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The Service Encounter – Journal and Analysis

Executive Summary

There exists a lot of differences and ambiguity regarding the marketing of services essentially due to the intangible nature of services. Product marketing is easier as there is a tangible item that may be shown to the customer or make them feel it literally. But in the case of services, it is not possible. So the whole paradigm of marketing literature changes with services. There have to be different methods and targets that have to be set to ensure that the intangibles of the services can be reduced to a minimum by providing customers a feel of the service. In this essay, we demonstrate that customer is the key focus of services and all the elements that are used to market service are ultimately customer-centric. To do this we have used support from a lot of scholarly works. In this essay, we first understand what is meant by my services and what their key characteristics are. Then we go ahead to describe the different problems of services marketing with examples and then we derive a relationship between service encounter and customer orientation.

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Introduction

Service marketing has been a paradox for marketers due to the very unique and obscure qualities it posses. There are a lot of dimensions of service marketing that are important to be understood and are required for marketing the services. The first and the foremost important element of service marketing are customers. So it becomes imperative for marketers to understand the customers, how customer loyalty can be created in a service marketing scenario, and how loyalty and satisfaction can enhance service quality and/or vice versa.

In this essay, we try to evaluate the definition of services and their characteristics so that we may understand the scope of services marketing. To do so we undertook a literature review of services marketing in order to ascertain what we can learn from the experience of service providers and the techniques we may derive from the strategies they implemented. The scope of this study is huge but the problem that we foresee is that there exists such a huge collection of literature that it is beyond the scope of this paper to assimilate all of it. But in a comprehensive and precise manner, we have tried to demonstrate the different effects and scopes of service marketing. We have undertaken a study of articles from the scholarly journal which has helped us to get a practical perspective of marketing of services and how it can be managed.

Service Description

Services refer to the intangible benefits that customers receive from an organization that are extremely valuable to them. Some of these service sector industries are restaurants, health, banking, airlines, etc. in these kinds of industries customers assume a major role as well as importance due to the unavailability of a tangible product. Hence, customer expectations are a prerequisite for delivering superior service. The range of customer expectations may be displayed in five dimensions of the services, namely, reliability, tangibles, responsiveness, assurance, and empathy. There exists a lot of differences between product and service marketing. According to Soshtack, the intangibility of services creates myopia in the marketing of the services.

He further he says that the first step to product marketing is to know the product, but knowing services is very difficult due to the intangible element attached to it (1977 p.76). So in defining any service one has to take the prevalent consensus regarding the service know-how. An element of service marketing is managing and differentiating the evidence that reality poses for the service and customers (Soshtack 1977, p. 78). Hence one must not overlook the tangible elements like customer feedback or letters to customers, as they become the evidence with which the marketers are supposed to work. so effective representation of the intangibles in intangible forms can reduce the vagueness in services marketing.

Customers’ service expectations have two levels: desired and adequate. The desired service level is the service the customer hopes to receive. The adequate service level is that which the customer finds acceptable. It is in part based on the customer’s assessment of what the service “will be”, that is, the customer’s “predicted service”. Separating the desired service level from the adequate service level is a zone of tolerance. Customer’s adequate service expectations seems to be influenced more by specific circumstances and are therefore more challengeable than their desired service expectations. The most important factors susceptible to influence customers’ adequate service expectations are the number of service alternatives customers perceived and emergency and service failure situations (Parasumaran, Berry, Zeithamel, 1991, p. 43). If customers perceive that they have alternative suppliers from which to choose, their zone of tolerance is likely to be smaller than if they don’t feel they have this flexibility. Emergency and service failure situations tend to raise customer’s adequate service level temporally thereby narrowing the zone of tolerance.

Service Characteristics

The different characteristics of service as named in the earlier section are discussed in depth in this section. These characteristics of services make the marketing of these intangible products easier as well as tougher, but it provides a clear understanding of the concepts. So the different characteristics of service are as follows: Reliability implies that customers expect the services providers to have the ability to perform the desired service dependably, accurately, and consistently. This involves keeping the service promise and the reputation. Tangibles are the way the physical facilities, like equipment appearance of personnel and the communication materials, are used by customers to judge the service. Tangibles influence service quality perceptions by offering indirect clues about the nature and quality of the service itself, and indirectly, by the usage of physical aspects in the production of service. The customers expect all these to be like they are promised and have the quality they appreciate.

