints about a brand, rather than shopping for new brands anytime they experience challenges. This form of marketing allows brands to follow up on prospects and new customers closely. It is cost effective and can reach billions of people at the same time.
Another avenue for the businesses to do direct marketing is through their physical shops. Most service providing companies today have physical locations in different parts of the UK to allow customers reach them as fast as possible when a problem arises. Physical stores are today the best place for customers to get information and explore brands. Here customers are able to get as much information as possible about products, and talk to the companies’ experts about any questions or concerns they may have about the products. “Companies today put in place such a big number of stores in place to allow fast activation of products, enable professional customer setup and give their customers expert advice about rate plans that best suit them” (Persson, 2010).
Online advertising is growing at a very first rate today. Businesses in the service sector in the UK use the internet through websites and social networks. By linking their website with other frequently visited websites, and giving promotion offers at the website, businesses are able to attract a crowd that the brand can easily communicate with. Establishing on-going communication with customers such as live chats and instantly replied mails, makes it easier to understand the customers’ expectations and demands.
By placing a shopping cart on a website, it is easy and convenient for clients to purchase available products conveniently from any part of the world, without the need to go to a physical shop or store. It is an avenue for a brand to communicate to its clients all over the country in a more manageable and cost effective way. The social networks have become an important avenue for the service sector to market itself today. Social networks’ interactivity is an important advantage, giving businesses an opportunity to access real-time information about customers’ preferences (Pickton and Broderick, 2005).
Customer service, quality and customer satisfaction are areas that have been of concern to researchers and other practitioners since they play an important role in improving the performance of businesses and encouraging customers to remain loyal. Customers have different orientations and this may lead them into attaching varying importance dimensions to service delivery. Many scholars have been conducting research on the importance of service delivery emphasizing its importance in satisfying customers, reducing costs and building the loyalty of customers in an organization (Berndt & Brink, 2004)
From the analysis, it is clear that an established brand loyalty is important to a company. “It increases a company’s ability to respond to competitive threats, makes it harder for new products to gain a market share and it allows a business greater sales and revenues” (Heinnman, 2010). Furthermore, it creates a consumer market base which is less sensitive to competitor’s efforts to gain a market share. Knowing this, companies in the service sector today will do everything they can to understand consumer-brand relationships, something that companies have been neglected for a long time. “Most of the consumer-brand relationships studies are based on a psychological orientation which looks at the cognitive process responsible for the development of a brand’s strength and attitude” (Fournier, 1999). Attention is centered on the relationships between a consumer’s satisfaction on a brand and how its quality drives loyalty of consumers. Other studies are based on a sociological view, trying to understand the meanings and emotional aspects of brand loyalty a perspective that is well applicable on products targeting consumers in the service sector.
Trust is critical in developing an enduring long term relationship between a consumer and a brand which will hold even when the brand is facing challenges and uncertainties. Trust in a brand by customers means that a brand has characteristics which make it more than just a mere product and sometimes it could mean that it gives customers more than they expect. A long term relationship between a brand and a consumer also means that the everyday execution of marketing plans by a company are working well towards creating a group that will stand by the brand. Trust and a long term relationship between a brand and customers is also an implication that it has been able to create value and go beyond customers’ satisfaction with its attributes and functional performance.
When conducting a market analysis for the brands, other than all the factors highlighted in the paper, businesses will take into consideration factors such as profit margins of other brands selling in a market, announced mergers, new technological discoveries and profit predictions for the coming quarters. Some brands may take a mathematical approach when doing market analysis, others will consider past market information and past analysis of similar brands while others take a more gut approach, relying on rumors, news sources and other companies activities. With growing competition in the accessories industry, the gut approach is rarely used as companies are now forced to get the facts right since a very slight mistake or misinformation could cost a brand so much in terms of maintaining a competitive advantage and trust from its customers.
Apart from the dynamic nature of a market, perceived risks associated with a brand play an important role in gaining loyalty from its customers. This is because risks create situations in which a customer faces ambiguity or uncertainty in the satisfaction of their expectations. Information available on a brand plays a critical role in how customers deal with such situations and how they make their decisions concerning holding to their loyalty on the brand or seeking alternatives in the market. Complete lack of information leads to a gamble which can be very disappointing to a consumer while perfect information leads rational decisions meaning that a consumer uses a brand with an informed mind of disappointments they may encounter.
The most important source of trust for a brand however is its level of satisfaction to a consumer. The more a consumer is satisfied with a brand, the more they will trust it. Nevertheless, it is important to take into consideration the fact that a consumer needs motivation to involve themselves with the brand which is where they get the experience from. This means that a company has to be able to motivate a consumer to try out the product for the first time and maintain their level of involvement with it. Customers who are constantly involved with a product will be able to make loyal decisions even in the face of uncertainties and possible inconsistencies. The biggest source of information consumers have about a brand is their own experience with it.
