BUMKT 2601- Service Encounter Analysis: Improving Service Strategies

This report analyzes service delivery issues encountered by customers, drawing from five journal entries and applying models like the service triangle, gap model, and technical/functional quality model. It identifies issues such as delays, poor online services, hidden costs, poor quality, and confidentia...Read More

Services Marketing Strategies

Table of Contents
INTRODUCTION...........................................................................................................................3
DIFFERENT SERVICE DELIVERY ISSUES...............................................................................3
ANALYSIS OF SERVICES ENCOUNTERS................................................................................4
Service Triangle...........................................................................................................................4
Gap model....................................................................................................................................5
Technical and fictional quality model.........................................................................................6
IMPACT OF SERVICE DELIVERY ISSUES ON BUSINESS AND CUSTOMERS..................7
On Business.................................................................................................................................8
On Customer................................................................................................................................8
STRATEGIES TO IMPROVE SERVICE QUALITY....................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
List of figures
Figure 1: Determinants of Service quality.......................................................................................7
Figure 2: Service Quality Model.....................................................................................................8
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INTRODUCTION
The customer plays important role in business success by evaluating organization’s
quality of delivered services (Reimann, Schilke & Thomas, 2010). Service delivery leads
customer satisfaction because satisfied customer provides positive views of the business (Singh,
2006). This requires businesses to focus on the customer service and issues which are being
faced by them (Hansemark & Albinson, 2004). The present report is based on the analysis of the
services delivery issues which are faced by customers while accessing services from different
organizations. For this purpose, five journals have been prepared and these were referred in
analyzing the report with the application of different models and framework related to the service
management.
DIFFERENT SERVICE DELIVERY ISSUES
There are different service delivery issues which are faced by customers while accessing
the services. These are explained as follows-
 Delay in rendering services-It is the potential reason behind the service delivery issue
because customer has to wait for a long time which causes the dissatisfaction. This has
been reflected in the encounter journal 2 wherein customer had to wait for getting
services even after taking the prior appointment for the same.
 Less responsive online services-The poor online service is another crucial issue which
affects the service quality to a great extent because customers cannot take the advantages
of online services rather they have to visit the physical store. It has been evidenced in the
4th encounter journal wherein customers tried to use the online application form of the
bank to open an account but got failed due to a technical issue on the site. These types of
errors should be looked into for providing the effective experience to buyers. issue of
hidden cost-Hidden cost is the main reason which affects service delivery. Due to this,
customers have to pay extra charges which are actually not mentioned before. This type
of scenarios misguides customers and they may lose the trust of the companies; however,
they can be communicated for the same in advanced. This has been described in
encounter journal 3 wherein unclear service charges influenced customer satisfaction.
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 Poor quality–In this type of service delivery issue customer retain a low quality of
services because they received unhygienic food product that causes dissatisfaction. This
issue was mentioned in the encounter journal 1 wherein poor service quality affected the
quality of the product as well and even after communication of the problem, firms did not
respond.
 Confidentiality-It is the major reason behind the services delivery issue because customer
suffered from leaks of information. This affects the overall satisfaction level of customers
in which has been shown in the encounter journal 5 wherein information got leaked even
after customer emphasizes on hiding due to careless attitude of the management.
ANALYSIS OF SERVICES ENCOUNTERS
In the modern era, the customer is the central focus of the businesses and their all
strategies are shaped by the single target of customer satisfaction. This determines the outcome
in the form of profitability, customer retention, strong brand image and satisfied customer or
loyalty (Taylor, Celuch & Goodwin, 2004). Similarly, Wilson, Zeithaml, Bitner & Gremler
(2012) asserted that in past decades making considerable attention on customer satisfaction
increases customer loyalty about company. However, it depends on the response of companies
towards the requirement of customers (Sureshchandar, Rajendran & Anantharaman, 2002). In
this regard, the five service delivery issues covered in the encounter journals have been
explained as follow with the application of different models and frameworks of service
marketing.
