Problem with the understanding - Essay Example

In this essay service management ideas, theories and techniques, which includes service concept, understanding customer types and SURVIVAL – customer expectations and perceptions, specifically with reference to purpose, application and limitations and with regard to how they might contribute to the success of a service organization will be described and explained with some critical thinking. Service Concept What is Service Concept?

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To begin with, service concept is a shared and articulated understanding of the nature of the service provided and received, which should capture information about the organizing idea, the service provided and the service received – the experience and outcomes Nonstop, et. All, 2012). It defines the how and the what of service sign and development, and helps mediate between customer needs and an organization’s strategic intent (Gemmed, 2003). In short, service concept is the service in mind of the customers, management and employees.

Purpose of Service Concept The purpose of the service concept is to create a clear message what the organization is selling/providing and what the customer is buying/receiving Nonstop, et. All, 2012). The purpose of service concept is not a promise, as it is an agreed view of the service provided and received, while the promise defines what the organization will do for the customer Nonstop, et. Al, 2012). Taking Mobil as an example, the purpose of service concept can be explained more thoroughly (see appendix 1).

At first Mobil had a very abstract and not clear service concept that was confusing staff members and customers and was not helping Mobil to reach their target audience. Afterwards, Mobil has clearly identified their service concept (service provided) to their staff members, management team and marketers in order to deliver satisfying experience and maintain a consistent service concept, which helped Mobil to reach their target audience and become a major American oil company (Harsh, 2009).

Application of Service Concept There are a lot of ways how managers can use the service concept, these include: define and communicate the nature of the business; create organizational alignment by developing a shared understanding; develop new service concepts to drive innovation and strategic advantage; help design and specify the service; assess the implications of design changes using capability mapping Nonstop, et. All, 2012). Creating the service concept is the second step after defining target market while developing a new strategy, thus it is of crucial importance for every company.

However, there are a lot of service organizations that do not invest in their staff training and not making sure every employee has the same view about what their company does and is delivering the same message. That results in inconsistent service provision and confused and annoyed internal and external customers Nonstop, et. All, 2012). Limitations of Service Concept To begin with, in a public sector it is complex to find out who the customer is, what they like and what the best way to reach them is.

Since public sector companies usually serve multiple customers – stakeholders, thus the challenge is to make revive as appealing as possible to the whole of the stakeholders. Secondly, customers are idiosyncratic – have variable moods. Their mood makes up more than half of their experience of the service. Sometimes despite how efficient the service was, customer’s bad mood influences a poor service experience. Furthermore, in most of the service transactions the customer is present so everything that is said and done affects the final service experience, there is no ‘undo’ or ‘rewind’ button Understanding Customer Types Who is the customer?

Robert Johnston (et. All, 2012) describes a customer as the recipient and often also a revived (co-producer) in a service process. ‘Customer’ refers to all the individuals, units or even organizations to whom, and often with whom, an individual, unit or organization provides service. They can be external/internal, intermediaries/end users, stakeholders: payers/beneficiaries or participants, and valuable/non-valuable. For service operations managers it is of crucial importance to know who all their customers are in order to provide a good service and gain excellent customers.

Purpose of Understanding Customer Types Firstly, one of the main purposes of understanding customer types is to retain label customers. It helps to increase revenues, reduce costs, spread positive word-of-mouth recommendations and maintain long-term revenue streams Nonstop, et. All, 2012). However, some service organizations are not able to choose their customers but still have to have relationships with them; however these organizations are not seeking to retain any of the customers or/and make profit from them.

These organizations include police, health services, charities, local government services, housing associations, etc. Also, creating and managing customer relationships is one of the main purposes. If company understand its customers it becomes easier to reach them and get them involved in certain organizational activities Nonstop, et. All, 2012). However, despite relationship marketing seems to be efficient, it is not appropriate in all situations. For instance, there are more people influenced by value for money than by a concept as intangible as a relationship.

Furthermore, some customers do not even wish to create any relationship with some organizations and their staff. Application of Understanding Customer Types First of all, one of the main application methods is a Consumer Relationship Management (CRM) system. CRM is mainly used in high-volume consumer services, with the objective of trying to form some closer understanding of the needs of individual consumer, which is referred to as ‘information-based continuous relationship marketing Nonstop, et. All, 2012). However researches show that a lot of CRM project fail.

Peter Floor (2012) in his article states that success rate of CRM projects were only 37% in 2011, which shows that it is almost twice as likely to fail as to succeed. Another approach that was explained by Johnston (et. All, 2012) and would be appropriate for organizations that have a relatively small number of tragic customers is Key Account Management (KM). KM recognizes that these relationships are complex, with more than one channel of contact between provider and customer. This approach is particularly useful for professional service firms – mostly BIB consumers.

However, Peter Chevron (2008) says that KM is all about managing the future, which is never easy; however there are three things that organizations have to balance in order to be successful in this pursuit (see appendix 2). Limitations of Understanding Customer Types Nothing is perfect, so is the theory of understanding customer types. For instance, sometimes it is hard for organization to determine the valuable and returning customers due to certain circumstances; these might include busy pace of organization, not well trained staff members, changing situation of customers, for instance the salary, living place, family expansion, etc.