Building a brand name and loyalty requires that a company starts by defining their specific market and having a clear knowledge of what they want to achieve in that market. When a target market is not defined, there are high chances of having contrasting market activities, sometimes attracting many customers who may not last for long. There is a need for a company to distinguish between their strategic planning and tactical planning to help explain how their marketing will differ at different levels and areas. The business needs to be able to clearly identify and describe the environmental characteristics which may influence strategic decisions about their brand. Finally the business needs to be able build and explain how they intend to enhance their customer satisfaction. This can be done by use of marketing, having a solid and well organized strategic plan and by use of healthy customer relationships.
In the process of satisfying customers’ preferences, a brand is then able to create and maintain relationships with its consumers. In today’s business environments and especially in the accessories industry where there are new brands each day, brand-consumer relationships are very important to a business to ensure that it is constantly updated on consumers’ expectations and dissatisfaction which will then allow it to work on them before the customers shift their preferences. The emergence of a marketing concept therefore must be customer oriented, have long-term ambitions and help develop and maintain effective relationships with customers and give them an avenue to air their complaints before they try out new options which distracts the trust relationship that may have been developing for the brand.
For any brand, when identifying key factors for success, cost structure is very important. “It is equally important when formulating strategies for brands to develop a competitive advantage” (McMillan, 2000). As Nash (2010) further explains, “this can be done through a market analysis as discussed which is aimed at determining the attractiveness of a market and to understand its evolving threats and opportunities as they relate to those of a business”. It is performed to help determine who the customers are in the market and what they want from a brand. Even if not everyone involved in the brand development process is asked to participate in the process, everyone in a company must be able to make decisions using the data collected during market analysis. Several areas of interest in data evaluation include market research, sales forecasting and market strategies. The dimensions of a market analysis when trying to understand or create brand loyalty include the market size of the brand, its growth and consumption rate, trends, profitability, its cost structure, success factors, weaknesses and distribution channels.
Customer relationship in one among the most important relationships in a business and is one of the strongest strategy for many big brands. The whole business loyalty theory is based on the relationship between a business, its products and its consumers. It is responsible for how the business identifies and enhances their customers’ satisfaction ability. For any business today, customer satisfaction is one of the strongest tools and the most important objective of a business. It is the most important tool for customer retention and getting new customers through word of mouth by already satisfied customers. Customer relationships have the ability of allowing a business and its brand to develop, grow and maintain short and long-term feedback from customers (Fournier, 1999).
It allows customers feel appreciated and view themselves as equal partners in a business. When customers feel valued, it encourages them to give their suggestions and air out their complaints more easily. In so doing, they give the business a chance to work on any mistakes on their products rather than lose their customers. It builds confidence among customers who are then willing to stand by a brand even when it is going through tough times. Satisfied customers are more willing to talk about their experience with the brands to other people helping the business attract new customers. This also means reduced expenses on marketing and promotional campaigns.
Customer relations are a collaborative effort between a business and its customers, but obligate a bigger responsibility to the business. It is a business’ responsibility to build stability, earn and retain its customers’ trust on them. This way, the business is offered the most effective way of collecting information which is customer feedback. With first hand information, a business is definitely able to have its products and solutions as close to the customers’ preferences as possible.
“Since cost is an essential consideration in any business, assessing a company’s costs position against that of its competitors can have more explicitly strategic implications” (Mano, 1993). A business that does not understand the cost structures of its industry will not be able to meet its customers’ expectations and demands, as it is not sustainable. If a business understands its competitor’s costs and strategies, it is able to understand the competitor’s supply curve which they can use to develop a market strategy (Linton, 1993). Businesses in the service industry in the UK will need to understand the market’s cost structures and use them to become quality leaders.
The service sector market has been a vibrant and popular one for a long time. Businesses can take advantage of this factor and use the market numbers to their advantage. However, this will only be possible if customers are happy with the products and are willing to stay constantly engaged in the markets. Strengthening the brands loyalty will of be of a valuable significance in such a competitive market. A healthy brand loyalty will ensure that customers do not abandon the well known brands in search of products from other markets outside the UK. Businesses will also be able to protect the brand from new and aggressive competitors’ marketing strategies. It is important for the sector to invest in quality improvement measures to keep customers satisfied and loyal.
On way through which this can be done is through having well thought and effective market entry plan for new products. In order for a new product to successfully enter and ensure quality and consistency for the customers, it must be able to choose a mode that is already working in the market (Kandampully, 1998). In this case, the strategy will include partnering with a experts in quality assurance and customer satisfaction.
Another way of ensuring consistency and quality is through proper distribution channels for services. Distribution channels are important in helping a business decide on the best methods to distribute their products and ones which will ensure that products are accessible to as many customers as possible. “In any market, there are existing distribution channels, emerging channels, trends and a well defined structure for the channels” (Fisk, Stephen and Joby, 2008). Existing channels are more direct to the customers as they are more used to them. Emerging ones however offer businesses an opportunity to develop a more competitive advantage as each business has a chance to come in with a new one. The power structures give retailers and other middle men a ground to negotiate with the manufacturers. Launching a new product in any market requires a well established distribution channel and a system that allows easy access of products. The UK service sector requires a well developed and structured distribution channel to reach its targeted consumers and establish consistency.