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Responsiveness, meaning that customers appreciate the willingness of services providers to provide the service promptly and efficiently. To be responsive to customers means help them keeping informed, buying and post buying, too. Assurance is caused by the employees, knowledge, courtesy, competence and ability to convey trust and confidence in customers. Every customer believes the ability must be doubled by trust. Empathy implies the customers’ desire to be very well understood by services providers because of which they expect the provision of caring, individualized attention, speak to them in the language they can understand and listen to them. Thus, they expect the provision of caring, individualized attention, speak to them in the language they can understand and listen to them (Buttle 1996 p.9). The service sector faces problems of service failures, problems with customer service, customer satisfaction, customer management, complaint handling, complaint resolution, feedback, customer relationship management, service recovery, and service quality. Since customers become very demanding of service providers the onus comes on the staff of the organization to deliver it.

The problem that is usually encountered by a service provider is standardized and personalized services and a third problem is managing a large number of services provided in a specific organization. These are common problems that are encountered in the hospitality industry. Singapore Airlines faces such problems. Known for its excellent services in the airline industry it often faces the above problems mainly due to very high customer expectations that are believed to change their expectations on the basis of the brand and due to comparison with not only other airlines but other industries too. One of the problems that the service sector as a whole has is consistency. So Singapore Airlines tries to master the above-mentioned problems by creating a “wow” effect and anticipating customer needs. In order to understand the customers better, Singapore Airlines maintains a very elaborate feedback mechanism, right from the front-line staff so that they can understand the pulse of the customer needs. Complaints are taken seriously and continuous training of the staff, eye for details, motivating the ground staff, etc. ensures a consistent service delivery (Wirtz & Johnston 2003, pp. 10-16).

The service quality has a particular meaning for the buyer’s decision. Thus, the service provider must identify and understand what quality means for the service customer. As was identified by Mayo Clinic in Arizona that service quality is an inevitable ingredient to achieve business excellence in the health industry, especially when the service provided is so critical to the customers. And in doing so the first thing that needs to be kept in mind in the doctor-customer relationship for health service, to a large extent, depends on the trust that customers have in the service provider (Frey, Leighton, and Cecala, 2005 pp. 40-41).

Service Encounter

Service organizations have to carefully monitor and manage their customer satisfaction. The service encounter, in particular, can play a prominent role in determining customer satisfaction (Gremler & Bitner 1993, p.34) Service encounter satisfaction is transaction-specific. Service encounter satisfaction is related to overall customer satisfaction: overall satisfaction is driven by satisfaction from a series of service encounters. Figure 1 illustrates our conception of the service encounter as a core task surrounded by the customer’s psychological experience during the transaction (Chase & Dasu 2001).

According to Chase and Dasu, some aspects which were important to understand and handle customer encounters were understanding emotions, sequence effects, duration effects, and shaping attributions. (2001). Emotions are both an input and an output of an encounter. Creating a good experience requires understanding what triggers different types of positive and negative emotions. This allows managers at an aggregate level to develop an emotional platform and at a tactical or process level to identify stages of the systems that are likely to engender strong emotions and to proactively manage them.

Most service experiences consist of a series of events that occur over time. The lay tendency is to focus on a strong start and assume things will take care of themselves as the service encounter unfolds. A big question is how do service marketers make positive events seem longer and negative events shorter in retrospect? There is some evidence that the greater the number of discrete segments that are perceived to the customer, the longer the process appears. Thus for an amusement park visit, several shorter rides make the day seem longer and more enjoyable than a few longer rides, even though the time spent actually riding was the same. In a call center, more steps and options create the perception of the interaction being longer than it actually is. Every service outcome contains the potential for placing blame or claiming credit. Attribution theory provides insights into how people make these judgments. For service encounter design, it is important to find ways of conveying upfront what is the customers’ responsibility without damaging their self-esteem.