Service Triangle
In the competitive market, relation between customer and organization is based on
services quality that’s why it is important to focus on the improving service quality (Harter,
Schmidt & Hayes, 2002). In this regard, De Man &et al., (2002) asserted that the service triangle
is based on internal and external marketing of services and these marketing strategies assist
customer loyalty. This is because company put efforts to train employees towards the objective
and accordingly influence them to offer quality services to customers (Hwang & Der-Jang,
2005). This mandates the interactive marketing through which employees address the issues
which are being faced by customers. In the discussed service encounter with National Australian
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Bank, the major issue was ignorance of customer convenience. This is because customer tried to
fill the form of account opening but did not get success due to the technical issue in application
procedure of company. At this juncture, company could have reviewed the application procedure
once so as to ensure that customers will not face any issues while accessing online services. In
this regard, technology advancement is beneficial or harmful for both firms and customer. It
creates positive or negative effect on customer services and also influences financial outcome of
firm (Bitner, Brown & Meuter, 2000). However, in the case of National Australia Bank service
encounter online banking makes negative impact on customer. Therefore, it reflects that National
Australia Bank was unaware of the issues and accordingly employees or even the company was
unable to address the problem of customers.
Another encounter with Hyundai automobile service centre reflects that employees were
less aware regarding aspects to retain buyers because of lack of communication. In this context,
Gounaris (2005) asserted that quality of services perceived by the customer leads to healthy
relationship with company. However, in case of Hyundai automobile services customer was
disappointed because lack of clarity about the service delivery aspects. This indicates that
internal marketing Hyundai needs improvement through which employees can maintain
consistency and resolve the issues which are being faced by customers.
Gap model
Gap model assists service quality by its determinants as reliability, responsiveness,
competence, access, courtesy, security and communication which helps in the shaping of
customer exception (Parasuraman, Zeithaml & Berry, 1985). Similarly, Naik, Gantasala &
Prabhakar (2010) asserted that the gap model helps organization in identifying gap between
actual services and expected services. This identification of gap can facilitate corporation to take
the necessary action and increase the satisfaction level of buyers. At this juncture, Harbour Day
Spa can improve their customer services by understanding the gap between actual and expected
services (refer encounter journal 2). However, the quality of services is good but its delivery
issue can affect the brand image. This is because associated personnel might not have ideas that
customers who have to wait might plan to switch to the next brand. This is because the delivery
of services on time is the crucial aspect that affects the satisfaction of buyers (Zomerdijk & Voss,
2010; Yee, Yeung & Cheng, 2010). In this context, Gorla, Somers & Wong (2010) asserted that
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an organization must create that environment in which employee effectively deliver services to
customer which increase customer loyalty. This reflects that service delivery system of Harbour
Day Spa is poor which merely waste time of the customers rather making them feel special and
asset of the business.
In encounter with care home, it was found that employees did not follow the standards to
record the information with confidentiality and not showing the same to the third person unless
the client provides the consent. Security of customer information affects customer satisfaction
(refer Figure 1) and with the help of gap model, as evidenced in encounter journal 5, care home
can increase confidentiality about client by making favorable connection with staff member. This
increases its employee satisfaction thus; they think about firm’s goodwill and don’t take any
action which affects its market reputation. In this context, Koys (2001) asserted that employee
satisfaction and organizational behavior have major impact on customer satisfaction and
profitability.
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Figure 1: Determinants of Service quality
(Source: Parasuraman & et al ,1985)
Technical and fictional quality model
For improving customer satisfaction, it is crucial for organizations to focus on perceived
service quality which helps in building the brand image of the business (Seth, Deshmukh & Vrat,
2004). As described in encounter with restaurant, their low-quality food and less helpful
customer care services influenced badly to customer whereby, customer tendency towards the
restaurant decreases (refer encounter journal 1). In this context, it is important for firm to
improve their product quality by applying technical and functional quality model because it helps
to understand consumers ‘expectations (Kang 2006).
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Figure 2: Service Quality Model
(Source: Grönroos, 1984)
As mentioned in Figure 2, technical quality assists to understand the difference between
actual and expected quality and accordingly evaluate them in context of functional quality as
described. This reflects that by getting detailed information related to expected quality
companies can increase the customers’ satisfaction level. This is because potential issues faced
by buyers will be known along with the aspects to be focused to retain them. Owing to this,
image of organization depends upon technical and functional qualities of services. However, as
evidenced in encounter journal 1, the restaurant could have evaluated their customer service and
also found that way in which they could have satisfied their customer. This reflects that gap
between actual and expected service quality was higher wherein firm was targeting to generate
profit only rather making the customers satisfied.