Also, R. Johnston (et. All, 2012) in his book adds on that it is difficult to link customers with a beneficiary in case of public services as, for instance, taxpayers fund these services but politicians are the ones who set the budget. SURVIVAL – customer expectations and perceptions What is service quality? Defining service quality can be especially hard because of the intangible nature of the service offering, the definition may vary from person to person, from situation to situation (Brown, et. All, 1991). Furthermore, Dry. R.

Cavity (2012) adds on that service quality is influenced by customers’ age, gender, education, location, occupation, monthly income and nature of ward. He also takes everything further and says that customers consider poor service to be if the expectations score (expected service) is higher than the perceived service score. This shows that service quality is also pendent upon two variables – expected service and perceived service. What does SURVIVAL stands for? Dry. Rash Shania (2010) says that SURVIVAL is a service quality framework, aimed at measuring the scale of quality in the service sectors.

There are 5 dimensions (RATER) that play an important role in the model – Reliability, Assurance, Tangibles, Empathy and Responsiveness. Also, there are 5 different gaps that create a void between the customer ‘s expectations and the service delivered by the service provider (see appendix 3). Purpose of SURVIVAL To begin with, SURVIVAL is a very efficient model in helping an organization shape p their efforts in bridging the gap between perceived and expected service. Also, SURVIVAL helps to identify the causes and provides appropriate solutions that are very crucial to minimize the void (Shania, 2010).

For instance, gap 1 indicates a problem with the understanding of the market, for this reason, it enables management team assessing service quality from the customer’s perspective. The gap 2 helps to set the right service quality standards in order to meet the target customers’ needs. Furthermore, helps to assess the expectations and perceptions of internal customers – other departments. For example, gap 4 helps not to harm customer perceptions by raised expectations from the other department.

Finally, SURVIVAL enables comparison to competitors on common aspects, which helps to stay competitive in the market (Shania, 2010). Application of SURVIVAL SURVIVAL can be used by a service organization to measure and improve service quality. This method involves conducting a sample survey of target consumers so that their perceived service needs are understood. These measured perceptions are then compared against an organization that is excellent. The results of the survey low an organization to focus its resources where necessary and to maximize quality whilst costs are controlled (Chuan, 2011).

The survey usually includes a series of questions based around a number of key service dimensions RATER in order to assess company’s service quality, track customer’s expectations and perceptions over time or compare company ‘s SURVIVAL scores against competitors. Limitations of SURVIVAL According to Francis Battle (1996) SURVIVAL has a lot of critique. Firstly, five dimensions (RATER) has been criticizes for being not universal and taking into account Just 5 elements. Research shows that there is a high degree of inter- correlation between the five RATER dimensions, thus the scores obtained cannot be exact.

Also, Battle (1996) claims that the model fails to draw on established economic, statistical and psychological theory. Furthermore, there is little evidence that customers assess service quality in terms of perception/expectation gaps. Finally, Battle (1996) came up with idea that SURVIVAL does not really help to solve the problems occurred, because the main focus there is on the process of the service delivery, not the outcomes of the service encounter. Conclusion In this essay the service management ideas, theories and techniques, which include service concept, understanding customer types and SURVIVAL, were analyses.

To conclude, knowing how to apply and measure these service management ideas, theories and techniques can benefit industry professionals in quantitative and qualitative ways. Setting a right service concept and measuring service quality can be used to improve and maintain quality of the service; trying to understand target customers’ needs and wants could help to gain loyal and valuable customers; thus verbal quality service would enable organizations to efficiently design the service delivery process.

However keeping in mind that service quality score depends on the person and the situation that sometimes make all of the studies more complicated and confuse both management team and consumers, or even makes some of the ideas, theories or techniques not able to be applied for certain situations. Also, one of the studies is never enough and cannot be trusted on its own, in order to get more exact results at least couple of the studies have to be applied and measured. In mineral, the study of service management is both important and challenging.

Future efforts should continue to advance the understanding of service management ideas, theories and techniques in order to meet and exceed customers’ needs. Appendix Appendix 1 At first, Mobil intended to offer ‘a fast, friendly serve’ to its target customers to create the buying experience. The service concept for a fast and friendly serve’ is too abstract and not clear. For this reason the attributes constituted the service concept (service provided) were then identified more thoroughly. These include mentioned in he picture above, such as quick access, parking area, clean amenities, etc. Harsh, 2009) Appendix 2 Peter Chevron (2008) in his book explains that KM is about managing the future, which is never easy, however in order to be successful the three main elements have to be balanced. These elements include business objectives, market opportunity, business resources (see the picture above). ‘Business objectives’ is the view of what sort of business you want to have in the future. Furthermore, the ‘market opportunity is the forces that will help and hinder. It is all about competitors and are there customers who will help you to get where you want to be.

Last but not least, ‘business resources’ is the things that will support you – your capabilities, production, logistics, money and people, etc. Appendix 3 Gap 1 results from a difference between what customers expect and what management perceives these expectations to be, usually known as the management perception gap. Gap 2 results from a difference between management perceptions of what customers expect and the specifications that management draws up when detailing the service quality delivery actions that are required, known as quality specification gap.