Supply chain and logistics for a product play a significant role in ensuring quality. A product must be able to reach a customer at the time when it is needed. The retailing industry must be able to establish transportation channels that do not add unreasonable cost to their consumers. The banking industry has to have well established mechanisms of processing and sharing information and customer documents to allow them get faster services. The operational techniques to used in a product’s logistics management must also be aimed at sustaining quality in the company. Using such techniques is intended at attaining better quality and keeping it monitored at all times. Quality assurance should be a big part of the product’s success.
For the service sector, logistical management is made possible through the companies’ commitment to quality. It is through quality that businesses are able to have a competitive edge, especially in such a changing, competitive and wide market. For products that attract large markets, handling information can be hectic and inaccurate without proper quality and organization. Knowing when products are designed and when they are due for delivery may be challenging without real time information, which can only be made through a logistics management that assures quality (McKnight, 2006).
Continual improvement should be a big part of the service sector’s culture. It is one of the focuses in the sector’s modern research projects. The businesses must be willing to seek to continually improve their products’ quality while reducing the cost of doing so. Being in such a competitive industry, customer satisfaction has to be on top of the sector’s priorities. This can be made possible by ensuring quality assurance through continuous improvement. Logistics will play a major role in quality assurance by ensuring supplies and information are available and are handled with proper care during transportation and storage.
Another important factor for service sector’s quality assurance is a factual approach to decision making. Such an approach can only be made possible if there is enough and accurate information for the sector’s decision makers. Logistics management will have to be in place to ensure that information collection, storage and recovery is available to the executive organ in the company. It is through market and customers information that the sector will be able to sustain a mutually beneficial relationship with its clients, who provide the company with the needed feedback about the products and services.
Another significant factor that influences quality and customer satisfaction is a business’ marketing strategy. In order to achieve the marketing objectives, a product must be designed and packaged in a combination of brands that suit different customers’ needs, but still remain a flagship brand in all the markets. The businesses must implement measures that ensure they gain a broader position in the markets. When this is done, it is easy to determine its relevance. It is important for a company to get enough feedback from the markets, both primary and secondary, to help the product deliver a high target in marketing and distribution. Moreover, such a position will create the much desired platform from which the businesses can further increase its range of products and meet more needs.
Promotion plays a critical role in helping customers understand products, and reduce chances of a disappointment. “The key success factors in a market include those elements which are important for a firm to achieve its marketing objectives” (Dutka, 2004).The sector with the best economies of scale is able to do much better than the others in any market and so will a company with technological resources which best suit the market. “They include access to essential unique resources such as communication services, a sector’s ability to achieve economies of scale, accessibility of distribution channels and technological processes” (Cunningham and Fried, 2002).
However, customer satisfaction and marketing should not only benefit the customer, businesses in the sectors should also benefit from the efforts. A proper marketing strategy must ensure that the product is felt in the market, not just when it is new but in the many years that follow. “Ultimately, each product will reach its maturity stage and a decline period but how long that takes is dependent on several factors” (Cronin, 2009). These factors include ability to fight price pressure from a competing product, ability to maintain brand loyalty, how well it can hold with emergence of new products, how soon the market gets saturated, amongst many other factors. Lack of growth drivers has negative effects on a product’s performance in a market regardless of its quality or how well it can cope with pressure and competition in the market.
Finally, pricing of products plays a role in ensuring customer satisfaction. “Any business with intentions of launching a new product to a market must base their pricing on several key trends that continually shape the global marketplace of the sector” (Karami, 2007). Factors that affect pricing include the cost of designing a product, target market, competitors’ pricing, consumers’ wealth, spending habits, among many others. The product’s pricing strategy must take into consideration well similar products have performed in the target markets. It should allow a business reasonable profitability, and the returns to customers must be worthy of what they are spending.
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- How do you rate the UK service industry in terms quality products?
- Very good
- Very bad
- What has been your experience as a consumer in the sector?
- Not sure
- What has been your level of satisfaction with the products from the sector?
- Very high
- Not satisfied at all
- Have your expectations been met as a consumer?
- Yes All the times
- Very few times
- How would you rate your level of loyalty to brands in the service sector?
- Very loyal
- Not loyal
- I try a new brand every time
- What influence your choice of brand?
- All of the above
- What determines how loyal you stay to a brand?
- All of the above
- Do you find yourself recommending a service that you are happy with to other people?
- All the times
- What is your opinion on the quality of products in the service sector industry in the UK?
- Are you as a consumer satisfied with the quality of products you have used before?
- Is there a different between the quality of local and foreign products in the service sector?
- In your opinion, what needs to be done to improve the quality in the service sector?
- Does the government play any role in ensuring quality to consumers in the service sector?
- Briefly give your general view on service quality and customer loyalty in the service sector in the UK
- How would you rate customer service and quality of products in the service sector?
- How as management in various businesses in the sector ensuring that service quality is achieved?
- How do companies in the sector develop brand loyalty among customers?
- What role does communication marketing play in ensuring customer satisfaction?
- What do you think needs to be done to create and maintain service quality?