IMPACT OF SERVICE DELIVERY ISSUES ON BUSINESS AND CUSTOMERS
In current competitive market, service delivery issue affects organization as well as
customer and which are describe below.
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Impact on business
The services delivery issues have direct impact on the brand image of the business
because customers switch to other brands. It also affects their brand image in the marketplace
(Gorla & et al, 2010). Owing to this, it decreases financial output through which business leg
behind from its competitors. In this regard, Liu, Guo & Lee (2011) asserted that dissatisfied
customers affect the brand image of the business because they share their negative view or bad
experience with others. This tends to switch buyers from one to another brand and accordingly
companies face issue in retaining them. At this juncture, it might be possible that company
produce the products and services but the revenue goes down due to switching of customers.
This leads to downgrade the growth of the business and affects the stakeholders associated. In
this context, Walsh, Mitchell, Jackson & Beatty (2009) also asserted that dissatisfied customers
influenced the market reputation of organization on the basis of their poor service quality.
However, it is important for organization to offer better services to their customer and obtain
customer satisfaction because they influenced company by all mean.
Impact on Customer
In today’s busy life schedule, people do not have enough time for searching new service
provider that’s why, if they do not receive good quality of services then they become
disappointed and searches alternative for those services (Choi & Mattila, 2008). By the negative
experience with a particular brand, customer loses trust from that particular brand and
accordingly it becomes very hard for them to stay loyal. Therefore, customers have to put efforts
to search for the suitable brand which can meet the requirement in the given time and invested
money.
STRATEGIES TO IMPROVE SERVICE QUALITY
On the basis of service encounter, following strategies should be used to improve firm’s
service delivery process.
 Training of employees-Service quality can be improved by offering training to
employees. For this purpose, employees should be trained to increase the customer
satisfaction by offering them quality services. Here, they must be aware of the fact the
how the delay in service, information leak, and poor quality of services can affect the
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brand image of the business through disappointment among customers. This would help
companies to retain buyers and offer them quality services.
 Product quality management-In the present time it is important for an organization to
focus on the quality of their product according to customer requirement. Even also should
focus on their quality control process which results an effective high quality product.
With the use of quality control measures issues as faced in the encounter journal 1 will be
reduced to a great extent and customers can be satisfied. Also, the associated employees
should be expert in the same field.
 Feedback from customers- It is necessary for an organization to focus on customer’s
feedback which has been provided after getting the services. It should receive feedback
by different mode on regular basis. These feedbacks contain information about service
delivery issues which helps in recognizing customer’s problem towards the service
delivery. This assists organization to make improvement in their service delivery. As
evidenced in the encounter journal 4 the bank can analyze their customer feedback and
should correct their technical problem in file submission.
 Trustworthy relationship with clients-It is important for company to make healthy
relationship with their client by providing them timely information related to products
and services and addressing their feedback properly. For example, encounter journal 3
indicates that company should make the trustworthy relationship client and understand
their problem in the right manner. This facilitates to augment the brand image and
increase overall rate of return of the business.
CONCLUSION
Above report concludes that service delivery issues have direct impact on the brand
image of the business because it creates negative impact in the mind of customers and influences
them to switch towards another brand. Not only this, but the service delivery issue frustrates
customers through which they lose the time and money invested in accessing the services. It can
also be concluded that service delivery issues affect both business and customer and increase
customer dissatisfaction. This dissatisfaction encourages buyer for switching of company and
decreases financial output. At the last, concluded that shortcoming can be corrected by applying
different service delivery strategies such as training of employees, trustworthy relationship with
customers and incorporating feedback into the strategy of the business.
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REFERENCES
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Choi, S., & Mattila, A. S. (2008). Perceived controllability and service expectations: Influences
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Yee, R. W., Yeung, A. C., & Cheng, T. E. (2010). An empirical study of employee loyalty,
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