Customer behavior and service setting

The servicescape is an important part of service marketing. Though services are intangible, there are certain elements that make the service tangible and these tangible elements impact the customer’s decision and satisfaction to a large extent. For instance, in a restaurant, the first thing that we look at as a customer is the ambiance of the place. This helps a lot to shape our perception as customers about the place. Again in a salon, we look at cleanliness or atmosphere or the décor that influences or decision to make a purchase of the services that is provided. For example, Disney found out that visitors at the park are more concerned with the cleanliness of the park, which again is a part of the service setting. This will help in shaping the customers’ behavior in the service setting (Ford, Heaton & Brown 2001).

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Customer Service / Service Quality

Service quality is often conceptualized as the comparison of service expectations with actual performance perceptions. Service loyalty, perceived service quality is often viewed as a key antecedent (Dick and Basu, 1994). Service loyalty is more dependent on the development of interpersonal relationships as opposed to loyalty with tangible products (Macintosh and Lockshin, 1998), for person to- person interactions form an essential element in the marketing of services (Surprenant and Solomon, 1987; Crosby et al., 1990). Little empirical research has focused explicitly on the relationship between service quality perceptions and customer loyalty. With regards to behavioral intentions in a services setting, Zeithaml et al. (1996) proposed a comprehensive, multi-dimensional framework of customer behavioral intentions in services. This framework was initially comprised of the following four main dimensions:

  • Word-of-mouth communications;
  • Purchase intention;
  • Price sensitivity; and
  • Complaining behavior.

According to Bloemer, Ruyter, and Wetzel’s managers of service firms to nuance the intuitive relationship between service quality and service loyalty and have a richer diagnostic value because both service quality and loyalty are measured at a detailed and specific level. In addition, information on the service quality-customer loyalty link may provide actionable benchmarks that individual firms may use to guide their service policies aimed at securing customer loyalty (1998 p.1099).

Handling complaints and managing service

Handling customer complaints is an integral part of service marketing (Wirtz & Johnston 2003). A proper feedback channel can reduce the tangible element in service s marketing and increasing customer satisfaction. For instance companies like Disney, Marriott, and Southwest Airlines have spent considerable effort discovering the price they pay when a customer leaves unhappy. They do whatever they can to make sure that each customer’s expectations are met or exceeded. They survey their customers constantly, use mystery shoppers to evaluate the quality of the customer experience, and train their employees to solicit both verbal and nonverbal feedback regarding customer satisfaction levels and assessment of quality. These organizations know that happy customer spread their satisfaction through word of mouth which increases the credentials of the service industry (Ford, Heaton & Brown 2001). They also know that with the proliferation of consumer websites, truly unhappy customers can and will share their unhappiness with countless potential customers all over the world. Organizations must work hard to identify problems and find satisfactory solutions for them quickly.

Managing customer relationship

In understanding a relationship between customer service and service quality it is imperative to understand the services marketing triangle which illustrates the relationships between a company, its employees, and its customers. The triangle suggests three types of marketing activities, each considered essential to the success of a service firm. The first type, external marketing, is concerned with many of the traditional marketing activities that occur between a firm and its customers (e.g. promotion, distribution, pricing). The second type of marketing, interactive marketing, is described by Grönroos (1990) to be concerned with the interactions between employees and the firm’s customers in services marketing organizations. These interactions termed service encounters, can occur at a hotel checkout counter, at the desk of the receptionist in a dentist’s office, or over the telephone when making airline ticket reservations. Most of the work on service encounters has been confined to the interactive marketing domain. That is, service encounter research has focused mainly on how customer-contact employees take care of or interact with, customers (Bitner et al. 1990, Suprenant and Solomon, 1987). The third type of marketing in the services marketing triangle is internal marketing. Internal marketing is concerned with the relationship between the company and its employees.

Nagel and Cilliers (1990) maintain that customer satisfaction is “the new standard by which customers are measuring business performance” (p. 4). Several business practitioners maintain that the needs of internal customers must be fulfilled before the needs of external customers can be met. Bill Marriott, Jr, chairman of Marriott Hotels, argues that employees must be satisfied before external customers will be satisfied. His reasoning is that if these internal customers are satisfied, they will love their jobs and feel a sense of pride in the hotel. This, in turn, will lead to external customers being well served (Dwayne & Bitner 1993).

Conclusion

In conclusion, we may say that service marketing, unlike product marketing, has a lot of problems. But as many scholars have argued that product marketing creates marketing myopia among marketers, service being intangible, has to be more alert and focused to provide consistent services. This essay has shown how service marketing has shaped the world of new-age marketing to provide customer satisfaction and loyalty through consistency, feedback orientation, and focus on customers has helped to shape the services industry and has even made product based companies adopt tools and methods of customer relationship management from these companies. Clearly, services marketing research is not complete and comprehensive and there exists a lot of discrepancies in the theories put forward by scholars, but it is clear that this form of marketing is unique and requires a lot more alertness and vigilance than product marketing.

Reference

Frey, Keith A, Leighton, Jonathan A, and Cecala, Katherine K. “Building a Culture of Service Excellence”. The Physician Executive December 2005: pp. 40-44.

Parasumaran, A., Berry, L., Zeithamel, V., „Understanding Customer Expectations of Service”, Sloan Management Review, 1991, Spring.

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Buttle, Francis. “SERVQUAL: review, critique, research agenda” European Journal of Marketing, Vol. 30 No. 1, 1996, pp. 8-32.

Wirtz, Jochen and Johnston, Robert. “Singapore Airlines: what it takes to sustain service excellence – a senior management perspective”, Managing Service Quality, Vol. 3 No. 1, 2003, pp. 10-19.

Shostack, C. Lynn. “Breaking Free from Product Marketing”, Journal of Marketing 1977.

Dwayne D. Gremler, Mary Jo Bitner “The Internal Service Encounter” International Journal of Service Industry Management, Vol. 5 No. 2, 1994, pp. 34-56.

Chase, Richard B. and Sriram Dasu, “Want to Perfect Your Company’s Service? Use Behavioral Science,” Harvard Business Review, vol. 79, no. 6, 2001, pp 78-85.

Nagel, P. and Cilliers, W. (1990), “Customer Satisfaction: A Comprehensive Approach”, International Journal of Physical Distribution and Logistics, Vol. 20 No. 6, pp. 2-46.

Bitner, M. (1990), “Evaluating Service Encounters: The Effects of Physical Surroundings and Employee Responses”, Journal of Marketing, Vol. 54, pp. 69-82.

Suprenant, C. and Solomon, M. (1987), “Predictability and Personalization in the Service Encounter”, Journal of Marketing, Vol. 51, pp. 86-96.

Grönroos, C. (1990), “Relationship Approach to Marketing in Service Contexts: The Marketing and Organizational Behavior Interface”, Journal of Business Research, Vol. 20, pp. 3-11.

Bloemer, Josee, Ruyter, Ko de and Wetzels, Martin “Linking perceived service quality and service loyalty: a multi-dimensional perspective” European Journal of Marketing, Vol. 33 No. 11/12, 1999, pp. 1082-1106.

Dick, A.S. and Basu, K. (1994), “Customer loyalty: toward an integrated conceptual framework”, Journal of the Academy of Marketing Science, Vol. 22, pp. 99-113.

Macintosh, G. and Lockshin, L.S. (1998), “Retail relationships and store loyalty; a multilevel perspective”, International Journal of Research in Marketing, Vol. 14, pp. 487-98.

Crosby, L.A., Evans, K. and Cowles, D. (1990), “Relationship quality in services selling: an interpersonal influence perspective”, Journal of Marketing, Vol. 54, pp. 68-81.

Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1996), “The behavioral consequences of service quality”, Journal of Marketing, Vol. 60, pp. 31-46.

Ford, Robert C, Heaton, Cherrill P, and Brown, Stephen W. “Delivering Excellent Service: Lessons from the best firms”, California Management Review Vol. 44, No. 1 2001.

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